UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


~~[X]~~☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30,~~, 2017~~ 2020

ORor


~~[ ]~~☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _______________

Commission file number: 001-37908

CAMPING WORLD HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	81-1737145
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer
~~incorporation or organization~~	Identification No.)

250 Parkway Drive, Suite 270

Lincolnshire, IL60069

~~Telephone: (847) 808-3000~~

(Address ~~including zip code, and telephone number, including~~

~~area code,~~ of registrant’s principal executive offices) (Zip Code)

Telephone: (847) 808-3000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock,

$0.01 par value per share

CWH

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒⌧No ☐◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐◻	Accelerated filer ☐
	⌧
Non-accelerated filer ☒◻	Smaller reporting company ☐
~~(Do not check if a smaller reporting company)~~	Emerging growth company ☐
		~~Emerging growth company~~ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒⌧

As of ~~November 7, 2017,~~August 3, 2020, the registrant had ~~36,527,406~~37,887,171 shares of Class A common stock, ~~50,836,629~~50,706,629 shares of Class B common stock and ~~one~~1 share of Class C common stock outstanding.

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, references to:

●

“we,” “us,” “our,” “CWH,” the “Company,” “Camping World” and similar references refer to Camping World Holdings, Inc., and, unless otherwise stated, all of its subsidiaries, including CWGS Enterprises, LLC, which we refer to as “CWGS, LLC” and, unless otherwise stated, all of its subsidiaries.

●

“Annual Report” refers to our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 filed with the Securities and Exchange Commission (“SEC”) on ~~March 13, 2017.~~

February 28, 2020.

●

“Continuing Equity Owners” refers collectively to ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profit Unit Holders and each of their permitted transferees that continue to own common units in CWGS, LLC after the ~~IPO~~initial public offering (“IPO”) of our stock and the ~~Reorganization Transactions~~related reorganization transactions (each as ~~defined~~discussed in Note 1 – Summary of Significant Accounting Policies to our consolidated financial statements included in Part I, Item 1 of this Form 10-Q) and who may redeem at each of their options their common units for, at our election (determined solely by our independent directors within the meaning of the rules of the New York Stock Exchange who are disinterested), cash or newly issued shares of our Class A common stock.

●

“Crestview” refers to Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P.

●

“CWGS LLC Agreement” refers to CWGS, LLC’s amended and restated limited liability company agreement, as amended to date.

●

“Former Equity Owners” refers to those Original Equity Owners controlled by Crestview Partners II GP, L.P. that have exchanged their direct or indirect ownership interests in CWGS, LLC for shares of our Class A common stock in connection with the consummation of our IPO.

“Former Profit Unit Holders” refers collectively to our named executive officers (excluding Marcus ~~Lemonis)~~A. Lemonis and Melvin Flanigan), Andris A. Baltins and K. Dillon Schickli, who are members of our board of directors, and certain other current and former non-executive employees and former directors, in each case, who held existing common units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to our IPO and who received common units of CWGS, LLC in exchange for their profit units in connection with our IPO.

●

“ML Acquisition” refers to ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus A. Lemonis.

●

~~“ML Related Parties” refers to ML Acquisition and its permitted transferees of common units.~~

~~“ML RV Group” refers to ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus Lemonis.~~

“Original Equity Owners” refers to the direct and certain indirect owners of interests in CWGS, LLC, collectively, prior to the Reorganization Transactions and Recapitalization (as defined in Note 1 – Summary of Significant Accounting Policies and Note 13 – Stockholders’ Equity to our consolidated financial statements included in Part I, Item 1 of this Form 10-Q, respectively) which includes ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profit Unit Holders.

“Tax Receivable Agreement” refers to the tax receivable agreement that the Company entered into with CWGS, LLC, each of the Continuing Equity Owners and Crestview Partners II GP, L.P. in connection with the Company’s IPO.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-Q may be forward-looking statements. Statements regarding our future results of operations and financial ~~position,~~position; the impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations and financial position; business strategy and plans and objectives of management for future ~~operations, including, among others, statements regarding~~operations; the timeline for and benefits of our 2019 Strategic Shift (as defined below); expected new retail location openings and closures, including greenfield locations and acquired locations; profitability of new retail locations; the impact from the Tax Receivable Agreement of the redemption of common units described below relating to the October 2017 Public Offering (as defined below); sufficiency of our sources of liquidity and capital and any potential need for additional ~~financing; use~~financing or refinancing, retirement or exchange of ~~proceeds from our borrowings under the Existing Credit Agreement;~~outstanding debt; future capital expenditures and debt service obligations; ~~refinancing, retirement or exchange of outstanding debt;~~ expectations regarding industry trends and consumer behavior and growth; our ~~comparative advantages and our plans and~~ ability to ~~expand our consumer base; our ability to respond to changing business~~capture positive industry trends and economic conditions; our plans to increase new products offered to our customers and grow our businesses to enhance revenue and cash flow, and increase our overall profitability; volatility in sales and potential impact of miscalculating the demand for our products or our product mix; our ability to drivepursue growth; anticipated impact of the acquisition of Gander Mountain Company (“Gander Mountain”) and its Overton’s boating business (the “Gander Mountain Acquisition”); the number of Gander Mountain locations the Company expects to open and operate and the anticipated timing of such store openings; expectations regarding assumption and rejection of leases for the locations acquired under the Gander Mountain Acquisition; rebranding of Gander Mountain expectations regarding increase of certain expenses, including in relation to the Gander Mountain Acquisition;our pending litigation, and our plans related to dividend payments, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘anticipates,’’ ‘‘could,’’ ‘‘intends,’’ ‘‘targets,’’ ‘‘projects,’’ ‘‘contemplates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential’’ or ‘‘continue’’ or the negative of these terms or other similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these important factors include, but are not limited to, the following:

~~the availability of financing to us and our customers;~~

~~fuel shortages, or high prices for fuel;~~

~~the well-being, as well as the continued popularity and reputation for quality, of our manufacturers;~~

~~general economic conditions in our markets, and ongoing economic and financial uncertainties;~~

~~our ability to attract and retain customers;~~

~~competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast;~~

~~our expansion into new, unfamiliar markets as well as delays in opening or acquiring new retail locations;~~

~~unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions;~~

~~our failure to maintain the strength and value of our brands;~~

~~our ability to successfully order and manage our inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends;~~

~~fluctuations in our same store sales and whether they will be a meaningful indicator of future performance;~~

~~the cyclical and seasonal nature of our business;~~

~~our ability to operate and expand our business and to respond to changing business and economic conditions, which depends on the availability of adequate capital;~~

~~the restrictive covenants in our Senior Secured Credit Facilities and Floor Plan Facility;~~

~~our reliance on three fulfillment and distribution centers for our retail, e-commerce and catalog businesses;~~

~~natural disasters, whether or not caused by climate change, unusual weather condition, epidemic outbreaks, terrorist acts and political events;~~

~~our dependence on our relationships with third party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations;~~

~~whether third party lending institutions and insurance companies will continue to provide financing for RV purchases;~~

~~our inability to retain senior executives and attract and retain other qualified employees;~~

~~our ability to meet our labor needs;~~

~~our inability to maintain the leases for our retail locations or locate alternative sites for our stores in our target markets and on terms that are acceptable to us;~~

~~our business being subject to numerous federal, state and local regulations;~~

~~regulations applicable to the sale of extended service contracts;~~

~~our dealerships’ susceptibility to termination, non-renewal or renegotiation of dealer agreements if state dealer laws are repealed or weakened;~~

~~our failure to comply with certain environmental regulations;~~

~~climate change legislation or regulations restricting emission of ‘‘greenhouse gases;’’~~

~~a failure in our e-commerce operations, security breaches and cybersecurity risks;~~

~~our inability to enforce our intellectual property rights and accusations of our infringement on the intellectual property rights of third parties;~~

~~our inability to maintain or upgrade our information technology systems or our inability to convert to alternate systems in an efficient and timely manner;~~

~~disruptions to our information technology systems or breaches of our network security;~~

Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition Company, LLC and ML RV Group, LLC, has substantial control over us and may approve or disapprove substantially all transactions and other matters requiring approval by our stockholders, including, but not limited to, the election of directors;

the exemptions from certain corporate governance requirements that we will qualify for, and intend to rely on, due to the fact that we are a ‘‘controlled company’’ within the meaning of the New York Stock Exchange, or NYSE, listing requirements;

~~whether we are able to realize any tax benefits that may arise from our organizational structure and any redemptions or exchanges of CWGS Enterprises, LLC common units for cash or stock; and~~

~~the other factors set forth under ‘‘Risk Factors’’ in Item 1A of Part I of our Annual Report and Item 1A of Part II of this Form 10-Q.~~

~~We qualify all of our forward-looking statements by these cautionary statements. The forward-looking statements in this Form 10-Q are only predictions.~~ We have based these forward-looking statements largely on our current expectations and projections about future events and ~~financial~~ trends that we believe may affect our ~~business,~~ financial condition, ~~and~~ results of ~~operations. Because~~operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are ~~inherently~~ subject to a number of risks, uncertainties, and ~~uncertainties, some~~assumptions, including the important factors described in “Risk Factors” in Item 1A of ~~which cannot be predicted~~Part I of our Annual Report, in Item 1A of Part II of this Form 10-Q, and in our other filings with the SEC, that may cause our actual results, performance or ~~quantified,~~achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.

Any forward-looking statements made herein speak only as of the date of this Form 10-Q, and you should not rely on ~~these~~ forward-looking statements as predictions of future events. ~~The events and circumstances~~Although we believe that the expectations reflected in ~~our~~the forward-looking statements ~~may not~~are reasonable, we cannot guarantee that the future effects, results, performance, or achievements reflected in the forward-looking statements will be achieved or ~~occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan~~occur. We undertake no obligation to ~~publicly~~ update ~~or revise~~ any of these forward-looking statements ~~contained herein, whether as a result of~~for any ~~new information, future events, changed circumstances or otherwise. For a further discussion of~~reason after the ~~risks relating to our business, see “Item 1A—Risk Factors” in Part I of our Annual Report and “Item 1A—Risk Factors” in Part II~~date of this Form ~~10-Q.~~10-Q or to conform these statements to actual results or revised expectations.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In Thousands Except Share and Per Share Amounts)

September 30,

December 31,

2017

2016
Assets

Current assets:

Cash and cash equivalents

$
163,225

$
114,196
Contracts in transit

79,499

29,012
Accounts receivable, net

73,700

58,488
Inventories, net

1,204,138

909,254
Prepaid expenses and other assets

27,685

21,755
Total current assets

1,548,247

1,132,705
Property and equipment, net

183,485

130,760
Deferred tax assets, net

262,433

125,878
Intangibles assets, net

37,972

3,386
Goodwill

328,402

153,105
Other assets

17,940

17,931
Total assets

$
2,378,479

$
1,563,765
Liabilities and stockholders' equity (deficit)

Current liabilities:

Accounts payable

$
158,026

$
68,655
Accrued liabilities

125,349

78,044
Deferred revenues and gains

78,934

68,643
Current portion of capital lease obligations

908

1,224
Current portion of tax receivable agreement liability

7,378

991
Current portion of long-term debt

7,400

6,450
Notes payable – floor plan, net

799,682

625,185
Other current liabilities

26,822

16,745
Total current liabilities

1,204,499

865,937
Capital lease obligations, net of current portion

207

841
Right to use liability

10,231

10,343
Tax receivable agreement liability, net of current portion

102,485

18,190
Long-term debt, net of current portion

709,507

620,303
Deferred revenues and gains

56,782

52,210
Deferred tax liabilities

49

—
Other long-term liabilities

35,775

24,156
Total liabilities

2,119,535

1,591,980
Commitments and contingencies

Stockholders' equity (deficit):

Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2017 and December 31, 2016

—

—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 30,227,113 issued and 30,227,061 outstanding as of September 30, 2017 and 18,935,916 issued and outstanding as of December 31, 2016

302

189
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 57,031,184 outstanding as of September 30, 2017 and 62,002,729 outstanding as of December 31, 2016

6

6
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2017 and December 31, 2016

—

—
Additional paid-in capital

157,031

74,239
Retained earnings

35,655

544
Total stockholders' equity attributable to Camping World Holdings, Inc.

192,994

74,978
Non-controlling interests

65,950

(103,193)
Total stockholders' equity (deficit)

258,944

(28,215)
Total liabilities and stockholders' equity (deficit)

$
2,378,479

$
1,563,765


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	227,902	$	147,521
Contracts in transit		171,437		44,947
Accounts receivable, less allowance for doubtful accounts of $3,457 and $3,537 in 2020 and 2019, respectively		84,493		81,847
Inventories		1,052,222		1,358,539
Prepaid expenses and other assets		55,974		57,827
Total current assets		1,592,028		1,690,681
Property and equipment, net		325,053		314,374
Operating lease assets		789,539		807,537
Deferred tax assets, net		126,097		129,710
Intangible assets, net		28,101		29,707
Goodwill		387,049		386,941
Other assets		16,684		17,290
Total assets	$	3,264,551	$	3,376,240
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	232,989	$	106,959
Accrued liabilities		184,751		130,316
Deferred revenues		84,286		87,093
Current portion of operating lease liabilities		60,315		58,613
Current portion of Tax Receivable Agreement liability		6,909		6,563
Current portion of long-term debt		15,828		14,085
Notes payable – floor plan, net		470,871		848,027
Other current liabilities		61,391		44,298
Total current liabilities		1,117,340		1,295,954
Operating lease liabilities, net of current portion		823,929		843,312
Tax Receivable Agreement liability, net of current portion		101,702		108,228
Revolving line of credit		20,885		40,885
Long-term debt, net of current portion		1,165,227		1,153,551
Deferred revenues		61,928		58,079
Other long-term liabilities		43,479		35,467
Total liabilities		3,334,490		3,535,476
Commitments and contingencies
Stockholders' deficit:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of June 30, 2020 and December 31, 2019		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 38,018,386 issued and 37,773,109 outstanding as of June 30, 2020 and 37,701,584 issued and 37,488,989 outstanding as of December 31, 2019		378		375
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 50,706,629 outstanding as of June 30, 2020 and December 31, 2019		5		5
Class C common stock, par value $0.0001 per share – 1 share authorized, issued and outstanding as of June 30, 2020 and December 31, 2019		—		—
Additional paid-in capital		52,747		50,152
Retained deficit		(44,754)		(83,134)
Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc.		8,376		(32,602)
Non-controlling interests		(78,315)		(126,634)
Total stockholders' deficit		(69,939)		(159,236)
Total liabilities and stockholders' deficit	$	3,264,551	$	3,376,240

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In Thousands Except Per Share Amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016
Revenue:

Consumer services and plans

$
46,169

$
45,442

$
144,518

$
135,868
Retail

New vehicles

715,182

545,154

1,982,644

1,532,919
Used vehicles

188,331

181,675

531,324

576,964
Parts, services and other

187,750

151,090

478,169

422,316
Finance and insurance, net

101,570

67,710

268,829

188,607
Subtotal

1,192,833

945,629

3,260,966

2,720,806
Total revenue

1,239,002

991,071

3,405,484

2,856,674
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):

Consumer services and plans

20,085

19,953

61,792

59,071
Retail

New vehicles

614,624

471,140

1,703,622

1,317,147
Used vehicles

138,796

138,637

393,436

454,659
Parts, services and other

108,830

81,105

265,376

223,781
Subtotal

862,250

690,882

2,362,434

1,995,587
Total costs applicable to revenue

882,335

710,835

2,424,226

2,054,658
Operating expenses:

Selling, general, and administrative

236,174

186,255

640,108

536,966
Depreciation and amortization

8,382

6,219

22,819

18,144
(Gain) loss on sale of assets

(5)

21

(292)

(227)
Total operating expenses

244,551

192,495

662,635

554,883
Income from operations

112,116

87,741

318,623

247,133
Other income (expense):

Floor plan interest expense

(7,414)

(4,322)

(19,303)

(14,851)
Other interest expense, net

(11,012)

(12,715)

(30,973)

(38,040)
Other expense, net

(96)

—

(79)

(2)

(18,522)

(17,037)

(50,355)

(52,893)
Income before income taxes

93,594

70,704

268,268

194,240
Income tax expense

(8,336)

(2,288)

(28,247)

(4,638)
Net income

85,258

68,416

240,021

189,602
Less: net income attributable to non-controlling interests

(65,131)

—

(193,036)

—
Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602

Earnings per share of Class A common stock (1):

Basic

$
0.68

$
1.97

Diluted

$
0.68

$
1.92

Weighted average shares of Class A common stock outstanding (1):

Basic

29,522

23,854

Diluted

88,452

85,947

Dividends declared per share

$
0.1532

$
0.4596

~~(1)~~

~~Basic and diluted earnings per Class A common stock is applicable only for periods after the Company’s IPO. See Note 16 — Earnings Per Share.~~


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue:
Good Sam Services and Plans	$	44,519	$	44,694	$	91,727	$	91,660
RV and Outdoor Retail
New vehicles		898,175		778,870		1,395,492		1,308,447
Used vehicles		274,910		245,749		481,575		425,757
Products, service and other		231,172		264,426		403,795		469,302
Finance and insurance, net		147,318		128,225		239,774		220,116
Good Sam Club		10,651		12,383		21,655		23,834
Subtotal		1,562,226		1,429,653		2,542,291		2,447,456
Total revenue		1,606,745		1,474,347		2,634,018		2,539,116
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		15,234		18,746		37,093		39,477
RV and Outdoor Retail
New vehicles		752,570		681,399		1,179,012		1,144,443
Used vehicles		208,829		192,681		372,622		335,527
Products, service and other		139,341		168,607		249,610		304,711
Good Sam Club		2,133		2,924		4,380		6,641
Subtotal		1,102,873		1,045,611		1,805,624		1,791,322
Total costs applicable to revenue		1,118,107		1,064,357		1,842,717		1,830,799
Operating expenses:
Selling, general, and administrative		271,591		303,366		539,247		571,431
Depreciation and amortization		12,567		13,946		26,645		27,540
Long-lived asset impairment		—		—		6,569		—
Lease termination		868		—		1,452		—
Loss on disposal of assets		272		2,374		783		2,160
Total operating expenses		285,298		319,686		574,696		601,131
Income from operations		203,340		90,304		216,605		107,186
Other income (expense):
Floor plan interest expense		(5,098)		(11,269)		(13,702)		(22,879)
Other interest expense, net		(14,547)		(18,211)		(29,205)		(35,854)
Tax Receivable Agreement liability adjustment		—		—		—		8,477
Total other expense		(19,645)		(29,480)		(42,907)		(50,256)
Income before income taxes		183,695		60,824		173,698		56,930
Income tax expense		(20,473)		(8,201)		(24,605)		(31,114)
Net income		163,222		52,623		149,093		25,816
Less: net income attributable to non-controlling interests		(105,145)		(34,606)		(99,176)		(27,194)
Net income (loss) attributable to Camping World Holdings, Inc.	$	58,077	$	18,017	$	49,917	$	(1,378)

Earnings (loss) per share of Class A common stock:
Basic	$	1.54	$	0.48	$	1.33	$	(0.04)
Diluted	$	1.54	$	0.46	$	1.32	$	(0.04)
Weighted average shares of Class A common stock outstanding:
Basic		37,635		37,239		37,585		37,217
Diluted		89,689		88,925		89,578		37,217

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders' Equity (Deficit)

(In Thousands)


										Additional		Retained		Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Earnings		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		(Deficit)		Interest		Total
Balance at December 31, 2019	37,489	$	375	50,707	$	5	—	$	—	$	50,152	$	(83,134)	$	(126,634)	$	(159,236)
Equity-based compensation	—		—	—		—	—		—		3,312		—		—		3,312
Vesting of restricted stock units	47		—	—		—	—		—		82		—		(82)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	(16)		—	—		—	—		—		(212)		—		—		(212)
Redemption of LLC common units for Class A common stock	20		—	—		—	—		—		4		—		49		53
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(8,410)		(8,410)
Dividends⁽¹⁾	—		—	—		—	—		—		—		(5,752)		—		(5,752)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(44)		—		—		(44)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,698)		—		1,698		—
Net loss	—		—	—		—	—		—		—		(8,160)		(5,969)		(14,129)
Balance at March 31, 2020	37,540	$	375	50,707	$	5	—	$	—	$	51,596	$	(97,046)	$	(139,348)	$	(184,418)
Equity-based compensation	—		—	—		—	—		—		4,182		—		—		4,182
Exercise of stock options	7		—	—		—	—		—		159		—		—		159
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(105)		—		105		—
Vesting of restricted stock units	153		2	—		—	—		—		(10)		—		8		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	(17)		—	—		—	—		—		(347)		—		—		(347)
Redemption of LLC common units for Class A common stock	90		1	—		—	—		—		58		—		245		304
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(47,015)		(47,015)
Dividends⁽¹⁾	—		—	—		—	—		—		—		(5,785)		—		(5,785)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(241)		—		—		(241)
Non-controlling interest adjustment	—		—	—		—	—		—		(2,545)		—		2,545		—
Net income	—		—	—		—	—		—		—		58,077		105,145		163,222
Balance at June 30, 2020	37,773	$	378	50,707	$	5	—	$	—	$	52,747	$	(44,754)	$	(78,315)	$	(69,939)

Additional

Non-

Class A Common Stock

Class B Common Stock

Class C Common Stock

Paid-In

Retained

Controlling


Shares

Amounts

Shares

Amounts

Shares

Amounts

Capital

Earnings

Interest

Total
Balance at January 1, 2017

18,936

189

62,003

6

—

—

74,239

544

(103,193)

(28,215)
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs

4,600

46

—

—

—

—

121,399

—

—

121,445
Non-controlling interest adjustment for purchase of common units from CWGS, LLC with proceeds from a public offering

—

—

—

—

—

—

(53,648)

—

87,203

33,555
Issuance of Class A common stock for an acquisition by a subsidiary

164

1

—

—

—

—

5,719

—

—

5,720
Non-controlling interest adjustment for capital contribution of Class A common stock for an acquisition by a subsidiary

—

—

—

—

—

—

(2,261)

—

3,678

1,417
Equity-based compensation

—

—

—

—

—

—

2,792

—

—

2,792
Vesting of restricted stock units

—

—

—

—

—

—

—

—

—

—
Repurchases of Class A common stock

—

—

—

—

—

—

—

—

—

—
Redemption of LLC common units for Class A common stock

6,526

66

(4,972)

—

—

—

69,091

—

5,191

74,348
Distributions to holders of LLC common units

—

—

—

—

—

—

—

—

(124,996)

(124,996)
Dividends

—

—

—

—

—

—

—

(11,874)

—

(11,874)
Deferred tax adjustments related to tax receivable agreement

—

—

—

—

—

—

(55,858)

—

—

(55,858)
Non-controlling interest adjustment

—

—

—

—

—

—

(4,442)

—

5,031

589
Net income

—

—

—

—

—

—

—

46,985

193,036

240,021
Balance at September 30, 2017

30,226

$
302

57,031

$
6

—

$
—

$
157,031

$
35,655

$
65,950

$
258,944
(1)The Company declared dividends per share of Class A common stock of $0.15 for each the three months ended March 31 and June 30, 2020.

Table of Contents


										Additional		Retained		Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Earnings		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		(Deficit)		Interest		Total
Balance at December 31, 2018	37,192	$	372	50,707	$	5	—		—	$	47,531	$	(3,370)	$	(11,621)	$	32,917
Adoption of ASC 842 accounting standard	—		—	—		—	—		—		—		3,705		6,332		10,037
Equity-based compensation	—		—	—		—	—		—		2,716		—		—		2,716
Vesting of restricted stock units	1		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	6		—	—		—	—		—		12		—		—		12
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(5,534)		(5,534)
Dividends⁽²⁾	—		—	—		—	—		—		—		(5,699)		—		(5,699)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(8)		—		—		(8)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,678)		—		1,678		—
Net loss	—		—	—		—	—		—		—		(19,395)		(7,412)		(26,807)
Balance at March 31, 2019	37,199		372	50,707		5	—		—		48,573		(24,759)		(16,557)		7,634
Equity-based compensation	—		—	—		—	—		—		3,863		—		—		3,863
Vesting of restricted stock units	96		1	—		—	—		—		143		—		(144)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	(22)		—	—		—	—		—		(273)		—		—		(273)
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(32,523)		(32,523)
Dividends⁽²⁾	—		—	—		—	—		—		—		(5,711)		—		(5,711)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,702)		—		1,702		—
Net income	—		—	—		—	—		—		—		18,017		34,606		52,623
Balance at June 30, 2019	37,273	$	373	50,707	$	5	—	$	—	$	50,604	$	(12,453)	$	(12,916)	$	25,613

(2)The Company declared dividends per share of Class A common stock of $0.15 for each of the three months ended March 31 and June 30, 2019.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Nine Months Ended September 30,

2017

2016
Operating activities

Net income

$
240,021

$
189,602

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

22,819

18,144
Equity-based compensation

2,792

60
Gain on sale of assets

(292)

(227)
Provision for (recovery of) losses on accounts receivable

(23)

1,701
Accretion of original issue discount

706

915
Non-cash interest expense

3,210

3,698
Deferred income taxes

3,256

3,089
Loss on remeasurement of tax receivable agreement

79

—
Change in assets and liabilities, net of acquisitions:

Receivables and contracts in transit

(64,211)

(38,415)
Inventories

(150,653)

68,316
Prepaid expenses and other assets

(6,381)

(8,324)
Checks in excess of bank balance

—

(7,478)
Accounts payable and other accrued expenses

105,154

67,935
Payment pursuant to tax receivable agreement

(203)

—
Accrued rent for cease-use locations

(91)

286
Deferred revenue and gains

14,863

12,849
Other, net

37,053

3,876
Net cash provided by operating activities

208,099

316,027

Investing activities

Purchases of property and equipment

(49,759)

(29,203)
Purchase of real property

(16,820)

(12,871)
Proceeds from the sale of real property

6,000

7,291
Purchases of businesses, net of cash acquired

(345,140)

(67,690)
Proceeds from sale of property and equipment

603

3,486
Net cash used in investing activities

$
(405,116)

$
(98,987)


	Six Months Ended June 30,
	2020		2019


Operating activities
Net income	$	149,093	$	25,816

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		26,645		27,540
Equity-based compensation		7,494		6,579
Loss on lease termination		1,452		—
Long-lived asset impairment		6,569		—
Loss on disposal of assets		783		2,160
Provision for losses on accounts receivable		531		379
Non-cash lease expense		28,638		27,182
Accretion of original debt issuance discount		531		532
Non-cash interest		2,104		2,348
Deferred income taxes		4,068		16,615
Tax Receivable Agreement liability adjustment		—		(8,477)
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(129,725)		(79,823)
Inventories		306,428		25,752
Prepaid expenses and other assets		1,214		7,082
Accounts payable and other accrued expenses		139,913		80,744
Payment pursuant to Tax Receivable Agreement		(6,563)		(9,425)
Accrued rent for cease-use locations		—		542
Deferred revenue		1,042		1,088
Operating lease liabilities		(34,379)		(27,174)
Other, net		10,075		719
Net cash provided by operating activities		515,913		100,179

Investing activities
Purchases of property and equipment		(13,660)		(27,848)
Purchase of real property		—		(25,093)
Proceeds from the sale of real property		—		10,117
Purchases of businesses, net of cash acquired		—		(38,608)
Proceeds from sale of property and equipment		491		910
Purchase of intangible assets		(150)		—
Net cash used in investing activities	$	(13,319)	$	(80,522)

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Nine Months Ended September 30,

2017

2016

Financing activities

Proceeds from long-term debt

$
94,762

$
134,325
Payments on long-term debt

(5,550)

(43,615)
Net borrowings on notes payable – floor plan, net

174,497

(65,967)
Borrowings on revolver

—

12,000
Payments on revolver

—

(12,000)
Payments of principal on capital lease obligations

(950)

(1,111)
Payments of principal on right to use liability

(112)

(164)
Payment of debt issuance costs

(1,176)

(2,685)
Proceeds from issuance of Class A common stock sold in a public offering net of underwriter discounts, commissions and offering expenses

121,445

—
Dividends on Class A common stock

(11,874)

—
Members' distributions

(124,996)

(214,782)
Net cash provided by (used in) financing activities

246,046

(193,999)

Increase in cash

49,029

23,041
Cash at beginning of the period

114,196

92,025
Cash at end of the period

$
163,225

$
115,066


	Six Months Ended June 30,
	2020		2019
Financing activities
Proceeds from long-term debt	$	—	$	11,662
Payments on long-term debt		(18,359)		(3,409)
Net payments on notes payable – floor plan, net		(316,492)		(29,426)
Borrowings on revolving line of credit		—		14,029
Payments on revolving line of credit		(20,000)		—
Payments of principal on finance lease obligations		—		(23)
Payment of debt issuance costs		—		(47)
Dividends on Class A common stock		(11,537)		(11,410)
Proceeds from exercise of stock options		159		—
RSU shares withheld for tax		(559)		(273)
Members' distributions		(55,425)		(38,057)
Net cash used in financing activities		(422,213)		(56,954)

Increase (decrease) in cash and cash equivalents		80,381		(37,297)
Cash and cash equivalents at beginning of the period		147,521		138,557
Cash and cash equivalents at end of the period	$	227,902	$	101,260

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

~~September~~June 30, ~~2017~~2020

1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of Camping World Holdings, Inc. ~~(“CWH”)~~ and its subsidiaries, ~~(collectively, the “Company”),~~ and are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the ~~Securities and Exchange Commission (the “SEC”).~~SEC. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All ~~significant~~ intercompany accounts and transactions of the Company and its subsidiaries have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 are unaudited. The condensed consolidated balance sheet as of December 31, ~~2016~~2019 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 (the “Annual Report”) filed with the SEC on ~~March 13, 2017.~~February 28, 2020. Operating results for ~~the~~ interim periods are not necessarily indicative of the results that may be expected for the full year.

CWH was formed on March 8, 2016 as a Delaware corporation for the purpose of facilitating an ~~initial public offering (the “IPO”)~~IPO and other related transactions in order to carry on the business of CWGS, ~~Enterprises, LLC (“CWGS, LLC”).~~LLC. CWGS, LLC was formed in March 2011 when it received, through contribution from its then parent company, all of the membership interests of Affinity Group Holding, LLC and FreedomRoads Holding Company, LLC (“FreedomRoads”). The IPO and related reorganization transactions ~~(the “Reorganization Transactions”)~~ that occurred on October 6, 2016 resulted in CWH as the sole managing member of CWGS, LLC, with CWH having sole voting power in and control of the management of CWGS, ~~LLC.~~LLC (see Note 14 — Stockholders’ Equity). Despite its position as sole managing member of CWGS, LLC, CWH has a minority economic interest in CWGS, LLC. As of ~~September~~June 30, ~~2017,~~2020 and December 31, 2019, CWH owned ~~34.1%~~42.3% and 42.0%, respectively, of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its condensed consolidated financial statements. As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for the periods prior to the IPO and related Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes.

The Company does not have any components of other comprehensive income recorded within its condensed consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements.

COVID-19

A novel strain of coronavirus was declared a pandemic by the World Health Organization in March 2020. To date, COVID-19 has surfaced in nearly all regions of the world and resulted in travel restrictions and business slowdowns or shutdowns in affected areas. Many affected areas have begun the process of easing restrictions and reopening certain businesses often under new operating guidelines.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, the Company saw significant sequential declines in its overall customer traffic levels and its overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, the Company began to see a significant improvement in its online web traffic levels and number of electronic leads, and in early May, the Company began to see improvements in its overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of the country, the Company experienced significant acceleration in its in-store and online traffic and revenue trends in May and June 2020.

Table of Contents

In order to offset the initially expected adverse impact of COVID-19 and better align expenses with reduced sales in the middle of March 2020 and early April 2020, the Company temporarily reduced salaries and hours throughout the business, including for its executive officers, and implemented headcount and other cost reductions. Most of these temporary salary reductions ended in May 2020 as the adverse impacts of the pandemic began to decline and the Company increased hours for certain employees and reinstated many positions from the initial headcount reductions as the demand for the Company’s products increased. The Company also negotiated lease payment deferrals with numerous landlords amounting to approximately $14.0 million from 2020 into 2021. As demand for all products accelerated and the Company’s cash position improved, the Company repaid these rent deferrals in full prior to June 30, 2020. The Company has also taken steps to add new private label lines, expand its relationships with smaller recreational (“RV”) manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

Throughout the pandemic, the majority of the Company’s RV and Outdoor Retail locations have continued to operate as essential businesses and the Company has continued to operate its e-commerce business. Since March 2020, the Company has implemented preparedness plans to keep its employees and customers safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home directives for a significant portion of the Company’s workforce.

Description of the Business

Camping World Holdings, Inc, together with its subsidiaries, is America’s largest retailer of RVs and related products and services. As noted above, CWGS, LLC is a holding company and operates through its subsidiaries. The ~~operations of~~Company has the ~~Company consist of two primary businesses:~~following 2 reportable segments: (i) ~~Consumer~~Good Sam Services and Plans and (ii) RV and Outdoor Retail. ~~The Company provides consumer services and plans offerings through its~~See Note 18 – Segments Information to the condensed consolidated financial statements for further information about the Company’s segments. Within the Good Sam ~~brand and the Company primarily provides its retail offerings through its Camping World brand. Within the Consumer~~ Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; ~~co-branded credit cards;~~ vehicle financing and ~~refinancing; club memberships;~~refinancing assistance; consumer shows and events; and consumer publications and directories. Within the RV and Outdoor Retail segment, the Company primarily derives ~~revenues~~revenue from the sale of ~~the following products:~~ new and used ~~recreational vehicles (“RV”);~~RVs; commissions on the finance and insurance contracts related to the sale of RVs; the sale of RV services and maintenance work; the sale of RV parts, ~~and service, including RV~~ accessories, and supplies; ~~camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine~~the sale of outdoor products, equipment, gear and

~~Table~~ supplies and the sale of ~~Contents~~

~~watersport equipment~~Good Sam Club memberships and ~~supplies; and finance and insurance.~~co-branded credit cards. The Company operates a national network of RV dealerships and service centers as well as a comprehensive e-commerce platform primarily ~~operates in various regions throughout~~under the ~~United States~~Camping World and Gander RV & Outdoors brands, and markets its products and services primarily to RV ~~owners~~ and outdoor enthusiasts. ~~At September 30, 2017,~~

In 2019, the Company ~~operated 137 Camping World~~made a strategic decision to refocus its business around its core RV competencies, and on September 3, 2019, the board of directors approved a strategic plan to shift the business away from locations that did not have the ability or where it was not feasible to sell and/or service RVs (the “2019 Strategic Shift”) (see Note 4 – Restructuring and Long-lived Asset Impairment). This resulted in the sale, closure or divestiture of 34 non-RV retail stores and the liquidation of approximately $108 million of non-RV related inventory in 2019.

