Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 08, 2017 | |
Entity Registrant Name | Camping World Holdings, Inc. | |
Entity Central Index Key | 1,669,779 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | true | |
Amendment Description | Camping World Holdings, Inc. (the "Company") is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q (this "Amendment") to restate and amend the Company's previously issued condensed consolidated financial statements and related financial information as of and for the three and six months ended June 30, 2017 and 2016 previously included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (the "Original Filing"), which was previously filed with the Securities and Exchange Commission (the "SEC") on May 4, 2017 (the "Original Filing Date"). "). In connection therewith, this Amendment amends and restates in their entirety the following items in the Original Filing: Item 1 of Part I "Financial Statements"; Item 2 of Part I "Management's Discussion and Analysis of Financial Condition and Results of Operations"; and Item 4 of Part I "Controls and Procedures". For the convenience of the reader, this Amendment sets forth the Original Filing, as modified where necessary to reflect the foregoing restatement and revisions. In addition, pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, Item 6 of Part II of the Original Filing has been amended to contain currently dated certifications from the Company's Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, which are attached as Exhibits 31.1, 31.2, 32.1, 32.2 to this Amendment. We have also updated our financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101. As described in the Company's Current Report on Form 8-K filed March 13, 2018, on March 10, 2018, the Audit Committee of our Board of Directors (the "Audit Committee"), after discussion with Company management and Ernst & Young LLP, our independent registered public accounting firm, determined that the audited consolidated financial statements as of and for the year ended December 31, 2016 included in our Annual Report on Form 10-K for the year ended December 31, 2016 and the unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2017 included in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 previously filed with the SEC should no longer be relied upon and should be amended to reflect the adjustments described herein. Except as described herein, this Amendment does not amend, update or change any other items or disclosures in the Original Filing and does not purport to reflect any information or events subsequent to the Original Filing Date. As such, this Amendment speaks only as of the Original Filing Date, and the Company has not undertaken to amend, supplement or update any information contained in the Original Filing to give effect to any subsequent events. Accordingly, this Amendment should be read in conjunction with the Company's filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings. Background On October 13, 2016, the Company completed an initial public offering of 11,363,636 shares of the Company's Class A common stock at a public offering price of $22.00 per share (the "IPO"). The Company received $233.4 million in proceeds, net of underwriting discounts and commissions, which were used to purchase 11,363,636 newly-issued common units from CWGS Enterprises, LLC ("CWGS, LLC") at a price per unit equal to the initial public offering price per share of Class A common stock in the IPO less underwriting discounts and commissions. In addition, on November 4, 2016, the underwriters exercised their option, in part, to purchase an additional 508,564 shares of Class A common stock. On November 9, 2016, the Company closed on the purchase of the additional 508,564 shares of Class A common stock and received $10.4 million in additional proceeds, net of underwriting discounts and commissions, which were used to purchase 508,564 newly-issued common units from CWGS, LLC at a price per unit equal to the initial public offering price per share of Class A common stock in the IPO less underwriting discounts and commissions. 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. Following the purchase of newly-issued common units from CWGS, LLC as described above, the Company's deferred tax balances have reflected the differences in the book and tax basis of its investment in CWGS, LLC (i.e., outside basis). In connection with preparing its financial statements for the year ended December 31, 2017, the Company determined that a portion of the outside basis deferred tax asset related to its acquisition of the direct interest in CWGS, LLC through newly issued LLC units is not expected to be realized unless the Company were to dispose of its investment in CWGS, LLC, which the Company has no current plan to do. Accordingly, the Company has determined that it should have established a valuation allowance of $102.7 million against this portion of its deferred tax asset that was recorded through equity as of December 31, 2016. Following the establishment of the valuation allowance as of December 31, 2016, the Company recognizes subsequent changes to the valuation allowance through the provision for income taxes or equity, in accordance with generally accepted accounting principles, and at June 30, 2017 the valuation allowance against this portion of its deferred tax asset was $138.6 million. Additional information regarding the impact of the valuation allowance against the portion of the Company's outside basis deferred tax asset related to its acquisition of a direct interest in CWGS, LLC through newly issued LLC units as of December 31, 2016 and June 30, 2017, is contained under the caption "Restatement of Previously Issued Financial Statements" in Note 1 "Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements included in this Amendment. Along with restating our financial statements for the correction discussed above, we are making adjustments for certain immaterial items with respect to the three months ended March 31, 2017 and 2016. The Company determined the effect of these corrections was not material to the previously issued financial statements for the years ended December 31, 2016 and 2015, the interim quarterly periods therein or the interim quarterly periods in the year ended December 31, 2017. In conjunction with the restatement described above, we have determined it would be appropriate within this Amendment to record these adjustments for the respective periods. Please refer to the section under the caption "Restatement of Previously Issued Financial Statements" in Note 1 "Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements in this Amendment for more information regarding the effect of these adjustments. Restatement of Conclusion Regarding Disclosure Controls and Procedures At the time of the Original Filing, our chief executive officer ("CEO") (principal executive officer) and chief financial officer ("CFO") (principal financial officer) concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2017. Subsequent to that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of June 30, 2017 because of the material weaknesses in internal control over financial reporting described in Item 4 of Part I "Controls and Procedures" of this Amendment. As a result, we have restated Item 4 of Part I "Controls and Procedures" to reflect the revised conclusion and to include disclosure of the material weaknesses. | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 29,419,813 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 57,031,184 | |
Class C common stock | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 252,161 | $ 114,196 |
Contracts in transit | 86,114 | 29,012 |
Accounts receivable, net | 73,164 | 58,488 |
Inventories, net | 1,100,383 | 902,711 |
Prepaid expenses and other assets | 24,189 | 21,755 |
Total current assets | 1,536,011 | 1,126,162 |
Property and equipment, net | 151,965 | 130,760 |
Deferred tax assets, net | 106,452 | 24,433 |
Intangibles assets, net | 21,785 | 3,386 |
Goodwill | 289,884 | 153,105 |
Other assets | 17,871 | 17,931 |
Total assets | 2,123,968 | 1,455,777 |
Current liabilities: | ||
Accounts payable | 142,236 | 68,655 |
Accrued liabilities | 115,374 | 78,044 |
Deferred revenues and gains | 72,592 | 71,128 |
Current portion of capital lease obligations | 985 | 1,224 |
Current portion of Tax Receivable Agreement liability | 6,469 | 991 |
Current portion of long-term debt | 7,400 | 6,450 |
Notes payable - floor plan, net | 780,905 | 625,185 |
Other current liabilities | 24,812 | 16,745 |
Total current liabilities | 1,150,773 | 868,422 |
Capital lease obligations, net of current portion | 389 | 841 |
Right to use liability | 10,270 | 10,343 |
Tax Receivable Agreement liability, net of current portion | 86,857 | 18,190 |
Long-term debt, net of current portion | 710,649 | 620,303 |
Deferred revenues and gains | 62,473 | 57,659 |
Other long-term liabilities | 31,688 | 24,156 |
Total liabilities | 2,053,099 | 1,599,914 |
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 June 30, 2017 and December 31, 2016 | ||
Additional paid-in capital | 12,015 | (30,006) |
Retained earnings | 19,603 | 71 |
Total stockholders' (deficit) equity attributable to Camping World Holdings, Inc. | 31,915 | (29,740) |
Non-controlling interests | 38,954 | (114,397) |
Total stockholders' equity (deficit) | 70,869 | (144,137) |
Total liabilities and stockholders' equity (deficit) | 2,123,968 | 1,455,777 |
Class A common stock | ||
Stockholders' equity (deficit): | ||
Common stock | 291 | 189 |
Total stockholders' equity (deficit) | 291 | 189 |
Class B common stock | ||
Stockholders' equity (deficit): | ||
Common stock | 6 | 6 |
Total stockholders' equity (deficit) | $ 6 | $ 6 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Stockholders' equity | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock authorized | 20,000,000 | 20,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Class A common stock | ||
Stockholders' equity | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 29,061,464 | 18,935,916 |
Common stock, outstanding | 29,061,420 | 18,935,916 |
Class B common stock | ||
Stockholders' equity | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 69,066,445 | 69,066,445 |
Common stock, outstanding | 57,031,184 | 62,002,729 |
Class C common stock | ||
Stockholders' equity | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1 | 1 |
Common stock, issued | 1 | 1 |
Common stock, outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Revenue: | |||||
Total Revenue | $ 1,279,026 | $ 1,065,259 | $ 2,160,661 | $ 1,861,290 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 906,446 | 765,073 | 1,536,152 | 1,339,412 | |
Operating expenses: | |||||
Selling, general, and administrative | 228,444 | 190,323 | 403,934 | 350,711 | |
Depreciation and amortization | 7,584 | 6,034 | 14,437 | 11,925 | |
Loss (gain) on sale of assets | 31 | (224) | (287) | (248) | |
Total operating expenses | 236,059 | 196,133 | 418,084 | 362,388 | |
Income from operations | 136,521 | 104,053 | 206,425 | 159,490 | |
Other income (expense): | |||||
Floor plan interest expense | (6,587) | (5,387) | (11,889) | (10,529) | |
Other interest expense, net | (10,557) | (12,577) | (19,961) | (25,325) | |
Tax Receivable Agreement liability adjustment | 17 | ||||
Other income | (2) | (2) | |||
Total other income (expense) | (17,144) | (17,966) | (31,833) | (35,856) | |
Income before income taxes | 119,377 | 86,087 | 174,592 | 123,634 | |
Income tax expense | (14,284) | (1,979) | (19,876) | (2,350) | |
Net income | 105,093 | 84,108 | 154,716 | 121,284 | |
Less: net income attributable to non-controlling interests | (85,749) | (127,850) | |||
Net income attributable to Camping World Holdings, Inc. | $ 19,344 | 84,108 | $ 26,866 | 121,284 | |
Weighted average shares of Class A common stock outstanding (1): | |||||
Dividends declared per share | $ 0.1532 | $ 0.3064 | |||
Class A common stock | |||||
Other income (expense): | |||||
Net income | $ 105,093 | $ 154,716 | |||
Less: net income attributable to non-controlling interests | (85,749) | (127,850) | |||
Net income attributable to Camping World Holdings, Inc. | $ 19,344 | $ 26,866 | |||
Earnings per share of Class A common stock (1): | |||||
Basic | [1] | $ 0.84 | $ 1.28 | ||
Diluted | [1] | $ 0.84 | $ 1.24 | ||
Weighted average shares of Class A common stock outstanding (1): | |||||
Basic | [1] | 22,977 | 20,973 | ||
Diluted | [1] | 22,977 | 84,673 | ||
Consumer services and plans | |||||
Revenue: | |||||
Total Revenue | $ 48,103 | 45,428 | $ 98,349 | 90,426 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 20,560 | 19,237 | 41,707 | 39,118 | |
Retail | |||||
Revenue: | |||||
Total Revenue | 1,230,923 | 1,019,831 | 2,062,312 | 1,770,864 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 885,886 | 745,836 | 1,494,445 | 1,300,294 | |
Retail | New vehicles | |||||
Revenue: | |||||
Total Revenue | 760,806 | 576,976 | 1,264,110 | 985,584 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 646,009 | 491,103 | 1,081,071 | 840,414 | |
Retail | Used vehicles | |||||
Revenue: | |||||
Total Revenue | 195,615 | 215,727 | 341,434 | 393,894 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 144,926 | 171,692 | 256,828 | 317,204 | |
Retail | Parts, services and other | |||||
Revenue: | |||||
Total Revenue | 174,196 | 157,742 | 290,419 | 271,226 | |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | |||||
Total costs applicable to revenue | 94,951 | 83,041 | 156,546 | 142,676 | |
Retail | Finance and insurance, net | |||||
Revenue: | |||||
Total Revenue | $ 100,306 | $ 69,386 | $ 166,349 | $ 120,160 | |
[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. |
Condensed Consolidated Stateme5
Condensed Consolidated Statement Stockholders' Deficit - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Additional Paid-in Capital | Retained Earnings | Non-controlling Interest | Class A common stock | Class B common stock | Class C common stock | Total |
Balance at Dec. 31, 2016 | $ (30,006) | $ 71 | $ (114,397) | $ 189 | $ 6 | $ (144,137) | |
Balance (in shares) at Dec. 31, 2016 | 18,935,916 | 62,002,729 | 1 | ||||
Increase (Decrease) in Members' Equity (Deficit) | |||||||
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs | 121,425 | $ 46 | 121,471 | ||||
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs (in shares) | 4,600,000 | ||||||
Non-controlling interest adjustment for purchase of common units from CWGS, LLC with proceeds from a public offering | (87,203) | 87,203 | |||||
Equity-based compensation | 1,588 | 1,588 | |||||
Redemption of LLC common units for Class A common stock | 53,580 | 6,014 | $ 56 | 59,650 | |||
Redemption of LLC common units for Class A common stock (in shares) | 5,525,000 | (4,972,000) | |||||
Distributions to holders of LLC Units | (69,335) | (69,335) | |||||
Dividends | (7,334) | (7,334) | |||||
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability | (45,750) | (45,750) | |||||
Non-controlling interest adjustment | (1,619) | 1,619 | |||||
Net income | 26,866 | 127,850 | $ 154,716 | 154,716 | |||
Balance at Jun. 30, 2017 | $ 12,015 | $ 19,603 | $ 38,954 | $ 291 | $ 6 | $ 70,869 | |
Balance (in shares) at Jun. 30, 2017 | 29,061,420 | 57,031,184 | 1 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net income | $ 154,716 | $ 121,284 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 14,437 | 11,925 |
Equity-based compensation | 1,588 | 60 |
Loss (gain) on sale of assets | (287) | (248) |
Provision for losses on accounts receivable | (45) | 506 |
Accretion of original issue discount | 481 | 606 |
Non-cash interest | 2,188 | 2,498 |
Deferred income taxes | 6,246 | 1,472 |
Tax Receivable Agreement liability adjustment | (17) | |
Change in assets and liabilities, net of acquisitions: | ||
Receivables and contracts in transit | (70,211) | (47,874) |
Inventories | (104,734) | (42,799) |
Prepaid expenses and other assets | (3,695) | (8,164) |
Checks in excess of bank balance | (7,478) | |
Accounts payable and other accrued expenses | 77,009 | 44,956 |
Payment pursuant to Tax Receivable Agreement | (203) | |
Accrued rent for cease-use locations | 72 | (148) |
Deferred revenue and gains | 6,278 | 4,364 |
Other, net | 6,753 | 943 |
Net cash provided by operating activities | 90,576 | 81,903 |
Investing activities | ||
Purchases of property and equipment | (23,164) | (17,217) |
Purchase of real property | (11,113) | (10,350) |
Proceeds from the sale of real property | 6,000 | 2,844 |
Purchases of businesses, net of cash acquired | (252,092) | (60,251) |
Proceeds from sale of property and equipment | 414 | 2,852 |
Net cash used in investing activities | (279,955) | (82,122) |
Financing activities | ||
Proceeds from long-term debt | 94,762 | |
Payments on long-term debt | (3,700) | (31,885) |
Net borrowings on notes payable - floor plan, net | 192,347 | 57,673 |
Borrowings on revolver | 12,000 | |
Payments on revolver | (12,000) | |
Payments of principal on capital lease obligations | (691) | (762) |
Payments of principal on right to use liability | (73) | (113) |
Payment of debt issuance costs | (1,176) | |
Proceeds from issuance of Class A common stock sold in a public offering net of underwriter discounts and commissions | 122,544 | |
Dividends on Class A common stock | (7,334) | |
Members' distributions | (69,335) | (77,653) |
Net cash provided by (used in) financing activities | 327,344 | (52,740) |
Increase (decrease) in cash | 137,965 | (52,959) |
Cash at beginning of the period | 114,196 | 92,025 |
Cash at end of the period | $ 252,161 | $ 39,066 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Camping World Holdings, Inc. (“CWH”) and its subsidiaries (collectively, the “Company”), and are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “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 six months ended June 30, 2017 are unaudited. The condensed consolidated balance sheet as of December 31, 2016 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 (the “Annual Report”) filed with the SEC on March 13, 2017. 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”) and other related transactions in order to carry on the business of CWGS Enterprises, LLC (“CWGS, LLC”). CWGS, LLC was formed in March 2011 when it received, through contribution from its then parent company, all of the membership interests of Affinity Group Holding, LLC and FreedomRoads Holding Company, LLC (“FreedomRoads”). The IPO and related reorganization transactions (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. Despite its position as sole managing member of CWGS, LLC, CWH has a minority economic interest in CWGS, LLC. As of June 30, 2017, CWH owned 32.9% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its 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 consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. Description of the Business CWGS, LLC is a holding company and operates through its subsidiaries. The operations of the Company consist of two primary businesses: (i) Consumer Services and Plans, and (ii) Retail. The Company provides consumer services and plans offerings through its 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; 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, the Company primarily derives revenues from the sale of the following products: new vehicles; used vehicles; parts and service, including recreational vehicle (“RV”) accessories and supplies; camping, hunting, fishing, marine and watersport equipment and supplies; and finance and insurance. The Company primarily operates in various regions throughout the United States and markets its products and services to RV owners and outdoor enthusiasts. At June 30, 2017, the Company operated 137 Camping World retail locations, of which 120 locations sell new and used RVs, and offer financing, ancillary services, protection plans, and other products for the RV purchasers and outdoor enthusiasts, and two Overton’s locations offering marine and watersports products. Restatement of Previously Issued Financial Statements Following the purchase of newly-issued common units from CWGS, LLC in connection with the IPO, the Company’s deferred tax balances have reflected the differences in the book and tax basis of its investment in CWGS, LLC (i.e., outside basis) (the “Outside Basis Deferred Tax Asset”). In connection with preparing its financial statements for the year ended December 31, 2017, the Company determined that a portion of the Outside Basis Deferred Tax Asset related to its acquisition of the direct interest in CWGS, LLC through newly issued LLC units is not expected to be realized unless the Company were to dispose of its investment in CWGS, LLC, which the Company has no current plan to do. Accordingly, the Company has determined that is should have established a valuation allowance of $102.7 million against this portion of its Outside Basis Deferred Tax Asset that was recorded through equity as of December 31, 2016. Following the establishment of the valuation allowance as of December 31, 2016, the Company recognizes subsequent changes to the valuation allowance through the provision for income taxes or equity, in accordance with generally accepted accounting principles, and at June 30, 2017 the valuation allowance was $138.6 million. Because the Company’s consolidated financial statements as of and for the year ended December 31, 2016 included the Outside Basis Deferred Tax Asset, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect a valuation allowance against the portion of the deferred tax asset related to the outside basis difference of $102.7 million. Accordingly, the Company has restated its condensed consolidated financial statements and related notes (including Notes 11 and 17) as of and for the three and six months ended June 30, 2017 to reflect the effect of this 2016 adjustment on the subsequent periods (the ”Restatement”). There was no impact on net income or cash flows for the related periods affected by the Restatement. The Company also corrected for errors that were immaterial to previously-reported consolidated financial statements. These errors were also identified in connection with the preparation of the financial statements for the year ended December 31, 2017, and related to i) the lack of deferral of a portion of Good Sam roadside assistance policies sold through the finance and insurance process with the sale of new and used vehicles, ii) the application of a portion of certain vendor rebates against the related inventory balances, iii) the elimination of intercompany allocation of certain revenue from new and used vehicles to consumer services and plans, and iv) the allocation of the intercompany markup between costs applicable to new and used vehicles. To quantify these errors, management performed an analysis of deferred roadside assistance policies and vendor rebates applicable to ending inventory for the years ended December 31, 2016, 2015, 2014, and 2013 and the interim periods in 2017 and 2016. The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108 and, determined the effect of these corrections was not material to the previously issued financial statements as of and for the years ended December 31, 2016 and 2015. As a result of also correcting these errors, new vehicles revenue, used vehicles revenue, finance and insurance, net revenue, costs applicable to revenue – new vehicles, costs applicable to revenue – used vehicles, all within the retail segment, and net income attributable to non-controlling interests. earnings per share, basic and diluted were revised (the Immaterial Adjustments”). There was no effect on any per share amounts prior to the quarter ended December 31, 2016, as the periods were before the Company’s IPO, see Note 16 — Earnings Per Share. There was no effect on per share amounts for the quarter ended June 30, 2017, or the six months ended June 30, 2017. The following table presents the effect of the Restatement and the Immaterial Adjustments on the Company’s condensed balance sheets for the periods indicated. As of June 30, 2017 As of December 31, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Inventories $ 1,106,098 $ (5,715) $ 1,100,383 $ 909,254 $ (6,543) $ 902,711 Total current assets 1,541,726 (5,715) 1,536,011 1,132,705 (6,543) 1,126,162 Deferred tax asset 243,185 (136,733) 106,452 125,878 (101,445) 24,433 Total assets 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 Deferred revenues and gains, current portion 69,920 2,672 72,592 68,643 2,485 71,128 Total current liabilities 1,148,101 2,672 1,150,773 865,937 2,485 868,422 Deferred revenues and gains, long-term portion 56,301 6,172 62,473 52,210 5,449 57,659 Total liabilities 2,044,255 8,844 2,053,099 1,591,980 7,934 1,599,914 Additional paid-in capital 153,071 (141,056) 12,015 74,239 (104,245) (30,006) Retained earnings 20,068 (465) 19,603 544 (473) 71 Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. 173,436 (141,521) 31,915 74,978 (104,718) (29,740) Non-controlling interest 48,725 (9,771) 38,954 (103,193) (11,204) (114,397) Stockholders' equity (deficit) 222,161 (151,292) 70,869 (28,215) (115,922) (144,137) Total liabilities and stockholders' equity (deficit) 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 The following table presents the effect of the Immaterial Adjustments on the Company’s condensed consolidated statements of operations for the periods indicated. Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 762,876 $ (2,070) $ 760,806 $ 578,289 $ (1,313) $ 576,976 Used vehicles 196,522 (907) 195,615 216,525 (798) 215,727 Finance and insurance, net 100,970 (664) 100,306 69,870 (484) 69,386 Retail segment revenues 1,234,564 (3,641) 1,230,923 1,022,427 (2,596) 1,019,831 Total revenue 1,282,667 (3,641) 1,279,026 1,067,855 (2,596) 1,065,259 Costs applicable to revenue- new vehicles 650,850 (4,841) 646,009 495,159 (4,056) 491,103 Costs applicable to revenue- used vehicles 143,497 1,429 144,926 170,934 758 171,692 Retail segment costs applicable to revenue 889,298 (3,412) 885,886 749,134 (3,298) 745,836 Total costs applicable to revenue 909,858 (3,412) 906,446 768,371 (3,298) 765,073 Income from operations 136,750 (229) 136,521 103,351 702 104,053 Income before income taxes 119,606 (229) 119,377 85,385 702 86,087 Income tax expense (14,284) — (14,284) (1,979) — (1,979) Net income 105,322 (229) 105,093 83,406 702 84,108 Net income attributable to non-controlling interests (85,917) 168 (85,749) — — — Net income attributable to Camping World Holdings, Inc. 19,405 (61) 19,344 83,406 702 84,108 Six Months Ended June 30, 2017 Six Months Ended June 30 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 1,267,462 $ (3,352) $ 1,264,110 $ 987,765 $ (2,181) $ 985,584 Used vehicles 342,993 (1,559) 341,434 395,289 (1,395) 393,894 Finance and insurance, net 167,259 (910) 166,349 120,897 (737) 120,160 Retail segment revenues 2,068,133 (5,821) 2,062,312 1,775,177 (4,313) 1,770,864 Total revenue 2,166,482 (5,821) 2,160,661 1,865,603 (4,313) 1,861,290 Costs applicable to revenue- new vehicles 1,088,998 (7,927) 1,081,071 846,007 (5,593) 840,414 Costs applicable to revenue- used vehicles 254,640 2,188 256,828 316,022 1,182 317,204 Retail segment costs applicable to revenue 1,500,184 (5,739) 1,494,445 1,304,705 (4,411) 1,300,294 Total costs applicable to revenue 1,541,891 (5,739) 1,536,152 1,343,823 (4,411) 1,339,412 Income from operations 206,507 (82) 206,425 159,392 98 159,490 Income before income taxes 174,674 (82) 174,592 123,536 98 123,634 Income tax expense (19,911) 35 (19,876) (2,350) — (2,350) Net income 154,763 (47) 154,716 121,186 98 121,284 Net income attributable to non-controlling interests (127,905) 55 (127,850) — — — Net income attributable to Camping World Holdings, Inc. 26,858 8 26,866 121,186 98 121,284 While the error corrections did not have an impact on cash provided by or used in operating, investing, or financing activities, the applicable line items on the above tables within cash provided by operating activities on the consolidated statements of cash flows have been appropriately revised for the periods presented. The impact of these error corrections to relevant segment financial information is presented in Note 17 to these unaudited condensed consolidated financial statements. 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 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, program cancellation reserves, and accruals related to self-insurance programs, estimated tax liabilities and other liabilities. Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). 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 effective for interim and annual periods beginning after December 15, 2016. The Company 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 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This ASU amends guidance on the classification and measurement of financial instruments. Although 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 accounting 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. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early adopted the amendments of this ASU as of January 1, 2017, which eliminated the disclosure requirements discussed above, and the adoption did not materially impact its consolidated financial statements or results of operations. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). 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 restricted cash equivalents. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. 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. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This ASU clarifies the definition of a business to exclude gross assets acquired (or disposed of) that have substantially all of their fair value concentrated in a single identifiable asset or group of similar identifiable assets. The ASU also updates the definition of the term “output” to be consistent with Accounting Standards Codification (“ASC”) Topic No. 606. The ASU is effective for annual reporting periods beginning after December 15, 2017 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. 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. 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 begun its review of 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 in the preliminary stages of evaluating 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 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 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 ASU will have on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The amendments in ASU 2017-09 require entities to apply modification accounting in Topic 718 only when changes to the terms or conditions of a share-based payment award result in changes to fair value, vesting conditions or the classification of the award 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. |