In connection with the 2019 Strategic Shift, the Company has reduced its number of retail store locations to 164 as of ~~which 121~~June 30, 2020 from 227 as of June 30, 2019. A summary of the retail store openings, closings, divestitures, conversions and number of locations ~~sell new and used RVs, and offer financing, ancillary services, protection plans, and other products for~~from June 30, 2019 to June 30, 2020, are in the RV purchaser and outdoor enthusiasts; two Overton’s locations offering marine and watersports products; two TheHouse.com locations offering skiing, snowboarding, bicycling, and skateboarding products; and one W82 location offering skiing, snowboarding, and skateboarding products.table below:


	RV		RV Service &		Other
	Dealerships		Retail Centers		Retail Stores		Total
Number of store locations as of June 30, 2019		151		14		62		227
Opened		6		—		—		6
Closed / divested		(7)		(2)		(55)		(64)
Temporarily closed⁽¹⁾		(3)		—		(2)		(5)
Converted		5		(2)		(3)		—
Number of store locations as of June 30, 2020		152		10		2		164

(1)	These locations are temporarily closed in response to the COVID-19 pandemic.

Table of Contents

Use of Estimates

The preparation of these ~~unaudited~~ condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. The Company bases its estimates and judgments on historical experience and other assumptions that management believes are reasonable. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, including those uncertainties arising from COVID-19, and, as a result, actual results could differ materially from these estimates. The Company periodically evaluates estimates and assumptions used in the preparation of the financial statements and makes changes on a prospective basis when adjustments are necessary. Significant estimates made in the accompanying ~~unaudited~~ condensed consolidated financial statements include certain assumptions related to accounts receivable, inventory, goodwill, intangible assets, long lived assets, ~~assets held for sale,~~long-lived asset impairments, program cancellation reserves, chargebacks, and accruals related to ~~self-insurance programs,~~ estimated tax liabilities, product return reserves, and other liabilities.

Contracts in Transit, Accounts Receivable and Current Expected Credit Losses

Contracts in transit consist of amounts due from non-affiliated financing institutions on retail finance contracts from vehicle sales for the portion of the vehicle sales price financed by the Company’s customers. These retail installment sales contracts are typically funded within ten days of the initial approval of the retail installment sales contract by the third-party lender. Due to increased demand, the Company saw a substantial increase in contracts in transit volume during the three months ended June 30, 2020. The increase in contract volume, coupled with the transition to working from home and additional employment verification procedures performed by lenders, have led to a backlog in contract funding. The Company has not observed any material changes in collectability trends during the period on these contracts.

Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts, which includes a reserve for expected credit losses. Accounts receivable balances due in excess of one year was $8.4 million at June 30, 2020 and $8.6 million at December 31, 2019 which are included in other assets in the condensed consolidated balance sheets.

The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risks characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to contracts in transit and determined that an allowance for doubtful accounts of $0.2 million was required at June 30, 2020. NaN allowance for doubtful accounts related to contracts in transit was required at December 31, 2019. Management additionally has evaluated the expected credit losses related to accounts receivable and determined that allowances of approximately $3.5 million for uncollectible accounts were required as of both June 30, 2020 and December 31, 2019.

The following table details the changes in the allowance for doubtful accounts (in thousands):


	Six Months Ended
	June 30,		June 30,
	2020		2019
Allowance for doubtful accounts:
Balance, beginning of period	$	3,537	$	4,398
Charged to bad debt expense		531		379
Deductions ⁽¹⁾		(611)		(131)
Balance, end of period	$	3,457	$	4,646

Table of Contents

(1)

These amounts primarily relate to the write off of uncollectable accounts after collection efforts have been exhausted.

Recently Adopted Accounting Pronouncements

In ~~July 2015,~~June 2016, the FASB issued ASU No. 2016-13, Financial ~~Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory~~Instruments - Credit Losses (Topic ~~330): Simplifying the Measurement of Inventory~~326) (“ASU ~~2015-11”~~2016-13”). This standard requires the use of a forward-looking expected loss impairment model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded through an allowance account and revises certain disclosure requirements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements, which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries when estimating the allowance. In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, which allows entities with an option to elect fair value for certain instruments upon adoption of Topic 326. The ~~amendments in the accounting~~ standard ~~replace the lower of cost or market test with a lower of cost and net realizable value test. The amendments in this ASU should be applied prospectively and are~~is effective for public companies for fiscal years, and interim ~~and annual~~ periods within those fiscal years, beginning after December 15, ~~2016.~~2019. The Company adopted ~~the amendments of this~~ ASU ~~as of~~2016-13 on January 1, ~~2017~~2020 and the adoption did not materially impact its condensed consolidated financial ~~statements or results of operations.~~statements.

In ~~January 2016,~~August 2018, the FASB issued ASU No. ~~2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities~~2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU ~~2016-01”~~2018-15”). This ~~ASU amends~~standard aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e., hosting arrangement) with the guidance on ~~the classification and measurement of financial instruments. Although~~capitalizing costs in ASC 350-40, Internal-Use Software. The ASU 2016-01 retains many current requirements, it significantly revises an entity’s accounting related to investments in equity securities, excluding those accounted for under the equity method of accountingpermits either a prospective or those that result in the consolidation of the investee. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. One of the amendments eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.retrospective transition approach. The standard will be effective for fiscal years, ~~beginning after December 15, 2017,~~ and interim periods within those fiscal ~~years.~~years, beginning after December 15, 2019. The Company ~~early~~ adopted ~~the amendments of this~~ ASU ~~as of~~2018-15 on January 1, ~~2017, which eliminated~~2020 using the ~~disclosure requirements discussed above,~~prospective transition approach and the adoption did not materially impact its condensed consolidated financial ~~statements or results of operations.~~statements.

In ~~November 2016,~~March 2020, the FASB issued ASU No. ~~2016-18, Statement of Cash Flows~~2020-04, Reference Rate Reform (Topic ~~230): Restricted Cash, a consensus of the FASB Emerging Issues Task Force~~848) (“ASU ~~2016-18”~~2020-04”). The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU do not provide a definition of restricted cash or

~~Table of Contents~~

~~restricted cash equivalents. The~~This standard, ~~will be~~ effective for ~~fiscal years beginning after~~reporting periods through December ~~15, 2017,~~31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., London Interbank Offered Rate (“LIBOR”)) with a new alternative reference rate. The guidance is applicable to investment securities, receivables, loans, debt, leases, derivatives and ~~interim periods within those fiscal years.~~hedge accounting elections and other contractual arrangements. The Company ~~early~~ adopted ~~the amendments of this~~ ASU 2020-04 as of January 1, ~~2017~~2020 and the adoption did not materially impact its condensed consolidated financial ~~statements or results of operations.~~statements.

Recently Issued Accounting Pronouncements

In ~~January 2017,~~December 2019, the FASB issued ASU No. ~~2017-01, Business Combinations~~2019-12, Income Taxes (Topic ~~805)~~740): ~~Clarifying~~Simplifying the ~~Definition of a Business~~Accounting for Income Taxes (“ASU ~~2017-01”~~2019-12”). This ~~ASU clarifies the definition of~~standard reduces complexity by removing specific exceptions to general principles related to intraperiod tax allocations, ownership changes in foreign investments, and interim period income tax accounting for year-to-date losses that exceed anticipated losses. This standard also simplifies accounting for franchise taxes that are partially based on income, transactions with a ~~business to exclude gross assets acquired (or disposed of)~~government that ~~have substantially all of their fair value concentrated~~result in a ~~single identifiable asset or group~~step up in the tax basis of ~~similar identifiable assets.~~goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The ~~ASU also updates the definition of the term “output” to be consistent with Accounting Standards Codification (“ASC”) Topic No. 606. The ASU~~standard is effective for ~~annual reporting periods beginning after December 15, 2017~~public companies for fiscal years, and interim periods within those ~~annual periods. The Company early adopted the amendments of this ASU as of January 1, 2017 and the adoption did not materially impact its consolidated financial statements or results of operations.~~

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual or any interim goodwill impairment tests in fiscal years, beginning after December 15, ~~2019 and must be applied prospectively.~~2020, with early adoption permitted. The ~~Company early adopted the amendments of this~~ ASU ~~as of January 1, 2017 and the adoption did not materially impact its consolidated financial statements~~permits either a retrospective basis or ~~results of operations.~~

~~Recently Issued Accounting Pronouncements~~

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The FASB has subsequently issued several related ASUs that clarified the implementation guidance for certain aspects of ASU 2014-09, which are effective upon the adoption of ASU 2014-09. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2017. The standard can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of adoption. To assess the impact of the ASU, the Company established an internal implementation team to review its current accounting policies and practices, identify all material revenue streams, assess the impact of the ASU on its material revenue streams and identify potential differences with current policies and practices. The Company’s internal implementation team is in the process of performing its initial review of the likely impacts that the application of the amendments in this ASU will have on its consolidated financial statements. The team has identified the Company’s material revenue streams to be the sale of new and used vehicles; the sale of parts, RV accessories, and supplies; the performance of vehicle maintenance and repair services; the arrangement of associated vehicle financing; the sale of insurance and emergency roadside assistance contracts; and the sale of club memberships. The team has continued to review a sample of associated contracts and other related documents, but currently, has not quantified and estimated impact of changes, if any, to its current revenue recognition policies and practices. The Company’s implementation team is continuing to evaluate the additional disclosure requirements of the ASU, as well as the change, if any, to the Company’s underlying accounting and financial reporting systems and processes necessary to support the recognition and disclosure requirements. The Company expects to identify and implement the necessary changes, if any, during 2017. The Company currently expects to adopt the amendments of this ASU as of January 1, 2018, as a cumulative effect adjustment as of the date of adoption, but will not make a final decision on the adoption method until later in 2017.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in this ASU relate to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of

~~Table of Contents~~

evaluating the impact that adoption will have on its consolidated balance sheet and statement of income. However, the Company expects that the adoption of the provisions of the ASU will have a significant impact on its consolidated balance sheet, as currently most of its real estate is leased via operating leases. Adoption of this ASU is required to be done using a modified retrospective transition approach.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendment addresses several specific cash flow issues with the objective of reducing the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of the provisions of ~~the~~this ASU will have on its consolidated financial statements.

~~In May 2017,~~

Table of Contents

2. Revenue

Contract Assets

As of June 30, 2020 and December 31, 2019, a contract asset of $5.4 million and $6.1 million, respectively, relating to RV service revenues was included in accounts receivable in the ~~FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope~~accompanying condensed consolidated balance sheets.

Deferred Revenues

As of ~~Modification Accounting (“ASU 2017-09”).~~June 30, 2020, the Company has unsatisfied performance obligations primarily relating to multi-year plans for its Good Sam Club, roadside assistance, Coast to Coast memberships, and magazine publication revenue streams. The ~~amendments in ASU 2017-09 require entities~~total unsatisfied performance obligation for these revenue streams at June 30, 2020 for the periods during which the Company expects to ~~apply modification accounting in Topic 718 only when changes to~~recognize the ~~terms or conditions of a share-based payment award result in changes to fair value, vesting conditions or the classification of the award~~amounts as equity or liability. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The guidance will be applied prospectively upon adoption. The Company does not expect the adoption will have a material impact on its consolidated financial statements or results of operations; however, the amount of the impact to equity-based compensation expense will depend on the terms specified in any new changes to the equity-based payment awards, if any. The Company plans to adopt this ASU on October 1, 2017.revenue are presented as follows (in thousands):


	As of
	June 30, 2020
2020	$	55,135
2021		47,149
2022		20,793
2023		10,538
2024		5,516
Thereafter		7,083
Total	$	146,214

3. Inventories ~~Net~~ and Floor Plan Payable

Inventories consisted of the following (in thousands):

September 30,

December 31,

2017

2016
New RV vehicles

$
931,016

$
727,634
Used RV vehicles

96,911

78,787
Parts, accessories and miscellaneous

176,211

102,833

$
1,204,138

$
909,254


	June 30,		December 31,
	2020		2019
Good Sam services and plans	$	14	$	590
New RVs		711,164		966,134
Used RVs		126,687		165,927
Products, parts, accessories and other		214,357		225,888
	$	1,052,222	$	1,358,539

New ~~and used vehicles~~RV inventory, included in ~~retail inventories are~~the RV and Outdoor Retail segment, is primarily financed by a floor plan ~~arrangements through~~credit agreement with a syndication of banks. The borrowings under the floor plan ~~notes~~credit agreement are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a wholly owned subsidiary of FreedomRoads, which operates the ~~Camping World~~RV dealerships, and bear interest at one-month ~~London Interbank Offered Rate (“LIBOR”)~~LIBOR plus 2.05% as of ~~September~~June 30, ~~2017~~2020 and ~~2.05%~~2.15% as of December 31, ~~2016.~~2019. LIBOR ~~as defined,~~ was ~~1.24%~~0.17% at ~~September~~June 30, ~~2017~~2020 and ~~0.62%~~1.71% as of December 31, ~~2016. Principal~~2019. The floor plan borrowings are tied to specific vehicles and principal is due upon the sale of the related ~~vehicle.~~vehicle or upon reaching certain aging criteria.

~~In August 2015,~~As of June 30, 2020 and December 31, 2019, FR ~~entered into a Sixth~~maintained floor plan financing through the Seventh Amended and Restated Credit Agreement ~~for floor plan financing~~ (“Floor Plan Facility”) ~~to extend the maturity date to August 2018.~~. On ~~July 1, 2016,~~October 8, 2019, FR entered into a Second Amendment ~~No. 1~~ to the ~~Sixth~~Seventh Amended and Restated Credit Agreement ~~for the Floor Plan Facility to, among other things, increase the available amount under the Floor Plan Facility from $880.0 million to $1.18 billion, amend the~~(the “Second Amendment”). The applicable borrowing rate margin on LIBOR and base rate loans ~~ranging~~ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at ~~FR, and extend the maturity date to~~FR. The Floor Plan Facility at June 30, ~~2019. The~~2020 allowed FR to borrow (a) up to $1.38 billion under a floor plan facility, (b) up to $15.0 million under a letter of credit ~~commitment within~~facility and (c) up to a maximum amount outstanding of $54.0 million under the revolving line of credit, which maximum amount outstanding further decreases by $3.0 million on the last day of each fiscal quarter. The maturity date of the Floor Plan Facility ~~remained~~is March 15, 2023.

On May 12, 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement (“Third Amendment”) that provides FR with a one-time option to request a temporary four-month

Table of Contents

reduction (“Current Ratio Reduction Period”) of the minimum consolidated current ratio at ~~$15.0 million.~~ any time during 2020 and the first seven days of 2021. FR has not yet exercised that option. During the Current Ratio Reduction Period, the applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 3.00% and 0.55% and 1.50%, respectively, based on the Consolidated Current Ratio at FR. Effective May 12, 2020 through July 31, 2020, FR is not allowed to draw further Revolving Credit Loans (as defined in the Floor Plan Facility).

The Floor Plan Facility includes ana flooring line aggregate interest reduction (“FLAIR”) offset account that allows the Company to transfer cash as an offset to the payable under the Floor Plan Facility. These transfers reduce the amount of liability outstanding under the floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the FLAIR offset account into the Company’s operating cash accounts. ~~When~~As a result of using the ~~Company uses the floor plan~~FLAIR offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of ~~income.~~operations. As of June 30, 2020 and December 31, 2019, FR had $216.9 million and $87.0 million, respectively, in the FLAIR offset account. The Third Amendment raised the Applicable FLAIR Maximum Percentage (as defined in the Floor Plan Facility) from 20% to 30% for the period of May 12, 2020 through August 31, 2020.

Management has determined that the credit agreement governing the Floor Plan Facility includes subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at June 30, 2020 that would trigger a subjective acceleration clause. Additionally, the credit agreement governing the Floor Plan Facility contains certain financial covenants. FR was in compliance with all debt covenants at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016.~~2019. On June 29, 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit.

~~Table of Contents~~

~~At September 30, 2017~~The following table details the outstanding amounts and ~~December 31, 2016, the principal amount outstanding~~available borrowings under the Floor Plan Facility ~~was $799.7 million~~as of June 30, 2020 and ~~$625.2 million, respectively, which was net~~December 31, 2019 (in thousands):


	June 30,		December 31,
	2020		2019
Floor Plan Facility
Notes payable - floor plan:
Total commitment	$	1,379,750	$	1,379,750
Less: borrowings, net		(470,871)		(848,027)
Less: flooring line aggregate interest reduction account		(216,850)		(87,016)
Additional borrowing capacity		692,029		444,707
Less: accounts payable for sold inventory		(88,556)		(27,892)
Less: purchase commitments		(31,993)		(8,006)
Unencumbered borrowing capacity	$	571,480	$	408,809

Revolving line of credit:	$	54,000	$	60,000
Less: borrowings		(20,885)		(40,885)
Less: temporary limitation on borrowing through July 31, 2020		(33,115)		—
Additional borrowing capacity	$	—	$	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

4. Restructuring and Long-lived Asset Impairment

Restructuring

On September 3, 2019, the board of directors of CWH approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service RVs at a sufficient capacity (the “Outdoor Lifestyle Locations”). Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company has closed or divested 39

Table of Contents

Outdoor Lifestyle Locations, 3 distribution centers, and 19 specialty retail locations through June 30, 2020. NaN of the ~~floor plan~~aforementioned closed distribution centers was reopened during the three months ended June 2020 and repurposed for online order fulfillment. The Company expects that the remaining limited number of store closures and/or divestitures will be completed by December 31, 2020. As part of the 2019 Strategic Shift, the Company evaluated the impact on its supporting infrastructure and operations, which included rationalizing inventory levels and composition, closing certain distribution centers, and realigning other resources. The Company had a reduction of headcount and labor costs for those locations that were closed or divested and the Company incurred material charges associated with the activities contemplated under the 2019 Strategic Shift.

The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift to be in the range of $78.6 million to $88.6 million. The breakdown of the estimated restructuring costs are as follows:

●

one-time employee termination benefits of $1.2 million, all of which has been incurred through June 30, 2020;

●

lease termination costs of $15.0 million to $20.0 million, of which $7.0 million has been incurred through June 30, 2020;

●

incremental inventory reserve charges of $42.4 million, all of which has been incurred through June 30, 2020; and

●

other associated costs of $20.0 million to $25.0 million, of which $14.4 million has been incurred through June 30, 2020.

Through June 30, 2020, the Company has incurred $14.4 million of such other associated costs primarily representing labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. The additional amount of $5.6 million to $10.6 million represents similar costs that may be incurred during the last six months of 2020 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842, Leases prior to lease termination. The Company intends to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases. Lease costs may continue to be incurred after December 31, 2020 on these leases if the Company is unable to terminate the leases under acceptable terms or offset ~~account~~the lease costs through sublease arrangements. The foregoing lease termination cost estimate represents the expected cash payments to terminate certain leases, but does not include the gain or loss from derecognition of ~~$91.1~~the related operating lease assets and liabilities, which is dependent on the particular leases that will be terminated.

The following table details the costs incurred during the three and six months ended June 30, 2020 associated with the 2019 Strategic Shift (in thousands):


	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
Restructuring costs:
One-time termination benefits⁽¹⁾	$	51	$	231
Lease termination costs⁽²⁾		656		1,245
Incremental inventory reserve charges⁽³⁾		57		543
Other associated costs⁽⁴⁾		4,483		10,099
Total restructuring costs	$	5,247	$	12,118

(1)	These costs were primarily in costs applicable to revenues – products, service and other, in the condensed consolidated statements of operations.

(2)	These costs were included in lease termination charges in the condensed consolidated statements of operations. This reflects termination fees paid, net of any gain from derecognition of the related operating lease assets and liabilities.

(3)	These costs were included in costs applicable to revenue – products, service and other in the condensed consolidated statements of operations.

Table of Contents

(4)

Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. For the three and six months ended June 30, 2020, costs of approximately $0.1 million and $0.4 million were included in costs applicable to revenue – products, service and other and $4.4 million and $9.7 million were included in selling, general, and administrative expenses, respectively, in the condensed consolidated statements of operations.

The following table details changes in the restructuring accrual associated with the 2019 Strategic Shift (in thousands):


	One-time		Lease		Other
	Termination		Termination		Associated
	Benefits		Costs⁽¹⁾		Costs		Total
Balance at June 30, 2019	$	—	$	—	$	—	$	—
Charged to expense		1,008		1,350		4,321		6,679
Paid or otherwise settled		(286)		(1,350)		(4,036)		(5,672)
Balance at December 31, 2019		722		—		285		1,007
Charged to expense		231		5,690		10,099		16,020
Paid or otherwise settled		(879)		(5,690)		(9,103)		(15,672)
Balance at June 30, 2020	$	74	$	—	$	1,281	$	1,355

(1)

Lease termination costs exclude the $1.3 million and the $4.4 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019 and for the six months ended June 30, 2020, respectively.

The Company evaluated the requirements of ASC No. 205-20, Presentation of Financial Statements – Discontinued Operations relative to the 2019 Strategic Shift and determined that discontinued operations treatment is not applicable. Accordingly, the results of operations of the locations impacted by the 2019 Strategic Shift are reported as part of continuing operations in the accompanying condensed consolidated financial statements.

Long-lived Asset Impairment

During the three months ended March 31, 2020, the Company had indicators of impairment of the long-lived assets for certain of its locations. For locations that failed the recoverability test based on an analysis of undiscounted cash flows, the Company estimated the fair value of the locations based on a discounted cash flow analysis. After performing the long-lived asset impairment test for these locations, the Company determined that 10 locations within the RV and Outdoor Retail segment had long-lived assets that were impaired. The long-lived asset impairment charge, subject to limitations described below, was calculated as the amount that the carrying value of the locations exceeded the estimated fair value. The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort. For most of these locations, the operating lease right-of-use assets and furniture and equipment were written down to their individual fair values and the remaining impairment charge was allocated to the remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.

For the three months ended June 30, 2020, the Company experienced no indicators of impairment of long-lived assets and recorded 0 long-lived asset impairment charges. During the six months ended June 30, 2020, the Company recorded the following long-lived asset impairment charges: $2.4 million related to leasehold improvements, $2.6 million related to furniture and ~~$68.5~~equipment, and $1.6 million ~~respectively.~~operating lease right-of-use assets. Of the $6.6 million long-lived asset impairment charge during the six months ended June 30, 2020, $6.5 million related to the 2019 Strategic Shift discussed above.

Table of Contents

5. Goodwill and Intangible Assets

Goodwill

The following is a summary of changes in the Company’s goodwill by ~~reportable segments~~segment for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 (in thousands):

Consumer

Services and


Plans

Retail

Consolidated
Balance as of December 31, 2016

$
49,944

$
103,161

$
153,105
Acquisitions (1)

—

175,297

175,297
Balance as of September 30, 2017

$
49,944

$
278,458

$
328,402


	Good Sam
	Services and		RV and
	Plans		Outdoor Retail		Consolidated
Balance as of December 31, 2019 (excluding impairment charges)	$	70,713	$	558,065	$	628,778
Accumulated impairment charges		(46,884)		(194,953)		(241,837)
Balance as of December 31, 2019		23,829		363,112		386,941
Acquisitions ⁽¹⁾		—		108		108
Balance as of June 30, 2020	$	23,829	$	363,220	$	387,049

(1)

⁽¹⁾

~~See~~Represents measurement period adjustments relating to prior period acquisitions (see Note 911 — ~~Acquisitions.~~

Acquisitions).

The Company evaluates goodwill for impairment on an annual basis ~~during~~as of the beginning of the fourth quarter, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite-lived intangible assets might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is required to perform the ~~quantitative~~first step of a two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds its fair value.

During the three months ended March 31, 2020, the Company determined that a triggering event for an interim goodwill impairment test of its RV and Outdoor Retail reporting unit had occurred as a result of the decline in the market price of the Company’s Class A common stock and the potential impact of COVID-19 on the Company’s business. As a result of the interim goodwill impairment test, the Company determined that the fair value of the RV and Outdoor Retail reporting unit was substantially above its respective carrying amount, therefore, 0 goodwill impairment was recorded. For the three months ended June 30, 2020, the Company determined that there were no triggering events for an interim goodwill impairment test of its reporting units.

Intangible Assets

Finite-lived intangible assets and related accumulated amortization consisted of the following at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 (in thousands):

September 30, 2017

Cost or

Accumulated


Fair Value

Amortization

Net
Trademarks and trade names

$
28,839

$
(420)

$
28,419
Membership and customer lists

10,778

(7,118)

3,660
Websites

5,990

(97)

5,893

$
45,607

$
(7,635)

$
37,972

December 31, 2016

Cost or

Accumulated


Fair Value

Amortization

Net
Membership and customer lists

$
9,485

$
(6,099)

$
3,386

$
9,485

$
(6,099)

$
3,386

The trademarks and trade names have useful lives of fifteen years. The membership and customer lists have weighted-average useful lives of approximately five years. The websites have useful lives of ten years.


	June 30, 2020
	Cost or		Accumulated
	Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership and customer lists	$	9,140	$	(8,325)	$	815
RV and Outdoor Retail:
Customer lists and domain names		2,065		(1,815)		250
Trademarks and trade names		28,955		(5,823)		23,132
Websites		6,140		(2,236)		3,904
	$	46,300	$	(18,199)	$	28,101

1417

Table of Contents

	December 31, 2019
	Cost or		Accumulated
	Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership and customer lists	$	9,140	$	(7,972)	$	1,168
RV and Outdoor Retail:
Customer lists and domain names		2,065		(1,768)		297
Trademarks and trade names		28,955		(4,862)		24,093
Websites		5,990		(1,841)		4,149
	$	46,150	$	(16,443)	$	29,707

6. Long-Term Debt

~~Long-term~~Outstanding long-term debt ~~consists~~consisted of the following (in thousands):

September 30,

December 31,

2017

2016
Term Loan Facility (1)

$
716,907

$
626,753
Less: current portion

(7,400)

(6,450)

$
709,507

$
620,303


	June 30,		December 31,
	2020		2019
Term Loan Facility ⁽¹⁾	$	1,134,391	$	1,148,115
Finance Lease Liabilities		28,192		—
Real Estate Facility ⁽²⁾		18,472		19,521
Subtotal		1,181,055		1,167,636
Less: current portion		(15,828)		(14,085)
Total	$	1,165,227	$	1,153,551

(1)

⁽¹⁾

Net of ~~$5.9~~$3.8 million and ~~$6.3~~$4.3 million of original issue discount at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively, and ~~$11.7~~$9.3 million and ~~$11.9~~$10.7 million of finance costs at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

(2)	Net of $0.2 million and $0.2 million of finance costs at June 30, 2020 and December 31, 2019, respectively.

~~Existing~~ Senior Secured Credit Facilities

~~On November 8, 2016,~~As of June 30, 2020 and December 31, 2019, CWGS Group, LLC (the “Borrower”), a ~~wholly owned~~wholly-owned subsidiary of CWGS, LLC, ~~entered into~~was party to a ~~new $680.0 million~~credit agreement (as amended from time to time, the “Credit Agreement”) for a senior secured credit facility ~~(“Existing Senior Secured Credit Facilities”) and used the proceeds to repay its previous senior secured credit facilities (“Previous Senior~~(the “Senior Secured Credit Facilities”). The ~~Existing~~ Senior Secured Credit Facilities ~~consists~~consist of a ~~seven-year $645.0 million Term Loan Facility (“Existing Term~~$1.19 billion term loan facility (the “Term Loan Facility”) and a ~~five-year~~ $35.0 million revolving credit facility ~~(“Existing Revolving~~(the “Revolving Credit Facility”). On March 17, 2017, CWGS Group, LLC entered into an amendment to the Existing Senior Secured Credit Facilities to increase the Existing Term Loan Facility by $95.0 million to $740.0 million. The net proceeds from the additional borrowings were intended to be used by FreedomRoads to purchase dealerships. No other terms of the credit agreement governing our Existing Senior Secured Credit Facilities were amended in connection with the amendment. The Existing Term Loan Facility includes mandatory amortization at 1% per annum in equal quarterly installments.

Interest on the Existing Term Loan Facility floats at the Company’s option at a) LIBOR multiplied by the statutory reserve rate (such product, the “Adjusted LIBOR Rate”), subject to a 0.75% floor, plus an applicable margin of 3.75%, or b) an Alternate Base Rate (“ABR”) equal to 2.75% per annum plus the greater of: (i) the prime rate published by The Wall Street Journal (the “WSJ Prime Rate”), (ii) federal funds effective rate plus 0.50%, or (iii) one-month Adjusted LIBOR Rate plus 1.00%, subject to a 1.75% floor. Interest on borrowings under the Existing Revolving Credit Facility is at the Company’s option of a) 3.25% to 3.50% per annum subject to a 0.75% floor in the case of a Eurocurrency loan, or b) 2.25% to 2.50% per annum plus the greater of the WSJ Prime Rate, federal funds effective rate plus 0.50%, or one-month Adjusted LIBOR Rate plus 1.00% in the case of an ABR loan, based on the Company’s total leverage ratio as defined in the Existing Senior Secured Credit Facilities. The Company also pays a commitment fee of 0.5% per annum on the unused amount of the Existing Senior Secured Credit Facility. Reborrowings under the Existing Term Loan Facility are not permitted.

Following the end of each fiscal year, commencing with the fiscal year ending December 31, 2017, the Company is required to prepay the term loan borrowings in an aggregate amount equal to 50% of excess cash flow, as defined in the Existing Senior Secured Credit Facilities, for such fiscal year. The required percentage prepayment of excess cash flow is reduced to 25% if the total leverage ratio, as defined, is 1.50 to 1.00 or greater but less than 2.00 to 1.00. If the total leverage ratio is less than 1.50 to 1.00, no prepayment of excess cash flow is required.

~~The Existing Revolving Credit Facility matures on November 8, 2021, and the Existing Term Loan Facility matures on November 8, 2023.~~ The funds available under the ~~Existing~~ Revolving Credit Facility may be utilized for borrowings or letters of credit; however, a maximum of $15.0 million may be allocated to such letters of credit. The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023. The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.0 million. Additionally, the Company is required to prepay the term loan borrowings in an aggregate amount equal to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio. On June 30, 2020, the Borrower made a $9.6 million voluntary principal payment on the Term Loan Facility.

Table of Contents

As of ~~September~~June 30, ~~2017,~~2020, the average interest rate on the term debt was 4.98%. As of September 30, 2017 and December 31, 2016, the Company had available borrowings of $31.8 million and $31.8 million, respectively, and letters of credit in the aggregate amount of $3.2 million and $3.2 million outstanding, respectively, under the Existing Revolving Credit Facility. As of September 30, 2017 and December 31, 2016, the principal balance of $734.5 million and $645.0 million, respectively, was outstanding

~~Table of Contents~~

~~under the Existing~~ Term Loan Facility was 4.12%. The following table details the outstanding amounts and ~~no amounts were outstanding on~~available borrowings under the ~~Existing Revolving Credit Facility in either period.~~

~~CWGS, LLC and CWGS Group, LLC have no revenue-generating operations of their own. Their ability to meet the financial obligations associated with the Existing~~ Senior Secured Credit Facilities ~~is dependent on the earnings and cash flows~~as of ~~its operating subsidiaries, primarily Good Sam Enterprises, LLC and FR, and their ability to upstream dividends.~~ (in thousands):


	June 30,		December 31,
	2020		2019
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,195,000	$	1,195,000
Less: cumulative principal payments		(47,513)		(31,898)
Less: unamortized original issue discount		(3,790)		(4,320)
Less: finance costs		(9,306)		(10,667)
		1,134,391		1,148,115
Less: current portion		(11,991)		(11,991)
Long-term debt, net of current portion	$	1,122,400	$	1,136,124
Revolving Credit Facility:
Total commitment	$	35,000	$	35,000
Less: outstanding letters of credit		(5,622)		(4,112)
Less: availability reduction due to Total Leverage Ratio		—		(21,622)
Additional borrowing capacity	$	29,378	$	9,266

The ~~Existing~~ Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR and its subsidiaries. The ~~Existing Senior Secured~~ Credit ~~Facilities contain~~Agreement contains certain restrictive covenants ~~including,~~pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the prepayment of dividends subject to certain limitations and minimum operating covenants. Additionally, management has determined that the Senior Secured Credit Facilities include subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at June 30, 2020 that would trigger a subjective acceleration clause.

The Credit Agreement requires the Borrower and its subsidiaries to comply on a quarterly basis with a maximum Total Leverage Ratio (as defined in the Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding) is greater than 30% of the aggregate amount of the Revolving Lenders’ Revolving Commitments (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding), as defined in the Credit Agreement. As of June 30, 2020, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At June 30, 2020, the Company would have met this covenant if the Company had exceeded the 30% threshold. The Company was in compliance with all applicable debt covenants at June 30, 2020 and December 31, 2019.

Finance Lease Liabilities

The Company’s finance lease liabilities consist of 2 real estate parcels with long-term leases and IT equipment contracts, which contain lease components that extend through the majority of the useful life of the asset. Certain IT equipment contracts also contain purchase options at the end of the term, which are likely to be exercised (see Note 7 — Lease Obligations).

Real Estate Facility

As of June 30, 2020 and December 31, 2019, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), were party to a loan and security agreement for a real estate credit facility with an aggregate maximum principal capacity of $21.5 million (“Real Estate Facility”). Borrowings under the Real Estate Facility are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. The Real Estate Facility may be used to finance the acquisition of real estate assets. The Real Estate Facility is secured by first priority security interest on the real

Table of Contents

estate assets acquired with the proceeds of the Real Estate Facility (“Real Estate Facility Properties”). The Real Estate Facility matures on October 31, 2023.

As of June 30, 2020, a principal balance of $18.7 million was outstanding under the Real Estate Facility, and the average interest rate was 4.09% with a commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facility. As of June 30, 2020, the Company had 0 available capacity under the Real Estate Facility.

In August 2020, the Company entered into an agreement to lease an owned property for a former distribution center in Greenville, North Carolina to a third party. By entering into this lease, the Company was required to pay down $10.3 million of the Real Estate Facility in August 2020.

Management has determined that the credit agreement governing the Real Estate Facility includes subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at June 30, 2020 that would trigger a subjective acceleration clause. Additionally, the Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants. The Company was in compliance with all debt covenants at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016.~~2019.

~~5. Right to Use Liabilities~~

The Company leases operating facilities throughout the United States. The Company analyzes all leases in accordance with Accounting Standards Codification (“ASC”) 840 — Leases. The Company has included the right to use assets in property and equipment, net, as follows (in thousands):

September 30,

December 31,

2017

2016
Right to use assets

$
10,673

$
10,673
Accumulated depreciation

(861)

(667)

$
9,812

$
10,006

7. Lease Obligations

The following ~~is a schedule by year~~presents certain information related to the costs for leases ($ in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	30,017	$	30,616	$	61,017	$	60,818
Finance lease cost:
Amortization of finance lease assets		1,048		—		1,048		—
Interest on finance lease liabilities		407		—		407		—
Short-term lease cost		390		873		879		1,586
Variable lease cost		6,028		550		11,056		1,102
Sublease income		(455)		(211)		(867)		(516)
Net lease costs	$	37,435	$	31,828	$	73,540	$	62,990

The following presents components of lease assets and lease liabilities, and the ~~future changes~~associated financial statement line items ($ in ~~the right to use liabilities as of September 30, 2017 (in~~ thousands):

2017

$
218
2018

583
2019

486
2020

486
2021

487
Thereafter (1)

13,813
Total minimum lease payments

16,073
Amounts representing interest

(5,842)
Present value of net minimum right to use liability payments

$
10,231


		June 30,		December 31,
Lease Assets and Liabilities	Financial Statement Line Items	2020		2019
Operating lease assets	Operating lease assets	$	789,539	$	807,537
Finance lease assets	Property and equipment, net		29,036		—
Total lease assets, net		$	818,575	$	807,537

Operating lease liabilities - current	Current portion of operating lease liabilities	$	60,315	$	58,613
Finance lease liabilities - current	Current portion of long-term debt		1,991		—
Operating lease liabilities - non-current	Operating lease liabilities, net of current portion		823,929		843,312
Finance lease liabilities - non-current	Long-term debt, net of current portion		26,201		—
Total lease liabilities		$	912,436	$	901,925

⁽¹⁾

~~Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent.~~

6.Table of Contents

The following presents supplemental cash flow information related to leases ($ in thousands):


	Six Months Ended June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases	$	61,248	$	60,605
Operating cash flows for finance leases		267		—
Financing cash flows for finance leases		1,725		—
Lease assets obtained in exchange for lease liabilities:
New, remeasured, and terminated operating leases	$	12,140	$	43,027
New finance leases		29,522		—

8. Fair Value Measurements

Accounting guidance for fair value measurements establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

For cash and cash equivalents; accounts receivable; other current assets; accounts payable; notes payable — floor plan, net; and other current liabilities the amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.

~~Table of Contents~~

There have been no0 transfers of assets or liabilities between the fair value measurement levels and there were no0 material re-measurements to fair value during ~~2017~~2020 and ~~2016~~2019 of assets and liabilities that are not measured at fair value on a recurring basis.

The following table presents the reported carrying value and fair value information for the Company’s debt instruments. The fair values shown below for the ~~Existing Term Loan Facility and Previous~~ Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2).

Fair Value

9/30/2017

12/31/2016
($ in thousands)

Measurement

Carrying Value

Fair Value

Carrying Value

Fair Value
Term Loan Facility

Level 2

$
716,907

$
740,876

$
626,753

$
649,838

, and the fair values shown below for the Floor Plan Facility, the Revolving Line of Credit, and the Real Estate Facility are estimated by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.


	Fair Value	June 30, 2020				December 31, 2019
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	1,134,391	$	1,044,213	$	1,148,115	$	1,104,947
Floor Plan Facility Revolving Line of Credit	Level 2		20,885		20,702		40,885		41,299
Real Estate Facility	Level 2		18,472		17,842		19,521		21,030

7.9. Commitments and Contingencies

Litigation

On October 19, 2018, a purported stockholder of the Company filed a putative class action lawsuit, captioned Ronge v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Ronge Complaint”). On October 25, 2018, a different purported stockholder of the Company filed a putative class action lawsuit, captioned Strougo v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Strougo Complaint”).

The Ronge and Strougo Complaints were consolidated and lead plaintiffs (the “Ronge Lead Plaintiffs”) appointed by the court. On February 27, 2019, the Ronge lead plaintiffs filed a consolidated complaint against

Table of Contents

the Company, ~~holds~~ certain ~~property and equipment under rental agreements and operating leases that have varying expiration dates. A majority~~ of its ~~operating facilities are leased from unrelated~~officers, directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C., and the underwriters of the May and October 2017 secondary offerings of the Company’s Class A common stock (the “Consolidated Complaint”). The Consolidated Complaint alleges violations of Sections 11 and 12(a)(2) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading related to the business, operations, and management of the Company. Additionally, it alleges that certain of the Company’s officers and directors, Crestview Partners II GP, L.P., and Crestview Advisors, L.L.C. violated Section 15 of the Securities Act of 1933 and Section 20(a) of the Securities Exchange Act of 1934, as amended, by allegedly acting as controlling persons of the Company. The lawsuit brings claims on behalf of a putative class of purchasers of the Company’s Class A common stock between March 8, 2017 and August 7, 2018, and seeks compensatory damages, rescission, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper. On May 17, 2019, the Company, along with the other defendants, moved to dismiss the Consolidated Complaint. On March 12, 2020, Ronge Lead Plaintiffs filed an Amended Consolidated Complaint, adding those allegations contained in the Geis Complaint (defined below). On March 13, Ronge Lead Plaintiffs filed an unopposed motion for preliminary approval of class action settlement, which the Court granted on April 7, 2020. On August 5, 2020, the Court granted final approval of the class action settlement and the case was dismissed with prejudice. The settlement is expected to be paid directly by the Company’s applicable insurance policies.

On December 12, 2018, a putative class action complaint styled International Union of Operating Engineers Benefit Funds of Eastern Pennsylvania and Delaware v. Camping World Holdings Inc., et al. was filed in the Supreme Court of the State of New York, New York County, on behalf of all purchasers of Camping World Class A common stock issued pursuant and/or traceable to a secondary offering of such securities in October 2017 (“IUOE Complaint”). The IUOE Complaint names as defendants the Company, and certain of its officers and directors, among others, and alleges violations of Sections 11, 12(a), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading and seeks compensatory damages, including prejudgment and post-judgement interest, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper, including rescission. On February 28, 2019, the Company, along with the other defendants, moved to dismiss this action. The parties ~~throughout~~argued the merits of defendants’ motion to dismiss before the Supreme Court of the State of New York, Commercial Division, on September 6, 2019. The Court granted in part and denied in part the motion to dismiss on April 22, 2020. On July 13, 2020, the parties entered into a confidential settlement agreement resolving the named plaintiff’s claims. The putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved at the Settlement Hearing on August 5, 2020. The Company expects to file a joint stipulation of dismissal with the named plaintiff in the Supreme Court of the State of New York in light of the settlement agreement in the Ronge case.

On February 22, 2019, a putative class action complaint styled Daniel Geis v. Camping World Holdings, Inc., et al. was filed in the Circuit Court of Cook County, Illinois, Chancery Division, on behalf of all purchasers of Camping World Class A common stock in and/or traceable to the Company’s initial public offering on October 6, 2016 (“Geis Complaint”). The Geis Complaint names as defendants the Company, certain of its officers and directors, and the underwriters of the offering, and alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading. The Geis Complaint seeks compensatory damages, prejudgment and post-judgment interest, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On April 19, 2019, the Company, along with the other defendants, moved to dismiss this action. The parties argued the merits of defendants’ motion to dismiss before the Circuit Court of Cook County, Illinois, Chancery Division on August 20, 2019. On August 26, 2019, the Court stayed the Geis Complaint pending resolution of the motion to dismiss the Consolidated Complaint that is pending in the United ~~States.~~States District Court for the Northern District of Illinois. The Geis plaintiff became a plaintiff in Ronge, and the Geis putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved on August 5, 2020. The Company expects to file a joint stipulation of dismissal of the Geis complaint in light of the settlement agreement in the Ronge case.

Table of Contents

On March 5, 2019, a shareholder derivative suit styled Hunnewell v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading (the “Hunnewell Complaint”). The Hunnewell Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks restitutionary and/or compensatory damages, disgorgement of all management fees, advisory fees, expenses and other fees paid by the Company during the period in question, disgorgement of profits pursuant to the alleged insider trading, attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On April 17, 2019, a shareholder derivative suit styled Lincolnshire Police Pension Fund v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”). The LPPF Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks compensatory damages, extraordinary equitable and/or injunctive relief, restitution and disgorgement, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On May 30, 2019, the Court granted the parties’ joint motion to consolidate the Hunnewell and LPPF Complaints (as well as any future filed actions relating to the subject matter) and stay the newly consolidated action pending the resolution of defendants’ motion to dismiss the Consolidated Complaint pending in the United States District Court for the Northern District of Illinois.

On August 6, 2019, 2 shareholder derivative suits, styled Janssen v. Camping World Holdings, Inc., et al., and Sandler v. Camping World Holdings, Inc. et al., were filed in the U.S. District Court of Delaware. Both actions name the Company as a nominal defendant, and name certain of the Company’s officers and directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. as defendants, and allege: (i) violations of Section 14(a) of the Securities Exchange Act for issuing proxy statements that allegedly omitted material information and allegedly included materially false and misleading financial statements; (ii) violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, seeking contribution for causing the Company to issue allegedly false and misleading statements and/or allegedly omit material information in public statements and/or Company filings concerning the Company’s financial performance, the effectiveness of internal controls to ensure accurate financial reporting, and the success and profitability of the integration and rollout of Gander Outdoors (now Gander RV) stores; (iii) breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement for allegedly causing or allowing the Company to disseminate to Camping World shareholders materially misleading and inaccurate information through the Company’s SEC filings; and (iv) breach of fiduciary duties for alleged insider selling and misappropriation of information (together, the “Janssen and Sandler Complaints”). The Janssen and Sandler Complaints seek restitutionary and/or compensatory damages, injunctive relief, disgorgement of all profits, benefits, and other compensation obtained by the certain of the Company’s officers and directors, attorneys’ fees and costs, and any other and further relief the court deems just and proper. We are only a nominal defendant in the Janssen and Sandler Complaints. On September 25, 2019, the Court granted the parties’ joint motion to consolidate the action and stay the action pending resolution of the motion to dismiss the Consolidated Complaint that is pending in the United States District Court for the Northern District of Illinois.

No assurance can be made that these or similar suits will not result in a material financial exposure in excess of insurance coverage, which could have a material adverse effect upon the Company’s financial condition and results of operations.

From time to time, the Company is involved in other litigation arising in the normal course of business operations. ~~The Company does not believe it is involved in any litigation that requires disclosure or will have a material adverse effect on its results~~

Table of ~~operations or financial position.~~Contents

8.10. Statement of Cash Flows

Supplemental disclosures of cash flow information for the following periods (in thousands): were as follows:


	Nine Months Ended
	September 30,		September 30,
	2017		2016
Cash paid (received) during the period for:

					Six Months Ended
					June 30,		June 30,
					2020		2019
Cash paid during the period for:
Interest	$	47,374	$	50,705	$	35,059	$	55,250
Income taxes		25,660		1,354		783		1,620
Non-cash investing activities:
Derecognized property and equipment for leases that qualified as operating leases after completion of construction		—		(19,958)
Property and equipment acquired through third-party capital lease arrangements				2,007
Leasehold improvements paid by lessor		857		—		24		10,353
Vehicles transferred to property and equipment from inventory		1,605		530		161		383
Portion of acquisition purchase price paid through issuance of Class A common stock		5,720		—
Capital expenditures in accounts payable and accrued liabilities						1,372		5,141
Non-cash financing activities:
Derecognized right to use liabilities for leases that qualified as operating leases after completion of construction		—		(20,056)
Third-party capital lease arrangements to acquire property and equipment				2,007
Non-cash distribution of equity interest in AutoMatch USA, LLC, an indirect wholly-owned subsidiary of the Company				(38,838)
Par value of Class A common stock issued in exchange for common units in CWGS, LLC		66		—		1		—
Par value of Class A common stock issued for vested restricted stock units		—		—		2		1
Par value of Class A common stock issued for acquisition		1		—

~~Table of Contents~~

9.11. Acquisitions

~~Dealerships and Consumer Shows~~

During the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016,~~2020, the Company did not acquire any businesses. During the six months ended June 30, 2019, subsidiaries of the Company acquired the assets of ~~multiple dealership locations and consumer shows.~~3 RV dealerships that constituted businesses under accounting rules. The Company used a combination of cash and floor plan financing proceeds from the May 2017 Public Offering (defined and described in Note 13 — Stockholders’ Equity), and additional borrowing on the Existing Term Loan Facility in March 2017 (see Note 4 — Long-term Debt) to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new RV and Outdoor Retail locations to expand its business and grow its customer base. The acquired businesses were recorded at their estimated fair values under the acquisition method of accounting. The balance of the purchase prices in excess of the fair values of net assets acquired were recorded as goodwill.

During the six months ended June 30, 2019, the RV and Outdoor Retail segment acquired the assets of RV dealerships for an aggregate purchase price of approximately $38.6 million. The purchases were partially funded through $8.4 million of borrowings under the Floor Plan Facility. For the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, concurrent with the acquisition of dealership businesses,~~2019, the Company purchased real ~~properties for $12.2~~property of $0.7 million ~~and $12.9 million, respectively,~~ from parties related to the sellers of the ~~dealership~~ businesses. ~~For the nine months ended September 30, 2017 and 2016, the Company sold other real properties to a third party in sale-leaseback transactions for $6.0 million and $7.3 million, respectively.~~

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships, retail and consumer shows consist of the following:

Nine Months Ended September 30,

Estimated
($ in thousands)

2017

2016

Life
Tangible assets (liabilities) acquired (assumed):

Accounts receivable

$
1,306

$
944

Inventory

98,869

29,713

Property and equipment

835

635

Other assets

72

142

Accrued liabilities

(3,019)

(2,231)

Other liabilities

(75)

Total tangible net assets acquired

98,063

29,128

Intangible assets acquired:

Membership and customer lists

793

2,774

4-7 years
Total intangible assets acquired

793

2,774

Goodwill

143,788

35,786

Purchase price

242,644

67,688

Inventory purchases financed via floor plan

(79,321)

(22,265)

Cash payment net of floor plan financing

$
163,323

$
45,423


	Six Months Ended June 30,
($ in thousands)	2020		2019
Tangible assets (liabilities) acquired (assumed):
Inventories, net	$	(108)	$	13,895
Prepaid expenses and other assets		—		96
Property and equipment, net		—		158
Accounts payable		—		(62)
Other liabilities		—		(38)
Total tangible net assets acquired		(108)		14,049
Goodwill		108		24,559
Purchase price		—		38,608
Cash paid for acquisitions, net of cash acquired		—		38,608
Inventory purchases financed via floor plan		—		(8,416)
Cash payment net of floor plan financing	$	—	$	30,192

~~The~~For the six months ended June 30, 2020, the fair values above ~~are preliminary as they are subject to~~represent measurement period adjustments for upvaluation of acquired inventories relating to ~~one~~dealership acquisitions during the year ~~from~~ended

Table of Contents

December 31, 2019. The primary items that generated the ~~date of acquisition as new information is obtained about facts and circumstances that existed as~~goodwill are the value of the ~~acquisition date. All of~~expected synergies between the acquired ~~goodwill~~businesses and the Company and the acquired assembled workforce, neither of which qualify for recognition as a separately identified intangible asset. For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019, acquired goodwill of $0 million and $24.6 million, respectively, is expected to be deductible for tax purposes. Included in the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016~~2019 consolidated financial results were ~~$210.7 million and $55.3~~$18.3 million of revenue ~~respectively,~~ and ~~$13.8 million and $1.7~~$1.0 million of pre-tax ~~income, respectively,~~loss of the acquired dealerships from the applicable acquisition dates.

~~Gander Mountain and Overton’s~~

~~On May 26, 2017, CWI, Inc. (“CWI”), an indirect subsidiary of~~ Pro forma information on these acquisitions has not been included, because the Company completed the acquisition of certain assets of the Gander Mountain Company (“Gander Mountain”) and its Overton’s, Inc. (“Overton’s”) boating business through a bankruptcy auction that took place in April 2017 for $35.4 million in cash and $1.1 million of contingent consideration. Priorhas deemed them to the acquisition, Gander Mountain operated 160 retail locations and an e-commerce business that serviced the hunting, camping, fishing, shooting sports, and outdoor markets. Overton’s operates two retail locations and an e-commerce business that services the marine and watersports markets. The Company believes these businesses are complementary to its existing

~~Table of Contents~~

~~businesses and will allow for cross marketing of the Company’s consumer services and plans to a wider customer base.~~not be individually or cumulatively material.

The assets acquired included the right to designate any real estate leases for assignment to CWI or other third parties (the “Designation Rights”), other agreements CWI could elect to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, Overton’s inventory, the Gander Mountain and Overton’s e-commerce businesses, and fixtures and equipment for Overton’s two retail locations and corporate operations. Furthermore, CWI had committed to exercise Designation Rights and take an assignment of no fewer than 15 Gander Mountain retail leases on or before October 6, 2017, in addition to the two Overton’s retail leases assumed at the closing of the acquisition. The Designation Rights expired on October 6, 2017, immediately after CWI assumed the minimum 15 additional Gander Mountain retail leases. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elected to assume, accrued time off for employees retained by CWI and retention bonuses payable to certain key Gander Mountain employees retained by CWI. The cure costs for the minimum 15 Gander Mountain leases assumed under the Designation Rights were $1.1 million and recorded as contingent consideration.

~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of Gander Mountain and Overton’s consist of the following:~~

Estimated

Estimated
($ in thousands)

Fair Value

Life
Tangible assets (liabilities) acquired (assumed):

Inventory

$
9,965

Prepaid expenses and other assets

42

Property and equipment

8,436

Accrued liabilities

(373)

Total tangible net assets acquired

18,070

Intangible assets acquired:

Trademarks and trade names

14,800

15 years
Membership and customer lists

500

6 years
Websites

1,900

10 years
Total intangible assets acquired

17,200

Goodwill

1,329

Purchase price

36,599

Contingent consideration unpaid at September 30, 2017

(1,021)

Cash paid for acquisition

$
35,578

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. All of the acquired goodwill from this acquisition is expected to be deductible for tax purposes. Included in the nine months ended September 30, 2017 consolidated financial results were $22.3 million of revenue and $11.3 million of pre-tax loss of Gander Mountain and Overton’s from the acquisition date.

~~TheHouse.com~~

On August 17, 2017, Camping World, Inc. (“CW”), an indirect subsidiary of the Company, completed the acquisition of all of the outstanding capital stock and outstanding debt of Active Sports, Inc. (“TheHouse.com”), which specializes in bikes, sailboards, skateboards, wakeboards, snowboards, and outdoor gear. TheHouse.com is primarily an online retailer and operates two retail locations. The Company believes this business is complementary to its existing businesses and enhances the product offerings from its earlier acquisition of Gander Mountain. The purchase price consisted of $30.0 million in cash, $5.7 million in restricted shares of Class A common stock of the Company, and the purchase or extinguishment of $35.3 million of TheHouse.com’s debt, including accrued interest.

~~Table of Contents~~

~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of TheHouse.com consist of the following:~~

Estimated

Estimated
($ in thousands)

Fair Value

Life
Tangible assets (liabilities) acquired (assumed):

Cash and cash equivalents

$
501

Accounts receivable

159

Inventory

36,317

Prepaid expenses and other assets

1,120

Property and equipment

548

Accounts payable

(7,582)

Accrued liabilities

(827)

Deferred tax liabilities

(6,016)

Total tangible net assets acquired

24,220

Intangible assets acquired:

Trademarks and trade names

14,039

15 years
Websites

4,090

10 years
Total intangible assets acquired

18,129

Goodwill

28,683

Purchase price

71,032

Cash and cash equivalents acquired

(501)

Non-cash consideration - Class A shares issued

(5,720)

Cash paid for acquisition, net of cash acquired

$
64,811

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. The amount of acquired goodwill that is expected to be deductible for tax purposes is $3.4 million. Included in the nine months ended September 30, 2017 consolidated financial results were $3.7 million of revenue and $0.2 million of pre-tax loss of TheHouse.com from the acquisition date.

~~W82~~

On September 22, 2017, W82, LLC, an indirect subsidiary of the Company, completed the acquisition of substantially all of the assets of EIGHTEEN0THREE LLC, dba W82 (“W82”), which specializes in snowboarding, skateboarding, longboarding, swimwear, footwear, apparel and accessories. The Company believes this business is complementary to its existing businesses and enhances the product offerings from its earlier acquisition of Gander Mountain. The purchase price consisted in $0.6 million in cash and the extinguishment of $1.5 million of W82’s debt, including accrued interest.

~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of W82 consist of the following:~~

Estimated
($ in thousands)

Fair Value
Tangible assets (liabilities) acquired (assumed):

Inventory

$
847
Prepaid expenses and other assets

7
Property and equipment

546
Accrued liabilities

(790)
Total tangible net assets acquired

610
Goodwill

1,497
Purchase price

$
2,107

~~Table of Contents~~

existed as of the acquisition date. All of the acquired goodwill from this acquisition is expected to be deductible for tax purposes. Included in the nine months ended September 30, 2017 consolidated financial results were $34,000 of revenue and $8,000 of pre-tax loss of W82 from the acquisition date.

~~10. Exit Activities~~

The Company closed certain retail locations in previous periods and, in March 2017, the Company subleased a portion of a lease that is adjacent to an existing retail location. The Company remains obligated under the terms of these leases for rent and other costs associated with these leases, and has no plan to occupy them in the future. In accordance with ASC 420, Accounting for Costs Associated with Exit or Disposal Activities, the Company recorded a charge to rent expense to recognize the costs of exiting the space. The liability was equal to the fair value of rent less the fair value of the amount of rent received by the Company from a tenant under a sublease over the remainder of the lease terms, which expire on various dates through 2032. The change in the estimated fair value of these amounts was recognized in income as part of income from operations. The current portion of the liability was $0.3 million and $0.3 million as of September 30, 2017 and December 31, 2016, respectively, and is included in other current liabilities. The liability outstanding was $2.7 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively.

~~11.~~12. Income Taxes

CWH is organized as a Subchapter C corporation and, ~~on October 6, 2016,~~ as ~~part~~ of ~~the Company’s IPO, became~~June 30, 2020, is a ~~22.6%~~42.3% owner of CWGS, LLC (see Note 1314 — Stockholders’ ~~Equity)~~Equity and Note 15 — Non-Controlling Interests). CWGS, LLC is organized as a limited liability company and treated as a partnership for federal tax purposes, with the exception of Americas Road and Travel Club, Inc., ~~CW,~~Camping World, Inc. (“CW”), and FreedomRoads RV, Inc. ~~(“FRRV”)~~ and their wholly-owned subsidiaries, which are Subchapter C corporations.

On January 1, 2019, the Company transferred certain assets relating to its Good Sam Club and co-branded credit card from its indirect wholly-owned subsidiary, GSS Enterprises LLC (“GSS”), to its indirect wholly-owned subsidiary, CW, a corporation. As a result of this transfer, the Company recorded an estimated $14.4 million of net income tax expense during the six months ended June 30, 2019 due to the revaluation of certain deferred tax assets and related changes in valuation allowance. As a result of transferring certain assets relating to its Good Sam Club and co-branded credit card from GSS to CW, as described above, the Company also re-evaluated the impact on its Tax Receivable Agreement liability related to the reduction of future expected tax amortization. The reduction in future expected tax amortization reduced the Tax Receivable Agreement liability by an estimated $7.2 million. Unrelated to the transfer described above, the Tax Receivable Agreement liability was reduced by an additional $1.1 million during the six months ended June 30, 2019 for changes in estimated state income tax rates applicable to CWH. As a result of these adjustments to the Tax Receivable Agreement liability, the Company recorded an estimated $8.5 million of other income in the condensed consolidated statement of operations for the six months ended June 30, 2019.

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of income tax and payroll tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three and six months ended ~~September~~June 30, ~~2017~~2020, there were no material tax impacts to the Company’s condensed consolidated financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $9.2 million as of June 30, 2020, which were included in other long-term liabilities in the condensed consolidated balance sheets. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and ~~2016,~~others.

For the six months ended June 30, 2020 and 2019, the Company’s effective income tax rate was ~~8.9%~~14.2% and ~~3.2%, respectively. For the nine months ended September 30, 2017 and 2016, the Company’s effective income tax rate was 10.5% and 2.4%~~54.7%, respectively. The ~~amount~~decrease is primarily a result of higher income ~~tax expense and~~incurred at CWGS, LLC for which the ~~effective income tax rate increased in 2017 primarily because CWH was also~~Company is subject to U.S. federal ~~state~~ and ~~local~~state taxes on its allocable share, partially offset by operating losses recorded by CW for which no tax benefit can be recognized and absent the transfer of ~~taxable~~certain assets between subsidiaries in the prior period, which had resulted in the $14.4 million of net income ~~or loss generated by CWGS, LLC subsequent to the Company’s IPO, and also partially to the increased profitability of FRRV.~~tax expense described above. The Company's effective income tax rate ~~is significantly less than~~for the six months ended June 30, 2020 was 14.2%, which differed from the federal statutory rate of ~~35.0%~~21.0% primarily ~~because no federal income taxes are payable by the Company for the non-controlling interests' share of CWGS, LLC’s taxable income~~ due to ~~CWGS, LLC’s pass-through structure~~a portion of the Company’s earnings being attributable to non-controlling interests in limited liability companies which are not subject to corporate level taxes and losses at certain subsidiaries for ~~federal and most state and local~~which an income tax ~~reporting, with~~benefit was not recorded, since there was a full valuation allowance against the ~~exception~~related deferred tax assets of ~~the Subchapter C corporations noted above.~~those subsidiaries.

The Company evaluates its deferred tax assets on a quarterly basis to determine if they can be realized and establishes valuation allowances when it is more likely than not that all or a portion of the deferred tax assets may not be realized. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company determined that all of its

Table of Contents

deferred tax assets ~~except~~(except those of CW and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized. The Company maintains a full valuation allowance against the deferred tax assets of CW, since it was determined that it is more likely than not, based on available objective evidence, that CW would have insufficient taxable income in the current or carryforward periods under the tax laws to realize the future tax benefits of its deferred tax assets. ~~During~~The Company maintains a partial valuation allowance against the ~~three months ended September 30, 2017, TheHouse.com was acquired by CW (see Note 9 — Acquisitions) and~~Outside Basis Deferred Tax Asset pertaining to the ~~related deferred~~portion that is not amortizable for tax ~~liabilities acquired reduced~~purposes, since the ~~amount~~Company would likely only realize the non-amortizable portion of the ~~valuation allowance necessary for~~Outside Basis Deferred Tax Asset if the deferred tax assets of CW by $6.0 million. The deferred taxes on TheHouse.com acquisition are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date.

~~The provision for income tax for the entities subject to federal income tax has been included~~investment in the consolidated financial statements. The income tax is based on the amount of taxes due on their tax returns plus deferred taxes computed based on the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities, using expected tax rates.

~~Table of Contents~~

CWGS, LLC was divested.

The Company ~~recognizes~~is party to the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements on a particular tax position are measured based on the largest benefit that has a greater than a 50% likelihood of being realized upon settlement. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. As of September 30, 2017 and December 31, 2016, the Company had no uncertain tax positions. The Company did not recognize any interest or penalties relating to income taxes for the three and nine months ended September 30, 2017 and 2016.

~~On October 6, 2016, the Company entered into a tax receivable agreement (the “Tax~~Tax Receivable ~~Agreement”)~~Agreement that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions or exchanges of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. CWGS intends to make an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a deemed exchange) of common units for cash or stock occur. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P. maintaining a continued ownership interest in CWGS, LLC. In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC). The Company expects to benefit from the remaining 15% of the tax benefits, if any, which may be realized. As part of the IPO, 1,698,763 common units in CWGS, LLC were exchanged for Class A common stock by Crestview Partners II GP, L.P., subject to the provisions of the Tax Receivable Agreement. During the ~~three and nine~~six months ended ~~September~~June 30, ~~2017, 1,001,248~~2020 and ~~6,526,610~~2019, 110,000 and 5,725 common units in CWGS, LLC, respectively, were exchanged for Class A common stock subject to the provisions of the Tax Receivable Agreement. The Company recognized a liability for the Tax Receivable Agreement payments due to those parties that redeemed common units, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the exchange, after concluding it was probable that the Tax Receivable Agreement payments would be paid based on estimates of future taxable income. As of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was ~~$109.9~~$108.6 million and ~~$19.2~~$114.8 million, respectively, of which ~~$7.4~~$6.9 million and ~~$1.0~~$6.6 million, respectively, ~~were~~was included in the current portion of the Tax Receivable Agreement liability in the ~~Consolidated Balance Sheets.~~condensed consolidated balance sheets.

~~Table of Contents~~

~~12.~~13. Related Party Transactions

~~Monitoring Agreement~~

Crestview Advisors, L.L.C. and Stephen Adams (together, the “Managers” and each, a “Manager”) and the Company were parties to a monitoring agreement relating to each Manager’s monitoring of its (or its affiliate’s) investment in CWGS, LLC. Pursuant to the monitoring agreement, CWGS, LLC agreed to pay each of the Managers an aggregate per annum monitoring fee equal to $1.0 million, payable in quarterly installments of $250,000. In addition, the Company agreed to reimburse each Manager and its affiliates, employees and agents for up to an aggregate per annum amount of $250,000 for all reasonable fees and expenses incurred in connection with such Manager’s monitoring of its (or its affiliate’s) investment in CWGS, LLC. CWGS, LLC also agreed to indemnify each Manager and its respective affiliates from and against all losses, claims, damages and liabilities arising out of the performance by such Managers’ monitoring of its (or its affiliate’s) investment in CWGS, LLC. For the three and nine months ended September 30, 2016, pursuant to the monitoring agreement, the Company incurred monitoring fees of $0.5 million and $1.5 million, respectively, and reimbursed fees and expenses of $0.1 and $0.4 million, respectively. The monitoring agreement was terminated upon the consummation of the Company’s IPO.

Transactions with Directors, Equity Holders and Executive Officers

FreedomRoads leases various ~~retail~~RV and Outdoor Retail locations from managers and officers. During the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the related party lease expense for these locations was $0.5 million and ~~$0.3~~$0.5 million, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the related party lease expense for these locations was ~~$1.4~~$1.0 million and $1.0 million, respectively.

In January 2012, FreedomRoads entered into a lease (the “Original Lease”) ~~with respect to~~for the ~~Company’s~~offices in Lincolnshire, Illinois, ~~offices,~~ which was amended inas of March 2013 ~~in connection with the Company’s leasing of additional premises within the same office building~~ (the ~~“Expansion Lease”~~“First Amendment”). The Original Lease ~~is payable in 132 monthly payments of~~ base rent ~~equal~~of $29,000 per month was increased to ~~approximately $29,000, commencing April~~$31,500 per month in March 2013 by virtue of the First Amendment and is subject to annual increases. ~~The Expansion~~As of November 1, 2019, by way of the Second Amendment to the Office Lease, ~~is payable in 132~~(together with the Original Lease and the First Amendment, collectively, the “Office Lease”), the Company began leasing additional space for an additional monthly ~~payments of~~ base rent ~~equal to approximately $2,500, commencing May 2013, subject to annual increases. Marcus Lemonis, the~~of $5,200. The Company’s Chairman and Chief Executive Officer has personally guaranteed ~~both leases. During~~ the three months ended September 30, 2017 and 2016, we made payments of approximately $193,000 and $211,000, respectively, in connection with the Original Lease, which includes approximately $94,000 and $113,000, respectively, for common area maintenance charges on the Original Lease, and we made payments of approximately $8,000 and $8,000, respectively, in connection with the Expansion Lease. During the nine months ended September 30, 2017 and 2016, we made payments of approximately $546,000 and $546,000, respectively, in connection with the Original Lease, which includes approximately $252,000 and $258,000, respectively, for common area maintenance charges on the Original Lease, and we made payments of approximately $25,000 and $25,000, respectively, in connection with the ExpansionOffice Lease.

The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, $0.3 million during the three and nine months ended September 30, 2017 and $0.1 million and $0.2 million during the three and nine months ended September 30, 2016, respectively.

Other Transactions

The Company does business with certain companies in which Mr. Lemonis has a direct or indirect material interest. The Company purchased fixtures for interior store sets at the Company’s retail locations from Precise ~~Graphix, LLC (“Precise Graphix”).~~Graphix. Mr. Lemonis has a ~~33%~~67% economic interest in Precise ~~Graphix and the~~Graphix. The Company paid Precise Graphix ~~$0.5~~$0.1 million and ~~$1.1~~$0.6 million for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively, and ~~the Company paid Precise Graphix $1.7~~$0.3 million and ~~$2.5~~$0.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively.

~~Cumulus Media Inc.~~The Company does business with certain companies in which Stephen Adams, a member of the Company’s board of directors, has a direct or indirect material interest. The Company from time to time purchases advertising services from Adams Radio of Fort Wayne LLC (“~~Cumulus Media”~~Adams Radio”), in which Mr. Adams has ~~provided radio advertising~~an indirect 90% interest. The Company paid Adams Radio $0 for both the three months ended June 30, 2020 and 2019, and $0 and $0.2 million for the six months ended June 30, 2020 and 2019, respectively.

Table of Contents

The Company ~~through Cumulus Media’s subsidiary, Westwood One, Inc. Crestview Partners II GP, L.P.~~paid Kaplan, Strangis and Kaplan, P.A., ~~an affiliate~~ of ~~CVRV,~~which Andris A. Baltins is a member, and a member of the ~~beneficial owner~~Company’s board of ~~approximately 30%~~directors, $0.1 million and $0.1 million during the six months ended June 30, 2020 and 2019, respectively, for legal services.

14. Stockholders’ Equity

CWH has authorized preferred stock and 3 classes of ~~Cumulus Media’s~~common stock. The Class A common stock ~~according~~entitles the holders to ~~Crestview~~

~~Table~~receive dividends; distributions upon the liquidation, dissolution, or winding up of ~~Contents~~

~~Partners II GP, L.P.’s most recently filed Schedule 13D amendment with respect~~the Company; and have voting rights. The Class B common stock and Class C common stock entitles the holders to voting rights, which in certain cases are disproportionate to the ~~company. For~~voting rights of the ~~three~~Class A common stock; however, the holders of Class B common stock and ~~nine months ended September 30, 2017,~~Class C common stock are not entitled to receive dividends or distributions upon the liquidation, dissolution, or winding up of the Company.

CWH is the sole managing member of CWGS, LLC and, although CWH has a minority economic interest in CWGS, LLC, CWH has the sole voting power in, and controls the management of, CWGS, LLC. Accordingly, the Company ~~incurred expense from Cumulus Media~~consolidated the financial results of ~~$0.4 million~~CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.