Inventories, Net and Floor Plan
Inventories, Net and Floor Plan Payable | 6 Months Ended |
Jun. 30, 2017 | |
Inventories, Net and Floor Plan Payable. | |
Inventories, Net and Floor Plan Payable | 2. Inventories, Net and Floor Plan Payable Inventories consisted of the following (in thousands): June 30, December 31, 2017 2016 New RV vehicles $ 898,119 $ 721,091 Used RV vehicles 75,826 78,787 Parts, accessories and miscellaneous 126,438 102,833 $ 1,100,383 $ 902,711 New and used vehicles included in retail inventories are primarily financed by floor plan arrangements through a syndication of banks. The floor plan notes are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a wholly owned subsidiary of FreedomRoads, which operates the Camping World dealerships, and bear interest at one month London Interbank Offered Rate (“LIBOR”) plus 2.15% as of June 30, 2017 and 2.05% as of December 31, 2016. LIBOR, as defined, was 1.05% at June 30, 2017 and 0.62% as of December 31, 2016. Principal is due upon the sale of the related vehicle. In August 2015, FR entered into a Sixth Amended and Restated Credit Agreement for floor plan financing (“Floor Plan Facility”) to extend the maturity date to August 2018. On July 1, 2016, FR entered into Amendment No. 1 to the Sixth 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 applicable borrowing rate margin on LIBOR and base rate loans ranging 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 June 30, 2019. The letter of credit commitment within the Floor Plan Facility remained at $15.0 million. The Floor Plan Facility includes an 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 offset account into the Company’s operating cash accounts. When the Company uses the floor plan offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of income. The credit agreement governing the Floor Plan Facility contains certain financial covenants. FR was in compliance with all debt covenants at June 30, 2017 and December 31, 2016. At June 30, 2017 and December 31, 2016, the principal amount outstanding under the Floor Plan Facility was $780.9 million and $625.2 million, respectively, which was net of the floor plan offset account of $86.5 million and $68.5 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 3. Goodwill and Intangible Assets Goodwill The following is a summary of changes in the Company’s goodwill by reportable segments for the six months ended June 30, 2017 (in thousands): Consumer Services and Plans Retail Consolidated Balance as of December 31, 2016 $ 49,944 $ 103,161 $ 153,105 Acquisitions (1) — 136,779 136,779 Balance as of June 30, 2017 $ 49,944 $ 239,940 $ 289,884 (1) See Note 9 — Acquisitions. The Company evaluates goodwill for impairment on an annual basis during 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 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. Intangible Assets Finite-lived intangible assets and related accumulated amortization consisted of the following at June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 17,900 $ (115) $ 17,785 Membership and customer lists 10,808 (6,808) 4,000 $ 28,708 $ (6,923) $ 21,785 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 a useful life of fifteen years. The membership and customer lists have weighted-average useful lives of approximately six years. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2017 | |
Long-Term Debt. | |
Long-Term Debt | 4. Long-Term Debt Long-term debt consists of the following (in thousands): June 30, December 31, 2017 2016 Term Loan Facility (1) $ 718,049 $ 626,753 Less: current portion (7,400) (6,450) $ 710,649 $ 620,303 (1) Net of $6.1 million and $6.3 million of original issue discount at June 30, 2017 and December 31, 2016, respectively, and $12.1 million and $11.9 million of finance costs at June 30, 2017 and December 31, 2016, respectively. Existing Senior Secured Credit Facilities On November 8, 2016, CWGS Group, LLC, a wholly owned subsidiary of CWGS, LLC, entered into a new $680.0 million senior secured credit facility (“Existing Senior Secured Credit Facilities”) and used the proceeds to repay its previous senior secured credit facilities (“Previous Senior Secured Credit Facilities”). The Existing Senior Secured Credit Facilities consists of a seven-year $645.0 million Term Loan Facility (“Existing Term Loan Facility”) and a five-year $35.0 million revolving credit facility (“Existing 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 are 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) on-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. As of June 30, 2017, the interest rate on the term debt was 4.84%. As of June 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 June 30, 2017 and December 31, 2016, the principal balance of $736.3 million and $645.0 million, respectively, was outstanding under the Existing Term Loan Facility and no amounts were outstanding on the Existing Revolving Credit Facility. 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 of its operating subsidiaries, primarily Good Sam Enterprises, LLC and FR, and their ability to upstream dividends. 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 FR and its subsidiaries. The Existing Senior Secured Credit Facilities contain certain restrictive covenants including, 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. The Company was in compliance with all debt covenants at June 30, 2017 and December 31, 2016. |
Right to Use Liabilities
Right to Use Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Right to Use Liabilities | |
Right to Use Liabilities | 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): June 30, December 31, 2017 2016 Right to use assets $ 10,673 $ 10,673 Accumulated depreciation (796) (667) $ 9,877 $ 10,006 The following is a schedule by year of the future changes in the right to use liabilities as of June 30, 2017 (in thousands): 2017 $ 436 2018 583 2019 486 2020 486 2021 487 Thereafter (1) 13,813 Total minimum lease payments 16,291 Amounts representing interest (6,021) Present value of net minimum right to use liability payments $ 10,270 (1) Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 6. Fair Value Measurements Accounting guidance for fair value measurements establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. For cash and cash equivalents; accounts receivable; other current assets; accounts payable; notes payable — floor plan, net; and other current liabilities the amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates. There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during 2017 and 2016 of assets and liabilities that are not measured at fair value on a recurring basis. The following table presents the reported carrying value and fair value information for the Company’s debt instruments. The fair values shown below for the Existing Term Loan Facility and Previous Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2). Fair Value 6/30/2017 12/31/2016 ($ in thousands) Measurement Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility Level 2 $ 718,049 $ 739,061 $ 626,753 $ 649,838 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 7. Commitments and Contingencies 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 parties throughout the United States. From time to time, the Company is involved in 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 of operations or financial position. |
Cash Flows
Cash Flows | 6 Months Ended |
Jun. 30, 2017 | |
Statement of Cash Flows | |
Statement of Cash Flows | 8. Statement of Cash Flows Supplemental disclosures of cash flow information for the following periods (in thousands): Six Months Ended June 30, June 30, 2017 2016 Cash paid (received) during the period for: Interest $ 30,454 $ 33,833 Income taxes 13,538 880 Non-cash investing activities: Derecognized property and equipment for leases that qualified as operating leases after completion of construction — (15,390) Property and equipment acquired through third-party capital lease arrangements 2,007 Leasehold improvements paid by lessor 857 — Vehicles transferred to property and equipment from inventory 1,238 433 Non-cash financing activities: Derecognized right to use liabilities for leases that qualified as operating leases after completion of construction — (15,393) 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) Class A common stock issued in exchange for common units in CWGS, LLC 56 — Class A common stock issued for vested restricted stock units — — |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions | |
Acquisitions | 9. Acquisitions Dealerships and Consumer Shows During the six months ended June 30, 2017 and 2016, subsidiaries of the Company acquired the assets of multiple dealership locations and consumer shows. The Company used a combination of cash, floor plan financing, and additional borrowing on the Existing Term Loan Facility in March 2017 (see Note 4 — Long-term Debt) to complete the acquisitions. 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. For the six months ended June 30, 2017, concurrent with the acquisition of dealership businesses, the Company purchased real properties for $11.1 million from related parties of the sellers and sold a real property to a third party in a sale-leaseback transaction for $6.0 million. For the six months ended June 30, 2016, concurrent with the acquisition of dealership businesses, the Company purchased real properties for $10.4 million from related parties of the sellers. For the six months ended June 30, 2016, the Company sold other real properties to a third party in sale-leaseback transactions for $2.8 million. The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships and consumer shows consist of the following: Six Months Ended June 30, Estimated ($ in thousands) 2017 2016 Life Tangible assets (liabilities) acquired (assumed): Accounts receivable $ 1,522 $ 944 Inventory 84,211 25,663 Property and equipment 792 635 Other assets 46 142 Accrued liabilities (2,872) (2,277) Total tangible net assets acquired 83,699 25,107 Intangible assets acquired: Membership and customer lists 793 1,349 4-7 years Total intangible assets acquired 793 1,349 Goodwill 132,119 33,795 Purchase price 216,611 60,251 Inventory purchases financed via floor plan (71,124) (22,265) Cash payment net of floor plan financing $ 145,487 $ 37,986 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 was deductible for tax purposes for the six months ended June 30, 2017 and 2016. Included in the six months ended June 30, 2017 and 2016 consolidated financial results were $117.7 million and $48.0 million of revenue, respectively, and $7.8 million and $1.3 million of pre-tax income, respectively, 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 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 $1.0 million of contingent consideration. Prior to the acquisition, Gander Mountain operated 160 retail locations and an ecommerce business that serviced the hunting, camping, fishing, shooting sports, and outdoor markets. Overton’s operates two retail locations and an ecommerce business that services the marine and watersports markets. The Company believes these businesses are complementary to its existing businesses and will allow for cross marketing of the Company’s consumer services and plans to a wider customer base. The assets acquired include the right to designate any real estate leases for assignment to CWI or other third parties (the “Designation Rights”), other agreements CWI elects to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, the Gander Mountain and Overton’s ecommerce businesses and fixtures and equipment for Overton’s two retail locations and corporate operations. Furthermore, CWI has 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 expire on October 6, 2017. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elects 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 to be assumed under the Designation Rights after the acquisition date, but no later than October 6, 2017, have been estimated at $1.0 million and recorded as contingent consideration. The estimated fair values of the assets acquired and liabilities assumed for the acquisition of Gander Mountain and Overton’s consist of the following: Estimated Estimated ($ in thousands) Fair Value Life Tangible assets (liabilities) acquired (assumed): Inventory $ 9,965 Prepaid expenses and other assets 42 Property and equipment 3,780 Accrued liabilities (373) Total tangible net assets acquired 13,414 Intangible assets acquired: Trademarks and trade names 17,900 15 years Membership and customer lists 500 6 years Total intangible assets acquired 18,400 Goodwill 4,660 Purchase price 36,474 Contingent consideration unpaid at June 30, 2017 (1,025) Cash paid for acquisition $ 35,449 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 was deductible for tax purposes was $4.7 million. Included in the six months ended June 30, 2017 consolidated financial results were $8.4 million of revenue and $1.6 million of pre-tax loss of Gander Mountain and Overton’s from the applicable acquisition dates . |
Exit Activities
Exit Activities | 6 Months Ended |
Jun. 30, 2017 | |
Exit Activities | |
Exit Activities | 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 June 30, 2017 and December 31, 2016, respectively, and is included in other current liabilities. The liability outstanding was $2.8 million and $2.8 million as of June 30, 2017 and December 31, 2016, respectively. |
Income Taxes (Restated)
Income Taxes (Restated) | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes (Restated). | |