In accordance with the amended and restated limited liability company agreement of CWGS, LLC (the “LLC Agreement”), the Continuing Equity Owners with common units in CWGS, LLC may elect to exchange or redeem the common units for ~~the aforementioned advertising services. The Company did not use the advertising services in 2016.~~

~~On September 22, 2017, W82, LLC, an indirect subsidiary~~newly-issued shares of the ~~Company, completed~~Company’s Class A common stock or cash at the ~~acquisition~~Company’s election, subject to certain restrictions. If the redeeming or exchanging party also holds Class B common stock, then simultaneously with the payment of ~~substantially all~~cash or newly-issued shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units, a number of shares of the ~~assets (the “W82 Acquisition”) of W82. The purchase price consisted in $0.6 million in cash and the extinguishment of $1.5 million of W82’s debt, including accrued interest. ML Fashion, LLC,~~Company’s Class B common stock will be cancelled for 0 consideration on a company in which Marcus Lemonis, our Chairman and Chief Executive Officer, has a 100% economic interest, was the holder of a secured convertible promissory note (the “Note”) issued by W82. Approximately $1.1 million of the proceeds from the W82 Acquisition were used to redeem the Note. The W82 Acquisition was approved by our audit committee in accordance with our related person transaction policy and procedures.

~~13. Stockholders’ Equity~~

~~Reorganization Transactions~~

~~In connection~~one-for-one basis with the ~~IPO on October 6, 2016,~~number of common units so redeemed or exchanged. As required by the ~~Company completed~~LLC Agreement, the ~~following Reorganization Transactions:~~

The Company amended and restated its certificate of incorporation which, among other things, authorized preferred stock and three classes of common stock. The Class A common stock entitles the holders to receive dividends; distributions upon the liquidation, dissolution, or winding up of the Company; and have voting rights. The Class B common stock and Class C common stock entitles the holders to voting rights, which in certain cases are disproportionate to the voting rights of the Class A common stock; however, the holders of Class B common stock and Class C common stock are not entitled to receive dividends or distributions upon the liquidation, dissolution, or winding up of the Company;

CWGS, LLC amended and restated the limited liability company agreement of CWGS, LLC (the “LLC Agreement” and the “Recapitalization”), which among other things, (i) provided for a new single class of common membership interests in CWGS, LLC, the common units, and (ii) exchanged all of the then-existing membership interests in CWGS, LLC to common units. The holders of the common units may elect to exchange or redeem the common units for newly-issued shares of the Company’s Class A common stock or cash at the Company’s election, subject to certain restrictions. If the redeeming or exchanging party also holds Class B common stock, then simultaneously with the payment of cash or newly-issued shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units, a number of shares of the Company’s Class B common stock will be cancelled for no consideration on a one-for-one basis with the number of common units so redeemed or exchanged; and

The Company acquired, by merger, an entity that was owned by former indirect members of CWGS, LLC (the “Former Equity Owners”), for which the Company issued 7,063,716 shares of Class A common stock as merger consideration (the “CWH BR Merger”). The only significant asset held by the merged entity prior to the CWH BR Merger was 7,063,716 common units of CWGS, LLC and a corresponding number of shares of CWH Class B common stock. Upon consummation of the CWH BR Merger, the Company canceled the 7,063,716 shares of Class B common stock and recognized the 7,063,716 of common units of CWGS, LLC at carrying value, as the CWH BR Merger was considered to be a transaction between entities under common control.

~~The~~ Company must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of common units of CWGS, LLC owned by CWH (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).

Immediately following the completion of the Reorganization Transactions and IPO, CWH owned 22.6% of CWGS, LLC and the remaining 77.4% of CWGS, LLC was owned by the Continuing Equity Owners (see Note 14 —15. Non-Controlling ~~Interests). As a result of the Reorganization Transactions, CWH became the~~

~~Table of Contents~~

sole managing member of CWGS, LLC and, although CWH had a minority economic interest in CWGS, LLC, CWH had the sole voting power in, and controlled the management of, CWGS, LLC. Accordingly, the Company consolidated the financial results of CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.Interests

As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. See the Company’s Annual Report for further details.

~~May 2017 Public Offering~~

On May 31, 2017, the Company completed a public offering (the “May 2017 Public Offering”) in which the Company sold 4,000,000 shares of the Company’s Class A common stock at a public offering price of $27.75 per share. The Company received $106.6 million in proceeds, net of underwriting discounts and commissions, which were used to purchase 4,000,000 newly-issued common units from CWGS, LLC at a price per unit equal to the public offering price per share of Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions. In addition, on June 5, 2017, the underwriters exercised their option to purchase an additional 600,000 shares of Class A common stock. On June 9, 2017, the Company closed on the purchase of the additional 600,000 shares of Class A common stock and received $16.0 million in additional proceeds, net of underwriting discounts and commissions, which were used to purchase 600,000 newly-issued common units from CWGS, LLC at a price per unit equal to the public offering price per share of Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions.

In connection with the May 2017 Public Offering, CVRV Acquisition LLC and CVRV Acquisition II LLC (“May 2017 Selling Stockholders”), each affiliates of Crestview, sold 5,500,000 shares of the Company’s Class A common stock at the same public offering price of $27.75 per share. CVRV Acquisition LLC redeemed 4,323,083 common units of CWGS, LLC for 4,323,083 shares of Class A common stock, which it sold in the May 2017 Public Offering along with 1,176,917 shares of Class A shares that CVRV Acquisition II LLC already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 4,323,083 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, on June 5, 2017, the underwriters exercised their option to purchase an additional 825,000 shares of Class A common stock from the May 2017 Selling Stockholders, in conjunction with their exercise of their option to purchase the additional 600,000 shares from the Company as described above. On June 9, 2017, the May 2017 Selling Stockholders closed on the sale of the additional 825,000 shares of Class A common stock. CVRV Acquisition LLC redeemed 648,462 common units of CWGS, LLC for 648,462 shares of Class A common stock, which it sold in the May 2017 Public Offering along with 176,538 shares of Class A shares that CVRV Acquisition II LLC already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 648,462 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. The Company did not receive any proceeds relating to the sale of the May 2017 Selling Stockholders’ shares.

~~14. Non-Controlling Interests~~

~~In connection with the Reorganization Transactions,~~ described in Note 1314 — Stockholders’ Equity, CWH ~~became~~is the sole managing member of CWGS, LLC and, as a result, consolidates the financial results of CWGS, LLC. The Company reports a non-controlling interest representing the common units of CWGS, LLC held by Continuing Equity Owners. Changes in CWH’s ownership interest in CWGS, LLC while CWH retains its controlling interest in CWGS, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of common units of CWGS, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when CWGS, LLC has positive or negative net assets, respectively. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, CWGS, LLC had ~~positive and~~ negative net

~~Table of Contents~~

assets, ~~respectively,~~ which resulted in ~~positive and~~ negative non-controlling interest amounts ~~respectively,~~ on the ~~Unaudited Condensed Consolidated Balance Sheets.~~condensed consolidated balance sheets. At the end of each period, the Company will record a non-controlling interest adjustment to additional paid-in capital such that the non-controlling interest on the condensed consolidated balance sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC net assets (see the condensed consolidated statement of stockholders’ equity (deficit)).

As of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, there were ~~88,536,365~~89,332,393 and ~~83,771,830~~89,158,273 common units of CWGS, LLC outstanding, respectively, of which CWH owned ~~30,227,061~~37,773,109 and ~~18,935,916~~37,488,989 common units of CWGS, LLC, respectively, representing ~~34.1%~~42.3% and ~~22.6%~~42.0% ownership interests in CWGS, LLC, respectively, and the Continuing Equity Owners owned ~~58,309,304~~51,559,284 and ~~64,835,914~~51,669,284 common units of CWGS, LLC, respectively, representing ~~65.9%~~57.7% and ~~77.4%~~58.0% ownership interests in CWGS, LLC, respectively.

Table of Contents

The following table summarizes the effects of changes in ownership in CWGS, LLC on the Company’s equity:

Three Months Ended

Nine Months Ended

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602
Transfers to non-controlling interests:

Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC

—

—

(53,648)

—
Decrease in additional paid-in capital as a result of the contribution of Class A common stock to CWGS, LLC for an acquisition by a subsidiary

(2,261)

—

(2,261)

—
Decrease in additional paid-in capital as a result of the vesting of restricted stock units

—

—

—

—
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC

13,468

—

69,091

—
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests

$
31,334

$
68,416

$
60,167

$
189,602


	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2020		2019		2020		2019
Net income (loss) attributable to Camping World Holdings, Inc.	$	58,077	$	18,017	$	49,917	$	(1,378)
Transfers to non-controlling interests:
Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options		(105)		—		(105)		—
(Decrease) increase in additional paid-in capital as a result of the vesting of restricted stock units		(10)		143		72		143
Decrease in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on vested RSUs		(347)		(273)		(559)		(273)
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC		58		—		62		12
Change from net income (loss) attributable to Camping World Holdings, Inc. and transfers to non-controlling interests	$	57,673	$	17,887	$	49,387	$	(1,496)

~~15.~~16. Equity-based Compensation Plans

The following table summarizes the equity-based compensation that has been included in the following line items within the consolidated statements of operations during:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Equity-based compensation expense:

Costs applicable to revenue

$
81

$
—

$
254

$
—
Selling, general, and administrative

1,123

60

2,538

60
Total equity-based compensation expense

$
1,204

$
60

$
2,792

$
60


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
($ in thousands)	2020		2019		2020		2019
Equity-based compensation expense:
Costs applicable to revenue	$	191	$	208	$	347	$	415
Selling, general, and administrative		3,991		3,655		7,147		6,164
Total equity-based compensation expense	$	4,182	$	3,863	$	7,494	$	6,579

The following table summarizes stock option activity for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2020:


	Stock Options

	~~Stock Options~~
	(in thousands)
Outstanding at December 31, ~~2016~~2019		~~1,118~~
~~Granted~~		—745
Exercised		—(7)
Forfeited		~~(62)~~
~~Cancelled~~		—(40)
Outstanding at ~~September~~June 30, ~~2017~~2020		~~1,056~~698
Options exercisable at June 30, 2020		516

~~Table of Contents~~

The following table summarizes restricted stock unit activity for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2020:


	Restricted
	Stock Units

	~~Restricted~~
	~~Stock Units~~
	(in thousands)
Outstanding at December 31, ~~2016~~2019		~~144~~1,806
Granted		~~292~~60
Vested		—(199)
Forfeited		~~(6)~~
~~Cancelled~~		—(153)
Outstanding at ~~September~~June 30, ~~2017~~2020		~~430~~1,514

In June 2020, the Company entered into a consulting agreement with Melvin Flanigan that became effective after his resignation as the Company’s Chief Financial Officer and Secretary on June 30, 2020. Prior to Mr. Flanigan’s resignation from his employment with the Company, he was previously granted awards of (a) 62,500 restricted stock units (“RSUs”) on January 21, 2019 (the “First Award”), and (b) 60,000 RSUs on

Table of Contents

November 12, 2019 (the “Second Award”) pursuant to the Company’s 2016 Incentive Award Plan. The consulting agreement provides, among other things, that: (i) the remaining unvested 41,667 RSUs held by Mr. Flanigan pursuant to the First Award will vest on January 1, 2021, provided that the consulting agreement has not been terminated prior to December 31, 2020, and (ii) 20,000 unvested RSUs held by Mr. Flanigan pursuant to the Second Award that are scheduled to vest on November 15, 2020 will vest on such date, provided that the Consulting Agreement has not been terminated prior to such date. This modification resulted in an incremental equity-based compensation charge of $0.6 million during the three months ended June 30, 2020 and the remaining equity-based compensation of $0.7 million relating to the modified RSUs will be recorded over the remaining service period, net of forfeitures, through December 31, 2020.

~~16.~~In July 2020, the Company granted 2.4 million RSUs to employees with an aggregate grant date fair value of $78.5 million, which will be recognized, net of forfeitures, through August 2025.

17. Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

As described in Note 13 — Stockholders’ Equity, on October 6, 2016, the LLC Agreement was amended and restated to, among other things, (i) provide for a new single class of common membership interests, the common units of CWGS, LLC, and (ii) exchange all of the then-existing membership interests of the Original Equity Owners for common units of CWGS, LLC. This Recapitalization changed the relative membership rights of the Original Equity Owners such that retroactive application of the Recapitalization to periods prior to the IPO for the purposes of calculating earnings per share would not be appropriate.

Prior to the IPO, the CWGS, LLC membership structure included membership units, preferred units, and Profits Units. During the period of September 30, 2014 to October 6, 2016, there were 70,000 preferred units outstanding that received a total preferred return of $2.1 million per quarter in addition to their proportionate share of distributions made to all members of CWGS, LLC. The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the IPO on October 6, 2016.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

Three Months

Nine Months

Ended

Ended

September 30,

September 30,
(In thousands except per share amounts)

2017

2017
Numerator:

Net income

$
85,258

$
240,021
Less: net income attributable to non-controlling interests

(65,131)

(193,036)
Net income attributable to Camping World Holdings, Inc. — basic

20,127

46,985
Add: Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

39,917

118,110
Net income attributable to Camping World Holdings, Inc. — diluted

$
60,044

$
165,095
Denominator:

Weighted-average shares of Class A common stock outstanding — basic

29,522

23,854
Dilutive common units of CWGS, LLC that are convertible into Class A common stock

58,930

62,093
Weighted-average shares of Class A common stock outstanding — diluted

88,452

85,947

Earnings per share of Class A common stock — basic

$
0.68

$
1.97
Earnings per share of Class A common stock — diluted

$
0.68

$
1.92


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands except per share amounts)	2020		2019		2020		2019
Numerator:
Net income	$	163,222	$	52,623	$	149,093	$	25,816
Less: net income attributable to non-controlling interests		(105,145)		(34,606)		(99,176)		(27,194)
Net income (loss) attributable to Camping World Holdings, Inc. — basic and diluted	$	58,077	$	18,017		49,917		(1,378)
Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock		79,603		22,565		68,383		—
Net income (loss) attributable to Camping World Holdings, Inc. — diluted	$	137,680	$	40,582	$	118,300	$	(1,378)
Denominator:
Weighted-average shares of Class A common stock outstanding — basic and diluted		37,635		37,239		37,585		37,217
Dilutive restricted stock units		434		17		359		—
Dilutive common units of CWGS, LLC that are convertible into Class A common stock		51,620		51,669		51,634		—
Weighted-average shares of Class A common stock outstanding — diluted		89,689		88,925		89,578		37,217

Earnings (loss) per share of Class A common stock — basic	$	1.54	$	0.48	$	1.33	$	(0.04)
Earnings (loss) per share of Class A common stock — diluted	$	1.54	$	0.46	$	1.32	$	(0.04)

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Stock options to purchase Class A common stock		715		804		726		831
Restricted stock units		620		1,351		658		1,427
Common units of CWGS, LLC that are convertible into Class A common stock		—		—		—		51,671

~~Table of Contents~~

For the three and nine months ended September 30, 2017, 1.1 million stock options and 0.4 million and 0.2 million restricted stock units, respectively, were excluded from the weighted-average in the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.

Shares of the Company’s Class B common stock and Class C common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock or Class C common stock under the two-class method has not been presented.

~~17.~~

Table of Contents

18. Segments Information

~~We have two~~The Company has the following 2 reportable segments: ~~(1) Consumer~~(i) Good Sam Services and Plans, and ~~(2)~~(ii) RV and Outdoor Retail. ~~The Company’s Consumer~~Within the Good Sam Services and Plans segment, ~~is comprised~~the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; ~~co-branded credit cards;~~ vehicle ~~financing~~refinancing and ~~refinancing; membership clubs;~~refinancing assistance; consumer shows and events; and consumer publications and directories. ~~The Company’s~~Within the RV and Outdoor Retail segment, ~~is comprised~~the Company primarily derives revenue from the sale of new and used RVs; ~~parts and service;~~commissions on the finance and ~~insurance;~~insurance contracts related to the sale of RVs; the sale of RV service and ~~skiing, snowboarding, bicycling, skateboarding, marine~~maintenance work; the sale of RV parts, accessories, and ~~watersports products. Corporate~~supplies; the sale of outdoor products, equipment, gear and ~~other is comprised~~supplies and the sale of ~~the corporate operations of the Company.~~Good Sam Club memberships and co-branded credit cards.

The reportable segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by the Company’s chief operating decision maker to allocate resources and assess performance. The Company’s chief operating decision maker is ~~its~~a group comprised of the Chief Executive ~~Officer.~~Officer and the President. Segment revenue includes intersegment revenue. Segment income includes intersegment allocations for subsidiaries and shared resources.

Reportable segment ~~revenue,~~revenue; segment ~~income,~~income; floor plan interest ~~expense,~~expense; depreciation and ~~amortization,~~amortization; other interest expense, net; and total assets ~~and capital expenditures~~ are as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Revenue:

Consumer Services and Plans

$
46,169

$
45,442

$
144,518

$
135,868
Retail

1,192,833

945,629

3,260,966

2,720,806
Total consolidated revenue

$
1,239,002

$
991,071

$
3,405,484

$
2,856,674

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Segment income (1):

Consumer Services and Plans

$
21,675

$
19,847

$
71,887

$
63,948
Retail

93,446

70,882

256,713

188,898
Total segment income

115,121

90,729

328,600

252,846
Corporate & other

(2,037)

(1,091)

(6,461)

(2,420)
Depreciation and amortization

(8,382)

(6,219)

(22,819)

(18,144)
Other interest expense, net

(11,012)

(12,715)

(30,973)

(38,040)
Other expense, net

(96)

—

(79)

(2)
Income from operations before income taxes

$
93,594

$
70,704

$
268,268

$
194,240


	Three Months Ended June 30, 2020								Three Months Ended June 30, 2019
	Good Sam		RV and						Good Sam		RV and
	Services		Outdoor		Intersegment				Services and		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total		Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	44,692	$	—	$	(173)	$	44,519	$	44,991	$	—	$	(297)	$	44,694
New vehicles		—		900,245		(2,070)		898,175		—		780,696		(1,826)		778,870
Used vehicles		—		275,699		(789)		274,910		—		246,531		(782)		245,749
Products, service and other		—		231,512		(340)		231,172		—		271,471		(7,045)		264,426
Finance and insurance, net		—		150,194		(2,876)		147,318		—		131,498		(3,273)		128,225
Good Sam Club		—		10,651		—		10,651		—		12,383		—		12,383
Total consolidated revenue	$	44,692	$	1,568,301	$	(6,248)	$	1,606,745	$	44,991	$	1,442,579	$	(13,223)	$	1,474,347

	Six Months Ended June 30, 2020								Six Months Ended June 30, 2019
	Good Sam		RV and						Good Sam		RV and
	Services		Outdoor		Intersegment				Services and		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total		Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	93,384	$	—	$	(1,657)	$	91,727	$	93,289	$	—	$	(1,629)	$	91,660
New vehicles		—		1,398,641		(3,149)		1,395,492		—		1,311,445		(2,998)		1,308,447
Used vehicles		—		482,932		(1,357)		481,575		—		427,136		(1,379)		425,757
Products, service and other		—		404,524		(729)		403,795		—		481,669		(12,367)		469,302
Finance and insurance, net		—		244,642		(4,868)		239,774		—		225,778		(5,662)		220,116
Good Sam Club		—		21,655		—		21,655		—		23,834		—		23,834
Total consolidated revenue	$	93,384	$	2,552,394	$	(11,760)	$	2,634,018	$	93,289	$	2,469,862	$	(24,035)	$	2,539,116


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
($ in thousands)	2020		2019		2020		2019
Segment income:(1)
Good Sam Services and Plans	$	24,591	$	21,208	$	45,931	$	43,622
RV and Outdoor Retail		188,383		75,687		188,511		75,312
Total segment income		212,974		96,895		234,442		118,934
Corporate & other		(2,165)		(3,914)		(4,894)		(7,087)
Depreciation and amortization		(12,567)		(13,946)		(26,645)		(27,540)
Other interest expense, net		(14,547)		(18,211)		(29,205)		(35,854)
Tax Receivable Agreement liability adjustment		—		—		—		8,477
Segment income before income taxes	$	183,695	$	60,824	$	173,698	$	56,930

⁽¹⁾

Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense.

~~Table of Contents~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Depreciation and amortization:

Consumer Services and Plans

$
888

$
926

$
2,889

2,777
Retail

7,266

5,293

19,587

15,367
Total

8,154

6,219

22,476

18,144
Corporate & other

228

—

343

—
Total depreciation and amortization

$
8,382

$
6,219

$
22,819

$
18,144

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Other interest expense, net:

Consumer Services and Plans

$
1

$
4

$
5

$
12
Retail

1,423

1,482

4,375

4,250
Total

1,424

1,486

4,380

4,262
Corporate & other

9,588

11,229

26,593

33,778
Total interest expense

$
11,012

$
12,715

$
30,973

$
38,040

September 30,

December 31,
($ in thousands)

2017

2016
Assets:

Consumer Services and Plans

$
122,273

$
152,689
Retail

1,900,638

1,235,250
Total

2,022,911

1,387,939
Corporate & other

355,568

175,826
Total assets

$
2,378,479

$
1,563,765

~~18. Subsequent Events~~

On October 6, 2017, CWGS Group, LLC (the “Borrower”), an indirect subsidiary of the Company, entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement dated as of November 8, 2016 (as amended by the First Amendment dated March 17, 2017 and as further amended, the "Credit Agreement"). The Second Amendment, among other things, (i) increased the Borrower’s term loan facility by $205.0 million to an outstanding principal amount of $939.5 million, (ii) amended the applicable margin to 2.00% from 2.75% per annum, in the case of base rate loans, and to 3.00% from 3.75% per annum, in the case of LIBOR loans, and (iii) increased the quarterly amortization payment to $2.4 million.

On October 30, 2017, the October 2017 Selling Stockholders (as defined below) completed a public secondary offering (the “October 2017 Public Offering”), in which CWGS Holding, LLC, a Delaware limited liability company, wholly-owned by ML Acquisition and CVRV Acquisition LLC, CVRV Acquisition II LLC, and Crestview Advisors, L.L.C., each affiliates of Crestview (collectively, the “October 2017 Selling Stockholders”) sold 6,700,000 shares of the Company’s Class A common stock at the public offering price of $40.50 per share. CWGS Holding, LLC and CVRV Acquisition LLC redeemed an aggregate of 5,415,529 common units of CWGS, LLC for 5,415,529 shares of Class A common stock, which they sold in the October 2017 Public Offering along with 1,284,471 shares of Class A shares sold by CVRV Acquisition II LLC and Crestview Advisors, L.L.C. that they already held as a result of the Reorganization Transactions and the previous vesting of RSUs held by certain members of the board of directors affiliated with Crestview, respectively. Pursuant to the terms of the LLC Agreement, an aggregate of 5,415,529 shares of the Company’s Class B common stock registered in the name of CWGS Holding, LLC and CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, on October 27, 2017, the underwriters partially exercised their option to purchase up to an additional 1,005,000 shares of Class A common stock from the October 2017 Selling Stockholders. On November 1, 2017, the October 2017 Selling Stockholders closed on the sale of the additional 963,799 shares of Class A common stock. CWGS Holding, LLC and CVRV Acquisition LLC redeemed an additional aggregate 779,026 common units of CWGS, LLC for 779,026 shares of Class A common stock, which they sold in the October 2017 Public

~~Table of Contents~~

Offering along with 184,773 shares of Class A shares sold by CVRV Acquisition II LLC and Crestview Advisors, L.L.C. that they already held as a result of the Reorganization Transactions and the previous vesting of RSUs held by certain members of the board of directors affiliated with Crestview, respectively. Pursuant to the terms of the LLC Agreement, an additional aggregate of 779,026 shares of the Company’s Class B common stock registered in the name of CWGS Holding, LLC and CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. The Company did not receive any proceeds relating to the sale of shares in the October 2017 Public Offering by the October 2017 Selling Stockholders. The impact from the Tax Receivable Agreement (see Note 11 — Income Taxes) of the redemption of common units described above relating to the October 2017 Public Offering is expected to increase the current portion of the Tax Receivable Agreement liability by approximately $5.7 million, increase the non-current portion of the Tax Receivable Agreement liability by approximately $106.0 million, increase deferred tax assets by approximately $143.0 million, and increase additional paid-in capital by approximately $31.3 million.

Table of Contents


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
($ in thousands)	2020		2019		2020		2019
Depreciation and amortization:
Good Sam Services and Plans	$	768	$	836	$	1,524		1,688
RV and Outdoor Retail		11,799		13,110		25,121		25,852
Total depreciation and amortization	$	12,567	$	13,946	$	26,645	$	27,540


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
($ in thousands)	2020		2019		2020		2019
Other interest expense, net:
Good Sam Services and Plans	$	—	$	(1)	$	—	$	(1)
RV and Outdoor Retail		2,082		2,265		3,974		4,413
Subtotal		2,082		2,264		3,974		4,412
Corporate & other		12,465		15,947		25,231		31,442
Total other interest expense, net	$	14,547	$	18,211	$	29,205	$	35,854


	June 30,		December 31,
($ in thousands)	2020		2019
Assets:
Good Sam Services and Plans	$	143,917	$	138,360
RV and Outdoor Retail		2,914,659		3,047,652
Subtotal		3,058,576		3,186,012
Corporate & other		205,975		190,228
Total assets	$	3,264,551	$	3,376,240

Table of Contents

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, ~~and~~ 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 ~~September~~June 30, ~~2017,~~2020, our most recently completed fiscal quarter. Additionally, references herein to the approximately 911 million U.S. households that own a recreational vehicle ("RV") are based on ~~The RV Consumer in 2011, an industry report published by the University of Michigan in 2011 (the "RV Survey"), which we believe to be the most recent such survey.~~

~~Overview~~

We believe we are the only provider of a comprehensive portfolio of services, protection plans, products, and resources for RV enthusiasts. Approximately 9 million households in the United States own an RV, and of that installed base, we had approximately 3.6 million Active Customers at September 30, 2017, excluding the impact of the acquisition of Gander Mountain and Overton’s in May 2017 (“Gander Mountain Acquisition”). In addition, as of the date of consummation of the Gander Mountain Acquisition, Gander Mountain and Overton’s had 2.5 million unique Active Customers related to the Gander Mountain Acquisition that do not overlap with the 3.6 million Active Customers noted above. We expect to operate significantly fewer retail locations than Gander Mountain operated prior to its bankruptcy. Therefore, we would anticipate that the favorable impact on our Active Customer countdata from the ~~Gander Mountain Acquisition over time would be approximately 0.7 million to 1.5 million. We generate recurring revenue by providing~~ RV owners and outdoor enthusiasts the full spectrum of services, protection plans, products, and resources that we believe are essential to operate, maintain, and protect their RV and to enjoy the RV and outdoor lifestyles. We provide these offerings through our two iconic brands, Good Sam and Industry Association.

Overview

Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational RVs and ~~following the Gander Mountain Acquisition, Gander Mountain, which will be rebranded as Gander Outdoors, and Overton’s.~~

We believe our Good Sam branded offerings provide the industry’s broadest and deepest range of services, protection plans, products, and resources, including: extended vehicle service contracts and insurance protection plans, roadside assistance, membership clubs, and financing products. A majority of these programs are on a multi‑year or annually renewable basis.

Our Camping World brand operates the largest national network of RV‑centric retail locations in the United States through our 137 retail locations in 36 states, as of September 30, 2017, and through our e‑commerce platforms. We believe we are significantly larger in scale than our next largest competitor. We provide new and used RVs, repair parts, RV accessories and supplies, RV repair and maintenance services, protection plans, travel assistance plans, RV financing, and lifestyle products and services for new and existing RV owners. Our retail locations are staffed with knowledgeable local team members, providing customers access to extensive RV expertise. Our Camping World retail locations are strategically located in key national RV markets. Additionally, our Overton’s brand operates two stores in one state and provides marine and watersport accessories and supplies; TheHouse.com, which is primarily an online retailer with two retail locations, offers skiing, snowboarding, bicycling, and skateboarding products; and our one W82 location offers skiing, snowboarding, and skateboarding products.

~~Table of Contents~~

We attract new customers primarily through our retail locations, e‑commerce platforms, and direct marketing. Once we acquire our customers through a transaction, they become part of our customer database where we leverage customized customer relationship management (“CRM”) tools and analytics to actively engage, market, and sell multiplerelated products and services. Our ~~goal~~vision is to ~~consistently grow~~build a long-term legacy business that makes RVing fun and easy, and our ~~customer database through~~Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our ~~various channels to increasingly cross‑sell our~~customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and ~~services.~~

~~Segments~~

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 identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions. We have identified two reporting segments: (a) Consumer Services and Plans and (b) Retail. We provide our consumer services and plans offerings throughalso believe that our Good Sam ~~brand~~organization and ~~we provide~~family of programs and services uniquely enables us to connect with our ~~retail offerings primarily through our Camping World brand. Within the Consumer Services and Plans segment, we primarily derive revenue from the sale~~customers as stewards of the following offerings: emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; co‑branded credit cards; vehicle financing and refinancing; club memberships; and publications and directories. Within the Retail segment,RV lifestyle. On June 30, 2020, we ~~primarily derive revenue from the sale~~operated a total of the following products: new vehicles; used vehicles; parts and service, including RV accessories and supplies; finance and insurance; and skiing, snowboarding, bicycling, skateboarding, marine and watersports products.164 retail locations, with 162 of these selling and/or servicing RVs. See Note ~~17 — Segment Information~~1 – Summary of Significant Accounting Policies to our ~~unaudited~~ condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~Growth Strategies~~After several years of strong growth, the overall RV industry experienced decelerating demand for new vehicles in 2018 and ~~Outlook~~

~~We believe~~2019. Along with the ~~savings~~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 ~~offer on a variety~~across the overall RV industry began improving and wholesale shipments of ~~vacation costs, an increase~~new RVs increased 13.2% in the ~~pool~~first two months of ~~potential~~2020 according to the RV ~~customers due~~Industry Association’s survey of manufacturers.

With the COVID-19 crisis causing many state and local governments to ~~an aging baby boomer demographic,~~issue “stay-at-home” and “shelter-in-place” restrictions in mid-to-late March, sales and traffic levels across the ~~increased~~ RV ~~ownership among younger consumers should continue~~industry declined significantly in April 2020. In response to ~~grow~~ the ~~installed base~~COVID-19 pandemic, many RV manufacturers, including Thor Industries, Forest River, Inc., and Winnebago Industries, temporarily suspended production from late March to mid-May. This led to a 44.6% decrease in wholesale shipments of new RVs for the three month period of March, April, and May 2020, according to the RV ~~owners,~~Industry Association’s survey of manufacturers. In conjunction with the stay-at-home and ~~will have~~shelter-in-place restrictions enacted in many areas, the Company saw significant sequential declines in its overall customer traffic levels and its overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, the Company began to see a ~~positive impact on RV usage.~~

~~We plan~~significant improvement in its online web traffic levels and number of electronic leads, and in early May, the Company began to ~~take advantage~~see improvements in its overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of ~~these positive trends~~the country the Company experienced significant acceleration in ~~RV usage to pursue the following strategies to continue to grow our~~its in-store and online traffic and revenue ~~and profits:~~

Grow our Active Base of Customers. We believe our strong brands, leading market position, ongoing investment in our service platform, broad product portfolio, and full suite of resources will continue to provide us with competitive advantages in targeting and capturing a larger share of consumers with whom we do not currently transact, in addition to the growing number of new RV and outdoor enthusiasts that are expected to enter the market. We expect to continue to grow the Active Customer base primarily through three strategies:

~~Targeted Marketing:~~ We continuously work to attract new customers to our existing retail and online locations through targeted marketing, attractive introductory offerings, and access to our wide array of resources for RV and outdoor enthusiasts.

~~Greenfield Retail Locations:~~ ~~We establish retail locations in new and existing markets to expand our customer base. Target markets and locations are identified by employing proprietary data and analytical tools.~~

~~Retail Location Acquisitions:~~ The RV dealership industry is highly fragmented with a large number of independent RV dealers. We use acquisitions of independent dealers as a fast and capital efficient alternative to new retail location openings to expand our business and grow our customer base.

~~Cross‑Sell Products and Services.~~ We believe our customer database of over 18 million unique contacts, including the impact of the Gander Mountain Acquisition, provides us with the opportunity to continue our growth through the cross‑selling of our products and services. We use our customized CRM system and database analytics to proactively market and cross‑sell to Active Customers. We also seek to increase the penetration of our products to customers who exhibit higher multi‑product attachment rates.

Table of Contents

trends in May and June 2020. The Company has also taken steps to add new private label lines, expand its relationships with smaller RV manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

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 condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

COVID-19

~~New Products and Vertical Acquisitions.~~ Introduction of new products enhances our cross‑selling effort, both by catering to evolving customer demands and by bringing in new customers. Through relationships with existing suppliers and through acquisitions, we look to increase the new products we can offer to our customers. Similarly, an opportunistic vertical acquisition strategy allows us to earn an increased margin on our services, protection plans, and products, and we evaluate such acquisitions that can allow us to capture additional sales from our customers at attractive risk‑adjusted returns.

As discussed in Note 91 — ~~Acquisitions~~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, the COVID-19 pandemic adversely impacted our business from mid-March through much of April 2020, but shifted to a favorable impact beginning primarily in May 2020.

In response to the pandemic, we have implemented preparedness plans to keep our employees and customers safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home orders for a significant portion of our workforce. The majority of our 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 June 30, 2020, we have temporarily closed three of our dealerships and two of our specialty retail locations as a result of COVID-19. We temporarily reduced salaries and hours throughout the Company, including for our executive officers and implemented headcount and other cost reductions primarily from the middle of March 2020 through the middle of May 2020, in an attempt to better align expenses with the initially expected reduced sales resulting from the impact of COVID-19 on our business. Most of these temporary salary reductions ended in May 2020 as the adverse impacts of the pandemic began to decline and we increased hours for certain employees and reinstated many positions from the initial headcount reductions as the demand for our products increased.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, we saw significant sequential declines in overall customer traffic levels and overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, we began to see a significant improvement in online web traffic levels, and in early May, we began to see improvements in overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic and revenue trends in May and June 2020. We believe that as stay-at-home restrictions around the U.S. continue to ease, the demand for safe travel modalities and recreational activities away from home will continue to increase, since we believe that the RV industry has benefitted and will continue to benefit from an anticipated slow recovery of the cruise line, air travel and hotel industries.

We have been implementing marketing and operational plans to optimize our leadership position through the recovery, regardless of the ultimate timing and slope of the recovery curve. We have adapted our sales practices to accommodate customers’ safety concerns in this COVID-19 environment, such as offering virtual tours of RVs and providing home delivery options.

If stay-at-home and shelter-in-place restrictions are put back into place or as other modes of transportation recover from the impact of COVID-19, the increased demand for our products may not be sustained. We are unable to accurately quantify the impact that COVID-19 could have on our business, results of operations and liquidity due to numerous uncertainties, including the severity of the disease, the duration of the pandemic, including additional waves of infection, the economic impact of the pandemic, actions that may be taken by governmental authorities and other as yet unanticipated consequences. In addition, there could be weakening demand for items that are not basic goods, and our supply chain could be disrupted in the future as a result of the outbreak, such as if Thor Industries, Inc. was to again close its North American production facilities as it did from late March to early May 2020. Either of these events 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.

Table of Contents

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 condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Results of Operations

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

The following table sets forth information comparing the components of net income for the three months ended June 30, 2020 and 2019:


	Three Months Ended
	June 30, 2020			June 30, 2019
			Percent of			Percent of	Favorable/ (Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%

Revenue:
Good Sam Services and Plans	$	44,519	2.8%	$	44,694	3.0%	$	(175)	(0.4%)
RV and Outdoor Retail:
New vehicles		898,175	55.9%		778,870	52.8%		119,305	15.3%
Used vehicles		274,910	17.1%		245,749	16.7%		29,161	11.9%
Products, service and other		231,172	14.4%		264,426	17.9%		(33,254)	(12.6%)
Finance and insurance, net		147,318	9.2%		128,225	8.7%		19,093	14.9%
Good Sam Club		10,651	0.7%		12,383	0.8%		(1,732)	(14.0%)
Subtotal		1,562,226	97.2%		1,429,653	97.0%		132,573	9.3%
Total revenue		1,606,745	100.0%		1,474,347	100.0%		132,398	9.0%

Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		29,285	1.8%		25,948	1.8%		3,337	12.9%
RV and Outdoor Retail:
New vehicles		145,605	9.1%		97,471	6.6%		48,134	49.4%
Used vehicles		66,081	4.1%		53,068	3.6%		13,013	24.5%
Products, service and other		91,831	5.7%		95,819	6.5%		(3,988)	(4.2%)
Finance and insurance, net		147,318	9.2%		128,225	8.7%		19,093	14.9%
Good Sam Club		8,518	0.5%		9,459	0.6%		(941)	(9.9%)
Subtotal		459,353	28.6%		384,042	26.0%		75,311	19.6%
Total gross profit		488,638	30.4%		409,990	27.8%		78,648	19.2%

Operating expenses:
Selling, general and administrative expenses		271,591	16.9%		303,366	20.6%		31,775	10.5%
Depreciation and amortization		12,567	0.8%		13,946	0.9%		1,379	9.9%
Lease termination		868	0.1%		—	—		(868)	(100.0%)
Loss on disposal of assets		272	0.0%		2,374	0.2%		2,102	88.5%
Total operating expenses		285,298	17.8%		319,686	21.7%		34,388	10.8%
Income from operations		203,340	12.7%		90,304	6.1%		113,036	125.2%
Other income (expense):
Floor plan interest expense		(5,098)	(0.3%)		(11,269)	(0.8%)		6,171	54.8%
Other interest expense, net		(14,547)	(0.9%)		(18,211)	(1.2%)		3,664	20.1%
Total other income (expense)		(19,645)	(1.2%)		(29,480)	(2.0%)		9,835	33.4%
Income before income taxes		183,695	11.4%		60,824	4.1%		122,871	202.0%
Income tax expense		(20,473)	(1.3%)		(8,201)	(0.6%)		(12,272)	(149.6%)
Net income		163,222	10.2%		52,623	3.6%		110,599	210.2%
Less: net income attributable to non-controlling interests		(105,145)	(6.5%)		(34,606)	(2.3%)		(70,539)	(203.8%)
Net income attributable to Camping World Holdings, Inc.	$	58,077	3.6%	$	18,017	1.2%	$	40,060	222.3%

Table of Contents

Supplemental Data


	Three Months Ended June 30,				Increase			Percent
	2020		2019		(decrease)			Change
Unit sales
New vehicles		27,168		22,906		4,262			18.6%
Used vehicles		11,618		10,809		809			7.5%
Total		38,786		33,715		5,071			15.0%

Average selling price
New vehicles	$	33,060	$	34,003	$	(943)			(2.8%)
Used vehicles	$	23,662	$	22,736	$	927			4.1%

Same store unit sales
New vehicles		24,628		21,413		3,215			15.0%
Used vehicles		10,610		10,365		245			2.4%
Total		35,238		31,778		3,460			10.9%

Same store revenue ($ in 000's)
New vehicles	$	818,865	$	736,661	$	82,204			11.2%
Used vehicles		255,201		238,822		16,379			6.9%
Products, service and other		151,406		147,713		3,693			2.5%
Finance and insurance		135,844		122,264		13,580			11.1%
Total	$	1,361,316	$	1,245,460	$	115,856			9.3%

Average gross profit per unit
New vehicles	$	5,359	$	4,255	$	1,104			25.9%
Used vehicles	$	5,688	$	4,910	$	778			15.9%
Finance and insurance, net per vehicle unit	$	3,798	$	3,803	$	(5)			(0.1%)
Total vehicle front-end yield(1)	$	9,256	$	8,268	$	988			11.9%

Gross margin
Good Sam Services and Plans		65.8%		58.1%		772	bps
New vehicles		16.2%		12.5%		370	bps
Used vehicles		24.0%		21.6%		244	bps
Products, service and other		39.7%		36.2%		349	bps
Finance and insurance, net		100.0%		100.0%		unch.	bps
Good Sam Club		80.0%		76.4%		359	bps
Subtotal RV and Outdoor Retail		29.4%		26.9%		254	bps
Total gross margin		30.4%		27.8%		260	bps

Inventories ($ in 000's)
New vehicles	$	711,164	$	1,000,977	$	(289,813)			(29.0%)
Used vehicles		126,687		121,744		4,943			4.1%
Products, parts, accessories and misc.		214,357		424,756		(210,399)			(49.5%)
Total RV and Outdoor inventories	$	1,052,208	$	1,547,477	$	(495,269)			(32.0%)

Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location	$	4,679	$	6,629	$	(1,950)			(29.4%)
Used vehicle inventory per dealer location	$	833		806	$	27			3.4%

Vehicle inventory turnover(2)
New vehicle inventory turnover		2.3		2.1		0.2			9.6%
Used vehicle inventory turnover		4.7		5.0		(0.3)			(5.2%)

Retail locations
RV dealerships		152		151		1			0.7%
RV service & retail centers		10		14		(4)			(28.6%)
Subtotal		162		165		(3)			(1.8%)
Other retail stores		2		62		(60)			(96.8%)
Total		164		227		(63)			(27.8%)

Other data
Active Customers(3)		5,220,367		5,251,874		(31,507)			(0.6%)
Good Sam Club members		2,067,253		2,177,743		(110,490)			(5.1%)
Finance and insurance gross profit as a % of total vehicle revenue		12.6%		12.5%		4	bps		n/a
Same store locations		143		n/a		n/a			n/a

Table of Contents

(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 units sold.

(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 $1.6 billion for the three months ended June 30, 2020, an increase of $132.4 million, or 9.0%, from $1.5 billion for the three months ended June 30, 2019. The increase in total revenue was driven by a $132.6 million, or 9.3%, increase in RV and Outdoor Retail revenue, partially offset by a $0.2 million, or 0.4% decrease in Good Sam Services and Plans revenue.

Total gross profit was $488.6 million for the three months ended June 30, 2020, an increase of $78.6 million, or 19.2%, from $410.0 million for the three months ended June 30, 2019. The increase in total gross profit was driven by a $75.3 million, or 19.6%, increase in RV and Outdoor Retail gross profit, and a $3.3 million, or 12.9%, increase in Good Sam Services and Plans gross profit.

Income from operations was $203.3 million for the three months ended June 30, 2020, an increase of $113.0 million, or 125.2%, from $90.3 million for the three months ended June 30, 2019. The increase in income from operations was primarily driven by a $78.6 million increase in gross profit, a $31.8 million decrease in selling, general and administrative expenses, a $2.1 million decrease in loss on disposal of assets, and a $1.4 million decrease in depreciation and amortization, partially offset by a $0.9 million increase in lease termination expense.

Total other expenses were $19.6 million for the three months ended June 30, 2020, a decrease of $9.8 million, or 33.4%, from $29.5 million for the three months ended June 30, 2019. The decrease in other expenses was driven by a $6.2 million decrease in floor plan interest expense and a $3.7 million decrease in other interest expense.

As a result of the above factors, income before income taxes was $183.7 million for the three months ended June 30, 2020 compared to $60.8 million for the three months ended June 30, 2019. Income tax expense was $20.5 million for the three months ended June 30, 2020, an increase of $12.3 million from $8.2 million for the three months ended June 30, 2019. As a result, net income was $163.2 million for the three months ended June 30, 2020 compared to $52.6 million for the three months ended June 30, 2019.

Good Sam Services and Plans

Good Sam Services and Plans revenue decreased 0.4%, or $0.2 million, to $44.5 million in the three months ended June 30, 2020, from $44.7 million in the three months ended June 30, 2019. The decrease was primarily attributable to a $0.5 million decrease in Good Sam TravelAssist revenue, a $0.4 million decrease from reduced magazine ad sales, and a $0.3 million decrease from other services and plans, partially offset by a $0.5 million increase from the vehicle insurance products, and a $0.5 million increase in revenue from RV refinancing.

Good Sam Services and Plans gross profit increased 12.9%, or $3.3 million, to $29.3 million in the three months ended June 30, 2020, from $25.9 million in the three months ended June 30, 2019 and gross margin increased to 65.8% from 58.1% in the same respective periods. The increase in gross profit was primarily attributable to a $1.7 million increase from the roadside assistance programs, a $1.2 million increase from our extended vehicle warranty programs, a $0.5 million increase from RV refinancing, and a $0.2 million increase in other services and plans, partially offset by a $0.3 million reduction from the Good Sam TravelAssist programs.

RV and Outdoor Retail

New Vehicles

New vehicle revenue increased 15.3%, or $119.3 million, to $898.2 million in the three months ended June 30, 2020 from $778.9 million in the three months ended June 30, 2019. The increase was primarily due to a 18.6% increase in vehicle units sold, partially offset by a 2.8% decrease in average selling price per vehicle

Table of Contents

sold resulting from a shift towards lower priced towable units. On a same store basis, new vehicle revenue increased 11.2% to $818.9 million and new vehicle units increased 15.0% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

New vehicle gross profit increased 49.4%, or $48.1 million, to $145.6 million in the three months ended June 30, 2020 from $97.5 million in the three months ended June 30, 2019. The increase was primarily due to a 25.9% increase in average gross profit per vehicle sold and an 18.6% increase in vehicle units sold. New vehicle gross margin increased to 16.2% in the three months ended June 30, 2020 from 12.5% in the three months ended June 30, 2019. The increase was primarily due to a sale mix shift towards higher margined towable units and to higher average motorized gross margins resulting from lower motorized inventory levels that have been better aligned with demand.

Used Vehicles

Used vehicle revenue increased 11.9%, or $29.2 million, to $274.9 million in the three months ended June 30, 2020 from $245.7 million in the three months ended June 30, 2019. The increase was primarily due to a 7.5% increase in vehicle units sold, and a 4.1% increase in average selling price per vehicle. On a same store basis, used vehicle revenue increased 6.9% to $255.2 million and used vehicle units increased 2.4% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

Used vehicle gross profit increased 24.5%, or $13.0 million, to $66.1 million in the three months ended June 30, 2020 from $53.1 million in the three months ended June 30, 2019. The increase was primarily from a 7.5% increase in vehicle units sold and a 15.9% increase in average gross profit per vehicle. Used vehicle gross margin increased 244 basis points to 24.0% in the three months ended June 30, 2020 from 21.6% in the three months ended June 30, 2019. The increase was driven by strength in the used vehicle market across nearly all product types.

Products, service and other

Products, service and other revenue decreased 12.6%, or $33.3 million, to $231.2 million in the three months ended June 30, 2020, from $264.4 million in the three months ended June 30, 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 2.5% to $151.4 million for the three months ended June 30, 2020 from $147.7 million in the three months ended June 30, 2019.

Products, service and other gross profit decreased 4.2%, or $4.0 million, to $91.8 million in the three months ended June 30, 2020 from $95.8 million in the three months ended June 30, 2019. The decrease was primarily due to store closures related to the 2019 Strategic Shift, partially offset by the increase in vehicles sold. Products, service and other gross margin increased to 39.7% in the three months ended June 30, 2020 from 36.2% in the three months ended June 30, 2019. The increase was primarily due to a sales mix shift towards 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 14.9%, or $19.1 million, to $147.3 million in the three months ended June 30, 2020 from $128.2 million in the three months ended June 30, 2019. Finance and insurance, net revenue as a percentage of new and used vehicles financed increased to 12.6% for the three months ended June 30, 2020 from 12.5% for the three months ended June 30, 2019. On a same store basis, finance and insurance, net revenue and gross profit increased 11.1%, or $13.6 million, to $135.8 million versus the three months ended June 30, 2019.

Good Sam Club

Good Sam Club revenue decreased 14.0%, or $1.7 million, to $10.7 million in the three months ended June 30, 2020 from $12.4 million in the three months ended June 30, 2019. The decrease primarily resulted

Table of Contents

from reduced membership fees related to fewer retail locations that resulted from store closures related to the 2019 Strategic Shift.

Good Sam Club gross profit decreased 9.9%, or $0.9 million, to $8.5 million in the three months ended June 30, 2020 from $9.5 million in the three months ended June 30, 2019. The decrease was primarily due to reduced membership fee activity from the decreased number of stores as a result of the store closure related to 2019 Strategic Shift. Good Sam Club gross margin increased to 80.0% in the three months ended June 30, 2020 from 76.4% in the three months ended June 30, 2019 primarily due to reduced club marketing expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased 10.5%, or $31.8 million, to $271.6 million in the three months ended June 30, 2020 from $303.4 million in the three months ended June 30, 2019. The $31.8 million decrease was primarily due to decreases of $17.2 million of selling expense, $5.0 million in wage-related expenses, $1.8 million of personal and real property expense, $1.6 million of service and professional fees, and $6.2 million of other store and corporate overhead expenses. Selling, general and administrative expenses as a percentage of total gross profit decreased to 55.6% in the three months ended June 30, 2020, from 74.0% in the three months ended June 30, 2019.

Depreciation and amortization

Depreciation and amortization decreased 9.9%, or $1.4 million, to $12.6 million in the three months ended June 30, 2020 from $13.9 million in the three months ended June 30, 2019 due to a reduction in capital expenditures.

Lease termination

Lease termination expense of $0.9 million in the three months ended June 30, 2020 related primarily to the 2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense decreased 54.8%, or $6.2 million, to $5.1 million in the three months ended June 30, 2020 from $11.3 million in the three months ended June 30, 2019. The decrease was primarily due to a 227 basis point decrease in the average floor plan borrowing rate, and a 16.2% decrease in average floor plan borrowings driven by lower average inventory levels.

Other interest expense, net

Other interest expense decreased 20.1%, or $3.7 million, to $14.5 million in the three months ended June 30, 2020 from $18.2 million in the three months ended June 30, 2019. The decrease was primarily due to a 121 basis point decrease in the average interest rate.

Income tax expense

Income tax expense increased $12.3 million to $20.5 million in the three months ended June 30, 2020 compared to the three months ended June 30, 2019. The increase was primarily due to higher 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 absent the transfer of certain 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 income

Net income increased 210.2%, or $110.6 million, to a net income of $163.2 million for the three months ended June 30, 2020 from a net income of $52.6 million in the three months ended June 30, 2019 primarily due to the items mentioned above.

Table of Contents

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:


	Three Months Ended
	June 30, 2020			June 30, 2019			Favorable/
			Percent of			Percent of	(Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	44,692	2.8%	$	44,991	3.1%	$	(299)	(0.7%)
RV and Outdoor Retail		1,568,301	97.6%		1,442,579	97.8%		125,722	8.7%
Elimination of intersegment revenue		(6,248)	(0.4%)		(13,223)	(0.9%)		6,975	52.7%
Total consolidated revenue		1,606,745	100.0%		1,474,347	100.0%		132,398	9.0%
Segment income:⁽¹⁾
Good Sam Services and Plans		24,591	1.5%		21,208	1.4%		3,383	16.0%
RV and Outdoor Retail		188,383	11.7%		75,687	5.1%		112,696	148.9%
Total segment income		212,974	13.3%		96,895	6.6%		116,079	119.8%
Corporate & other		(2,165)	(0.1%)		(3,914)	(0.3%)		1,749	44.7%
Depreciation and amortization		(12,567)	(0.8%)		(13,946)	(0.9%)		1,379	9.9%
Other interest expense, net		(14,547)	(0.9%)		(18,211)	(1.2%)		3,664	20.1%
Income before income taxes	$	183,695	11.4%	$	60,824	4.1%	$	122,871	202.0%

Same store revenue- RV and Outdoor Retail⁽²⁾	$	1,361,316		$	1,245,460		$	115,856	9.3%

(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 decreased 0.7%, or $0.3 million, to $44.7 million in the three months ended June 30, 2020, from $45.0 million in the three months ended June 30, 2019. The decrease was primarily attributable to a $0.5 million decrease in Good Sam TravelAssist revenue, a $0.5 million decrease from reduced magazine ad sales, and a $0.3 million decrease from other services and plans, partially offset by a $0.5 million increase from the vehicle insurance products, and a $0.5 million increase in revenue from RV refinancing.

Good Sam Services and Plans segment income increased 16.0%, or $3.4 million, to $24.6 million in the three months ended June 30, 2020, from $21.2 million in the three months ended June 30, 2019. The increase was primarily attributable to a $1.7 million increase from the roadside assistance programs, a $1.2 million increase from our vehicle insurance programs, a $0.5 million increase from RV refinancing, and a $0.3 million increase in other services and plans, partially offset by a $0.3 million reduction in the Good Sam TravelAssist programs. Good Sam Services and Plans segment margin increased 779 basis points to 55.2% in the three months ended June 30, 2020 from 47.5% in the three months ended June 30, 2019.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue increased 8.7%, or $125.7 million, to $1.6 billion in the three months ended June 30, 2020 from $1.4 billion in the three months ended June 30, 2019. The increase was primarily driven by a $119.5 million, or 15.3%, increase in new vehicle revenue, a $29.2 million, or 11.8%, increase in used vehicle revenue, and an $18.7 million,or 14.2%, increase in finance and insurance revenue, partially offset by a $40.0 million, or 14.7%, decrease in products, service and other revenue primarily due to the 2019 Strategic Shift, and a $1.7 million, or 14.0%, decrease in Good Sam Club revenue.

Table of Contents

RV and Outdoor Retail segment income increased 148.9%, or $112.7 million, to a segment income of $188.4 million in the three months ended June 30, 2020 from a segment income of $75.7 million in the three months ended June 30, 2019. The increase was primarily related to increased segment gross profit of $75.3 million primarily due to increased volume of new vehicles sold and increased gross profit per unit sold, reduced selling, general and administrative expenses of $30.0 million, reduced floor plan interest expense of $6.2 million, and $2.1 million of reduced loss on asset disposal, partially offset by $0.9 million of lease termination expense. RV and Outdoor Retail segment margin increased 676 basis points to 12.1% in the three months ended June 30, 2020 from 5.3% in the three months ended June 30, 2019.

Corporate and other expenses

Corporate and other expenses decreased 44.7%, or $1.7 million, to $2.2 million in the three months ended June 30, 2020 from $3.9 million in the three months ended June 30, 2019 primarily from reduced professional fees.

Table of Contents

Results of Operations

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

The following table sets forth information comparing the components of net income for the six months ended June 30, 2020 and 2019:


	Six Months Ended
	June 30, 2020			June 30, 2019
			Percent of			Percent of	Favorable/ (Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	91,727	3.5%	$	91,660	3.6%	$	67	0.1%
RV and Outdoor Retail:
New vehicles		1,395,492	53.0%		1,308,447	51.5%		87,045	6.7%
Used vehicles		481,575	18.3%		425,757	16.8%		55,818	13.1%
Products, service and other		403,795	15.3%		469,302	18.5%		(65,507)	(14.0%)
Finance and insurance, net		239,774	9.1%		220,116	8.7%		19,658	8.9%
Good Sam Club		21,655	0.8%		23,834	0.9%		(2,179)	(9.1%)
Subtotal		2,542,291	96.5%		2,447,456	96.4%		94,835	3.9%
Total revenue		2,634,018	100.0%		2,539,116	100.0%		94,902	3.7%

Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		54,634	2.1%		52,183	2.1%		2,451	4.7%
RV and Outdoor Retail:
New vehicles		216,480	8.2%		164,004	6.5%		52,476	32.0%
Used vehicles		108,953	4.1%		90,230	3.6%		18,723	20.8%
Products, service and other		154,185	5.9%		164,591	6.5%		(10,406)	(6.3%)
Finance and insurance, net		239,774	9.1%		220,116	8.7%		19,658	8.9%
Good Sam Club		17,275	0.7%		17,193	0.7%		82	0.5%
Subtotal		736,667	28.0%		656,134	25.8%		80,533	12.3%
Total gross profit		791,301	30.0%		708,317	27.9%		82,984	11.7%

Operating expenses:
Selling, general and administrative expenses		539,247	20.5%		571,431	22.5%		32,184	5.6%
Depreciation and amortization		26,645	1.0%		27,540	1.1%		895	3.2%
Long-lived asset impairment		6,569	0.2%		—	—		(6,569)	(100.0%)
Lease termination		1,452	0.1%		—	—		(1,452)	(100.0%)
Loss on disposal of assets		783	0.0%		2,160	0.1%		1,377	63.8%
Total operating expenses		574,696	21.8%		601,131	23.7%		26,435	4.4%
Income from operations		216,605	8.2%		107,186	4.2%		(109,419)	(102.1%)
Other income (expense):
Floor plan interest expense		(13,702)	(0.5%)		(22,879)	(0.9%)		9,177	40.1%
Other interest expense, net		(29,205)	(1.1%)		(35,854)	(1.4%)		6,649	18.5%
Tax Receivable Agreement liability adjustment		—	—		8,477	0.3%		(8,477)	(100.0%)
Total other income (expense)		(42,907)	(1.6%)		(50,256)	(2.0%)		7,349	14.6%
Income before income taxes		173,698	6.6%		56,930	2.2%		116,768	205.1%
Income tax expense		(24,605)	(0.9%)		(31,114)	(1.2%)		6,509	20.9%
Net income		149,093	5.7%		25,816	1.0%		123,277	477.5%
Less: net income attributable to non-controlling interests		(99,176)	(3.8%)		(27,194)	(1.1%)		(71,982)	(264.7%)
Net income attributable to Camping World Holdings, Inc.	$	49,917	1.9%	$	(1,378)	(0.1%)	$	51,295	3,722.4%

Table of Contents

Supplemental Data


	Six Months Ended June 30,				Increase			Percent
	2020		2019		(decrease)			Change
Unit sales
New vehicles		41,376		37,922		3,454			9.1%
Used vehicles		20,300		18,986		1,314			6.9%
Total		61,676		56,908		4,768			8.4%

Average selling price
New vehicles	$	33,727	$	34,504	$	(777)			(2.3%)
Used vehicles	$	23,723	$	22,425	$	1,298			5.8%

Same store unit sales
New vehicles		37,382		35,681		1,701			4.8%
Used vehicles		18,521		18,303		218			1.2%
Total		55,903		53,984		1,919			3.6%

Same store revenue ($ in 000's)
New vehicles	$	1,269,206	$	1,245,892	$	23,314			1.9%
Used vehicles		447,863		414,978		32,885			7.9%
Products, service and other		263,955		261,088		2,867			1.1%
Finance and insurance		220,224		211,166		9,058			4.3%
Total	$	2,201,248	$	2,133,124	$	68,124			3.2%

Average gross profit per unit
New vehicles	$	5,232	$	4,325	$	907			21.0%
Used vehicles	$	5,367	$	4,752	$	615			12.9%
Finance and insurance, net per vehicle unit	$	3,888	$	3,868	$	20			0.5%
Total vehicle front-end yield⁽¹⁾	$	9,164	$	8,335	$	829			9.9%

Gross margin
Good Sam Services and Plans		59.6%		56.9%		263	bps
New vehicles		15.5%		12.5%		298	bps
Used vehicles		22.6%		21.2%		143	bps
Products, service and other		38.2%		35.1%		311	bps
Finance and insurance, net		100.0%		100.0%		unch.	bps
Good Sam Club		79.8%		72.1%		764	bps
Subtotal RV and Outdoor Retail		29.0%		26.8%		217	bps
Total gross margin		30.0%		27.9%		215	bps

Inventories ($ in 000's)
New vehicles	$	711,164	$	1,000,977	$	(289,813)			(29.0%)
Used vehicles		126,687		121,744		4,943			4.1%
Products, parts, accessories and misc.		214,357		424,756		(210,399)			(49.5%)
Total RV and Outdoor Retail inventories	$	1,052,208	$	1,547,477	$	(495,269)			(32.0%)

Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location	$	4,679	$	6,629	$	(1,950)			(29.4%)
Used vehicle inventory per dealer location	$	833	$	806	$	27			3.4%

Vehicle inventory turnover⁽²⁾
New vehicle inventory turnover		2.3		2.1		0.2			9.6%
Used vehicle inventory turnover		4.7		5.0		(0.3)			(5.2%)

Retail locations
RV dealerships		152		151		1			0.7%
RV service & retail centers		10		14		(4)			(28.6%)
Subtotal		162		165		(3)			(1.8%)
Other retail stores		2		62		(60)			(96.8%)
Total		164		227		(63)			(27.8%)

Other data
Active Customers⁽³⁾		5,220,367		5,251,874		(31,507)			(0.6%)
Good Sam Club members		2,067,253		2,177,743		(110,490)			(5.1%)
Finance and insurance gross profit as a % of total vehicle revenue		12.8%		12.7%		8	bps		n/a
Same store locations		143		n/a		n/a			n/a

Table of Contents

(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 units sold.

(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 $2.6 billion for the six months ended June 30, 2020, an increase of $94.9 million, or 3.7%, from $2.5 billion for the six months ended June 30, 2019. The increase in total revenue was driven by a $94.8 million, or 3.9%, increase in RV and Outdoor Retail revenue and a $0.1 million, or 0.1%, increase in Good Sam Services and Plans revenue.

Total gross profit was $791.3 million for the six months ended June 30, 2020, an increase of $83.0 million, or 11.7%, from $708.3 million for the six months ended June 30, 2019. The increase in total gross profit was driven by an $80.5 million, or 12.3%, increase in RV and Outdoor Retail gross profit and a $2.5 million, or 4.7%, increase in Good Sam Services and Plans gross profit.

Income from operations was $216.6 million for the six months ended June 30, 2020, an increase of $109.4 million, or 102.1%, from $107.2 million for the six months ended June 30, 2019. The increase in income from operations was primarily driven by an $83.0 million increase in gross profit, a $32.2 million decrease in selling, general and administrative expenses, a $1.4 million decrease in loss on disposal of assets, and a $0.9 million decrease in depreciation and amortization, partially offset by a $6.6 million increase in long-lived asset impairment, and a $1.5 million increase in lease termination expense.

Total other expenses were $42.9 million for the six months ended June 30, 2020, a decrease of $7.3 million, or 14.6%, from $50.3 million for the six months ended June 30, 2019. The decrease in other expenses was driven by a $9.2 million decrease in floor plan interest expense and a $6.6 million decrease in other interest expense, partially offset by an $8.5 million favorable adjustment in Tax Receivable Agreement Liability in 2019, which did not reoccur in 2020.

As a result of the above factors, income before income taxes was $173.7 million for the six months ended June 30, 2020 compared to $56.9 million for the six months ended June 30, 2019. Income tax expense was $24.6 million for the six months ended June 30, 2020, a decrease of $6.5 million from $31.1 million for the six months ended June 30, 2019. As a result, net income was $149.1 million for the six months ended June 30, 2020 compared to $25.8 million for the six months ended June 30, 2019.

Good Sam Services and Plans

Good Sam Services and Plans revenue remained essentially flat at $91.7 million in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019. The slight increase was primarily attributable to a $1.1 million increase in the vehicle insurance products primarily due to increased policies in force, and an $0.8 million increase in our roadside assistance programs primarily resulting from upsells to higher priced product offerings, partially offset by a $1.3 million decrease in consumer shows revenue due to eight fewer consumer shows, and a $0.6 million decrease from lower magazine ad sales.

Good Sam Services and Plans gross profit increased 4.7%, or $2.5 million, to $54.6 million in the six months ended June 30, 2020, from $52.2 million in the six months ended June 30, 2019 and gross margin increased to 59.6% from 56.9% in the same respective periods. The increase in gross profit was primarily attributable to $2.1 million from the roadside assistance programs primarily resulting from increased revenue and reduced program costs, $1.3 million from the extended vehicle programs primarily due to increased revenue and reduced marketing costs, and $0.8 million from the vehicle insurance products, partially offset by $0.9 million of increased accrual for program costs, a $0.6 million reduction from reduced consumer shows, and a $0.2 million reduction resulting from reduced magazine ad sales.

Table of Contents

RV and Outdoor Retail

New Vehicles

New vehicle revenue increased 6.7%, or $87.0 million, to $1.4 billion in the six months ended June 30, 2020 from $1.3 billion in the six months ended June 30, 2019. The increase was primarily due to a 9.1% increase in vehicle units sold, partially offset by a 2.3% decrease in average selling price per vehicle, resulting from a shift towards lower priced towable units. On a same store basis, new vehicle revenue increased 1.9% to $1.3 billion in the six months ended June 30, 2020 from $1.2 billion in the six months ended June 30, 2019.

New vehicle gross profit increased 32.0%, or $52.5 million, to $216.5 million in the six months ended June 30, 2020 from $164.0 million in the six months ended June 30, 2019. The increase was primarily due to a 21.0% increase in average gross profit per vehicle sold and by a 9.1% increase in vehicle units sold. Gross margin increased to 15.5% in the six months ended June 30, 2020 from 12.5% in the six months ended June 30, 2019. The increase was primarily due to a sales mix shift towards higher margined towable units, and to higher average motorized gross margins resulting from lower motorized inventory levels that have been better aligned with demand.

Used Vehicles

Used vehicle revenue increased 13.1%, or $55.8 million, to $481.6 million in the six months ended June 30, 2020 from $425.8 million in the six months ended June 30, 2019. The increase was primarily due to a 6.9% increase in vehicle units sold, and a 5.8% increase in average selling price per vehicle sold. On a same store basis, used vehicle revenue increased 7.9% to $447.9 million in the six months ended June 30, 2020 from $415.0 million in the six months ended June 30, 2019.

Used vehicle gross profit increased 20.8%, or $18.7 million, to $109.0 million in the six months ended June 30, 2020 from $90.2 million in the six months ended June 30, 2019. The increase was primarily from a 6.9% increase in vehicle units sold and a 12.9% increase in average gross profit per vehicle. Used vehicle gross margin increased to 22.6% in the six months ended June 30, 2020 from 21.2% in the six months ended June 30, 2019. The increase was driven by nearly all product types as a result of strength in the used market across nearly all product types.

Products, service and other

Products, service and other revenue decreased 14.0%, or $65.5 million, to $403.8 million in the six months ended June 30, 2020, from $469.3 million in the six months ended June 30, 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 1.1% to $264.0 million for the six months ended June 30, 2020 from $261.1 million in the six months ended June 30, 2019.

Products, service and other gross profit decreased 6.3%, or $10.4 million, to $154.2 million in the six months ended June 30, 2020 from $164.6 million in the six months ended June 30, 2019. The decrease was primarily due to store closures related to the 2019 Strategic Shift. Products, service and other gross margin increased to 38.2% in the six months ended June 30, 2020 from 35.1% in the six months ended June 30, 2019. The increase was primarily due to a sales mix shift towards 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 8.9%, or $19.7 million, to $239.8 million in the six months ended June 30, 2020 from $220.1 million in the six months ended June 30, 2019. Finance and insurance, net revenue as a percentage of new and used vehicles financed increased to 12.8% for the six months ended June 30, 2020 from 12.7% for the six months

Table of Contents

ended June 30, 2019. On a same store basis, finance and insurance, net revenue and gross profit increased 4.3%, or $9.1 million, to $220.2 million versus the six months ended June 30, 2019.

Good Sam Club

Good Sam Club revenue decreased 9.1%, or $2.2 million, to $21.7 million in the six months ended June 30, 2020 from $23.8 million in the six months ended June 30, 2019. The decrease resulted from reduced membership fees and royalty fees from the credit card related to fewer retail locations that resulted from store closures related to the 2019 Strategic Shift.

Good Sam Club gross profit increased 0.5%, or $0.1 million, to $17.3 million in the six months ended June 30, 2020 from $17.2 million in the six months ended June 30, 2019. The increase was primarily due to reduced marketing expenses for the Good Sam membership related to fewer retail locations as a result of store closures related to the 2019 Strategic Shift. Gross margin increased to 79.8% in the six months ended June 30, 2020 from 72.1% in the six months ended June 30, 2019 primarily due to reduced club marketing expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased 5.6%, or $32.2 million, to $539.2 million in the six months ended June 30, 2020 from $571.4 million in the six months ended June 30, 2019. The $32.2 million decrease was primarily due to a decrease of $16.8 million in selling expense, $4.3 million in wage-related expenses, $2.7 million of personal and real property expense, $6.1 million of other store and corporate overhead expenses, and $2.3 million of service and professional fees. Selling, general and administrative expenses as a percentage of total gross profit decreased to 68.1% in the six months ended June 30, 2020, from 80.7% in the six months ended June 30, 2019.

Depreciation and amortization

Depreciation and amortization decreased 3.2%, or $0.9 million, to $26.6 million in the six months ended June 30, 2020 from $27.5 million in the six months ended June 30, 2019 due to a reduction in capital expenditures and the asset impairment related to the 2019 Strategic Shift.

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 ~~have exercised~~recognized $6.6 million of long-lived asset impairments during the ~~Designation Rights and assumed 15 Gander Mountain retail leases on October 6, 2017, in addition~~six months ended June 30, 2020, of which $6.5 million related to the ~~two Overton’s retail leases assumed at~~2019 Strategic Shift discussed above.

Lease termination

Lease termination expense of $1.5 million in the closing of the Gander Mountain Acquisition. The Designation Rights expired on October 6, 2017. Contingent on our final lease negotiations, our current plan is to open the initial 15 to 20 Gander Mountain stores, which will be rebranded as Gander Outdoors, by the end of the first quarter of 2018 and another 40 to 45 stores during the second and third quarters of 2018, with measured growth thereafter. Outside of the 15 Gander Mountain retail leases assumed under the Designation Rights, we expect to enter into new leases directly with the lessors for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business and open stores. We believe Gander Mountain’s and Overton’s consumers’ affinitysix months ended June 30, 2020 related primarily to the ~~outdoor lifestyle complements our businesses with potential opportunities to build on our Good Sam strategy of selling clubs, warranties, insurance and other related products.~~2019 Strategic Shift discussed above.