Income Taxes (Restated) | 11. Income Taxes (Restated) CWH is organized as a Subchapter C corporation and, on October 6, 2016, as part of the Company’s IPO, became a 22.6% owner of CWGS, LLC (see Note 13 — Stockholders’ Equity). 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., Camping World, Inc. (“CW”), and FreedomRoads RV, Inc. (“FRRV”) and their wholly-owned subsidiaries, which are Subchapter C corporations. For the three months ended June 30, 2017 and 2016, the Company’s effective income tax rate was 12% and 2%, respectively. For the six months ended June 30, 2017 and 2016, the Company’s effective income tax rate was 11% and 2%, respectively. The amount of income tax expense and the effective income tax rate increased in 2017 primarily because CWH was also subject to U.S. federal, state and local taxes on its allocable share of taxable income or loss generated by CWGS, LLC subsequent to the Company’s IPO, and also partially to the increased profitability of FRRV. The Company's effective tax rate is significantly less than the federal statutory rate of 35.0% 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 for federal and most state and local income tax reporting, with the exception of the Subchapter C corporations noted above. 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 June 30, 2017 and December 31, 2016, the Company determined that all of its deferred tax assets, except those pertaining to CW and the direct investment in the outside basis of CWGS, LLC, 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 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. The Company maintains a valuation allowance against the portion of the deferred tax asset pertaining to the outside basis of CWGS, LLC that is not amortizable for tax purposes, since the Company would likely only realize the non-amortizable portion of the deferred tax asset if the investment in CWGS, LLC was divested. The provision for income tax for the entities subject to federal income tax has been included 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. The Company recognizes 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 June 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 six months ended June 30, 2017 and 2016. On October 6, 2016, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions or exchanges of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. 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 six months ended June 30, 2017, 5,515,362 and 5,525,362 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 June 30, 2017 and December 31, 2016, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $93.3 million and $19.2 million, respectively, of which $6.5 million and $1.0 million, respectively, were included in current portion of the Tax Receivable Agreement liability in the Consolidated Balance Sheets. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions | |
Related Party Transactions | 12. 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 six months ended June 30, 2016, pursuant to the monitoring agreement, the Company incurred monitoring fees of $0.5 million and $1.0 million, respectively, and reimbursed fees and expenses of $0.1 and $0.3 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 locations from managers and officers. During the three months ended June 30, 2017 and 2016, the related party lease expense for these locations was $0.5 million and $0.4 million, respectively. During the six months ended June 30, 2017 and 2016, the related party lease expense for these locations was $0.9 million and $0.7 million, respectively. In January 2012, FreedomRoads entered into a lease (the “Original Lease”) with respect to the Company’s Lincolnshire, Illinois offices, which was amended in March 2013 in connection with the Company’s leasing of additional premises within the same office building (the “Expansion Lease”). The Original Lease is payable in 132 monthly payments of base rent equal to approximately $29,000, commencing April 2013, subject to annual increases. The Expansion Lease is payable in 132 monthly payments of base rent equal to approximately $2,500, commencing May 2013, subject to annual increases. Marcus Lemonis, the Company’s Chairman and Chief Executive Officer, has personally guaranteed both leases. During the three months ended June 30, 2017 and 2016, we made payments of approximately $176,000 and $168,000, respectively, in connection with the Original Lease, which includes approximately $79,000 and $72,000, 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 six months ended June 30, 2017 and 2016, we made payments of approximately $352,000 and $336,000, respectively, in connection with the Original Lease, which includes approximately $158,000 and $145,000, respectively, for common area maintenance charges on the Original Lease, and we made payments of approximately $17,000 and $16,000, respectively, in connection with the Expansion Lease. 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”). Mr. Lemonis has a 33% economic interest in Precise Graphix and the Company paid Precise Graphix $0.9 million and $0.8 million for the three months ended June 30, 2017 and 2016, respectively, and the Company paid Precise Graphix $1.2 million and $1.4 million for the six months ended June 30, 2017 and 2016, respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 13. Stockholders’ Equity Reorganization Transactions In connection with the IPO on October 6, 2016, the Company completed 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 — Non-Controlling Interests). As a result of the Reorganization Transactions, CWH became the 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. 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. 2017 Public Offering On May 31, 2017, the Company completed a public offering (the “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 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 2017 Public Offering, less underwriting discounts and commissions. In the same 2017 Public Offering, CVRV Acquisition LLC and CVRV Acquisition II LLC (“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. The Selling Stockholders redeemed 4,323,083 common units of CWGS, LLC for 4,323,083 shares of Class A common stock, which they sold in the 2017 Public Offering along with 1,176,917 shares of Class A shares that they 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 the Selling Stockholders 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 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 Selling Stockholders closed on the sale of the additional 825,000 shares of Class A common stock. The Selling Stockholders redeemed 648,462 common units of CWGS, LLC for 648,462 shares of Class A common stock, which they sold in the 2017 Public Offering along with 176,538 shares of Class A shares that they 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 the Selling Stockholders 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 Selling Stockholders’ shares. |
Non-Controlling Interests
Non-Controlling Interests | 6 Months Ended |
Jun. 30, 2017 | |
Non-Controlling Interests | |
Non-Controlling Interests | 14. Non-Controlling Interests In connection with the Reorganization Transactions, described in Note 13 — Stockholders’ Equity, CWH became 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 June 30, 2017 and December 31, 2016, CWGS, LLC had positive and negative net assets, respectively, which resulted in positive and negative non-controlling interest amounts, respectively, on the Unaudited Condensed Consolidated Balance Sheets. As of June 30, 2017 and December 31, 2016, there were 88,371,972 and 83,771,830 common units of CWGS, LLC outstanding, respectively, of which CWH owned 29,061,420 and 18,935,916 common units of CWGS, LLC, respectively, representing 32.9% and 22.6% ownership interests in CWGS, LLC, respectively, and the Continuing Equity Owners owned 59,310,552 and 64,835,914 common units of CWGS, LLC, respectively, representing 67.1% and 77.4% ownership interests in CWGS, LLC, respectively. The following table summarizes the effects of changes in ownership in CWGS, LLC on the Company’s equity: Three Months Ended Six Months Ended June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Net income attributable to Camping World Holdings, Inc. $ 19,344 $ 84,108 $ 26,866 $ 121,284 Transfers to non-controlling interests: Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC (87,203) — (87,203) — 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 53,430 — 53,580 — Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests $ (14,429) $ 84,108 $ (6,757) $ 121,284 |
Equity-based Compensation Plans
Equity-based Compensation Plans | 6 Months Ended |
Jun. 30, 2017 | |
Equity-based Compensation Plans | |
Equity-based Compensation Plans | 15. 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 Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Equity-based compensation expense: Costs applicable to revenue $ 81 $ — $ 173 $ — Selling, general, and administrative 788 60 1,415 60 Total equity-based compensation expense $ 869 $ 60 $ 1,588 $ 60 The following table summarizes stock option activity for the six months ended June 30, 2017: Stock Options (in thousands) Outstanding at December 31, 2016 1,118 Granted — Exercised — Forfeited (45) Cancelled — Outstanding at June 30, 2017 1,073 The following table summarizes restricted stock unit activity for the six months ended June 30, 2017: Restricted Stock Units (in thousands) Outstanding at December 31, 2016 144 Granted 223 Vested — Forfeited (4) Cancelled — Outstanding at June 30, 2017 363 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share | |
Earnings Per Share | 16. 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 Six Months Ended Ended June 30, June 30, (In thousands except per share amounts) 2017 2017 Numerator: Net income $ 105,093 $ 154,716 Less: net income attributable to non-controlling interests (85,749) (127,850) Net income attributable to Camping World Holdings, Inc. — basic 19,344 26,866 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 — 78,160 Net income attributable to Camping World Holdings, Inc. — diluted $ 19,344 $ 105,026 Denominator: Weighted-average shares of Class A common stock outstanding — basic 22,977 20,973 Dilutive common units of CWGS, LLC that are convertible into Class A common stock — 63,700 Weighted-average shares of Class A common stock outstanding — diluted 22,977 84,673 Earnings per share of Class A common stock — basic $ 0.84 $ 1.28 Earnings per share of Class A common stock — diluted $ 0.84 $ 1.24 For the three and six months ended June 30, 2017, 1.1 million stock options and 0.2 million restricted stock units 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. For the three months ended June 30, 2017, 62.6 million common units of CWGS, LLC were also 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. |
Segments Information (Restated)
Segments Information (Restated) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information (Restated) | |
Segment Information (Restated) | 17. Segments Information (Restated) We have two reportable segments: (1) Consumer Services and Plans, and (2) Retail. The Company’s Consumer Services and Plans segment is comprised of emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; co-branded credit cards; vehicle financing and refinancing; membership clubs; and publications and directories. The Company’s Retail segment is comprised of new vehicles; used vehicles; parts and service; finance and insurance; and marine and watersports products. Corporate and other is comprised of the corporate operations of the Company. 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 Chief Executive Officer. Reportable segment revenue, segment income, floor plan interest expense, depreciation and amortization, other interest expense, total assets, and capital expenditures are as follows: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Revenue: Consumer Services and Plans $ 48,103 $ 45,428 $ 98,349 $ 90,426 Retail 1,230,923 1,019,831 2,062,312 1,770,864 Total consolidated revenue $ 1,279,026 $ 1,065,259 $ 2,160,661 $ 1,861,290 Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Segment income (1): Consumer Services and Plans $ 23,959 $ 22,503 $ 50,212 $ 44,101 Retail 117,042 82,908 163,185 118,114 Total segment income 141,001 105,411 213,397 162,215 Corporate & other (3,483) (711) (4,424) (1,329) Depreciation and amortization (7,584) (6,034) (14,437) (11,925) Other interest expense, net (10,557) (12,577) (19,961) (25,325) Tax Receivable Agreement liability adjustment — — 17 — Other income (expense), net — (2) — (2) Income from operations before income taxes $ 119,377 $ 86,087 $ 174,592 $ 123,634 (1) Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense. Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Depreciation and amortization: Consumer Services and Plans $ 1,005 $ 932 $ 2,001 1,851 Retail 6,464 5,102 12,321 10,074 Total 7,469 6,034 14,322 11,925 Corporate & other 115 — 115 — Total depreciation and amortization $ 7,584 $ 6,034 $ 14,437 $ 11,925 Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Other interest expense, net: Consumer Services and Plans $ 2 $ 4 $ 4 $ 8 Retail 1,360 1,376 2,952 2,768 Total 1,362 1,380 2,956 2,776 Corporate & other 9,195 11,197 17,005 22,549 Total interest expense $ 10,557 $ 12,577 $ 19,961 $ 25,325 June 30, December 31, ($ in thousands) 2017 2016 Assets: Consumer Services and Plans $ 116,233 $ Retail 1,757,221 Total 1,873,454 Corporate & other 250,514 Total assets $ 2,123,968 $ |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Camping World Holdings, Inc. (“CWH”) and its subsidiaries (collectively, the “Company”), and are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “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 six months ended June 30, 2017 are unaudited. The condensed consolidated balance sheet as of December 31, 2016 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 (the “Annual Report”) filed with the SEC on March 13, 2017. 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”) and other related transactions in order to carry on the business of CWGS Enterprises, LLC (“CWGS, LLC”). CWGS, LLC was formed in March 2011 when it received, through contribution from its then parent company, all of the membership interests of Affinity Group Holding, LLC and FreedomRoads Holding Company, LLC (“FreedomRoads”). The IPO and related reorganization transactions (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. Despite its position as sole managing member of CWGS, LLC, CWH has a minority economic interest in CWGS, LLC. As of June 30, 2017, CWH owned 32.9% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its 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 consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. |