As discussed below under “— Liquidity and Capital Resources,” we believe that our sources of liquidity and capital will be sufficient to take advantage of these positive trends in RV usage and finance our growth strategy, including the Gander Mountain Acquisition. However, the operation of our business, the rate of our expansion and our ability to respond to changing business and economic conditions depend on the availability of adequate capital, which in turn typically depends on cash flow generated by our business and, if necessary, the availability of equityFloor plan interest expense

Floor plan interest expense decreased 40.1%, or debt capital. In addition, as we grow, we will face the risk that our existing resources and systems, including management resources, accounting and finance personnel, and operating systems, may be inadequate to support our growth. Any inability to generate sufficient cash flows from operations or raise additional equity or debt capital or retain the personnel or make the other changes in our systems that may be required to support our growth could have a material adverse effect on our business, financial condition and results of operations. 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” and “Risk Factors — Risks Related to our Business — Our expansion into new, unfamiliar markets presents increased risks that may prevent us from being profitable in these new markets. Delays in opening or acquiring new retail locations could have a material adverse effect on our business, financial condition and results of operations” included in Part I, Item 1A of our Annual Report.

~~How We Generate Revenue~~

~~Revenue across each of our two reporting segments is impacted by the following key revenue drivers:~~

~~Number of Active Customers.~~ As of September 30, 2017 and December 31, 2016, we had approximately 3.6 million and 3.3 million Active Customers, respectively, excluding the impact of the Gander Mountain Acquisition. As discussed above, we estimate that the favorable impact on our Active Customer count from the Gander Mountain Acquisition over time will be approximately 0.7$9.2 million, to ~~1.5 million. Our Active Customer base is an integral part of our business model~~$13.7 million in the six months ended June 30, 2020 from $22.9 million in the six months ended June 30, 2019. The decrease was primarily due to a 154 basis point decrease in the average floor plan borrowing rate, and ~~has~~ a ~~significant effect on our revenue. We attract new customers~~12.1% decrease in average floor plan borrowings driven by lower average inventory levels.

Other interest expense, net

Other interest expense decreased 18.5%, or $6.6 million, to ~~our business~~$29.2 million in the six months ended June 30, 2020 from $35.9 million in the six months ended June 30, 2019. The decrease was primarily ~~through our retail locations, e-commerce platforms, and direct marketing. Once we acquire our customers through~~due to a ~~transaction, they become part of our customer database where we use CRM tools to cross‑sell Active Customers additional products and services.~~

~~Consumer Services and Plans.~~ The majority of our consumer services and plans, such as our roadside assistance, extended service contracts, insurance programs, travel assist, and our Good Sam and Coast to Coast clubs, are built on a recurring revenue model. A majority of these programs are on a

107 basis point decrease in the average interest rate.

Table of Contents

~~multi‑year or annually renewable basis and have annualized fees typically ranging from $20~~Income tax expense

Income tax expense decreased $6.5 million to ~~$5,200. We believe that many of these products and services are essential for our customers to operate, maintain and protect their RVs, and to enjoy~~$24.6 million in the RV lifestyle, resulting in attractive annual retention rates. As we continue to grow our consumer services and plans business, we expect to further enhance our visibility with respect to revenue and cash flow, and increase our overall profitability. As of September 30, 2017 and December 31, 2016, we had 1.8 million club members in our Good Sam and Coast to Coast clubs.

~~Retail Locations.~~ We open new retail locations through organic growth and acquisitions. Our new retail locations are one of the primary ways in which we attract new customers to our business. Our retail locations typically offer our full array of products and services, including new and used RVs, RV financing, protection plans, a selection of OEM and aftermarket repair parts, RV accessories, RV maintenance products, supplies, and other outdoor lifestyle products. For the threesix months ended ~~September~~June 30, ~~2017 and 2016, we opened one and zero acquired retail locations, respectively, opened zero greenfield locations in both periods, and opened zero acquired Overton’s locations in both periods. For~~2020 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, we opened fifteen and four acquired retail locations, opened one and one greenfield locations, and opened two and zero acquired Overton’s locations, respectively. In addition, during~~2019. The decrease was primarily due to the ~~three months ended September 30, 2017,~~transfer of assets to CW that was recorded in the prior year as ~~a result of the acquisitions of TheHouse.com and W82, we acquired two TheHouse.com and one W82 retail locations (see~~discussed in Note ~~9 — Acquisitions~~12 – Income Taxes to our ~~unaudited~~ consolidated financial statements included in Part I, Item 1 of this Form ~~10-Q).~~10-Q, offset by higher 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 CW for which no tax benefit can be recognized.

~~Same store sales.~~ ~~Same store sales measure~~Net income

Net income increased 477.5%, or $123.3 million, to a net income of $149.1 million for the ~~performance~~six months ended June 30, 2020 from a net income of ~~a retail location during the current reporting period against the performance of the same retail location~~$25.8 million in the corresponding period of the previous year. Same store sales calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.

Same store sales growth is driven by increases in the number of transactions and the average transaction price. In addition to attracting new customers and cross‑selling our consumer services and plans, we also drive our sales through new product introductions, including our private label offerings. Although growth in same store sales drives our overall revenue, we have and will continue to experience volatility in same store sales from period to period, mainly due to changes in our product sales mix. Our product mix in any period is principally impacted by the number and mix of new or used RVs that we sellsix months ended June 30, 2019 primarily due to the ~~high price points~~items mentioned above.

Segment results

The following tables sets forth a reconciliation of ~~these products compared~~total segment income to consolidated income before income taxes for each of our ~~other retail products~~segments for the periods presented:


	Six Months Ended
	June 30, 2020			June 30, 2019			Favorable/
			Percent of			Percent of	(Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	93,384	3.5%	$	93,289	3.7%	$	95	0.1%
RV and Outdoor Retail		2,552,394	96.9%		2,469,862	97.3%		82,532	3.3%
Elimination of intersegment revenue		(11,760)	(0.4%)		(24,035)	(0.9%)		12,275	51.1%
Total consolidated revenue		2,634,018	100.0%		2,539,116	100.0%		94,902	3.7%
Segment income:⁽¹⁾
Good Sam Services and Plans		45,931	1.7%		43,622	1.7%		2,309	5.3%
RV and Outdoor Retail		188,511	7.2%		75,312	3.0%		113,199	150.3%
Total segment income		234,442	8.9%		118,934	4.7%		115,508	97.1%
Corporate & other		(4,894)	(0.2%)		(7,087)	(0.3%)		2,193	30.9%
Depreciation and amortization		(26,645)	(1.0%)		(27,540)	(1.1%)		895	3.2%
Tax Receivable Agreement liability adjustment		—	—		8,477	0.3%		(8,477)	(100.0%)
Other interest expense, net		(29,205)	(1.1%)		(35,854)	(1.4%)		6,649	18.5%
Income before income taxes	$	173,698	6.6%	$	56,930	2.2%	$	116,768	205.1%

Same store revenue- RV and Outdoor Retail(2)	$	2,201,248		$	2,133,124		$	68,124	3.2%

(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 ~~the range of price points among the types of RVs sold.~~Plans

As of September 30, 2017 and 2016, we had, respectively, a base of 115 and 107 same stores, of which 17 of those same stores did not include dealerships. For the three months ended September 30, 2017 and 2016, our aggregate same store sales were $982.2 million and $897.9 million, respectively. For the nine months ended September 30, 2017 and 2016, our aggregate same store sales were $2.8 billion and $2.6 billion, respectively. As of September 30, 2017 and 2016, we had, respectively, a total of 137 and 120 Camping World retail locations, and two and zero Overton’s locations.

~~Other Key Performance Indicators~~

~~Gross Profit and Gross Margins.~~ Gross profit is our total revenue less our total costs applicable to revenue. Our total costs applicable to revenue primarily consists of the cost of goods and cost of sales. Gross margin is gross profit as a percentage of revenue.

~~Our gross profit is variable in nature and generally follows changes in our revenue. While gross margins for our Retail segment are lower than our gross margins for our Consumer~~Good Sam Services and Plans segment ~~our Retail segment generates significant gross profit and is~~revenue increased 0.1%, or $0.1 million, to $93.4 million in the six months ended June 30, 2020, from $93.3 million in the six months ended June 30, 2019. The increase was primarily attributable to a ~~primary means of acquiring new customers, to which we then cross‑sell our higher margin~~$1.1 million in the vehicle insurance products ~~and services with recurring revenue. We believe the overall growth of our Retail segment will allow us to continue to drive growth in gross profits~~primarily due to increased policies in force and an $0.8 million increase in our ~~ability~~roadside assistance programs primarily resulting from upsells to ~~cross‑sell our~~higher priced product offerings, partially offset by a $1.2 million decrease in consumer shows revenue due to eight fewer consumer shows, and a $0.6 million decrease from other services and plans to our increasing Active Customer base. For the three months ended September 30, 2017 and 2016, gross profit was $26.1 million and $25.5 million, respectively, and gross margin was 56.5% and 56.1%, respectively, for our Consumerplans.

Good Sam Services and Plans segment ~~and~~income increased 5.3%, or $2.3 million, to $45.9 million in the six months ended June 30, 2020, from $43.6 million in the six months ended June 30, 2019. The increase was primarily attributable to increased segment gross profit ~~was $330.6~~of $2.5 million consisting mostly of a $2.1 million increase from the roadside assistance programs, a $1.3 million increase from the extended vehicle programs, and ~~$254.7~~an $0.8 million ~~respectively,~~increase from the vehicle insurance products, partially offset by $0.9 million of increased accrual for program costs, a $0.6 million reduction from reduced consumer shows, and ~~gross margin was 27.7%~~a $0.2 million decrease from other services and ~~26.9%, respectively, for our Retail segment. For the nine months ended September 30, 2017~~plans, in addition to a $0.2 million increase in selling, general and ~~2016,~~

administrative

~~gross profit was $82.7 million and $76.8 million, respectively, and gross margin was 57.2% and 56.5%, respectively, for our Consumer~~expenses. Good Sam Services and Plans segment margin increased 248 basis points to 50.1% in the six months ended June 30, 2020 from 47.6% in the six months ended June 30, 2019.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue increased 3.3%, or $82.5 million, to $2.6 billion in the six months ended June 30, 2020 from $2.5 billion in the six months ended June 30, 2019. The increase was primarily driven by an $87.2 million, or 6.6%, increase in new vehicle revenue, a $55.8 million, or 13.1%, increase in used vehicle revenue, and an $18.9 million,or 8.4%, increase in finance and insurance revenue, partially offset by a $77.2 million, or 16.0%, decrease in products, service and other revenue primarily due to the 2019 Strategic Shift, and a $2.2 million, or 9.1%, decrease in Good Sam Club revenue.

RV and Outdoor Retail segment income increased 150.3%, or $113.2 million, to a segment income of $188.5 million in the six months ended June 30, 2020 from a segment income of $75.3 million in the six months ended June 30, 2019. The increase was primarily related to increased segment gross profit ~~was $898.5~~of $80.6 million ~~and $725.2 million, respectively, and gross margin was 27.6% and 26.7%, respectively, for our Retail segment.~~

~~SG&A as a percentage~~primarily due to the volume increase of ~~Gross Profit.~~ ~~Selling,~~vehicles sold, reduced selling, general and administrative ~~(“SG&A”)~~ expenses ~~as a percentage~~ of ~~gross profit allows us~~$30.1 million, reduced floor plan interest expense of $9.2 million, and $1.4 million of reduced loss on asset disposal, partially offset by $6.6 million of long-lived asset impairment, and $1.5 million of lease termination losses. RV and Outdoor Retail segment margin increased 434 basis points to ~~monitor our expense control over a period of time. SG&A consists primarily of wage‑related~~7.4%

Corporate and other expenses selling expenses related to commissions and advertising, lease expenses and corporate overhead expenses. We calculate SG&A expenses as a percentage of gross profit by dividing SG&A expenses for the period by total gross profit. For the three months ended September 30, 2017 and 2016, SG&A as a percentage of gross profit was 66.2% and 66.5%, respectively. For the nine months ended September 30, 2017 and 2016, SG&A as a percentage of gross profit was 65.2% and 67.0%, respectively. We expect SG&A expenses to increase as we open new retail locations through organic growth and acquisitions, which we also expect will drive increases in revenue and gross profit. Additionally, we expect that our SG&A expenses will increase in future periods in part due to additional legal, accounting, insurance

Corporate and other expenses ~~that we expect~~decreased 30.9%, or $2.2 million, to ~~incur as a result of being a public company, including compliance with the Sarbanes‑Oxley Act and the related rules and regulations.~~

~~Adjusted EBITDA and Adjusted EBITDA Margin.~~ Adjusted EBITDA and Adjusted EBITDA Margin are some of the primary metrics management uses to evaluate the financial performance of our business. Adjusted EBITDA and Adjusted EBITDA Margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance as follows:

as a measurement of operating performance to assist us in comparing the operating performance of our business on a consistent basis, and remove the impact of items not directly resulting from our core operations;

~~for planning purposes, including the preparation of our internal annual operating budget and financial projections;~~

~~to evaluate the performance and effectiveness of our operational strategies; and~~

~~to evaluate our capacity to fund capital expenditures and expand our business.~~

We define Adjusted EBITDA as net income before other interest expense (excluding floor plan interest expense), provision for income taxes, depreciation and amortization, loss (gain) and expense on debt restructure, loss (gain) on sale of assets and disposition of stores, monitoring fees, equity-based compensation, an adjustment to rent on right to use assets, loss (gain) on remeasurement of Tax Receivable Agreement, certain acquisition related transaction expenses and pre-opening costs, and other unusual or one‑time items. We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA by total revenue for the period. Adjusted EBITDA and Adjusted EBITDA Margin are not GAAP measures of our financial performance and should not be considered as alternatives to net income or net income margin, respectively, as measures of financial performance, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or non‑recurring items. Additionally, Adjusted EBITDA and Adjusted EBITDA Margin are not intended to be a measure of discretionary cash to invest$4.9 million in the ~~growth of our business, as it does not reflect tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur~~six months ended June 30, 2020 from $7.1 million in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA and Adjusted EBITDA Margin supplementally. Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. For a reconciliation of Adjusted EBITDA to net income, a reconciliation of Adjusted EBITDA Margin to net income margin, and a further discussion of how we utilize this non-GAAP financial measure, see “Non-GAAP Financial Measures” below.six months ended June 30, 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 ~~U.S.~~United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted ~~Pro Forma~~ 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 ~~Pro Forma~~ Earnings Per ~~Fully Exchanged and~~Share – Diluted ~~Share~~ (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 measures~~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 ~~taxes~~tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain ~~non‑cash~~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, ~~(gain) and expense~~loss on ~~debt restructure, loss (gain) on sale~~disposal of assets, ~~and disposition of stores, monitoring fees,~~ equity-based compensation, ~~an adjustment to rent on right to use assets, loss (gain) on remeasurement of~~ Tax Receivable Agreement ~~certain acquisition~~liability adjustment, restructuring costs related ~~transaction expenses and pre-opening costs,~~to the 2019 Strategic Shift, and other unusual or ~~one‑~~one-

Table of Contents

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~~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 income ~~net income,~~ and net income margin, respectively:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
EBITDA:

Net income

$
85,258

$
68,416

$
240,021

$
189,602
Other interest expense, net

11,012

12,715

30,973

38,040
Depreciation and amortization

8,382

6,219

22,819

18,144
Income tax expense

8,336

2,288

28,247

4,638
Subtotal EBITDA

112,988

89,638

322,060

250,424
Loss (gain) on sale of assets (a)

(5)

21

(292)

(225)
Monitoring fee (b)

—

625

—

1,875
Equity-based compensation (c)

1,204

—

2,792

60
Loss on remeasurement of Tax Receivable Agreement (d)

96

—

79

—
Acquisitions - transaction expense (e)

453

—

2,553

—
Acquisitions - pre-opening costs (f)

7,318

—

8,669

—
Adjusted EBITDA

$
122,054

$
90,284

$
335,861

$
252,134


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
($ in thousands)	2020		2019		2020		2019
EBITDA:
Net income	$	163,222	$	52,623	$	149,093	$	25,816
Other interest expense, net		14,547		18,211		29,205		35,854
Depreciation and amortization		12,567		13,946		26,645		27,540
Income tax expense		20,473		8,201		24,605		31,114
Subtotal EBITDA		210,809		92,981		229,548		120,324
Long-lived asset impairment (a)		—		—		6,569		—
Lease termination (b)		868		—		1,452		—
Loss on disposal of assets, net (c)		272		2,374		783		2,160
Equity-based compensation (d)		4,182		3,863		7,494		6,579
Tax Receivable Agreement liability adjustment (e)		—		—		—		(8,477)
Restructuring costs (f)		4,591		—		10,873		—
Adjusted EBITDA	$	220,722	$	99,218	$	256,719	$	120,586

~~Table of Contents~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
(as percentage of total revenue)

2017

2016

2017

2016
EBITDA margin:

Net income margin

6.9%

6.9%

7.0%

6.6%
Other interest expense, net

0.9%

1.3%

0.9%

1.3%
Depreciation and amortization

0.7%

0.6%

0.7%

0.6%
Income tax expense

0.7%

0.2%

0.8%

0.2%
Subtotal EBITDA margin

9.1%

9.0%

9.5%

8.8%
Loss (gain) on sale of assets (a)

(0.0%)

0.0%

(0.0%)

(0.0%)
Monitoring fee (b)

—

0.1%

—

0.1%
Equity-based compensation (c)

0.1%

—

0.1%

0.0%
Loss on remeasurement of Tax Receivable Agreement (d)

0.0%

—

0.0%

—
Acquisition transaction expense (e)

0.0%

—

0.1%

—
Acquisitions - pre-opening costs (f)

0.6%

—

0.3%

—
Adjusted EBITDA margin

9.9%

9.1%

9.9%

8.8%


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
(as percentage of total revenue)	2020		2019		2020		2019
EBITDA margin:
Net income margin		10.2%		3.6%		5.7%		1.0%
Other interest expense, net		0.9%		1.2%		1.1%		1.4%
Depreciation and amortization		0.8%		0.9%		1.0%		1.1%
Income tax expense		1.3%		0.6%		0.9%		1.2%
Subtotal EBITDA margin		13.1%		6.3%		8.7%		4.7%
Long-lived asset impairment (a)		—		—		0.2%		—
Lease termination (b)		0.1%		—		0.1%		—
Loss on disposal of assets, net (c)		0.0%		0.2%		0.0%		0.1%
Equity-based compensation (d)		0.3%		0.3%		0.3%		0.3%
Tax Receivable Agreement liability adjustment (e)		—		—		—		(0.3%)
Restructuring costs (f)		0.3%		—		0.4%		—
Adjusted EBITDA margin		13.7%		6.7%		9.7%		4.7%

(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 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.

~~(b)~~

(d)

Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams. The monitoring agreement was terminated on October 6, 2016 in connection with our initial public offering (our “IPO”).

~~(c)~~

Represents non-cash equity-based compensation expense relating to employees, directors, and ~~directors~~consultants of the Company.

~~(d)~~

(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.~~

rate and the transfer of certain assets from GSS to CW. See Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~(e)~~

(f)

Represents ~~transaction expenses, primarily legal~~restructuring costs ~~associated with acquisitions into new or complimentary markets, including the Gander Mountain Acquisition. This amount excludes transaction expenses~~ relating to ~~the acquisition~~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 ~~RV dealerships, consumer shows, TheHouse.com, and W82.~~

this Form 10-Q for additional information.

~~(f)~~

~~Represents pre-opening store costs, including payroll costs, associated with the Gander Mountain Acquisition.~~

Table of Contents

Adjusted ~~Pro Forma~~ Net Income Attributable to Camping World Holdings, Inc. and Adjusted ~~Pro Forma~~ Earnings Per ~~Fully Exchanged and Diluted~~ Share

We define “Adjusted ~~Pro Forma~~ Net ~~Income”~~Income Attributable to Camping World Holdings, Inc. – Basic” as net income attributable to Camping World Holdings, Inc. adjusted for the reallocation of income attributable to non-controlling interests from the assumed exchange of all outstanding common units in CWGS, LLC (or the common unit equivalent of membership interests in CWGS, LLC for periods prior to the IPO) for shares of newly-issued Class A common stock of Camping World Holdings, Inc. and further adjusted for the impact of certain ~~non‑cash~~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 ~~(gain)~~ on ~~debt restructure, loss (gain) and expense on sale~~disposal of assets, ~~and disposition of stores, gain on derivative instruments, monitoring fees,~~ equity-based compensation, ~~an adjustment to rent on right to use assets, loss (gain) on remeasurement of~~ Tax Receivable Agreement ~~interest expense on our Series B notes, acquisition~~liability adjustment, restructuring costs related ~~transaction expenses and pre-opening costs,~~to the 2019 Strategic Shift, other unusual or ~~one‑time~~one-time items, ~~and~~ the income tax expense effect of ~~(i)~~ these adjustments, and ~~(ii)~~ the ~~pass-through entity taxable~~effect of net income ~~as if the parent company was a subchapter C corporation in periods prior~~attributable to ~~the IPO.~~ non-controlling interests from these adjustments.

We define “Adjusted ~~Pro Forma~~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 ~~Fully Exchanged and Diluted Share”~~Share – Basic” as Adjusted ~~Pro Forma~~ 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 ~~full~~ exchange of all outstanding common units in CWGS, LLC ~~(or the common unit equivalent of membership interests in CWGS, LLC for periods prior to the IPO)~~ for newly-issued shares of Class A common stock of Camping World Holdings, Inc., ~~(ii) the Class A common stock issued in connection with the IPO was outstanding as of January 1 of each year presented,~~if dilutive, and ~~(iii)~~(ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted ~~Pro Forma~~ 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 ~~Pro Forma~~ Earnings Per ~~Fully Exchanged and~~Share – Diluted ~~Share~~ 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‑~~Non GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

3749

The following table reconciles Adjusted ~~Pro Forma~~ 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 ~~Pro Forma~~ Earnings Per ~~Fully Exchanged and~~Share – Diluted ~~Share~~ 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 ~~— diluted:~~– basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
(In thousands except per share amounts)

2017

2016

2017

2016
Numerator:

Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602
Adjustments:

Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units in CWGS, LLC (a)

65,131

—

193,036

—
Loss (gain) on sale of assets (b)

(5)

21

(292)

(225)
Monitoring fee (c)

—

625

—

1,875
Equity-based compensation (d)

1,204

—

2,792

60
Loss on remeasurement of Tax Receivable Agreement (e)

96

—

79

—
Acquisitions - transaction expense (f)

453

—

2,553

—
Acquisitions - pre-opening costs (g)

7,318

—

8,669

—
Income tax expense (h)

(25,676)

(24,300)

(75,888)

(70,078)
Adjusted pro forma net income

$
68,648

$
44,762

$
177,934

$
121,234
Denominator:

Weighted-average Class A common shares outstanding - diluted

88,452

—

85,947

—
Adjustments:

Assumed exchange of pre-IPO common unit equivalent of membership interests in CWGS, LLC (i)

—

71,900

—

72,157
Assumed issuance of Class A common stock in connection with IPO (j)

—

11,872

—

11,872
Dilutive options to purchase Class A common stock

219

—

140

—
Dilutive restricted stock units

128

—

82

—
Adjusted pro forma fully exchanged weighted average Class A common shares outstanding - diluted

88,799

83,772

86,169

84,029
Adjusted pro forma earnings per fully exchanged and diluted share

$
0.77

$
0.53

$
2.06

$
1.44


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
(In thousands except per share amounts)	2020		2019		2020		2019
Numerator:
Net income (loss) attributable to Camping World Holdings, Inc.	$	58,077	$	18,017	$	49,917	$	(1,378)
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		868		—		1,452		—
Income tax expense for above adjustment (b)		(23)		—		(23)		—
Loss on disposal of assets and other expense, net (d):
Gross adjustment		272		2,374		783		2,160
Income tax (expense) benefit for above adjustment (b)		(2)		(3)		(3)		6
Equity-based compensation (e):
Gross adjustment		4,182		3,863		7,494		6,579
Income tax expense for above adjustment (b)		(383)		(348)		(685)		(569)
Tax Receivable Agreement liability adjustment (f):
Gross adjustment		—		—		—		(8,477)
Income tax benefit for above adjustment (b)		—		—		—		2,143
Restructuring costs (g):
Gross adjustment		4,591		—		10,873		—
Income tax expense for above adjustment (b)		(23)		—		(58)		—
Adjustment to net income (loss) attributable to non-controlling interests resulting from the above adjustments (h)		(5,733)		(3,624)		(15,727)		(5,077)
Adjusted net income (loss) attributable to Camping World Holdings, Inc. – basic		61,826		20,279		60,579		(4,613)
Adjustments related to diluted calculation:
Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (i)		—		7		550		—
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j)		—		(2)		(145)		—
Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (i)		110,878		—		—		—
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (j)		(26,132)		—		—		—
Assumed income tax expense of combining C-corporations with full valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in CWGS, LLC (k)		(1,708)		—		—		—
Adjusted net income (loss) attributable to Camping World Holdings, Inc. – basic and diluted	$	144,864	$	20,284	$	60,984	$	(4,613)
Denominator:
Weighted-average Class A common shares outstanding – basic		37,635		37,239		37,585		37,217
Adjustments related to diluted calculation:
Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (l)		51,620		—		—		—
Dilutive restricted stock units (l)		434		17		359		—
Adjusted weighted average Class A common shares outstanding – diluted		89,689		37,256		37,944		37,217

Adjusted earnings (loss) per share - basic	$	1.64	$	0.54	$	1.61	$	(0.12)
Adjusted earnings (loss) per share - diluted	$	1.62	$	0.54	$	1.61	$	(0.12)

Table of Contents


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
(In thousands except per share amounts)	2020		2019		2020		2019
Anti-dilutive amounts (m):
Numerator:
Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (i)	$	—	$	38,223	$	114,353	$	32,271
Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (j)	$	—	$	(12,524)	$	(31,720)	$	(17,089)
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 (k)	$	—	$	5,457	$	6,435	$	16,024
Denominator:
Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (l)		—		51,669		51,634		51,671
Anti-dilutive restricted stock units (l)		—		—		—		12

(a)

~~(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 ~~reallocation~~current and deferred income tax expense or benefit effect of ~~net income attributable~~the above adjustments, many of which are related to ~~non-controlling interests from~~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 ~~assumed exchange~~adjustments for the 2020 and 2019 periods, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of ~~common units of CWGS, LLC in periods where income was attributable to non-controlling interests.~~

our non-GAAP metric.

(c)

~~(b)~~

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 ~~losses~~gains and ~~gains~~losses on sales of various ~~assets.~~

assets, and losses on the disposal or sale of real estate at closed RV and Outdoor Retail locations.

(e)

~~(c)~~

~~Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams. The monitoring agreement was terminated on October 6, 2016 in connection with our IPO.~~

~~(d)~~

Represents non-cash equity-based compensation expense relating to employees, directors, and ~~directors~~consultants of the Company.

(f)

~~(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.~~

rate and the transfer of certain assets from GSS to CW. See Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

(g)

~~(f)~~

this Form 10-Q for additional information.

(h)

~~(g)~~

Represents ~~pre-opening store costs, including payroll costs, associated with~~ the ~~Gander Mountain Acquisition.~~

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 57.8% and 58.1% for the three months ended June 30, 2020 and 2019, respectively, and 57.9% and 58.1% for the six months ended June 30, 2020, respectively.

(i)	~~(h)~~ 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.

(j)

Represents the income tax expense effect of ~~(i)~~ the above ~~adjustments and (ii) the pass-through entity taxable~~adjustment for reallocation of net income ~~as if the parent company was a subchapter C corporation in periods prior~~attributable to ~~the IPO.~~non-controlling interests. This assumption uses an effective tax rate of ~~38.5%~~25.0% and 25.3% for the adjustments for the 2020 and 2019 periods, respectively.

(k)

Represents adjustments to reflect the ~~pass-through entity taxable~~ income ~~in periods prior~~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 ~~IPO.~~

~~(i)~~

~~Represents the assumed~~ exchange of ~~pre-IPO membership interests~~all common units in CWGS, LLC, ~~at their common unit equivalent amount.~~

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 2020 and 2019 periods, 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.

(l)

~~(j)~~

Represents the ~~assumption that~~impact to the ~~shares~~denominator for stock options, restricted stock units, and/or common units of ~~Class A common stock issued~~CWGS, LLC.

(m)	The below amounts have not been considered in ~~connection with~~our adjusted earnings per share – diluted amounts as the ~~IPO were outstanding as~~effect of ~~January 1 of each period.~~ these items are anti-dilutive.

Table of Contents

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;

~~Table of Contents~~

●

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~~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 ~~Existing~~ 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 ~~unaudited condensed~~ 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~~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~~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 ~~(gain)~~ on ~~debt restructure, loss (gain) on sale~~disposal of assets, ~~and disposition of stores, gain on derivative instruments, monitoring fees,~~ equity-based compensation, ~~an adjustment to rent on right to use assets, loss (gain) on remeasurement of~~ Tax Receivable Agreement ~~acquisition~~liability, restructuring costs related ~~transaction expenses and pre-opening costs,~~to the 2019 Strategic Shift, other unusual or ~~one‑time~~one-time items, and the income tax expense effect described above, as applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. ~~In addition, these certain Non-GAAP Financial Measures adjust for other items that we do not expect to regularly record in periods after the IPO, including monitoring fees.~~ Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to ~~day‑to‑day~~day-to-day operations.

3952

Table of Contents

~~Results of Operations~~

~~Three and Nine Months Ended September 30, 2017 Compared to Three and Nine Months Ended September 30, 2016~~

~~The following table sets forth information comparing the components of net income for the three and nine months ended September 30, 2017 and 2016:~~

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Percent of

Percent of

Favorable/ (Unfavorable)

Percent of

Percent of

Favorable/ (Unfavorable)
($ in thousands)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%

Revenue:

Consumer Services and Plans

$
46,169

3.7%

$
45,442

4.6%

$
727

1.6%

$
144,518

4.2%

$
135,868

4.8%

$
8,650

6.4%
Retail

New vehicles

715,182

57.7%

545,154

55.0%

170,028

31.2%

1,982,644

58.2%

1,532,919

53.7%

449,725

29.3%
Used vehicles

188,331

15.2%

181,675

18.3%

6,656

3.7%

531,324

15.6%

576,964

20.2%

(45,640)

-7.9%
Parts, services and other

187,750

15.2%

151,090

15.2%

36,660

24.3%

478,169

14.0%

422,316

14.8%

55,853

13.2%
Finance and insurance, net

101,570

8.2%

67,710

6.8%

33,860

50.0%

268,829

7.9%

188,607

6.6%

80,222

42.5%
Subtotal

1,192,833

96.3%

945,629

95.4%

247,204

26.1%

3,260,966

95.8%

2,720,806

95.2%

540,160

19.9%
Total revenue

1,239,002

100.0%

991,071

100.0%

247,931

25.0%

3,405,484

100.0%

2,856,674

100.0%

548,810

19.2%

Gross profit (exclusive of depreciation and amortization shown separately below):

Consumer Services and Plans

26,084

2.1%

25,489

2.6%

595

2.3%

82,726

2.4%

76,797

2.7%

5,929

7.7%
Retail

New vehicles

100,558

8.1%

74,014

7.5%

26,544

35.9%

279,022

8.2%

215,772

7.6%

63,250

29.3%
Used vehicles

49,535

4.0%

43,038

4.3%

6,497

15.1%

137,888

4.0%

122,305

4.3%

15,583

12.7%
Parts, services and other

78,920

6.4%

69,985

7.1%

8,935

12.8%

212,793

6.2%

198,535

6.9%

14,258

7.2%
Finance and insurance, net

101,570

8.2%

67,710

6.8%

33,860

50.0%

268,829

7.9%

188,607

6.6%

80,222

42.5%
Subtotal

330,583

26.7%

254,747

25.7%

75,836

29.8%

898,532

26.4%

725,219

25.4%

173,313

23.9%
Total gross profit

356,667

28.8%

280,236

28.3%

76,431

27.3%

981,258

28.8%

802,016

28.1%

179,242

22.3%

Operating expenses:

Selling, general and administrative expenses

236,174

19.1%

186,255

18.8%

(49,919)

-26.8%

640,108

18.8%

536,966

18.8%

(103,142)

-19.2%
Depreciation and amortization

8,382

0.7%

6,219

0.6%

(2,163)

-34.8%

22,819

0.7%

18,144

0.6%

(4,675)

-25.8%
Gain on asset sales

(5)

0.0%

21

0.0%

26

-123.8%

(292)

0.0%

(227)

0.0%

65

28.6%
Income from operations

112,116

9.0%

87,741

8.9%

24,375

27.8%

318,623

9.4%

247,133

8.7%

71,490

28.9%
Other income (expense):

Floor plan interest expense

(7,414)

-0.6%

(4,322)

-0.4%

(3,092)

-71.5%

(19,303)

-0.6%

(14,851)

-0.5%

(4,452)

-30.0%
Other interest expense, net

(11,012)

-0.9%

(12,715)

-1.3%

1,703

13.4%

(30,973)

-0.9%

(38,040)

-1.3%

7,067

18.6%
Other expense, net

(96)

0.0%

—

0.0%

(96)

-100.0%

(79)

0.0%

(2)

0.0%

(77)

3850.0%

(18,522)

-1.5%

(17,037)

-1.7%

(1,485)

-8.7%

(50,355)

-1.5%

(52,893)

-1.9%

2,538

4.8%
Income before income taxes

93,594

7.6%

70,704

7.1%

22,890

32.4%

268,268

7.9%

194,240

6.8%

74,028

38.1%
Income tax expense

(8,336)

-0.7%

(2,288)

-0.2%

(6,048)

-264.3%

(28,247)

-0.8%

(4,638)

-0.2%

(23,609)

-509.0%
Net income

85,258

6.9%

68,416

6.9%

16,842

24.6%

240,021

7.0%

189,602

6.6%

50,419

26.6%
Less: net income attributable to non-controlling interests

(65,131)

-5.3%

—

0.0%

(65,131)

-100.0%

(193,036)

-5.7%

—

0.0%

(193,036)

-100.0%
Net income attributable to Camping World Holdings, Inc.

$
20,127

1.6%

$
68,416

6.9%

$
(48,289)

-70.6%

$
46,985

1.4%

$
189,602

6.6%

$
(142,617)

-75.2%

~~Table of Contents~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Total revenue was $1.2 billion for the three months ended September 30, 2017, an increase of $247.9 million, or 25.0%, as compared to $991.1 million for the three months ended September 30, 2016. The increase was primarily driven by the 33.3% increase in new vehicle unit sales in our Retail segment, and corresponding revenue increases from variable products such as parts, services and other, and finance and insurance.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Total revenue was $3.4 billion for the nine months ended September 30, 2017, an increase of $548.8 million, or 19.2%, as compared to $2.9 billion for the nine months ended September 30, 2016. The increase was primarily driven by the 34.6% increase in new vehicle unit sales in our Retail segment, and a corresponding revenue increase from our variable finance and insurance products.