Description of the Business | Description of the Business CWGS, LLC is a holding company and operates through its subsidiaries. The operations of the Company consist of two primary businesses: (i) Consumer Services and Plans, and (ii) Retail. The Company provides consumer services and plans offerings through its 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; 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, the Company primarily derives revenues from the sale of the following products: new vehicles; used vehicles; parts and service, including recreational vehicle (“RV”) accessories and supplies; camping, hunting, fishing, marine and watersport equipment and supplies; and finance and insurance. The Company primarily operates in various regions throughout the United States and markets its products and services to RV owners and outdoor enthusiasts. At June 30, 2017, the Company operated 137 Camping World retail locations, of which 120 locations sell new and used RVs, and offer financing, ancillary services, protection plans, and other products for the RV purchasers and outdoor enthusiasts, and two Overton’s locations offering marine and watersports products. |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements Following the purchase of newly-issued common units from CWGS, LLC in connection with the IPO, the Company’s deferred tax balances have reflected the differences in the book and tax basis of its investment in CWGS, LLC (i.e., outside basis) (the “Outside Basis Deferred Tax Asset”). In connection with preparing its financial statements for the year ended December 31, 2017, the Company determined that a portion of the Outside Basis Deferred Tax Asset related to its acquisition of the direct interest in CWGS, LLC through newly issued LLC units is not expected to be realized unless the Company were to dispose of its investment in CWGS, LLC, which the Company has no current plan to do. Accordingly, the Company has determined that is should have established a valuation allowance of $102.7 million against this portion of its Outside Basis Deferred Tax Asset that was recorded through equity as of December 31, 2016. Following the establishment of the valuation allowance as of December 31, 2016, the Company recognizes subsequent changes to the valuation allowance through the provision for income taxes or equity, in accordance with generally accepted accounting principles, and at June 30, 2017 the valuation allowance was $138.6 million. Because the Company’s consolidated financial statements as of and for the year ended December 31, 2016 included the Outside Basis Deferred Tax Asset, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect a valuation allowance against the portion of the deferred tax asset related to the outside basis difference of $102.7 million. Accordingly, the Company has restated its condensed consolidated financial statements and related notes (including Notes 11 and 17) as of and for the three and six months ended June 30, 2017 to reflect the effect of this 2016 adjustment on the subsequent periods (the ”Restatement”). There was no impact on net income or cash flows for the related periods affected by the Restatement. The Company also corrected for errors that were immaterial to previously-reported consolidated financial statements. These errors were also identified in connection with the preparation of the financial statements for the year ended December 31, 2017, and related to i) the lack of deferral of a portion of Good Sam roadside assistance policies sold through the finance and insurance process with the sale of new and used vehicles, ii) the application of a portion of certain vendor rebates against the related inventory balances, iii) the elimination of intercompany allocation of certain revenue from new and used vehicles to consumer services and plans, and iv) the allocation of the intercompany markup between costs applicable to new and used vehicles. To quantify these errors, management performed an analysis of deferred roadside assistance policies and vendor rebates applicable to ending inventory for the years ended December 31, 2016, 2015, 2014, and 2013 and the interim periods in 2017 and 2016. The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108 and, determined the effect of these corrections was not material to the previously issued financial statements as of and for the years ended December 31, 2016 and 2015. As a result of also correcting these errors, new vehicles revenue, used vehicles revenue, finance and insurance, net revenue, costs applicable to revenue – new vehicles, costs applicable to revenue – used vehicles, all within the retail segment, and net income attributable to non-controlling interests. earnings per share, basic and diluted were revised (the Immaterial Adjustments”). There was no effect on any per share amounts prior to the quarter ended December 31, 2016, as the periods were before the Company’s IPO, see Note 16 — Earnings Per Share. There was no effect on per share amounts for the quarter ended June 30, 2017, or the six months ended June 30, 2017. The following table presents the effect of the Restatement and the Immaterial Adjustments on the Company’s condensed balance sheets for the periods indicated. As of June 30, 2017 As of December 31, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Inventories $ 1,106,098 $ (5,715) $ 1,100,383 $ 909,254 $ (6,543) $ 902,711 Total current assets 1,541,726 (5,715) 1,536,011 1,132,705 (6,543) 1,126,162 Deferred tax asset 243,185 (136,733) 106,452 125,878 (101,445) 24,433 Total assets 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 Deferred revenues and gains, current portion 69,920 2,672 72,592 68,643 2,485 71,128 Total current liabilities 1,148,101 2,672 1,150,773 865,937 2,485 868,422 Deferred revenues and gains, long-term portion 56,301 6,172 62,473 52,210 5,449 57,659 Total liabilities 2,044,255 8,844 2,053,099 1,591,980 7,934 1,599,914 Additional paid-in capital 153,071 (141,056) 12,015 74,239 (104,245) (30,006) Retained earnings 20,068 (465) 19,603 544 (473) 71 Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. 173,436 (141,521) 31,915 74,978 (104,718) (29,740) Non-controlling interest 48,725 (9,771) 38,954 (103,193) (11,204) (114,397) Stockholders' equity (deficit) 222,161 (151,292) 70,869 (28,215) (115,922) (144,137) Total liabilities and stockholders' equity (deficit) 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 The following table presents the effect of the Immaterial Adjustments on the Company’s condensed consolidated statements of operations for the periods indicated. Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 762,876 $ (2,070) $ 760,806 $ 578,289 $ (1,313) $ 576,976 Used vehicles 196,522 (907) 195,615 216,525 (798) 215,727 Finance and insurance, net 100,970 (664) 100,306 69,870 (484) 69,386 Retail segment revenues 1,234,564 (3,641) 1,230,923 1,022,427 (2,596) 1,019,831 Total revenue 1,282,667 (3,641) 1,279,026 1,067,855 (2,596) 1,065,259 Costs applicable to revenue- new vehicles 650,850 (4,841) 646,009 495,159 (4,056) 491,103 Costs applicable to revenue- used vehicles 143,497 1,429 144,926 170,934 758 171,692 Retail segment costs applicable to revenue 889,298 (3,412) 885,886 749,134 (3,298) 745,836 Total costs applicable to revenue 909,858 (3,412) 906,446 768,371 (3,298) 765,073 Income from operations 136,750 (229) 136,521 103,351 702 104,053 Income before income taxes 119,606 (229) 119,377 85,385 702 86,087 Income tax expense (14,284) — (14,284) (1,979) — (1,979) Net income 105,322 (229) 105,093 83,406 702 84,108 Net income attributable to non-controlling interests (85,917) 168 (85,749) — — — Net income attributable to Camping World Holdings, Inc. 19,405 (61) 19,344 83,406 702 84,108 Six Months Ended June 30, 2017 Six Months Ended June 30 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 1,267,462 $ (3,352) $ 1,264,110 $ 987,765 $ (2,181) $ 985,584 Used vehicles 342,993 (1,559) 341,434 395,289 (1,395) 393,894 Finance and insurance, net 167,259 (910) 166,349 120,897 (737) 120,160 Retail segment revenues 2,068,133 (5,821) 2,062,312 1,775,177 (4,313) 1,770,864 Total revenue 2,166,482 (5,821) 2,160,661 1,865,603 (4,313) 1,861,290 Costs applicable to revenue- new vehicles 1,088,998 (7,927) 1,081,071 846,007 (5,593) 840,414 Costs applicable to revenue- used vehicles 254,640 2,188 256,828 316,022 1,182 317,204 Retail segment costs applicable to revenue 1,500,184 (5,739) 1,494,445 1,304,705 (4,411) 1,300,294 Total costs applicable to revenue 1,541,891 (5,739) 1,536,152 1,343,823 (4,411) 1,339,412 Income from operations 206,507 (82) 206,425 159,392 98 159,490 Income before income taxes 174,674 (82) 174,592 123,536 98 123,634 Income tax expense (19,911) 35 (19,876) (2,350) — (2,350) Net income 154,763 (47) 154,716 121,186 98 121,284 Net income attributable to non-controlling interests (127,905) 55 (127,850) — — — Net income attributable to Camping World Holdings, Inc. 26,858 8 26,866 121,186 98 121,284 While the error corrections did not have an impact on cash provided by or used in operating, investing, or financing activities, the applicable line items on the above tables within cash provided by operating activities on the consolidated statements of cash flows have been appropriately revised for the periods presented. The impact of these error corrections to relevant segment financial information is presented in Note 17 to these unaudited condensed consolidated financial statements. |
Use of Estimates | 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 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, program cancellation reserves, and accruals related to self-insurance programs, estimated tax liabilities and other liabilities. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). 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 effective for interim and annual periods beginning after December 15, 2016. The Company 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 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This ASU amends guidance on the classification and measurement of financial instruments. Although 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 accounting 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. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early adopted the amendments of this ASU as of January 1, 2017, which eliminated the disclosure requirements discussed above, and the adoption did not materially impact its consolidated financial statements or results of operations. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). 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 restricted cash equivalents. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. 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. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This ASU clarifies the definition of a business to exclude gross assets acquired (or disposed of) that have substantially all of their fair value concentrated in a single identifiable asset or group of similar identifiable assets. The ASU also updates the definition of the term “output” to be consistent with Accounting Standards Codification (“ASC”) Topic No. 606. The ASU is effective for annual reporting periods beginning after December 15, 2017 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. 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. 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 begun its review of 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 in the preliminary stages of evaluating 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 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 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 ASU will have on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The amendments in ASU 2017-09 require entities to apply modification accounting in Topic 718 only when changes to the terms or conditions of a share-based payment award result in changes to fair value, vesting conditions or the classification of the award 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. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of restatement | As of June 30, 2017 As of December 31, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Inventories $ 1,106,098 $ (5,715) $ 1,100,383 $ 909,254 $ (6,543) $ 902,711 Total current assets 1,541,726 (5,715) 1,536,011 1,132,705 (6,543) 1,126,162 Deferred tax asset 243,185 (136,733) 106,452 125,878 (101,445) 24,433 Total assets 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 Deferred revenues and gains, current portion 69,920 2,672 72,592 68,643 2,485 71,128 Total current liabilities 1,148,101 2,672 1,150,773 865,937 2,485 868,422 Deferred revenues and gains, long-term portion 56,301 6,172 62,473 52,210 5,449 57,659 Total liabilities 2,044,255 8,844 2,053,099 1,591,980 7,934 1,599,914 Additional paid-in capital 153,071 (141,056) 12,015 74,239 (104,245) (30,006) Retained earnings 20,068 (465) 19,603 544 (473) 71 Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. 173,436 (141,521) 31,915 74,978 (104,718) (29,740) Non-controlling interest 48,725 (9,771) 38,954 (103,193) (11,204) (114,397) Stockholders' equity (deficit) 222,161 (151,292) 70,869 (28,215) (115,922) (144,137) Total liabilities and stockholders' equity (deficit) 2,266,416 (142,448) 2,123,968 1,563,765 (107,988) 1,455,777 The following table presents the effect of the Immaterial Adjustments on the Company’s condensed consolidated statements of operations for the periods indicated. Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 762,876 $ (2,070) $ 760,806 $ 578,289 $ (1,313) $ 576,976 Used vehicles 196,522 (907) 195,615 216,525 (798) 215,727 Finance and insurance, net 100,970 (664) 100,306 69,870 (484) 69,386 Retail segment revenues 1,234,564 (3,641) 1,230,923 1,022,427 (2,596) 1,019,831 Total revenue 1,282,667 (3,641) 1,279,026 1,067,855 (2,596) 1,065,259 Costs applicable to revenue- new vehicles 650,850 (4,841) 646,009 495,159 (4,056) 491,103 Costs applicable to revenue- used vehicles 143,497 1,429 144,926 170,934 758 171,692 Retail segment costs applicable to revenue 889,298 (3,412) 885,886 749,134 (3,298) 745,836 Total costs applicable to revenue 909,858 (3,412) 906,446 768,371 (3,298) 765,073 Income from operations 136,750 (229) 136,521 103,351 702 104,053 Income before income taxes 119,606 (229) 119,377 85,385 702 86,087 Income tax expense (14,284) — (14,284) (1,979) — (1,979) Net income 105,322 (229) 105,093 83,406 702 84,108 Net income attributable to non-controlling interests (85,917) 168 (85,749) — — — Net income attributable to Camping World Holdings, Inc. 19,405 (61) 19,344 83,406 702 84,108 Six Months Ended June 30, 2017 Six Months Ended June 30 2016 ($ in thousands) As Reported Adjustment As Corrected As Reported Adjustment As Corrected Revenue: New vehicles $ 1,267,462 $ (3,352) $ 1,264,110 $ 987,765 $ (2,181) $ 985,584 Used vehicles 342,993 (1,559) 341,434 395,289 (1,395) 393,894 Finance and insurance, net 167,259 (910) 166,349 120,897 (737) 120,160 Retail segment revenues 2,068,133 (5,821) 2,062,312 1,775,177 (4,313) 1,770,864 Total revenue 2,166,482 (5,821) 2,160,661 1,865,603 (4,313) 1,861,290 Costs applicable to revenue- new vehicles 1,088,998 (7,927) 1,081,071 846,007 (5,593) 840,414 Costs applicable to revenue- used vehicles 254,640 2,188 256,828 316,022 1,182 317,204 Retail segment costs applicable to revenue 1,500,184 (5,739) 1,494,445 1,304,705 (4,411) 1,300,294 Total costs applicable to revenue 1,541,891 (5,739) 1,536,152 1,343,823 (4,411) 1,339,412 Income from operations 206,507 (82) 206,425 159,392 98 159,490 Income before income taxes 174,674 (82) 174,592 123,536 98 123,634 Income tax expense (19,911) 35 (19,876) (2,350) — (2,350) Net income 154,763 (47) 154,716 121,186 98 121,284 Net income attributable to non-controlling interests (127,905) 55 (127,850) — — — Net income attributable to Camping World Holdings, Inc. 26,858 8 26,866 121,186 98 121,284 |
Inventories, Net and Floor Pl26
Inventories, Net and Floor Plan Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventories, Net and Floor Plan Payable | |
Inventories, Net and Floor Plan Payable | Inventories consisted of the following (in thousands): June 30, December 31, 2017 2016 New RV vehicles $ 898,119 $ 721,091 Used RV vehicles 75,826 78,787 Parts, accessories and miscellaneous 126,438 102,833 $ 1,100,383 $ 902,711 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets | |
Changes in goodwill by business line | The following is a summary of changes in the Company’s goodwill by reportable segments for the six months ended June 30, 2017 (in thousands): Consumer Services and Plans Retail Consolidated Balance as of December 31, 2016 $ 49,944 $ 103,161 $ 153,105 Acquisitions (1) — 136,779 136,779 Balance as of June 30, 2017 $ 49,944 $ 239,940 $ 289,884 (1) See Note 9 — Acquisitions. |
Finite-lived intangible assets and related accumulated amortization | Finite-lived intangible assets and related accumulated amortization consisted of the following at June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 17,900 $ (115) $ 17,785 Membership and customer lists 10,808 (6,808) 4,000 $ 28,708 $ (6,923) $ 21,785 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 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Long-Term Debt. | |
Long-Term debt | Long-term debt consists of the following (in thousands): June 30, December 31, 2017 2016 Term Loan Facility (1) $ 718,049 $ 626,753 Less: current portion (7,400) (6,450) $ 710,649 $ 620,303 (1) Net of $6.1 million and $6.3 million of original issue discount at June 30, 2017 and December 31, 2016, respectively, and $12.1 million and $11.9 million of finance costs at June 30, 2017 and December 31, 2016, respectively. |
Right to Use Liabilities (Table
Right to Use Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Right to Use Liabilities | |
Schedule of right to use assets | The Company has included the right to use assets in property and equipment, net, as follows (in thousands): June 30, December 31, 2017 2016 Right to use assets $ 10,673 $ 10,673 Accumulated depreciation (796) (667) $ 9,877 $ 10,006 |
Schedule of future changes in the right to use liability | The following is a schedule by year of the future changes in the right to use liabilities as of June 30, 2017 (in thousands): 2017 $ 436 2018 583 2019 486 2020 486 2021 487 Thereafter (1) 13,813 Total minimum lease payments 16,291 Amounts representing interest (6,021) Present value of net minimum right to use liability payments $ 10,270 Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements | |
Summary of aggregate carrying value and fair value of fixed rate debt | Fair Value 6/30/2017 12/31/2016 ($ in thousands) Measurement Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility Level 2 $ 718,049 $ 739,061 $ 626,753 $ 649,838 |
Cash Flows (Tables)
Cash Flows (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Statement of Cash Flows | |
Supplemental disclosures of cash flow information | Supplemental disclosures of cash flow information for the following periods (in thousands): Six Months Ended June 30, June 30, 2017 2016 Cash paid (received) during the period for: Interest $ 30,454 $ 33,833 Income taxes 13,538 880 Non-cash investing activities: Derecognized property and equipment for leases that qualified as operating leases after completion of construction — (15,390) Property and equipment acquired through third-party capital lease arrangements 2,007 Leasehold improvements paid by lessor 857 — Vehicles transferred to property and equipment from inventory 1,238 433 Non-cash financing activities: Derecognized right to use liabilities for leases that qualified as operating leases after completion of construction — (15,393) 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) Class A common stock issued in exchange for common units in CWGS, LLC 56 — Class A common stock issued for vested restricted stock units — — |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Assets Or Stock Of Multiple Dealership Locations Acquired | |
Acquisitions | |
Summary of the purchase price allocations | Six Months Ended June 30, Estimated ($ in thousands) 2017 2016 Life Tangible assets (liabilities) acquired (assumed): Accounts receivable $ 1,522 $ 944 Inventory 84,211 25,663 Property and equipment 792 635 Other assets 46 142 Accrued liabilities (2,872) (2,277) Total tangible net assets acquired 83,699 25,107 Intangible assets acquired: Membership and customer lists 793 1,349 4-7 years Total intangible assets acquired 793 1,349 Goodwill 132,119 33,795 Purchase price 216,611 60,251 Inventory purchases financed via floor plan (71,124) (22,265) Cash payment net of floor plan financing $ 145,487 $ 37,986 |
Gander Mountain and Overton's | |
Acquisitions | |
Summary of the purchase price allocations | Estimated Estimated ($ in thousands) Fair Value Life Tangible assets (liabilities) acquired (assumed): Inventory $ 9,965 Prepaid expenses and other assets 42 Property and equipment 3,780 Accrued liabilities (373) Total tangible net assets acquired 13,414 Intangible assets acquired: Trademarks and trade names 17,900 15 years Membership and customer lists 500 6 years Total intangible assets acquired 18,400 Goodwill 4,660 Purchase price 36,474 Contingent consideration unpaid at June 30, 2017 (1,025) Cash paid for acquisition $ 35,449 |
Non-Controlling Interest (Table
Non-Controlling Interest (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Non-Controlling Interests | |
Schedule of effects of change in ownership | Three Months Ended Six Months Ended June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Net income attributable to Camping World Holdings, Inc. $ 19,344 $ 84,108 $ 26,866 $ 121,284 Transfers to non-controlling interests: Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC (87,203) — (87,203) — 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 53,430 — 53,580 — Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests $ (14,429) $ 84,108 $ (6,757) $ 121,284 |
Equity-based Compensation Pla34
Equity-based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity-based Compensation Plans | |
Schedule of equity-based compensation expense classified with the consolidated statements of operations | Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Equity-based compensation expense: Costs applicable to revenue $ 81 $ — $ 173 $ — Selling, general, and administrative 788 60 1,415 60 Total equity-based compensation expense $ 869 $ 60 $ 1,588 $ 60 |
Summary of stock option activity | Stock Options (in thousands) Outstanding at December 31, 2016 1,118 Granted — Exercised — Forfeited (45) Cancelled — Outstanding at June 30, 2017 1,073 |
Summary of restricted stock unit activity | Restricted Stock Units (in thousands) Outstanding at December 31, 2016 144 Granted 223 Vested — Forfeited (4) Cancelled — Outstanding at June 30, 2017 363 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share | |
Schedule of reconciliations of the numerators and denominators used to compute basic and diluted earnings | Three Months Six Months Ended Ended June 30, June 30, (In thousands except per share amounts) 2017 2017 Numerator: Net income $ 105,093 $ 154,716 Less: net income attributable to non-controlling interests (85,749) (127,850) Net income attributable to Camping World Holdings, Inc. — basic 19,344 26,866 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 — 78,160 Net income attributable to Camping World Holdings, Inc. — diluted $ 19,344 $ 105,026 Denominator: Weighted-average shares of Class A common stock outstanding — basic 22,977 20,973 Dilutive common units of CWGS, LLC that are convertible into Class A common stock — 63,700 Weighted-average shares of Class A common stock outstanding — diluted 22,977 84,673 Earnings per share of Class A common stock — basic $ 0.84 $ 1.28 Earnings per share of Class A common stock — diluted $ 0.84 $ 1.24 |
Segments Information (Restate36
Segments Information (Restated) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information (Restated) | |
Reportable segment revenue | Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Revenue: Consumer Services and Plans $ 48,103 $ 45,428 $ 98,349 $ 90,426 Retail 1,230,923 1,019,831 2,062,312 1,770,864 Total consolidated revenue $ 1,279,026 $ 1,065,259 $ 2,160,661 $ 1,861,290 |
Reportable segment income | Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Segment income (1): Consumer Services and Plans $ 23,959 $ 22,503 $ 50,212 $ 44,101 Retail 117,042 82,908 163,185 118,114 Total segment income 141,001 105,411 213,397 162,215 Corporate & other (3,483) (711) (4,424) (1,329) Depreciation and amortization (7,584) (6,034) (14,437) (11,925) Other interest expense, net (10,557) (12,577) (19,961) (25,325) Tax Receivable Agreement liability adjustment — — 17 — Other income (expense), net — (2) — (2) Income from operations before income taxes $ 119,377 $ 86,087 $ 174,592 $ 123,634 (1) Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense. |
Reportable depreciation and amortization and other interest expense, net | Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Depreciation and amortization: Consumer Services and Plans $ 1,005 $ 932 $ 2,001 1,851 Retail 6,464 5,102 12,321 10,074 Total 7,469 6,034 14,322 11,925 Corporate & other 115 — 115 — Total depreciation and amortization $ 7,584 $ 6,034 $ 14,437 $ 11,925 Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, ($ in thousands) 2017 2016 2017 2016 Other interest expense, net: Consumer Services and Plans $ 2 $ 4 $ 4 $ 8 Retail 1,360 1,376 2,952 2,768 Total 1,362 1,380 2,956 2,776 Corporate & other 9,195 11,197 17,005 22,549 Total interest expense $ 10,557 $ 12,577 $ 19,961 $ 25,325 |
Reportable segment assets | June 30, December 31, ($ in thousands) 2017 2016 Assets: Consumer Services and Plans $ 116,233 $ Retail 1,757,221 Total 1,873,454 Corporate & other 250,514 Total assets $ 2,123,968 $ |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Description of Business (Details) | 6 Months Ended | |
Jun. 30, 2017segmentstore | Jun. 30, 2017itemstore | |
Segments Information | ||
Number of primary businesses | 2 | 2 |
Number of locations related to RV purchasers and outdoor enthusiasts | 137 | 137 |
Number of locations related to marine and watersports products | 2 | 2 |
New and used RVs, financing, and other ancillary services, protection plans, and products for the RV purchaser | ||
Segments Information | ||
Number of locations related to RV purchasers and outdoor enthusiasts | 120 | 120 |
CWGS, LLC | ||
Segments Information | ||
Ownership interest | 32.90% | 32.90% |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Restatement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Restatement | ||||||
Valuation allowance related to CWGS, LLC | $ 138,600 | $ 138,600 | $ 102,700 | |||
Assets | ||||||
Inventories | 1,100,383 | 1,100,383 | 902,711 | |||
Total current assets | 1,536,011 | 1,536,011 | 1,126,162 | |||
Deferred tax asset | 106,452 | 106,452 | 24,433 | |||
Total assets | 2,123,968 | 2,123,968 | 1,455,777 | |||
Liabilities and stockholders' equity (deficit) | ||||||
Deferred revenues and gains, current portion | 72,592 | 72,592 | 71,128 | |||
Total current liabilities | 1,150,773 | 1,150,773 | 868,422 | |||
Deferred revenues and gains, long-term portion | 62,473 | 62,473 | 57,659 | |||
Total liabilities | 2,053,099 | 2,053,099 | 1,599,914 | |||
Additional paid-in capital | 12,015 | 12,015 | (30,006) | |||
Retained earnings | 19,603 | 19,603 | 71 | |||
Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. | 31,915 | 31,915 | (29,740) | |||
Non-controlling interests | 38,954 | 38,954 | (114,397) | |||
Stockholders' deficit | 70,869 | 70,869 | (144,137) | |||
Total liabilities and stockholders' deficit | 2,123,968 | 2,123,968 | 1,455,777 | |||
Revenue: | ||||||
Total Revenue | 1,279,026 | $ 1,065,259 | 2,160,661 | $ 1,861,290 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 906,446 | 765,073 | 1,536,152 | 1,339,412 | ||
Income from operations | 136,521 | 104,053 | 206,425 | 159,490 | ||
Income before income taxes | 119,377 | 86,087 | 174,592 | 123,634 | ||
Income tax expense | (14,284) | (1,979) | (19,876) | (2,350) | ||
Net income | 105,093 | 84,108 | 154,716 | 121,284 | ||
Net income attributable to non-controlling interests | (85,749) | (127,850) | ||||
Net income attributable to Camping World Holdings, Inc. | 19,344 | 84,108 | 26,866 | 121,284 | ||
Class A common stock | ||||||
Liabilities and stockholders' equity (deficit) | ||||||
Stockholders' deficit | 291 | 291 | 189 | |||
Costs applicable to revenue | ||||||
Net income | 105,093 | 154,716 | ||||
Net income attributable to non-controlling interests | (85,749) | (127,850) | ||||
Net income attributable to Camping World Holdings, Inc. | $ 19,344 | $ 26,866 | ||||
Earnings per share of Class A common stock: | ||||||
Basic | [1] | $ 0.84 | $ 1.28 | |||
Diluted | [1] | $ 0.84 | $ 1.24 | |||
Operating Segments | ||||||
Assets | ||||||
Total assets | $ 1,873,454 | $ 1,873,454 | 1,381,396 | |||
Costs applicable to revenue | ||||||
Income from operations | 141,001 | 105,411 | 213,397 | 162,215 | ||
Retail | ||||||
Revenue: | ||||||
Total Revenue | 1,230,923 | 1,019,831 | 2,062,312 | 1,770,864 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 885,886 | 745,836 | 1,494,445 | 1,300,294 | ||
Retail | New vehicles | ||||||
Revenue: | ||||||
Total Revenue | 760,806 | 576,976 | 1,264,110 | 985,584 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 646,009 | 491,103 | 1,081,071 | 840,414 | ||
Retail | Used vehicles | ||||||
Revenue: | ||||||
Total Revenue | 195,615 | 215,727 | 341,434 | 393,894 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 144,926 | 171,692 | 256,828 | 317,204 | ||
Retail | Finance and insurance, net | ||||||
Revenue: | ||||||
Total Revenue | 100,306 | 69,386 | 166,349 | 120,160 | ||
Retail | Operating Segments | ||||||
Assets | ||||||
Total assets | 1,757,221 | 1,757,221 | 1,228,707 | |||
Revenue: | ||||||
Total Revenue | 1,230,923 | 1,019,831 | 2,062,312 | 1,770,864 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 885,886 | 745,836 | 1,494,445 | 1,300,294 | ||
Income from operations | 117,042 | 82,908 | 163,185 | 118,114 | ||
Retail | Operating Segments | New vehicles | ||||||
Revenue: | ||||||
Total Revenue | 760,806 | 576,976 | 1,264,110 | 985,584 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 646,009 | 491,103 | 1,081,071 | 840,414 | ||
Retail | Operating Segments | Used vehicles | ||||||
Revenue: | ||||||
Total Revenue | 195,615 | 215,727 | 341,434 | 393,894 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 144,926 | 171,692 | 256,828 | 317,204 | ||
Retail | Operating Segments | Finance and insurance, net | ||||||
Revenue: | ||||||
Total Revenue | 100,306 | 69,386 | 166,349 | 120,160 | ||
As Reported | ||||||
Assets | ||||||
Inventories | 1,106,098 | 1,106,098 | 909,254 | |||
Total current assets | 1,541,726 | 1,541,726 | 1,132,705 | |||
Deferred tax asset | 243,185 | 243,185 | 125,878 | |||
Total assets | 2,266,416 | 2,266,416 | 1,563,765 | |||
Liabilities and stockholders' equity (deficit) | ||||||
Deferred revenues and gains, current portion | 69,920 | 69,920 | 68,643 | |||
Total current liabilities | 1,148,101 | 1,148,101 | 865,937 | |||
Deferred revenues and gains, long-term portion | 56,301 | 56,301 | 52,210 | |||
Total liabilities | 2,044,255 | 2,044,255 | 1,591,980 | |||
Additional paid-in capital | 153,071 | 153,071 | 74,239 | |||
Retained earnings | 20,068 | 20,068 | 544 | |||
Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. | 173,436 | 173,436 | 74,978 | |||
Non-controlling interests | 48,725 | 48,725 | (103,193) | |||
Stockholders' deficit | 222,161 | 222,161 | (28,215) | |||
Total liabilities and stockholders' deficit | 2,266,416 | 2,266,416 | 1,563,765 | |||
Revenue: | ||||||
Total Revenue | 1,282,667 | 1,067,855 | 2,166,482 | 1,865,603 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 909,858 | 768,371 | 1,541,891 | 1,343,823 | ||
Income from operations | 136,750 | 103,351 | 206,507 | 159,392 | ||
Income before income taxes | 119,606 | 85,385 | 174,674 | 123,536 | ||