~~Consumer Services and Plans~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans revenue was $46.2 million for the three months ended September 30, 2017, an increase of $0.7 million, or 1.6%, as compared to $45.4 million for the three months ended September 30, 2016. The increased revenue was attributable to a $1.1 million increase from our extended vehicle warranty and the Good Sam TravelAssist programs primarily due to increased policies in force, partially offset by $0.4 million of other decreases.

Consumer Services and Plans gross profit was $26.1 million for the three months ended September 30, 2017, an increase of $0.6 million, or 2.3%, as compared to $25.5 million for the three months ended September 30, 2016. This increase was primarily due to increased policies in force from our Good Sam TravelAssist and roadside assistance programs and reduced roadside assistance program costs. Gross margin increased 41 basis points to 56.5% primarily resulting from increased policies in force for the Good Sam TravelAssist programs, and reduced program costs for the roadside assistance programs.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Consumer Services and Plans revenue was $144.5 million for the nine months ended September 30, 2017, an increase of $8.7 million, or 6.4%, as compared to $135.9 million for the nine months ended September 30, 2016. The increased revenue was attributable to a$2.7 million increase from our vehicle insurance and Good Sam TravelAssist programs primarily due to increased policies in force; a $2.1 million increase from our clubs and roadside assistance programs primarily due to increased file size; a $1.7 million increase from consumer show exhibit and admissions revenue resulting from the acquisition of five consumer shows in the fourth quarter of 2016 and our new Good Sam RV Super Show introduced in February 2017; and $2.2 million of other increases.

Consumer Services and Plans gross profit was $82.7 million for the nine months ended September 30, 2017, an increase of $5.9 million, or 7.7%, as compared to $76.8 million for the nine months ended September 30, 2016. This increase was primarily due to increased policies in force from our vehicle insurance and Good Sam TravelAssist programs of $3.0 million; increased roadside assistance contracts in force and reduced claims, together resulting in a gross profit increase of $2.0 million; an increase from our consumer shows of $0.8 million resulting from the five acquired shows and the new Good Sam RV Super Show introduced in February 2017; and a $0.1 million increase from other ancillary products. Gross margin increased 72 basis points to 57.2% primarily due to increased contracts in force with reduced program costs for the roadside assistance programs, and increased policies in force from the Good Sam TravelAssist programs.

~~Table of Contents~~

~~Retail:~~

~~New Vehicles~~

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/
($ in thousands,

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
715,182

100.0%

$
545,154

100.0%

$
170,028

31.2%

$
1,982,644

100.0%

$
1,532,919

100.0%

$
449,725

29.3%

Gross profit

100,558

14.1%

74,014

13.6%

26,544

35.9%

279,022

14.1%

215,772

14.1%

63,250

29.3%

New vehicle unit sales

19,107

14,333

4,774

33.3%

54,800

40,718

14,082

34.6%

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

New vehicle revenue was $715.2 million for the three months ended September 30, 2017, an increase of $170.0 million, or 31.2%, as compared to $545.2 million for the three months ended September 30, 2016. The increase was primarily due to a 33.3% increase in new vehicle unit sales primarily attributable to a same store sales increase of 14.5% driven by increases in travel trailers, Class C and fifth wheel units. The balance of the increase was from acquired locations and the greenfield location opened in June 2017. These increases were partially offset by a 1.6% decrease in the average sales price per unit resulting from a product mix shift toward lower priced towable units.

New vehicle gross profit was $100.6 million for the three months ended September 30, 2017, an increase of $26.5 million, or 35.9%, as compared to $74.0 million for the three months ended September 30, 2016. The increase was primarily due to the 33.3% increase in new vehicle unit sales and a 1.9% increase in average gross profit per unit. Gross margin increased to 14.1% from 13.6% in the three months ended September 30, 2016.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

New vehicle revenue was $1,982.6 million for the nine months ended September 30, 2017, an increase of $449.7 million, or 29.3%, as compared to $1,532.9 million for the nine months ended September 30, 2016. The increase was primarily due to a 34.6% increase in new vehicle unit sales primarily attributable to a same store sales increase of 17.0% driven by increases in travel trailers, Class C and fifth wheel units. The balance of the increase was from acquired locations and the greenfield location opened in June 2017. These increases were partially offset by a 3.9% decrease in the average sales price per unit resulting from a product mix shift toward lower priced towable units.

New vehicle gross profit was $279.0 million for the nine months ended September 30, 2017, an increase of $63.3 million, or 29.3%, as compared to $215.8 million for the nine months ended September 30, 2016. The increase was primarily due to the 34.6% increase in new vehicle unit sales partially offset by a 3.9% decrease in average gross profit per unit resulting from a product mix shift toward lower priced towable units. Gross margin remained unchanged versus prior year at 14.1% for the nine months ended September 30, 2016.

~~Used Vehicles~~

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/
($ in thousands,

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
188,331

100.0%

$
181,675

100.0%

$
6,656

3.7%

$
531,324

100.0%

$
576,964

100.0%

$
(45,640)

-7.9%

Gross profit

49,535

26.3%

43,038

23.7%

6,497

15.1%

137,888

26.0%

122,305

21.2%

15,583

12.7%

Used vehicle unit sales

8,557

7,986

571

7.2%

24,146

25,918

(1,772)

-6.8%

~~Table of Contents~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Used vehicle revenue was $188.3 million for the three months ended September 30, 2017, an increase of $6.7 million, or 3.7%, as compared to $181.7 million for the three months ended September 30, 2016. The increase was primarily due to a 7.2% increase in the volume of used units sold, mostly travel trailers at our new stores, partially offset by a same store sales decrease of 7.9%.

Used vehicle gross profit was $49.5 million for the three months ended September 30, 2017, an increase of $6.5 million, or 15.1%, as compared to $43.0 million for the three months ended September 30, 2016. This increase primarily resulted from the 7.2% increase in unit volume consisting of increases for nearly all product types, and a shift towards higher-margined towable units, resulting in a 7.4% increase in gross profit per unit. Gross margin increased to 26.3% from 23.7% in the three months ended September 30, 2016.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Used vehicle revenue was $531.3 million for the nine months ended September 30, 2017, a decrease of $45.6 million, or 7.9%, as compared to $577.0 million for the nine months ended September 30, 2016. The decrease was primarily due to reduced inventory availability, resulting from fewer trades on new vehicle unit sales, and the elimination of the automobile unit business as a result of the distribution of the AutoMatch business during the nine months ended September 30, 2016, driving a 6.8% decrease in used vehicle unit sales. Same store sales decreased by 9.6% with the remaining decrease driven by the disposition of the AutoMatch business.

Used vehicle gross profit was $137.9 million for the nine months ended September 30, 2017, an increase of $15.6 million, or 12.7%, as compared to $122.3 million for the nine months ended September 30, 2016. The increase was primarily attributable to increases for nearly all product types and elimination of lower margin auto sales upon the disposition of the AutoMatch business during the second quarter of 2016, resulting in a 21.0% increase in gross profit per unit and a gross margin increase of 475 basis points, partially offset by a 6.8% decrease in vehicle unit sales.

~~Parts, Services and Other~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Parts, services and other revenue was $187.8 million for the three months ended September 30, 2017, an increase of $36.7 million, or 24.3%, as compared to $151.1 million for the three months ended September 30, 2016. The increase was primarily attributable to increased revenue from the new stores, the Overton’s and Active Sports acquisitions, and an increase from the wholesale channel. Same store sales increased 1.4% for the three months ended September 30, 2017 versus the comparable period in 2016.

Parts, services and other gross profit was $78.9 million for the three months ended September 30, 2017, an increase of $8.9 million, or 12.8%, as compared to $70.0 million for the three months ended September 30, 2016. The gross profit increase was primarily due to increased revenue. Gross margin decreased 429 basis points to 42.0% primarily due to merchandise markdowns in the e-commerce business, and increased distribution and supply costs.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Parts, services and other revenue was $478.2 million for the nine months ended September 30, 2017, an increase of $55.9 million, or 13.2%, as compared to $422.3 million for the nine months ended~~

~~Table of Contents~~

~~September 30, 2016. The increase was primarily attributable to the new stores added; the Overton’s acquisition; and the wholesale channel; partially offset by a 0.7% decrease in same store sales.~~

Parts, services and other gross profit was $212.8 million for the nine months ended September 30, 2017, an increase of $14.3 million, or 7.2%, as compared to $198.5 million for the nine months ended September 30, 2016. The gross profit increase was primarily due to increased revenue and the Overton’s acquisition. Gross margin decreased 251 basis points to 44.5% primarily due to merchandise markdowns in the e-commerce business, and increased distribution and supply costs.

~~Finance and Insurance, net~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Finance and insurance, net revenue and gross profit were each $101.6 million for the three months ended September 30, 2017, an increase of $33.9 million, or 50.0%, as compared to $67.7 million for the three months ended September 30, 2016. The increase was primarily due to incremental vehicle finance contracts assigned due to higher vehicle unit sales and higher finance and insurance sales penetration rates resulting from a 30.5% increase in same store sales and the remainder from acquired locations and the greenfield location opened in June 2017. Finance and insurance, net revenue as a percentage of total new and used vehicle revenue increased to 11.2% for the three months ended September 30, 2017 from 9.3% for the comparable period in 2016.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Finance and insurance, net revenue and gross profit were each $268.8 million for the nine months ended September 30, 2017, an increase of $80.2 million, or 42.5%, as compared to $188.6 million for the nine months ended September 30, 2016. The increase was primarily due to incremental vehicle finance contracts assigned due to higher vehicle unit sales, higher finance and insurance sales penetration rates, a 29.7% increase in same store sales, and the remainder from acquired locations and the greenfield location opened in June 2017. Finance and insurance, net revenue as a percentage of total new and used vehicle revenue increased to 10.7% for the nine months ended September 30, 2017 from 8.9% for the comparable period in 2016.

~~Selling, general and administrative expenses~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

~~Selling, general and administrative expenses were $236.2 million for the three months ended September 30, 2017, an increase~~ of $49.9 million, or 26.8%, as compared to $186.3 million for the three months ended September 30, 2016. The increase was due to increases of $25.1 million of wage-related expenses, primarily attributable to increased vehicle unit sales; the ~~acquired locations and the greenfield location opened in June 2017~~; $7.3 million of pre-opening and payroll costs associated with the Gander Mountain acquisition; $6.7 million of store and corporate overhead expenses; $6.5 million of additional variable selling expense; $2.2 million of additional lease expense; $1.6 million of additional professional and service fees; and $0.5 million of transaction expenses associated with the acquisitions into new or complementary markets, including the Gander Mountain Acquisition. Selling, general and administrative expenses as a percentage of total gross ~~profit was 66.2% for the three months ended September 30, 2017, compared to 66.5% for the three months ended September 30, 2016, a decrease of 25 basis points.~~

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Selling, general and administrative expenses were $640.1 million for the nine months ended September 30, 2017, an increase of $103.1 million, or 19.2%, as compared to $537.0 million for the nine months ended September 30, 2016. The increase was due to increases of $54.4 million of wage-related expenses, primarily attributable to increased vehicle sales, ~~the~~ acquired locations and the greenfield location opened in June 2017; $15.5 million of additional variable selling expense; $8.7 million of pre-opening and payroll costs associated with the Gander Mountain acquisition; $14.2 million of store and corporate overhead expenses; $5.4 million of additional lease expense; $2.6 million of transaction expenses associated with the acquisitions into new or complementary markets, including the Gander Mountain Acquisition; and $2.3 million of additional professional and service fees. Selling, general and administrative expenses as a percentage of total gross profit was 65.2% for the nine months ended September 30, 2017, compared to 67.0% for the nine months ended September 30, 2016, a decrease of 172 basis points.

~~Depreciation and amortization~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Depreciation and amortization was $8.4 million for the three months ended September 30, 2017, an increase of $2.2 million, or 34.8%, as compared to $6.2 million for the three months ended September 30, 2016 primarily due to acquired locations, the greenfield location opened in June 2017, and acquired businesses.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Depreciation and amortization was $22.8 million for the nine months ended September 30, 2017, an increase of $4.7 million, or 25.8%, as compared to $18.1 million for the nine months ended September 30, 2016 primarily due to the addition of acquired locations, and the greenfield location opened in June 2017.

~~Floor plan interest expense~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Floor plan interest expense was $7.4 million for the three months ended September 30, 2017, an increase of $3.1 million, or 71.5%, as compared to $4.3 million for the three months ended September 30, 2016. The increase was primarily due to increased average outstanding amount payable under our Floor Plan Facility for the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily resulting from an increased inventory level due to new dealership locations and locations expecting higher unit sales, and a 68 basis point increase in the average floor plan borrowing rate.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Floor plan interest expense was $19.3 million for the nine months ended September 30, 2017, an increase of $4.5 million, or 30.0%, as compared to $14.9 million for the nine months ended September 30, 2016. The increase was primarily due to increased average outstanding amount payable under our Floor Plan Facility for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily resulting from an increased inventory level due to new dealership locations and locations expecting higher unit sales, and a 35 basis point increase in the average floor plan borrowing rate.

~~Other interest expense, net~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Other interest expense, net was $11.0 million for the three months ended September 30, 2017, a decrease of $1.7 million, or 13.4%, as compared to $12.7 million for the three months ended September 30, 2016. The decrease was primarily due to a decrease in interest expense attributable to a decrease in average debt outstanding, and an 86 basis point decrease in the average interest rate.

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Other interest expense, net was $31.0 million for the nine months ended September 30, 2017, a decrease of $7.1 million, or 18.6%, as compared to $38.0 million for the nine months ended September 30, 2016. The decrease was primarily due to a decrease in interest expense attributable to a decrease in average debt outstanding, and a 100 basis point decrease in the average interest rate.

~~Segment results~~

~~The following table sets forth a reconciliation of total segment income to consolidated income from operations before income taxes for each of our segments for the period presented:~~

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
($ in thousands)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%
Revenue:

Consumer Services and Plans

$
46,169

3.7%

$
45,442

4.6%

$
727

1.6%

$
144,518

4.2%

$
135,868

4.8%

$
8,650

6.4%
Retail

1,192,833

96.3%

945,629

95.4%

247,204

26.1%

3,260,966

95.8%

2,720,806

95.2%

540,160

19.9%
Total consolidated revenue

1,239,002

100.0%

991,071

100.0%

247,931

25.0%

3,405,484

100.0%

2,856,674

100.0%

548,810

19.2%
Segment income:(1)

Consumer Services and Plans

21,675

1.7%

19,847

2.0%

1,828

9.2%

71,887

2.1%

63,948

2.2%

7,939

12.4%
Retail

93,446

7.5%

70,882

7.2%

22,564

31.8%

256,713

7.5%

188,898

6.6%

67,815

35.9%
Total segment income

115,121

9.3%

90,729

9.2%

24,392

26.9%

328,600

9.6%

252,846

8.9%

75,754

30.0%
Corporate & other

(2,037)

-0.2%

(1,091)

-0.1%

(946)

-86.7%

(6,461)

-0.2%

(2,420)

-0.1%

(4,041)

-167.0%
Depreciation and amortization

(8,382)

-0.7%

(6,219)

-0.6%

(2,163)

-34.8%

(22,819)

-0.7%

(18,144)

-0.6%

(4,675)

-25.8%
Other interest expense, net

(11,012)

-0.9%

(12,715)

-1.3%

1,703

13.4%

(30,973)

-0.9%

(38,040)

-1.3%

7,067

18.6%
Other non-operating expense, net

(96)

0.0%

—

0.0%

(96)

-100.0%

(79)

0.0%

(2)

0.0%

(77)

-100.0%
Income from operations before income taxes

$
93,594

7.6%

$
70,704

7.1%

$
22,890

32.4%

$
268,268

7.9%

$
194,240

6.8%

$
74,028

38.1%

⁽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.~~

~~Consumer Services and Plans segment revenue~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans segment revenue was $46.2 million for the three months ended September 30, 2017, an increase of $0.7 million, or 1.6%, as compared to $45.4 million for the three months ended September 30, 2016. The increased revenue was attributable to a $1.1 million increase from our extended vehicle warranty and the Good Sam TravelAssist programs primarily due to increased policies in force, partially offset by $0.4 million of other decreases.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Consumer Services and Plans segment revenue was $144.5 million for the nine months ended September 30, 2017, an increase of $8.7 million, or 6.4%, as compared to $135.9 million for the nine months ended September 30, 2016. The increased revenue was attributable to a$2.7 million increase from our vehicle insurance and Good Sam TravelAssist programs primarily due to increased policies in force; a $2.1 million increase from our clubs and roadside assistance programs; a $1.7 million increase from consumer show exhibit and admissions revenue resulting from the acquisition of five consumer shows in the fourth quarter of 2016 and our new Good Sam RV Super Show introduced in February 2017; and $2.2 million of other increases.

~~Retail segment revenue~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Retail segment revenue was $1.2 billion for the three months ended September 30, 2017, an increase of $247.2 million, or 26.1%, as compared to $945.6 million for the three months ended September 30, 2016. The increase was primarily due to the 33.3% increase in new vehicle unit volume which resulted from a 9.4% increase in same store sales, as described below, and the acquired locations.

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Retail segment revenue was $3.3 billion for the nine months ended September 30, 2017, an increase of $540.2 million, or 19.9%, as compared to $2.7 billion for the nine months ended September 30, 2016. The increase was primarily due to the 34.6% increase in new vehicle unit volume which resulted from a 9.9% increase in same store sales, as described below, the acquired locations, and the greenfield location opened in June 2017.

~~Same store sales~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Same store sales were $982.2 million for the three months ended September 30, 2017, an increase of $84.3 million, or 9.4%, as compared to $897.9 million for the three months ended September 30, 2016. The increase was primarily due to the increased volume of new towable and Class C motorhome units sold and the revenue increase from finance and insurance, partially offset by a decrease in same store sales from used vehicle units sold.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Same store sales were $2.8 billion for the nine months ended September 30, 2017, an increase of $253.5 million, or 9.9%, as compared to $2.6 billion for the nine months ended September 30, 2016. The increase was primarily due to the increased volume of new towable and Class C motorhome units sold and the revenue increase from finance and insurance, partially offset by a decrease in same store sales from used vehicle units sold.

~~Total segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Total segment income was $115.1 million for the three months ended September 30, 2017, an increase of $24.4 million, or 26.9%, as compared to $90.7 million for the three months ended September 30, 2016. The increase was primarily due to gross profit increases from finance and insurance and new vehicles, partially offset by increases in variable selling, general and administrative expenses. Total segment income margin increased 14 basis points to 9.3%.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Total segment income was $328.6 million for the nine months ended September 30, 2017, an increase of $75.8 million, or 30.0%, as compared to $252.8 million for the nine months ended September 30, 2016. The increase was primarily due to gross profit increases from finance and insurance and new vehicles, partially offset by increases in variable selling, general and administrative expenses. Total segment income margin increased 80 basis points to 9.6%.

~~Consumer Services and Plans segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans segment income was $21.7 million for the three months ended September 30, 2017, an increase of $1.8 million, or 9.2%, as compared to $19.8 million for the three months ended September 30, 2016. The segment income increase was attributable to an increase from our Good Sam TravelAssist and roadside assistance programs of $0.9 million primarily due to increased policies in force; and a $1.2 million reduction in selling, general and administrative expenses; partially offset by a decrease of $0.3 million from other ancillary products. Consumer Services and Plans segment income margin increased 327 basis points to 46.9%, which was primarily due to a 387 basis point increase in segment gross margin and reduced selling, general and administrative expenses that was largely from reduced wages.

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Consumer Services and Plans segment income was $71.9 million for the nine months ended September 30, 2017, an increase of $7.9 million, or 12.4%, as compared to $63.9 million for the nine months ended September 30, 2016. The segment income increase was attributable to an increase from our vehicle insurance and Good Sam TravelAssist programs of $3.0 million primarily due to increased policies in force; increased roadside assistance contracts in force and reduced claims, together resulting in a gross profit increase of $2.0 million; an increase from our consumer shows of $0.8 million resulting from the five acquired consumer shows and one new show; a $0.1 million increase from other ancillary products, and a $2.0 million reduction in selling, general and administrative expenses primarily from reduced wages. Consumer Services and Plans segment income margin increased 268 basis points to 49.7%, which was primarily due to a $2.0 million decrease in selling, general and administrative expenses that was largely from reduced wages and a 72 basis point increase in Consumer Services and Plans gross margin.

~~Retail segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Retail segment income was $93.4 million for the three months ended September 30, 2017, an increase of $22.6 million, or 31.8%, as compared to $70.9 million for the three months ended September 30, 2016. The increase was primarily due to increased segment gross profit of $75.8 million primarily due to higher revenue and sales penetration of finance and insurance products, an increase of $26.5 million primarily from increased new vehicle unit volume of 4,774 units for the three months ended September 30, 2017 compared to the three months ended September 30, 2016, an increase of $8.9 million from parts, services and other, and an increase of $6.5 million from used vehicles; partially offset by increased selling, general and administrative expenses of $50.2 million primarily due to increased variable wages relating to increased revenue, increased variable selling expenses; and an increase of approximately $3.0 million in floor plan interest expense relating to an increase in the average floor plan balance. Retail segment income margin increased 34 basis points to 7.8%, primarily due to increased penetration of the finance and insurance revenue to 11.2% of total new and used revenue, from 9.3% for the comparable prior year period, increased used vehicle gross margin of 261 basis points, and decreased selling, general and administrative expenses as a percentage of segment gross profit of 98 basis points, partially offset by a reduction of 429 basis points in parts, services and other gross margin.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Retail segment income was $256.7 million for the nine months ended September 30, 2017, an increase of $67.8 million, or 35.9%, as compared to $188.9 million for the nine months ended September 30, 2016. The increase was primarily due to increased segment gross profit of $173.3 million primarily due to higher revenue and sales penetration of finance and insurance products, an increase of $63.3 million primarily from increased new vehicle unit volume of 14,082 units for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, an increase of $15.6 million from used vehicles, and an increase of $14.3 million from parts, services and other; partially offset by increased selling, general and administrative expenses of $101.1 million primarily relating to increased variable wages relating to increased revenue, increased variable selling expense and increased rent relating to new stores; and an increase in floor plan interest expense of approximately $4.5 million relating to an increase in the average floor plan balance. Retail segment income margin increased 93 basis points to 7.9%, primarily due to increased penetration of the finance and insurance revenue to 10.7% of total new and used revenue, from 8.9% for the comparable prior year period, increased used vehicle gross margin of 475 basis points, and decreased selling, general and administrative expenses as a percentage of segment gross profit of 262 basis points.

~~Table of Contents~~

~~Corporate and other expenses~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Corporate and other expenses were $2.0 million for the three months ended September 30, 2017, an increase of 86.7%, as compared to $1.1 million for the three months ended September 30, 2016. The $0.9 million increase was primarily due to $0.5 million of transaction expenses associated with acquisitions into new or complementary markets, including the Gander Mountain Acquisition; and $0.4 million of other professional fees.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Corporate and other expenses were $6.5 million for the nine months ended September 30, 2017, an increase of 167.0%, as compared to $2.4 million for the nine months ended September 30, 2016. The approximately $4.0 million increase was primarily due to $2.6 million of transaction expenses associated with the acquisitions into new or complementary markets, including the Gander Mountain Acquisition; and $1.4 million of other professional fees.

Liquidity and Capital Resources

General

Our primary requirements for liquidity and capital have been working capital, inventory management, acquiring and building new retail locations, ~~including pre-opening expenses,~~ 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, ~~proceeds from the~~ May 2017 ~~Public Offering,~~public equity offering and October 2017 public equity offering, borrowings under our ~~Existing~~ Senior Secured Credit Facilities (as defined below) or ~~previously under~~ our ~~Previous Senior Secured Credit Facilities, and~~previous senior secured credit facilities, borrowings under our Floor Plan ~~Facility.~~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 ~~sheltered~~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 1112 — 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. On July 20, 2020, our board of directors approved the increase of the quarterly dividend to $0.09 per share of Class A common stock from $0.08 per share. During each of the ~~nine~~three months ended ~~September~~December 31, 2019, March 31, 2020 and June 30, ~~2017,~~2020, we paid ~~three~~a regular quarterly cash ~~dividends~~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

~~Table of Contents~~

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.”~~Policy” in our Annual Report. During each of the ~~nine~~three months ended ~~September~~March 31 and June 30, ~~2017,~~2020, we paid ~~three~~a special cash ~~dividends~~dividend of $0.0732 per share of our Class A common stock. Additionally, on July 20, 2020, our board of directors increased the quarterly special cash dividend to $0.08 per share of Class A common stock from $0.0732 per share. 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 six months ended June 30, 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 $1.2 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 $5.6 million to $10.6 million of other associated costs, and $8.0 million to $13.0 million of lease termination costs, will result in future cash expenditures. For a discussion of the 2019 Strategic Shift, see Note 4 — Restructuring and Long-

Table of Contents

lived Asset Impairment to our 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 initially took proactive steps to increase cash available on-hand, including, but not limited to, reducing cash expenditures, including wage reductions through a combination of temporary salary reductions, layoffs, and furloughs; negotiating payment deferrals with lessors; reducing marketing and promotional expenses; and delaying strategic capital expenditures. We had negotiated lease payment deferrals with numerous landlords amounting to approximately $14.0 million from 2020 into 2021. As demand for our products accelerated and our cash position improved, we repaid these deferred lease payment amounts in full prior to June 30, 2020 and most of the temporary salary reductions ended in May 2020. Additionally, as a result of our improved cash position, we made voluntary principal payments in June 2020 of $9.6 million on our Term Loan Facility and $20.0 million on our Revolving Credit Facility. Due to accelerated industry demand, we saw a substantial increase in contracts in transit volume during the three months ended June 30, 2020. For the three months ended June 30, 2020, we saw a substantial increase in our contracts in transit volume. The increase was driven by accelerated industry demand for new and used RVs and longer contract funding periods. The longer contract funding periods are being driven by the closure of many Department of Motor Vehicles (“DMV”) state facilities, lenders implementing additional employment verification procedures, and a general process slowdown that has resulted from many people working from home. The longer contract funding period has led to an increased backlog in contract funding, which impacts the timing of cash receipts for the sale of RVs and related finance and insurance revenues.

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 ~~Gander Mountain Acquisition,~~opening of any additional RV and outdoor retail locations, regular quarterly cash dividends (as described above) and additional expenses we expect to incur ~~as a public company~~ 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 ~~Existing~~ 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 ~~Existing~~ 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.~~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 ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, we had working capital of ~~$343.7~~$474.7 million and ~~$266.8~~$394.7 million, respectively, including ~~$163.2~~$227.9 million and ~~$114.2~~$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 ~~$78.9~~$84.3 million and ~~$68.6~~$87.1 million as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~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. Our Floor Plan Facility includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows us to transfer cash as an offset to the payable under the Floor Plan Facility. Of the $216.9 million in the FLAIR offset account at June 30, 2020, we could have withdrawn $180.9 million of cash from the FLAIR offset account and remained in compliance with the financial covenants of the Floor Plan Facility.

Table of Contents

Seasonality

We have experienced, and expect to continue to experience, variability in revenue, net income, and cash flows as a result of annual seasonality in our business. Because RVs are used primarily by vacationers and campers, demand for services, protection plans, products, and resources generally declines during the winter season, while sales and profits are generally highest during the spring and summer months. In addition, unusually severe weather conditions in some geographic areas may impact demand.

We generate a disproportionately higher amount of our annual revenue in our second and third fiscal quarters, ~~respectively,~~ which include the spring and summer months. We incur additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs. If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to decline.

Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the timing of acquisitions and the seasonality of our business. We prefer to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the location to be ~~re‑modeled~~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.

~~Table of Contents~~

Cash Flow

The following table shows summary cash flows information for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016:~~2019:

Nine Months Ended

September 30,
(In thousands)

2017

2016
Net cash provided by operating activities

$
208,099

$
316,027
Net cash used in investing activities

(405,116)

(98,987)
Net cash provided by (used in) financing activities

246,046

(193,999)
Net increase in cash and cash equivalents

$
49,029

$
23,041


	Six Months Ended
	June 30,
(In thousands)	2020		2019
Net cash provided by operating activities	$	515,913	$	100,179
Net cash used in investing activities		(13,319)		(80,522)
Net cash used in financing activities		(422,213)		(56,954)
Net increase (decrease) in cash and cash equivalents	$	80,381	$	(37,297)

Operating activities.Our cash flows from operating activities are primarily collections from contracts in transit and customers following the sale of new and used vehicles, as well as from the sale of retail ~~parts,~~products and services and ~~consumer~~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 ~~consumer~~ services and program costs.

Net cash provided by operating activities was ~~$208.1~~$515.9 million ~~for~~in the ~~nine~~six months ended ~~September~~June 30, ~~2017, a decrease~~2020, an increase of ~~$107.9~~$415.7 million from ~~$316.0~~$100.2 million of net cash provided byin operating activities ~~for~~in the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2019. The ~~decrease~~increase was primarily due to ~~$219.0 million from increases in inventory balances, partially offset by a $37.2 million increase in accounts payable and accrued liabilities, $23.5~~$280.7 million of ~~other net favorable changes, and~~reduced inventory purchases, a ~~$50.4~~$123.3 million increase in net ~~income.~~ income, $59.2 million of increased accounts payable and other accrued expenses, and $2.4 million of other increases, partially offset by $49.9 million of reduced receivables and contracts in transit.

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 ~~Existing~~ Senior Secured Credit Facilities.

Table of Contents

The table below summarizes our capital expenditures for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016:~~2019:

Nine Months Ended

September 30,
(In thousands)

2017

2016
IT hardware and software

$
11,570

$
5,546
Greenfield and acquired retail locations

24,896

5,708
Existing retail locations

11,483

14,278
Corporate and other

1,810

3,671
Total capital expenditures

$
49,759

$
29,203


	Six Months Ended
	June 30,
(In thousands)	2020		2019
IT hardware and software	$	4,607	$	4,372
Greenfield and acquired retail locations		2,830		18,103
Existing retail locations		6,176		4,472
Corporate and other		47		901
Total capital expenditures	$	13,660	$	27,848

Our capital expenditures consist primarily of investing in acquired and greenfield retail and ~~acquired retail~~RV dealership locations, existing retail locations, information technology, hardware, and software. There were no material commitments for capital expenditures as of ~~September~~June 30, ~~2017.~~2020. Additionally, during the six months ended June 30, 2020, we entered into the non-cash activity of new finance leases for $6.5 million for IT hardware and $23.0 million for real estate.

Net cash used in investing activities was ~~$405.1~~$13.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2020. The ~~$405.1~~$13.3 million of cash used in investing activities was primarily composed of $345.1 million for the acquisition of fifteen retail locations, three consumer shows, Gander Mountain and Overton’s, TheHouse.com, and W82 (see Note 9 — Acquisitions to our unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q). The remaining cash used in investing activities was composedcomprised of approximately ~~$49.8~~$13.7 million of capital expenditures primarily related to retail locations, and ~~$16.8 for the~~a $0.1 million purchase of ~~real property,~~intangible assets, partially offset by proceeds of ~~$6.0 million from the sale of real property and $0.6~~$0.5 million from the sale of property and equipment.

Net cash used in investing activities was ~~$99.0~~$80.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2019. The ~~$99.0~~$80.5 million of cash used in investing activities ~~included $67.7~~was comprised of $38.6 million for the acquisition of ~~five~~

~~Table of Contents~~

~~retail locations, of which four were opened and one was scheduled to open in the fourth quarter of 2016, a wholesale parts dealer and six consumer shows, in addition to $29.2~~RV dealerships, $27.8 million of capital expenditures related to retail locations, and ~~$12.9~~$25.1 million for the purchase of real property, partially offset by proceeds of $10.1 million from the sale ~~and leaseback~~ of real property and $0.9 million of proceeds from the sale of property and ~~equipment~~equipment. See Note 11 – Acquisitions to our condensed consolidated financial statements included in Part 1, Item 1 of ~~approximately $7.3 million and $3.5 million, respectively.~~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 provided by financing activities was $246.0 million for the nine months ended September 30, 2017. The $246.0 million of cash provided by financing activities was primarily due to $174.5 million of borrowings under the Floor Plan Facility, $121.4 million of proceeds we received from the May 2017 Public Offering, and $94.8 million of net proceeds from long-term debt, partially offset by $125.0 million of non-controlling interest member distributions, $11.9 million of dividends paid on Class A common stock, $5.6 million of principal payments under the Existing Term Loan Facility, and other financing uses of $2.2 million during the nine months ended September 30, 2017.

Our net cash used in financing activities was ~~$194.0~~$422.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. The ~~$194.0~~$422.2 million of cash used in financing activities was primarily due to ~~$214.8~~$316.5 million of reduced borrowings under the Floor Plan Facility, $55.4 million of member distributions, ~~$66.0~~$20.0 million of ~~principal~~payments on credit facilities, $16.7 million of payments on our long-term debt, $11.5 million of dividends paid on Class A common stock, $1.7 million of finance lease payments, and $0.5 million of payments related to RSU shares withheld for taxes, partially offset by proceeds from exercise of stock options of $0.1 million.

Our net cash used in financing activities was $57.0 million for the six months ended June 30, 2019. The $57.0 million of cash used in financing activities was primarily due to $38.1 million of non-controlling member distributions, $29.4 million of net payments under the Floor Plan Facility, ~~principal payments under the Previous Senior Secured Credit Facilities~~$11.4 million of ~~$43.6~~dividends paid on Class A common stock and $3.8 million ~~and~~of other financing uses, ~~of $3.9 million,~~ partially offset by ~~$134.3~~$14.0 million of ~~borrowings~~net proceeds under the ~~Floor Plan~~Revolving Credit Facility, ~~during~~and $11.7 million of proceeds received from the ~~nine months ended September 30, 2016.~~Real Estate Facility.

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

As of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, we had outstanding debt in the form of our credit agreement that included a $734.5 million and $645.0 million term loan (the ‘‘Existing Term Loan Facility’’), respectively, and $35.0 million of commitments for revolving loans (the ‘‘Existing Revolving Credit Facility’’ and, together with the Existing Term Loan Facility, the ‘‘Existing Senior Secured Credit ~~Facilities’’)~~Facilities, our Floor Plan Facility, and our ~~floor plan financing facility with $1.165 billion in maximum borrowing availability and a letter of credit commitment of $15.0 million (the ‘‘Floor Plan Facility’’).~~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. ~~In the past, we have used interest rate swap derivatives to diversify our debt portfolio between fixed and variable rate instruments.~~ 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.

~~Existing~~56

Table of Contents

Senior Secured Credit Facilities

As of June 30, 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 June 30, 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 June 30, 2020, we were not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At June 30, 2020, we would have met this covenant if we had exceeded the 30% threshold. We were in compliance with all applicable debt covenants at June 30, 2020 and December 31, 2019. On June 30, 2020, the Borrower made a $9.6 million voluntary principal payment on the Term Loan Facility. Additionally, the Borrower is required to prepay the term loan borrowings in an aggregate amount equal to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio.