Income tax expense | (14,284) | (1,979) | (19,911) | (2,350) | ||
Net income | 105,322 | 83,406 | 154,763 | 121,186 | ||
Net income attributable to non-controlling interests | (85,917) | (127,905) | ||||
Net income attributable to Camping World Holdings, Inc. | 19,405 | 83,406 | 26,858 | 121,186 | ||
As Reported | Retail | Operating Segments | ||||||
Revenue: | ||||||
Total Revenue | 1,234,564 | 1,022,427 | 2,068,133 | 1,775,177 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 889,298 | 749,134 | 1,500,184 | 1,304,705 | ||
As Reported | Retail | Operating Segments | New vehicles | ||||||
Revenue: | ||||||
Total Revenue | 762,876 | 578,289 | 1,267,462 | 987,765 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 650,850 | 495,159 | 1,088,998 | 846,007 | ||
As Reported | Retail | Operating Segments | Used vehicles | ||||||
Revenue: | ||||||
Total Revenue | 196,522 | 216,525 | 342,993 | 395,289 | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 143,497 | 170,934 | 254,640 | 316,022 | ||
As Reported | Retail | Operating Segments | Finance and insurance, net | ||||||
Revenue: | ||||||
Total Revenue | 100,970 | 69,870 | 167,259 | 120,897 | ||
Adjustment | ||||||
Assets | ||||||
Inventories | (5,715) | (5,715) | (6,543) | |||
Total current assets | (5,715) | (5,715) | (6,543) | |||
Deferred tax asset | (136,733) | (136,733) | (101,445) | |||
Total assets | (142,448) | (142,448) | (107,988) | |||
Liabilities and stockholders' equity (deficit) | ||||||
Deferred revenues and gains, current portion | 2,672 | 2,672 | 2,485 | |||
Total current liabilities | 2,672 | 2,672 | 2,485 | |||
Deferred revenues and gains, long-term portion | 6,172 | 6,172 | 5,449 | |||
Total liabilities | 8,844 | 8,844 | 7,934 | |||
Additional paid-in capital | (141,056) | (141,056) | (104,245) | |||
Retained earnings | (465) | (465) | (473) | |||
Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc. | (141,521) | (141,521) | (104,718) | |||
Non-controlling interests | (9,771) | (9,771) | (11,204) | |||
Stockholders' deficit | (151,292) | (151,292) | (115,922) | |||
Total liabilities and stockholders' deficit | (142,448) | (142,448) | $ (107,988) | |||
Revenue: | ||||||
Total Revenue | (3,641) | (2,596) | (5,821) | (4,313) | ||
Costs applicable to revenue | ||||||
Cost of Revenue | (3,412) | (3,298) | (5,739) | (4,411) | ||
Income from operations | (229) | 702 | (82) | 98 | ||
Income before income taxes | (229) | 702 | (82) | 98 | ||
Income tax expense | 35 | |||||
Net income | (229) | 702 | (47) | 98 | ||
Net income attributable to non-controlling interests | 168 | 55 | ||||
Net income attributable to Camping World Holdings, Inc. | (61) | 702 | 8 | 98 | ||
Adjustment | Retail | Operating Segments | ||||||
Revenue: | ||||||
Total Revenue | (3,641) | (2,596) | (5,821) | (4,313) | ||
Costs applicable to revenue | ||||||
Cost of Revenue | (3,412) | (3,298) | (5,739) | (4,411) | ||
Adjustment | Retail | Operating Segments | New vehicles | ||||||
Revenue: | ||||||
Total Revenue | (2,070) | (1,313) | (3,352) | (2,181) | ||
Costs applicable to revenue | ||||||
Cost of Revenue | (4,841) | (4,056) | (7,927) | (5,593) | ||
Adjustment | Retail | Operating Segments | Used vehicles | ||||||
Revenue: | ||||||
Total Revenue | (907) | (798) | (1,559) | (1,395) | ||
Costs applicable to revenue | ||||||
Cost of Revenue | 1,429 | 758 | 2,188 | 1,182 | ||
Adjustment | Retail | Operating Segments | Finance and insurance, net | ||||||
Revenue: | ||||||
Total Revenue | $ (664) | $ (484) | $ (910) | $ (737) | ||
[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. |
Inventories, Net and Floor Pl39
Inventories, Net and Floor Plan Payable - Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Inventories | $ 1,100,383 | $ 902,711 |
New RV vehicles | ||
Inventories | ||
Inventories | 898,119 | 721,091 |
Used RV vehicles | ||
Inventories | ||
Inventories | 75,826 | 78,787 |
Parts, accessories and miscellaneous | ||
Inventories | ||
Inventories | $ 126,438 | $ 102,833 |
Inventories, Net and Floor Pl40
Inventories, Net and Floor Plan Payable - Floor Plan Payable (Details) - Line of Credit $ in Millions | Jul. 01, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) |
Notes Payable to Banks | Floor Plan Facility | ||||
Floor Plan Payable | ||||
Maximum borrowing capacity | $ 1,180 | $ 880 | ||
Amount outstanding | $ 780.9 | $ 625.2 | ||
Offset account | $ 86.5 | $ 68.5 | ||
Notes Payable to Banks | Floor Plan Facility, floor plan notes | London Interbank Offered Rate (LIBOR) | ||||
Floor Plan Payable | ||||
Variable rate spread (as a percent) | 2.15% | 2.05% | ||
Variable rate basis (as a percent) | 1.05 | 0.62 | ||
Notes Payable to Banks | Floor Plan Facility, floor plan notes | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Floor Plan Payable | ||||
Variable rate spread (as a percent) | 2.05% | |||
Notes Payable to Banks | Floor Plan Facility, floor plan notes | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Floor Plan Payable | ||||
Variable rate spread (as a percent) | 2.50% | |||
Notes Payable to Banks | Floor Plan Facility, floor plan notes | Base Rate | Minimum | ||||
Floor Plan Payable | ||||
Variable rate spread (as a percent) | 0.55% | |||
Notes Payable to Banks | Floor Plan Facility, floor plan notes | Base Rate | Maximum | ||||
Floor Plan Payable | ||||
Variable rate spread (as a percent) | 1.00% | |||
Letters of credit | ||||
Floor Plan Payable | ||||
Maximum borrowing capacity | $ 15 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Change in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill | |
Balance | $ 153,105 |
Acquisitions | 136,779 |
Balance | 289,884 |
Consumer services and plans | |
Goodwill | |
Balance | 49,944 |
Balance | 49,944 |
Retail | |
Goodwill | |
Balance | 103,161 |
Acquisitions | 136,779 |
Balance | $ 239,940 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Finite-lived Intangible Assets and Related Accumulated Amortization (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Intangible Assets | ||
Cost or Fair Value | $ 28,708 | $ 9,485 |
Accumulated Amortization | (6,923) | (6,099) |
Net | 21,785 | 3,386 |
Trademarks and trade names | ||
Intangible Assets | ||
Cost or Fair Value | 17,900 | |
Accumulated Amortization | (115) | |
Net | $ 17,785 | |
Useful lives (in years) | 15 years | |
Membership and customer lists | ||
Intangible Assets | ||
Cost or Fair Value | $ 10,808 | 9,485 |
Accumulated Amortization | (6,808) | (6,099) |
Net | $ 4,000 | $ 3,386 |
Weighted Average | Membership and customer lists | ||
Intangible Assets | ||
Useful lives (in years) | 6 years | 6 years |
Long-Term Debt - Tabular Disclo
Long-Term Debt - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Long-Term Debt | ||
Term Loan Facility | $ 718,049 | $ 626,753 |
Less: current portion | (7,400) | (6,450) |
Long-term debt, net of current maturities | 710,649 | 620,303 |
Unamortized discount | 6,100 | 6,300 |
Finance costs | $ 12,100 | $ 11,900 |
Long-Term Debt - Borrowings (De
Long-Term Debt - Borrowings (Details) - Secured Debt - USD ($) $ in Millions | Mar. 17, 2017 | Nov. 08, 2016 |
Line of Credit | Existing Senior Secured Credit Facility | ||
Long-Term Debt | ||
Maximum borrowing capacity | $ 740 | $ 680 |
Maximum borrowing capacity, increase in capacity | $ 95 | |
Mandatory amortization of new credit facility (as a percent) | 1.00% | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | ||
Long-Term Debt | ||
Maximum borrowing capacity | $ 645 | |
Term | 7 years | |
Principal payment frequency | quarterly | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Term Loan Facility | ||
Long-Term Debt | ||
Term | 5 years | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | ||
Long-Term Debt | ||
Maximum borrowing capacity | $ 35 |
Long-Term Debt - Interest, Fees
Long-Term Debt - Interest, Fees, and Principal Payments (Details) - Secured Debt | Nov. 08, 2016 | Jun. 30, 2017 |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | ||
Long-Term Debt | ||
Prepayment requirement as a percentage of excess cash flow (as a percent) | 50.00% | |
Prepayment requirement as a percentage of excess cash flow, reduced amount (as a percent) | 25.00% | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Minimum | ||
Long-Term Debt | ||
Prepayment requirement as a percentage of excess cash flow, reduced amount, leverage ratio | 1.50 | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Maximum | ||
Long-Term Debt | ||
Prepayment requirement as a percentage of excess cash flow, reduced amount, leverage ratio | 2 | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Interest on Debt Instrument, Option One | London Interbank Offered Rate (LIBOR) | ||
Long-Term Debt | ||
Variable rate basis floor (as a percent) | 0.75% | |
Variable rate spread (as a percent) | 3.75% | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Interest on Debt Instrument, Option Two | ||
Long-Term Debt | ||
Alternate base rate (as a percent) | 2.75% | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Interest on Debt Instrument, Option Two | One Month Adjusted London Interbank Offer Rate | ||
Long-Term Debt | ||
Variable rate basis floor (as a percent) | 1.75% | |
Variable rate spread (as a percent) | 1.00% | |
Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | Interest on Debt Instrument, Option Two | Federal Funds Effective Rate | ||
Long-Term Debt | ||
Variable rate spread (as a percent) | 0.50% | |
Revolving Credit Facility | ||
Long-Term Debt | ||
Commitment fee (as a percent) | 0.50% | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | Interest on Debt Instrument, Option One | ||
Long-Term Debt | ||
Variable rate basis floor (as a percent) | 0.75% | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | Interest on Debt Instrument, Option Two | Minimum | ||
Long-Term Debt | ||
Variable rate spread (as a percent) | 2.25% | |
Alternate base rate (as a percent) | 3.25% | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | Interest on Debt Instrument, Option Two | Maximum | ||
Long-Term Debt | ||
Variable rate spread (as a percent) | 2.50% | |
Alternate base rate (as a percent) | 3.50% | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | Interest on Debt Instrument, Option Two | One Month Adjusted London Interbank Offer Rate | ||
Long-Term Debt | ||
Variable rate spread (as a percent) | 1.00% | |
Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | Interest on Debt Instrument, Option Two | Federal Funds Effective Rate | ||
Long-Term Debt | ||
Variable rate spread (as a percent) | 0.50% |
Long-Term Debt - General Inform
Long-Term Debt - General Information (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Nov. 08, 2016 |
Long-Term Debt | |||
Amount outstanding | $ 718,049 | $ 626,753 | |
Secured Debt | Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | |||
Long-Term Debt | |||
Interest rate (as a percent) | 4.84% | ||
Amount outstanding | $ 736,300 | 645,000 | |
Secured Debt | Revolving Credit Facility | Existing Senior Secured Credit Facility, Revolving Credit Facility | |||
Long-Term Debt | |||
Maximum amount allocated to letters of credit | $ 15,000 | ||
Available borrowings | 31,800 | 31,800 | |
Amount outstanding | 0 | 0 | |
Secured Debt | Letters of credit | Senior Secured Credit Facility, Letters of Credit | |||
Long-Term Debt | |||
Available borrowings | $ 3,200 | $ 3,200 |
Right to Use Liabilities - Righ
Right to Use Liabilities - Right to Use Assets (Details) - Right To Use Assets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Right to Use Assets | ||
Right to use assets | $ 10,673 | $ 10,673 |
Accumulated depreciation | (796) | (667) |
Total | $ 9,877 | $ 10,006 |
Right to Use Liabilities - Futu
Right to Use Liabilities - Future Changes in the Right to Use Liabilities (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Right to Use Liabilities | |
Scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months rent | $ 5,000 |
Right to Use Liabilities | |
Right to Use Liabilities | |
2,017 | 436 |
2,018 | 583 |
2,019 | 486 |
2,020 | 486 |
2,021 | 487 |
Thereafter | 13,813 |
Total minimum lease payments | 16,291 |
Amounts representing interest | (6,021) |
Present value of net minimum right to use liability payments | $ 10,270 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Fair Value Measurements | ||
Transfers of assets between the fair value measurement levels 1 to level 2 | $ 0 | $ 0 |
Transfers of assets between the fair value measurement levels 2 to level 1 | 0 | 0 |
Transfers of liabilities between the fair value measurement levels 1 to level 2 | 0 | 0 |
Transfers of liabilities between the fair value measurement levels 2 to level 1 | 0 | 0 |
Transfers of assets or liabilities between the fair value measurement levels 3 | 0 | 0 |
Carrying Value | ||
Fair Value Measurements | ||
Term Loan Facility | 718,049 | 626,753 |
Level 2 | Fair Value | ||
Fair Value Measurements | ||
Term Loan Facility | $ 739,061 | $ 649,838 |
Cash Flows - Supplemental Discl
Cash Flows - Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash paid during the year for: | ||
Interest | $ 30,454 | $ 33,833 |
Income taxes | 13,538 | 880 |
Non-cash investing activities: | ||
Derecognized property and equipment for leases that qualified as operating leases after completion of construction | (15,390) | |
Property and equipment acquired through third party capital lease arrangements | 2,007 | |
Leasehold improvements paid by lessor | 857 | |
Vehicles transferred to property and equipment from inventory | 1,238 | 433 |
Non-cash financing activities: | ||
Derecognized right to use liabilities for leases that qualified as operating leases after completion of construction | (15,393) | |
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) | |
Class A common stock issued in exchange for common units in CWGS, LLC | $ 56 |
Acquisitions - General Informat
Acquisitions - General Information (Details) $ in Millions | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | May 26, 2017lease | May 25, 2017store | |
Assets Or Stock Of Multiple Dealership Locations Acquired | ||||
Acquisitions | ||||
Real properties purchased | $ | $ 11.1 | $ 10.4 | ||
Real properties sold in sale-leaseback transactions | $ | $ 6 | $ 2.8 | ||
Gander Mountain | ||||
Acquisitions | ||||
Number of retail leases | lease | 15 | |||
Gander Mountain | ||||
Acquisitions | ||||
Number of locations | store | 160 | |||
Overton's | ||||
Acquisitions | ||||
Number of locations | store | 2 |
Acquisitions - Assets (Liabilit
Acquisitions - Assets (Liabilities) Acquired (Assumed) at Fair Value (Details) - USD ($) $ in Thousands | May 26, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Assets (liabilities) acquired (assumed) at fair value: | ||||
Goodwill | $ 289,884 | $ 153,105 | ||
Trademarks and trade names | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Estimated life (in years) | 15 years | |||
Assets Or Stock Of Multiple Dealership Locations Acquired | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Accounts receivable | $ 1,522 | $ 944 | ||
Inventory | 84,211 | 25,663 | ||
Property and equipment | 792 | 635 | ||
Other assets | 46 | 142 | ||
Accrued liabilities | (2,872) | (2,277) | ||
Total tangible net assets acquired | 83,699 | 25,107 | ||
Intangible assets acquired | 793 | 1,349 | ||
Goodwill | 132,119 | 33,795 | ||