The following table details the outstanding amounts and available borrowings under our ~~Existing~~ Senior Secured Credit Facilities as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 (in thousands):

September 30,

December 31,

2017

2016
Existing Senior Secured Credit Facilities:

Existing Term Loan Facility:

Principal amount of borrowings

$
740,000

$
645,000
Less: cumulative principal payments

(5,550)

—
Less: unamortized original issue discount

(5,880)

(6,349)
Less: finance costs

(11,663)

(11,898)

716,907

626,753
Less: current portion

(7,400)

(6,450)
Long-term debt, net of current portion

$
709,507

$
620,303
Existing Revolving Credit Facility:

Total commitment

$
35,000

$
35,000
Less: outstanding letters of credit

(3,237)

(3,237)
Additional borrowing capacity

$
31,763

$
31,763


	June 30,		December 31,
	2020		2019
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,195,000	$	1,195,000
Less: cumulative principal payments		(47,513)		(31,898)
Less: unamortized original issue discount		(3,790)		(4,320)
Less: finance costs		(9,306)		(10,667)
		1,134,391		1,148,115
Less: current portion		(11,991)		(11,991)
Long-term debt, net of current portion	$	1,122,400	$	1,136,124
Revolving Credit Facility:
Total commitment	$	35,000	$	35,000
Less: outstanding letters of credit		(5,622)		(4,112)
Less: availability reduction due to Total Leverage Ratio		—		(21,622)
Additional borrowing capacity	$	29,378	$	9,266

~~Table of Contents~~

On March 17, 2017, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, entered into a First Amendment (the “First Amendment”) to the Credit Agreement, dated as of November 8, 2016 (as amended, the "Existing Credit Agreement"). Per the terms of the First Amendment, the Borrower’s $645.0 million term loan facility was increased by $95.0 million to $740.0 million. The proceeds from the additional borrowings were used to purchase dealerships within FreedomRoads. No other terms of the Credit Agreement were amended.

~~On October~~See our Annual Report and Note 6 2017, we further amended our Existing Credit Agreement. This amendment, among other things, (i) increased our Existing Term Loan Facility by $205.0 million to an outstanding principal amount of $939.5 million, (ii) amended the applicable margin to 2.00% from 2.75% per annum, in the case of base rate loans, and to 3.00% from 3.75% per annum, in the case of LIBOR loans and, (iii) increased the quarterly amortization payment to $2.4 million. See Note 18 — Subsequent Events– Long-term Debt to our ~~unaudited~~condensed consolidated financial statements included in Part I, Item 1 of this Form ~~10-Q.~~

~~See our Annual Report~~10-Q for a further discussion of the terms of the ~~Existing~~ Senior Secured Credit Facilities.

Floor Plan Facility

As of June 30, 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 “Second Amendment’). The applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR. At June 30, 2020, the Floor Plan Facility allowed FR to borrow (a) up to $1.38

Table of Contents

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 $54.0 million under the revolving line of credit, which maximum amount outstanding decreases by $3.0 million on the last day of each fiscal quarter. The maturity date of the Floor Plan Facility is March 15, 2023. On May 12, 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement (“Third Amendment”) that provides FR with a one-time option to request a temporary four-month reduction (“Current Ratio Reduction Period”) of the minimum Consolidated Current Ratio (as defined in the Floor Plan Facility) at any time during 2020 and the first seven days of 2021. During the Current Ratio Reduction Period, the applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 3.00% and 0.55% and 1.50%, respectively, based on the Consolidated Current Ratio at FR. Effective May 12, 2020 through July 31, 2020, FR is not allowed to draw further Revolving Credit Loans (as defined in the Floor Plan Facility). On June 29, 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit.

The credit agreement governing the Floor Plan Facility contains certain financial covenants, which we were in compliance with at June 30, 2020 and December 31, 2019 and we have not exercised the option to request the Current Ratio Reduction Period.

The following table details the outstanding amounts and available borrowings under our Floor Plan Facility as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 (in thousands):


	June 30,		December 31,
	2020		2019
Floor Plan Facility:
Notes payable — floor plan:
Total commitment	$	1,379,750	$	1,379,750
Less: borrowings, net		(470,871)		(848,027)
Less: flooring line aggregate interest reduction account		(216,850)		(87,016)
Additional borrowing capacity		692,029		444,707
Less: accounts payable for sold inventory		(88,556)		(27,892)
Less: purchase commitments		(31,993)		(8,006)
Unencumbered borrowing capacity	$	571,480	$	408,809

Revolving line of credit	$	54,000	$	60,000
Less: borrowings		(20,885)		(40,885)
Less: temporary limitation on borrowing through July 31, 2020		(33,115)		-
Additional borrowing capacity	$	-	$	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

September 30,

December 31,

2017

2016
Floor Plan Facility:

Notes payable — floor plan:

Total commitment

$
1,165,000

$
1,165,000
Less: borrowings

(799,682)

(625,185)
Additional borrowing capacity

$
365,318

$
539,815
Letters of credits:

Total commitment

$
15,000

$
15,000
Less: outstanding letters of credit

(8,020)

(8,020)
Additional borrowing capacity

$
6,980

$
6,980

Table of Contents

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

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 June 30, 2020 and December 31, 2019.

The outstanding principal of the Real Estate Facility was $18.7 million and $19.7 million as of June 30, 2020 and December 31, 2019. In August 2020, we entered into an agreement to lease an owned property for a former distribution center in Greenville, North Carolina to a third party. By entering into this lease, we were required to pay down $10.3 million of the Real Estate Facility in August 2020.

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~~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 ~~and Gains~~

Deferred revenue ~~and gains consist~~consists of our sales for products not yet recognized as revenue at the end of a given ~~period and deferred gains on sale-leaseback and derecognition of right to use asset transactions.~~period. Our deferred revenue ~~and deferred gains~~ as of ~~September~~June 30, 2017 were $124.2 million and $11.5 million, respectively. Deferred revenue is expected to be recognized as revenue and deferred gains are expected to be recognized ratably over the lease terms as an offset to rent expense.2020 was $146.2 million.

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2017,~~2020, we did not have any off-balance sheet arrangements ~~except for operating~~other than short-term leases ~~entered into~~not included in our lease obligation.

Contractual Obligations

There were no material changes in our commitments during the ~~normal~~three months ended June 30, 2020 under contractual obligations from those disclosed in our Annual Report outside the course of normal business.

~~Table of Contents~~

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.

Table of Contents

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, of Part I of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~We are exposed to~~For a discussion of the Company’s quantitative and qualitative disclosures about market ~~risk from~~risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risks, in our Annual Report. As of June 30, 2020, there have been no material changes in inflation and interest rates. All of these market risks arise in the normal course of business, as we do not engage in speculative trading activities. The following analysis provides quantitative information regarding these risks.

~~Impact of Inflation~~

We believe that inflation over the last three fiscal years has not had a significant impact on our operations; however, we cannot assure you there will be no such effect in the future. Our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Additionally, the cost of remodeling acquired retail locations and constructing new retail locations is subject to inflationary increase in the costs of labor and material, which results in higher rent expense on new retail locations. Finally, we finance substantially all of our inventory through various revolving floor plan arrangements with interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

~~Interest Rate Risk~~

Our operating results are subject to risk from interest rate fluctuations on our Existing Senior Secured Credit Facilities and our Floor Plan Facility, which carries variable interest rates. Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. Advances under our Existing Senior Secured Credit Facilities, which include the Existing Term Loan Facility and the Existing Revolving Credit Facility, is tied to a borrowing base and bear interest at variable rates. Additionally, under our Floor Plan Facilities we have the ability to draw on revolving floor plan arrangements, which bear interest at variable rates. Because our Existing Senior Secured Credit Facilities and Floor Plan Facility bear interest at variable rates, we are exposed to market risks relating to changes in interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. As of September 30, 2017, we had no outstanding borrowings under our Existing Revolving Credit Facility aside from letters of credit in the aggregate amount of $3.2 million outstanding under the Existing Revolving Credit Facility, $717.0 million of variable rate debt outstanding under our Existing Term Loan Facility, net of $5.9 million of unamortized original issue discount and $11.7 million of finance costs, and $799.7 million in outstanding borrowings under our Floor Plan Facility. Based on September 30, 2017 debt levels, an increase or decrease of 1% in the effective interest rate would cause an increase or decrease in interest expense under our Existing Term Loan Facility of $7.4 million and $3.6 million, respectively, over the next 12 months and an increase or decrease of 1% in the effective rate would cause an increase or decrease in interest expense under our Floor Plan Facility of approximately $8.0 million over the next 12 months. We do not use derivative

~~Table of Contents~~

~~financial instruments for speculative or trading purposes, but~~ this ~~does not preclude our adoption of specific hedging strategies in the future.~~information.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, 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 ~~September~~June 30, ~~2017.~~2020.

Changes in Internal Control over Financial Reporting

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 ~~September~~June 30, ~~2017,~~2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1:1. Legal Proceedings

See Note 9 – Commitments and Contingencies to our condensed consolidated financial statements in Item 1, Part I of this Form 10-Q.

We are engaged in various legal actions, claims and proceedings arising in the ordinary course of business, including claims related to employment-related matters, breach of contracts, products liabilities, consumer protection and intellectual property matters resulting from our business activities. We do not believe that the ultimate resolution of these pending claims will have a material adverse effect on our business, financial condition or results of operations. However, litigation is subject to many uncertainties, and the outcome of certain individual litigated matters may not be reasonably predictable and any related damages may not be estimable. Some litigation matters could result in an adverse outcome to us, and any such adverse outcome could have a material adverse effect on our business, financial condition and results of operations.

Item 1A. Risk Factors

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, ~~2016~~2019 filed with the Securities and Exchange Commission on ~~March 13, 2017,~~February 28, 2020, other than with respect to the risk factors described below.

~~Risks Related to~~60

Table of Contents

The COVID-19 pandemic has had, and could again have in the ~~Gander Mountain Acquisition~~

If we continue to open and operate existing Gander Mountain retail locations, we may be required to raise additional funds in order to fund such openings. We cannot assure you that the terms of any additional debt or equity financing we obtain to fund the openings will be favorable to us.

~~Contingent~~future, certain negative impacts on our ~~final lease negotiations, our current plan is to open the initial 15 to 20 Gander Mountain stores, which will be rebranded as Gander Outdoors, by the end of the first quarter of 2018 and~~

~~Table of Contents~~

another 40 to 45 stores during the second and third quarters of 2018, with measured growth thereafter. We assumed 15 Gander Mountain leases on October 6, 2017 through the exercise of Designation Rights and expect to enter into new leases for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business, and ~~open stores.~~

Based on our current plans, we currently expect to fund the opening and initial working capital needs of our current goal to operate Gander Mountain stores and certain liabilities that we will assume in connection therewith with available cash on hand and proceeds from the Second Amendment to our Senior Secured Credit Facilities. We may also be required to raise additional capital from equity or debt financing to finance the opening and operation of Gander Mountain stores. We cannot assure you that we will be able to obtain such additional equity or debt financing on favorable terms or at all. Moreover, the issuance by us of Class A common stock in any future offerings may result in substantial dilution to our existing stockholders andimpacts may have a material adverse effect on the market price of our Class A common stock. Furthermore, to the extent that we need to incur additional debt financing in connection with the opening and operation of any Gander Mountain retail locations, such debt financings may have an adverse effect on our financial condition and may limit our ability to obtain financing in the future.

Additionally, if we fail to realize the expected benefits from the Gander Mountain Acquisition or if the financial performance of Gander Mountain and Overton's do not meet our current expectations, it may make it more difficult for us to service our debt and our results of operations, ~~may fail~~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 ~~meet expectations.~~

~~We may not complete~~limit COVID-19's spread have had, and could again have in the ~~opening of Gander Mountain retail locations within the time frame we anticipate or at all, which could have a~~future, certain negative ~~effect~~impacts on our business including, without limitation, the following:

●

When governmentally mandated or voluntary stay-at-home guidelines were put in place, we had experienced a decrease in traffic at our RV and Outdoor Retail locations, which resulted in a decrease in the sales of certain of our products and services at our RV and Outdoor Retail locations. If stay-at-home or shelter-in-place orders are reinstated, we may again experience negative impacts on our sales that could be more prolonged and more severe than what we have experienced to date. As stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic and revenue trends in May and June 2020. The industry has seen an influx of new first time participants because RVs allow people to travel in a safe and socially distant manner during the COVID-19 crisis. These trends may not continue in the future, in particular if the cruise line, air travel and hotel industries begin to recover. Accordingly, investors are cautioned not to unduly rely on the historical information in this Form 10-Q regarding our business, results of operations, financial condition or liquidity.

●

National parks and RV parks temporarily closed and may in the future close again in response to the COVID-19 pandemic, which could cause consumers to use their RVs less frequently and be less inclined to need or renew certain of our services or purchase products through our e-commerce websites.

●

As of June 30, 2020, we have temporarily closed three dealerships and two of our specialty retail locations 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 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 temporary closure of its North American production facilities from late March to early May 2020.

●

Disruptions in supply chains may place constraints on our ability to source products, which may increase our product costs or lead to shortages.

Table of Contents

●

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 ~~results of operations.~~consumers, vendors or third-party service providers.

~~On May 26, 2017, CWI, an indirect subsidiary~~Any of the Company, completed the acquisition of certain assets of Gander Mountain and its Overton's boating business through a bankruptcy auction that took place in April 2017 for $35.4 million in cash and $1.1 million of contingent consideration, as described in Note 9 — Acquisitions to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

The assets acquired include the right to designate any real estate leases for assignment to CWI or other third parties through the Designation Rights, other agreements CWI elects to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, Overton’s inventory, the Gander Mountain and Overton's e-commerce businesses and fixtures and equipment for Overton's two retail locations and corporate operations. Furthermore, CWI committed to exercise Designation Rights and take an assignment of no fewer than 15 Gander Mountain retail leases on or before October 6, 2017, in addition to the two Overton's retail leases assumed at the closingnegative impacts of the acquisition. The Designation Rights expired on October 6, 2017 after CWI elected to be designated 15 Gander Mountain retail leases. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elected to assume, accrued time off for employees retained by CWI and retention bonuses payable to certain key Gander Mountain employees retained by CWI. The cure costs for the 15 Gander Mountain leases assumed under the Designation Rights were approximately $1.1 million.

Contingent on our final lease negotiations, our current plan is to open the initial 15 to 20 Gander Mountain stores, which will be rebranded as Gander Outdoors, by the end of the first quarter of 2018 and another 40 to 45 stores during the second and third quarters of 2018,COVID-19 pandemic, including those described above, alone or in combination with measured growth thereafter. We assumed 15 Gander Mountain leases on October 6, 2017 through the exercise of Designation Rights and expect to enter into new leases for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business and open stores. Additionally, given the current liquidation of the existing Gander Mountain inventory, we will need to continue to supply each retail location that we determine to operate with new inventory in a timely manner, whichothers, may also require us to raise additional capital from equity or debt financings. If we are unable to negotiate lease terms with the landlords acceptable to us, order new inventory or raise additional capital, in each case, within the expected time frame, or at all, it could have a negative effect on our financial performance and our ability to execute on our operating strategy for Gander Mountain.

~~Table of Contents~~

Combining Gander Mountain (including Overton's) with Camping World may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the transaction may not be fully realized.

The success of the Gander Mountain Acquisition, including the realization of anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine the businesses of Gander Mountain (including Overton's) and Camping World. The integration may be more difficult, costly or time consuming than expected. It is possible that the integration process could result in the loss of key employees or the disruption of each company's ongoing businesses or that the alignment of standards, controls, procedures and policies may adversely affect the combined company's ability to maintain relationships with clients, customers, suppliers and employees or to fully achieve the anticipated benefits and cost savings of the transaction. The loss of key employees could adversely affect our ability to successfully conduct our existing business in the markets in which Gander Mountain and Overton's operated prior to the Gander Mountain Acquisition, which could have an adverse effect on our financial results and the market price of our Class A common stock. Other potential difficulties of combining the businesses of Gander Mountain (including Overton's) and Camping World include unanticipated issues in integrating suppliers, logistics, distribution, retail operations, negotiation of lease terms with landlords on terms acceptable to us, information communications and other systems. We also expect to continue to incur non-recurring charges, including transaction costs, directly attributable to the Gander Mountain Acquisition and the opening of these retail locations.

If we experience difficulties with the integration process, the anticipated benefits of the transaction may not be realized fully or at all, or may take longer to realize than expected. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on each of Camping World and Gander Mountain (including Overton's) during this transition period and for an undetermined period after completion of the Gander Mountain Acquisition on the combined company.

Moreover, in connection with the opening of the Gander Mountain retail locations, we expect that we will continue to expand into numerous new markets and will be selling various new product lines or categories, including firearms. See "— We may incur costs from litigation relating to products that we currently sell as a result of the consummation of the Gander Mountain Acquisition and the opening of retail locations, particularly firearms and ammunition, which could adversely affect our total revenue and profitability." As a result, opening retail locations may be more costly or time consuming than expected. Additionally, our unfamiliarity with the Gander Mountain product lines and new markets may also impact our ability to operate these locations profitably once they are opened. Other factors that may impact the profitability of these retail locations include our ability to retain existing store personnel or hire and train new store personnel, especially management personnel, our ability to provide a satisfactory mix of merchandise, our ability to negotiate favorable lease agreements, our ability to supply retail locations with inventory in a timely manner and the other factors described under "— Risks Related to our Business — Our expansion into new, unfamiliar markets, products lines or categories presents increased risks that may prevent us from being profitable in these new markets, products lines or categories. Delays in opening or acquiring new retail locations could have a material adverse effect on our ~~business,~~results of operations, financial condition and ~~results~~cash flows. Any of ~~operations." under ‘‘Risk Factors’’~~these negative impacts, alone or in combination with others, could exacerbate many of

Table of Contents

the risk factors discussed in “Risk Factors” in Item 1A of Part I of our Annual Report. ~~As a result, we cannot assure you that we~~The full extent to which the COVID-19 pandemic will ~~be successful in operating the Gander Mountain business on a profitable basis, and~~negatively affect our ~~failure to do so could have a material adverse effect on our business,~~results of operations, financial condition and ~~results of operations.~~

Wecash flows will depend on future developments that are highly uncertain and ~~Gander Mountain (including Overton's) will~~cannot be ~~subject to business uncertainties while~~predicted, including the ~~liquidation sales are pending.~~

~~Uncertainty about the effect~~scope and duration of the ~~Gander Mountain Acquisition, the timing of the completion of liquidation sales at Gander Mountain's existing stores~~pandemic and ~~the expected opening~~actions taken by governmental authorities and operation of Gander Mountain and Overton's retail locations on employees, customers and suppliers may have an adverse effect on us. These uncertainties may impair our or Gander Mountain's (including Overton's) ability to attract, retain and motivate key personnel until the liquidation sales are completed, and could cause customers, suppliers and others that deal with Gander Mountain (including Overton's) or us to seek to change existing business relationships with Gander Mountain (including Overton's) or us. If key employees depart or current customers

~~Table of Contents~~

~~or suppliers terminate or modify their business relationships with us or Gander Mountain (including Overton's) because of issues relating~~other third parties in response to the uncertainty of the timing of the completion of liquidation sales at Gander Mountain's existing stores, the timing of the opening of retail locations and difficulty of integration or a desire not to remain with us or Gander Mountain (including Overton's), our business could be harmed.pandemic.

The obligations and liabilities of Gander Mountain (including Overton's), some of which may be unanticipated or unknown, may be greater than we have anticipated which may diminish the value of Gander Mountain (including Overton's) to us.

Under the asset purchase agreement entered into in connection with the Gander Mountain Acquisition, we have assumed, and will continue to assume, certain liabilities associated with Gander Mountain, including cure costs for real property leases and other agreements we elect to assume, accrued time off for employees retained by us and retention bonuses payable to certain key Gander Mountain employees retained by us. These liabilities may be greater than we have anticipated. The obligations and liabilities of Gander Mountain (including Overton's) could have a material adverse effect on Gander Mountain's (including Overton's) business or Gander Mountain (including Overton's) value to us or on our business, financial condition or results of operations.

We may incur costs from litigation relating to products that we currently sell as a result of the Gander Mountain Acquisition and the opening of retail locations, particularly firearms and ammunition, which could adversely affect our total revenue and profitability.

We may incur damages due to lawsuits relating to products we currently sell as a result of the Gander Mountain Acquisition and the opening of Gander Mountain retail locations, including, but not limited to, lawsuits relating to firearms, ammunition, tree stands and archery equipment. We may incur losses due to lawsuits, including potential class actions, relating to our performance of background checks on firearms purchases and compliance with other sales laws as mandated by state and federal law. We may also incur losses from lawsuits relating to the improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other organizations attempting to recover costs from manufacturers and retailers of firearms and ammunition. Our insurance coverage and the insurance provided by our vendors for certain products they sell to us may be inadequate to cover claims and liabilities related to products that we sell. In addition, claims or lawsuits related to products that we sell, or the unavailability of insurance for product liability claims, could result in the elimination of these products from our product line, thereby reducing total revenue. If one or more successful claims against us are not covered by or exceed our insurance coverage, or if insurance coverage is no longer available, our available working capital may be impaired and our operating results could be materially adversely affected. Even unsuccessful claims could result in the expenditure of funds and management time and could have a negative impact on our profitability and on future premiums we would be required to pay on our insurance policies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3:3. Defaults Upon Senior Securities

None.

Item 4:4. Mine Safety Disclosures

Not applicable.

Item 5:5. Other Information

None.

Item 6. Exhibits

Exhibits Index


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
3.1	Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.	10-Q	001-37908	3.1	11/10/16

3.2	Amended and Restated Bylaws of Camping World Holdings, Inc.	10-Q	001-37908	3.2	11/10/16

4.1	Specimen Stock Certificate evidencing the shares of Class A common stock	S-1/A	333-211977	4.1	9/13/16

10.1	Third Amendment to Seventh Amended and Restated Credit Agreement	8-K	001-37908	10.1	5/18/20

10.2	Employment Agreement with Karin L. Bell, dated July 1, 2020					*

10.3	Consulting Agreement with Melvin Flanigan, dated July 1, 2020					*

31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer					*

5863

Table of Contents


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith

31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer					*

32.1	Section 1350 Certification of Chief Executive Officer					**

32.2	Section 1350 Certification of Chief Financial Officer					**

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					***

101.SCH	Inline XBRL Taxonomy Extension Schema Document					***

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					***

101.DEF	Inline XBRL Extension Definition Linkbase Document					***

101.LAB	Inline XBRL Taxonomy Label Linkbase Document					***

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					***

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					***

~~Item 6: Exhibits~~

~~Exhibits Index~~

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed/
Furnished
Herewith
3.1

Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.

10-Q

001-37908

3.1

11/10/16

3.2

Amended and Restated Bylaws of Camping World Holdings, Inc.

10-Q

001-37908

3.2

11/10/16

4.1

Specimen Stock Certificate evidencing the shares of Class A common stock

S-1/A

333‑211977

4.1

9/13/16

10.1

Second Amendment to Credit Agreement, dated October 6, 2017, by and among CWGS Enterprises, LLC, as holdings, CWGS Group, LLC, as borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent

8-K

001-37908

10.1

10/10/17

31.1

Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer

*

31.2

Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer

*

32.1

Section 1350 Certification of Chief Executive Officer

**

32.2

Section 1350 Certification of Chief Financial Officer

**

101.INS

XBRL Instance Document

***

101.SCH

XBRL Taxonomy Extension Schema Document

***

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

***

101.DEF

XBRL Extension Definition Linkbase Document

***

101.LAB

XBRL Taxonomy Label Linkbase Document

***

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

***

~~Table of Contents~~

* Filed herewith

** Furnished herewith

*** Submitted electronically herewith

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Camping World Holdings, Inc.

Date: ~~November 9, 2017~~August 6, 2020	By:	/s/ ~~Thomas F. Wolfe~~Karin L. Bell
		Karin L. Bell
		~~Thomas F. Wolfe~~
		Chief Financial Officer ~~and Secretary~~

		(Authorized Officer and Principal Financial Officer and Principal Accounting Officer)


		Page
			~~Page~~


PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)	53
	Unaudited Condensed Consolidated Balance Sheets – ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019	53
	Unaudited Condensed Consolidated Statements of Operations – Three and ~~Nine Months~~Six months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019	64
	Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity ~~(Deficit)~~ – ~~Nine Months~~Six months Ended ~~September~~June 30, ~~2017~~2020 and 2019	75
	Unaudited Condensed Consolidated Statements of Cash Flows – ~~Nine Months~~Six months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019	87
	Notes to Unaudited Condensed Consolidated Financial Statements	109
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3132
Item 3	Quantitative and Qualitative Disclosures About Market Risk	5460
Item 4	Controls and Procedures	5560

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	5560
Item 1A	Risk Factors	5560
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	5863
Item 3	Defaults Upon Senior Securities	5863
Item 4	Mine Safety Disclosures	5863
Item 5	Other Information	5863
Item 6	Exhibits	5963

Signatures		6165


	September 30,		December 31,
	2017		2016
Assets
Current assets:
Cash and cash equivalents	$	163,225	$	114,196
Contracts in transit		79,499		29,012
Accounts receivable, net		73,700		58,488
Inventories, net		1,204,138		909,254
Prepaid expenses and other assets		27,685		21,755
Total current assets		1,548,247		1,132,705
Property and equipment, net		183,485		130,760
Deferred tax assets, net		262,433		125,878
Intangibles assets, net		37,972		3,386
Goodwill		328,402		153,105
Other assets		17,940		17,931
Total assets	$	2,378,479	$	1,563,765
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	158,026	$	68,655
Accrued liabilities		125,349		78,044
Deferred revenues and gains		78,934		68,643
Current portion of capital lease obligations		908		1,224
Current portion of tax receivable agreement liability		7,378		991
Current portion of long-term debt		7,400		6,450
Notes payable – floor plan, net		799,682		625,185
Other current liabilities		26,822		16,745
Total current liabilities		1,204,499		865,937
Capital lease obligations, net of current portion		207		841
Right to use liability		10,231		10,343
Tax receivable agreement liability, net of current portion		102,485		18,190
Long-term debt, net of current portion		709,507		620,303
Deferred revenues and gains		56,782		52,210
Deferred tax liabilities		49		—
Other long-term liabilities		35,775		24,156
Total liabilities		2,119,535		1,591,980
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2017 and December 31, 2016		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 30,227,113 issued and 30,227,061 outstanding as of September 30, 2017 and 18,935,916 issued and outstanding as of December 31, 2016		302		189
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 57,031,184 outstanding as of September 30, 2017 and 62,002,729 outstanding as of December 31, 2016		6		6
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2017 and December 31, 2016		—		—
Additional paid-in capital		157,031		74,239
Retained earnings		35,655		544
Total stockholders' equity attributable to Camping World Holdings, Inc.		192,994		74,978
Non-controlling interests		65,950		(103,193)
Total stockholders' equity (deficit)		258,944		(28,215)
Total liabilities and stockholders' equity (deficit)	$	2,378,479	$	1,563,765


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenue:
Consumer services and plans	$	46,169	$	45,442	$	144,518	$	135,868
Retail
New vehicles		715,182		545,154		1,982,644		1,532,919
Used vehicles		188,331		181,675		531,324		576,964
Parts, services and other		187,750		151,090		478,169		422,316
Finance and insurance, net		101,570		67,710		268,829		188,607
Subtotal		1,192,833		945,629		3,260,966		2,720,806
Total revenue		1,239,002		991,071		3,405,484		2,856,674
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Consumer services and plans		20,085		19,953		61,792		59,071
Retail
New vehicles		614,624		471,140		1,703,622		1,317,147
Used vehicles		138,796		138,637		393,436		454,659
Parts, services and other		108,830		81,105		265,376		223,781
Subtotal		862,250		690,882		2,362,434		1,995,587
Total costs applicable to revenue		882,335		710,835		2,424,226		2,054,658
Operating expenses:
Selling, general, and administrative		236,174		186,255		640,108		536,966
Depreciation and amortization		8,382		6,219		22,819		18,144
(Gain) loss on sale of assets		(5)		21		(292)		(227)
Total operating expenses		244,551		192,495		662,635		554,883
Income from operations		112,116		87,741		318,623		247,133
Other income (expense):
Floor plan interest expense		(7,414)		(4,322)		(19,303)		(14,851)
Other interest expense, net		(11,012)		(12,715)		(30,973)		(38,040)
Other expense, net		(96)		—		(79)		(2)
		(18,522)		(17,037)		(50,355)		(52,893)
Income before income taxes		93,594		70,704		268,268		194,240
Income tax expense		(8,336)		(2,288)		(28,247)		(4,638)
Net income		85,258		68,416		240,021		189,602
Less: net income attributable to non-controlling interests		(65,131)		—		(193,036)		—
Net income attributable to Camping World Holdings, Inc.	$	20,127	$	68,416	$	46,985	$	189,602

Earnings per share of Class A common stock (1):
Basic	$	0.68			$	1.97
Diluted	$	0.68			$	1.92
Weighted average shares of Class A common stock outstanding (1):
Basic		29,522				23,854
Diluted		88,452				85,947

Dividends declared per share	$	0.1532			$	0.4596


										Additional				Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Retained		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		Earnings		Interest		Total
Balance at January 1, 2017	18,936		189	62,003		6	—		—		74,239		544		(103,193)		(28,215)
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs	4,600		46	—		—	—		—		121,399		—		—		121,445
Non-controlling interest adjustment for purchase of common units from CWGS, LLC with proceeds from a public offering	—		—	—		—	—		—		(53,648)		—		87,203		33,555
Issuance of Class A common stock for an acquisition by a subsidiary	164		1	—		—	—		—		5,719		—		—		5,720
Non-controlling interest adjustment for capital contribution of Class A common stock for an acquisition by a subsidiary	—		—	—		—	—		—		(2,261)		—		3,678		1,417
Equity-based compensation	—		—	—		—	—		—		2,792		—		—		2,792
Vesting of restricted stock units	—		—	—		—	—		—		—		—		—		—
Repurchases of Class A common stock	—		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	6,526		66	(4,972)		—	—		—		69,091		—		5,191		74,348
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(124,996)		(124,996)
Dividends	—		—	—		—	—		—		—		(11,874)		—		(11,874)
Deferred tax adjustments related to tax receivable agreement	—		—	—		—	—		—		(55,858)		—		—		(55,858)
Non-controlling interest adjustment	—		—	—		—	—		—		(4,442)		—		5,031		589
Net income	—		—	—		—	—		—		—		46,985		193,036		240,021
Balance at September 30, 2017	30,226	$	302	57,031	$	6	—	$	—	$	157,031	$	35,655	$	65,950	$	258,944


	Nine Months Ended September 30,
	2017		2016
Operating activities
Net income	$	240,021	$	189,602

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		22,819		18,144
Equity-based compensation		2,792		60
Gain on sale of assets		(292)		(227)
Provision for (recovery of) losses on accounts receivable		(23)		1,701
Accretion of original issue discount		706		915
Non-cash interest expense		3,210		3,698
Deferred income taxes		3,256		3,089
Loss on remeasurement of tax receivable agreement		79		—
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(64,211)		(38,415)
Inventories		(150,653)		68,316
Prepaid expenses and other assets		(6,381)		(8,324)
Checks in excess of bank balance		—		(7,478)
Accounts payable and other accrued expenses		105,154		67,935
Payment pursuant to tax receivable agreement		(203)		—
Accrued rent for cease-use locations		(91)		286
Deferred revenue and gains		14,863		12,849
Other, net		37,053		3,876
Net cash provided by operating activities		208,099		316,027

Investing activities
Purchases of property and equipment		(49,759)		(29,203)
Purchase of real property		(16,820)		(12,871)
Proceeds from the sale of real property		6,000		7,291
Purchases of businesses, net of cash acquired		(345,140)		(67,690)
Proceeds from sale of property and equipment		603		3,486
Net cash used in investing activities	$	(405,116)	$	(98,987)


	Consumer
	Services and
	Plans		Retail		Consolidated
Balance as of December 31, 2016	$	49,944	$	103,161	$	153,105
Acquisitions (1)		—		175,297		175,297
Balance as of September 30, 2017	$	49,944	$	278,458	$	328,402


	September 30, 2017
	Cost or		Accumulated
	Fair Value		Amortization		Net
Trademarks and trade names	$	28,839	$	(420)		$	28,419
Membership and customer lists		10,778		(7,118)			3,660
Websites		5,990		(97)			5,893
	$	45,607	$	(7,635)		$	37,972


	December 31, 2016
	Cost or		Accumulated
	Fair Value		Amortization		Net
Membership and customer lists	$	9,485	$	(6,099)	$	3,386
	$	9,485	$	(6,099)	$	3,386


2017	$	218
2018		583
2019		486
2020		486
2021		487
Thereafter (1)		13,813
Total minimum lease payments		16,073
Amounts representing interest		(5,842)
Present value of net minimum right to use liability payments	$	10,231


	Fair Value	9/30/2017				12/31/2016
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	716,907	$	740,876	$	626,753	$	649,838


	Nine Months Ended September 30,				Estimated
($ in thousands)	2017		2016		Life
Tangible assets (liabilities) acquired (assumed):
Accounts receivable	$	1,306	$	944
Inventory		98,869		29,713
Property and equipment		835		635
Other assets		72		142
Accrued liabilities		(3,019)		(2,231)
Other liabilities				(75)
Total tangible net assets acquired		98,063		29,128
Intangible assets acquired:
Membership and customer lists		793		2,774	4-7 years
Total intangible assets acquired		793		2,774
Goodwill		143,788		35,786
Purchase price		242,644		67,688
Inventory purchases financed via floor plan		(79,321)		(22,265)
Cash payment net of floor plan financing	$	163,323	$	45,423


	Three Months		Nine Months
	Ended		Ended
	September 30,		September 30,
(In thousands except per share amounts)	2017		2017
Numerator:
Net income	$	85,258	$	240,021
Less: net income attributable to non-controlling interests		(65,131)		(193,036)
Net income attributable to Camping World Holdings, Inc. — basic		20,127		46,985
Add: Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock		39,917		118,110
Net income attributable to Camping World Holdings, Inc. — diluted	$	60,044	$	165,095
Denominator:
Weighted-average shares of Class A common stock outstanding — basic		29,522		23,854
Dilutive common units of CWGS, LLC that are convertible into Class A common stock		58,930		62,093
Weighted-average shares of Class A common stock outstanding — diluted		88,452		85,947

Earnings per share of Class A common stock — basic	$	0.68	$	1.97
Earnings per share of Class A common stock — diluted	$	0.68	$	1.92