Purchase price | 216,611 | 60,251 | ||
Assets Or Stock Of Multiple Dealership Locations Acquired | Membership and customer lists | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Intangible assets acquired | $ 793 | $ 1,349 | ||
Assets Or Stock Of Multiple Dealership Locations Acquired | Membership and customer lists | Minimum | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Estimated life (in years) | 4 years | 4 years | ||
Assets Or Stock Of Multiple Dealership Locations Acquired | Membership and customer lists | Maximum | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Estimated life (in years) | 7 years | 7 years | ||
Gander Mountain and Overton's | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Inventory | $ 9,965 | |||
Prepaid expenses and other assets | 42 | |||
Property and equipment | 3,780 | |||
Accrued liabilities | (373) | |||
Total tangible net assets acquired | 13,414 | |||
Intangible assets acquired | 18,400 | |||
Goodwill | 4,660 | |||
Purchase price | 36,474 | |||
Contingent consideration unpaid at June 30, 2017 | (1,025) | |||
Gander Mountain and Overton's | Trademarks and trade names | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Intangible assets acquired | $ 17,900 | |||
Estimated life (in years) | 15 years | |||
Gander Mountain and Overton's | Membership and customer lists | ||||
Assets (liabilities) acquired (assumed) at fair value: | ||||
Intangible assets acquired | $ 500 | |||
Estimated life (in years) | 6 years |
Acquisitions - Purchase Price (
Acquisitions - Purchase Price (Details) - USD ($) $ in Thousands | May 26, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
Assets Or Stock Of Multiple Dealership Locations Acquired | |||
Acquisitions | |||
Purchase Price | $ 216,611 | $ 60,251 | |
Inventory purchases financed via floor plan | (71,124) | (22,265) | |
Cash payment net of holdback and floor plan financing | $ 145,487 | $ 37,986 | |
Gander Mountain and Overton's | |||
Acquisitions | |||
Purchase Price | $ 36,474 | ||
Contingent consideration | 1,000 | ||
Cash paid for acquisition | 35,449 | ||
Goodwill for tax purposes | $ 4,700 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Assets Or Stock Of Multiple Dealership Locations Acquired | |||
Acquisitions | |||
Revenue | $ 117.7 | $ 48 | |
Pre-tax income (loss) | $ 7.8 | $ 1.3 | |
Gander Mountain and Overton's | |||
Acquisitions | |||
Revenue | $ 8.4 | ||
Pre-tax income (loss) | $ (1.6) |
Exit Activities (Details)
Exit Activities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Exit activities | ||
Liability outstanding | $ 2.8 | $ 2.8 |
Other current liabilities | Facility closure | ||
Exit activities | ||
Current portion of the liability | $ 0.3 | $ 0.3 |
Income Taxes (Restated) - Feder
Income Taxes (Restated) - Federal Tax purpose (Details) - USD ($) $ in Thousands | Oct. 06, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Effective tax rate | 12.00% | 2.00% | 11.00% | 2.00% | ||
Federal statutory rate | 35.00% | 35.00% | ||||
Uncertain tax positions | $ 0 | $ 0 | $ 0 | |||
Interest or penalties relating to income taxes | 0 | $ 0 | 0 | $ 0 | ||
Current portion of liabilities under tax receivable agreement | 6,469 | 6,469 | 991 | |||
Tax receivable agreement | ||||||
Expected future tax benefits retained by the Company (as a percent) | 15.00% | |||||
Tax receivable agreement | Continuing Equity Owners and Crestview partners II GP LP | ||||||
Payment, as percent of tax benefits (as a percent) | 85.00% | |||||
Tax receivable agreement | Crestview Partners II GP LP | ||||||
Liability under tax receivable agreement | 93,300 | 93,300 | 19,200 | |||
Current portion of liabilities under tax receivable agreement | $ 6,500 | $ 6,500 | $ 1,000 | |||
Camping World Holdings, Inc | ||||||
Payment, as percent of tax benefits (as a percent) | 85.00% | |||||
CWGS Enterprises, LLC and Subsidiaries | ||||||
Ownership interest | 22.60% | 32.90% | 32.90% | 22.60% | ||
Units held | 29,061,420 | 29,061,420 | 18,935,916 | |||
CWGS Enterprises, LLC and Subsidiaries | Tax receivable agreement | ||||||
Units issued in exchange | 5,515,362 | 5,525,362 | ||||
CWGS Enterprises, LLC and Subsidiaries | Tax receivable agreement | IPO | ||||||
Units issued in exchange | 1,698,763 | |||||
CWGS, LLC | ||||||
Ownership interest | 32.90% | 32.90% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Membership units | ||||
Non-cash distribution declared | $ 38,838,000 | |||
Cash distribution to members | $ 69,335,000 | 77,653,000 | ||
Monitoring Agreement | Crestview Advisors, L.L.C. and Stephen Adams | ||||
Related party transactions | ||||
Related party expense | $ 500,000 | 1,000,000 | ||
Monitoring Agreement | Crestview Advisors, L.L.C | ||||
Related party transactions | ||||
Annual monitoring fee | 1,000,000 | |||
Quarterly installments | 250,000 | |||
Monitoring Agreement | Stephen Adams | ||||
Related party transactions | ||||
Annual monitoring fee | 1,000,000 | |||
Quarterly installments | 250,000 | |||
Reimbursable Fees | Crestview Advisors, L.L.C. and Stephen Adams | ||||
Related party transactions | ||||
Related party expense | 100,000 | 300,000 | ||
Reimbursable Fees | Crestview Advisors, L.L.C | ||||
Related party transactions | ||||
Managers' reimbursable expenses per annum per related party | 250,000 | |||
Reimbursable Fees | Stephen Adams | ||||
Related party transactions | ||||
Managers' reimbursable expenses per annum per related party | 250,000 | |||
Related Party Agreement | Precise Graphix | ||||
Related party transactions | ||||
Related party expense | $ 900,000 | 800,000 | 1,200,000 | 1,400,000 |
FreedomRoads | Lease Agreement | Managers and Officers | ||||
Related party transactions | ||||
Related party expense | 500,000 | 400,000 | $ 900,000 | 700,000 |
FreedomRoads | Lease Agreement | Mr. Lemonis | Original Lease | ||||
Related party transactions | ||||
Term of lease | 132 months | |||
Base rent | 29,000 | $ 29,000 | ||
Lease payments | 176,000 | 168,000 | 352,000 | 336,000 |
Common area maintenance payments | 79,000 | 72,000 | $ 158,000 | 145,000 |
FreedomRoads | Lease Agreement | Mr. Lemonis | Expansion Lease | ||||
Related party transactions | ||||
Term of lease | 132 months | |||
Base rent | 2,500 | $ 2,500 | ||
Lease payments | $ 8,000 | $ 8,000 | $ 17,000 | $ 16,000 |
Precise Graphix | Mr. Lemonis | ||||
Related party transactions | ||||
Economic interest (as a percent) | 33.00% |
Stockholder's Equity - (Details
Stockholder's Equity - (Details) - USD ($) | Jun. 09, 2017 | Jun. 05, 2017 | May 31, 2017 | Oct. 06, 2016 | May 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Common Stock | |||||||
Number of shares issued | 600,000 | 4,000,000 | |||||
Offering price (in dollars per share) | $ 27.75 | $ 27.75 | |||||
Proceeds, net of underwriting discounts and commissions | $ 16,000,000 | $ 106,600,000 | $ 122,544,000 | ||||
Continuing Equity Owners | |||||||
Common Stock | |||||||
Units held | 59,310,552 | 64,835,914 | |||||
Percentage of ownership | 77.40% | 67.10% | 77.40% | ||||
Class A common stock | |||||||
Common Stock | |||||||
Common stock, outstanding | 29,061,420 | 18,935,916 | |||||
Number of shares issued | 4,600,000 | ||||||
Class A common stock | Selling Stockholders | |||||||
Common Stock | |||||||
Offering price (in dollars per share) | $ 27.75 | $ 27.75 | |||||
Redemption of common stock by selling shareholders | 4,323,083 | ||||||
Shares of common stock redeemed for shares of common stock | 648,462 | 4,323,083 | 4,323,083 | ||||
Shares issued by selling stockholders | 825,000 | 5,500,000 | 5,500,000 | ||||
Shares sold that were previously held | 176,538 | 1,176,917 | |||||
Class A common stock | Over allotment | |||||||
Common Stock | |||||||
Number of shares issued | 600,000 | ||||||
Class A common stock | Over allotment | Selling Stockholders | |||||||
Common Stock | |||||||
Shares issued by selling stockholders | 825,000 | ||||||
Class B common stock | |||||||
Common Stock | |||||||
Common stock, outstanding | 57,031,184 | 62,002,729 | |||||
Class B common stock | Selling Stockholders | |||||||
Common Stock | |||||||
Redemption of common stock by selling shareholders | 648,462 | ||||||
Number of common stock cancelled | 648,462 | 4,323,083 | 4,323,083 | ||||
Consideration for redemption of shares | $ 0 | $ 0 | |||||
Class C common stock | |||||||
Common Stock | |||||||
Common stock, outstanding | 1 | 1 | |||||
CWH BR Merger | |||||||
Common Stock | |||||||
Units held | 7,063,716 | ||||||
Common stock, outstanding | 7,063,716 | ||||||
CWH BR Merger | Class A common stock | |||||||
Common Stock | |||||||
Shares issued in acquisition | 7,063,716 | ||||||
CWH BR Merger | Class B common stock | |||||||
Common Stock | |||||||
Shares cancelled | 7,063,716 | ||||||
CWGS Enterprises, LLC and Subsidiaries | |||||||
Common Stock | |||||||
Units held | 29,061,420 | 18,935,916 | |||||
Ownership interest | 22.60% | 32.90% | 22.60% | ||||
CWGS LLC | |||||||
Common Stock | |||||||
Purchase of newly-issued common units | 600,000 | 4,000,000 | 4,000,000 |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Oct. 06, 2016 | |
Summarizes the effects of change in ownership: | ||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 19,344 | $ 84,108 | $ 26,866 | $ 121,284 | ||
Transfers to non-controlling interests: | ||||||
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests | $ (14,429) | $ 84,108 | $ (6,757) | $ 121,284 | ||
Continuing Equity Owners | ||||||
Non-Controlling Interests | ||||||
Units held | 59,310,552 | 59,310,552 | 64,835,914 | |||
Percentage of ownership | 67.10% | 67.10% | 77.40% | 77.40% | ||
Additional Paid-in Capital | ||||||
Transfers to non-controlling interests: | ||||||
Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC | $ (87,203) | $ (87,203) | ||||
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC | $ 53,430 | $ 53,580 | ||||
CWGS Enterprises, LLC and Subsidiaries | ||||||
Non-Controlling Interests | ||||||
LLC outstanding | 88,371,972 | 88,371,972 | 83,771,830 | 70,000 | ||
Units held | 29,061,420 | 29,061,420 | 18,935,916 | |||
Ownership interest | 32.90% | 32.90% | 22.60% | 22.60% |
Equity-based Compensation Pla60
Equity-based Compensation Plans - Summary of Equity-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Equity-based compensation expense: | ||||
Equity based compensation expense | $ 869 | $ 60 | $ 1,588 | $ 60 |
Costs applicable to revenue | ||||
Equity-based compensation expense: | ||||
Equity based compensation expense | 81 | 173 | ||
Selling, general, and administrative | ||||
Equity-based compensation expense: | ||||
Equity based compensation expense | $ 788 | $ 60 | $ 1,415 | $ 60 |
Equity-based Compensation Pla61
Equity-based Compensation Plans - Stock Options (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017shares | |
Stock Options | |
Outstanding at December 31, 2016 (in shares) | 1,118 |
Forfeited (in shares) | (45) |
Outstanding at June 30, 2017 (in shares) | 1,073 |
Equity-based Compensation Pla62
Equity-based Compensation Plans - Restricted Stock Units (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017shares | |
Restricted Stock Units | |
Outstanding at December 31, 2016 (in shares) | 144 |
Granted (in shares) | 223 |
Forfeited (in shares) | (4) |
Outstanding at June 30, 2017 (in shares) | 363 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 06, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Numerator: | |||||||
Net income | $ 105,093 | $ 84,108 | $ 154,716 | $ 121,284 | |||
Less: net income attributable to non-controlling interests | (85,749) | (127,850) | |||||
Net income attributable to Camping World Holdings, Inc. | 19,344 | $ 84,108 | 26,866 | $ 121,284 | |||
Class A common stock | |||||||
Numerator: | |||||||
Net income | 105,093 | 154,716 | |||||
Less: net income attributable to non-controlling interests | (85,749) | (127,850) | |||||
Net income attributable to Camping World Holdings, Inc. | 19,344 | 26,866 | |||||
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 | 78,160 | ||||||
Net income attributable to Camping World Holdings, Inc. - diluted | $ 19,344 | $ 105,026 | |||||
Denominator: | |||||||
Weighted-average shares of Class A common stock outstanding -basic | [1] | 22,977,000 | 20,973,000 | ||||
Dilutive common units of CWGS, LLC that are convertible into Class A common stock | 63,700,000 | ||||||
Weighted-average shares of Class A common stock outstanding - diluted | [1] | 22,977,000 | 84,673,000 | ||||
Earnings per share of Class A common stock - basic | [1] | $ 0.84 | $ 1.28 | ||||
Earnings per share of Class A common stock - diluted | [1] | $ 0.84 | $ 1.24 | ||||
Class A common stock | Stock Option | |||||||
Antidilutive securities excluded from the computation of diluted earnings per share | 1,100,000 | 1,100,000 | |||||
Class A common stock | Restricted Stock Units (RSUs) | |||||||
Antidilutive securities excluded from the computation of diluted earnings per share | 200,000 | 200,000 | |||||
CWGS Enterprises, LLC and Subsidiaries | |||||||
Preferred units outstanding (in units) | 70,000 | 88,371,972 | 88,371,972 | 83,771,830 | |||
Quarterly preferred returns | $ 2,100 | ||||||
CWGS Enterprises, LLC and Subsidiaries | Class A common stock | |||||||
Antidilutive securities excluded from the computation of diluted earnings per share | 62,600,000 | ||||||
[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. |
Segments Information (Restate64
Segments Information (Restated) - General Information (Details) - 6 months ended Jun. 30, 2017 | segment | item |
Segments Information | ||
Number of reportable segments | 2 | 2 |
Segments Information (Restate65
Segments Information (Restated) - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segments Information | ||||
Revenue | $ 1,279,026 | $ 1,065,259 | $ 2,160,661 | $ 1,861,290 |
Consumer services and plans | ||||
Segments Information | ||||
Revenue | 48,103 | 45,428 | 98,349 | 90,426 |
Retail | ||||
Segments Information | ||||
Revenue | $ 1,230,923 | $ 1,019,831 | $ 2,062,312 | $ 1,770,864 |
Segments Information (Restate66
Segments Information (Restated) - Segment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segments Information | ||||
Total segment income | $ 136,521 | $ 104,053 | $ 206,425 | $ 159,490 |
Selling, general, and administrative expense | (228,444) | (190,323) | (403,934) | (350,711) |
Depreciation and amortization | (7,584) | (6,034) | (14,437) | (11,925) |
Other interest expense, net | (10,557) | (12,577) | (19,961) | (25,325) |
Tax Receivable Agreement liability adjustment | 17 | |||
Other income (expense), net | (2) | (2) | ||
Income before income taxes | 119,377 | 86,087 | 174,592 | 123,634 |
Operating Segments | ||||
Segments Information | ||||
Total segment income | 141,001 | 105,411 | 213,397 | 162,215 |
Depreciation and amortization | (7,469) | (6,034) | (14,322) | (11,925) |
Other interest expense, net | (1,362) | (1,380) | (2,956) | (2,776) |
Corporate, Non-Segment | ||||
Segments Information | ||||
Selling, general, and administrative expense | (3,483) | (711) | (4,424) | (1,329) |
Depreciation and amortization | (115) | (115) | ||
Other interest expense, net | (9,195) | (11,197) | (17,005) | (22,549) |
Consumer services and plans | Operating Segments | ||||
Segments Information | ||||
Total segment income | 23,959 | 22,503 | 50,212 | 44,101 |
Depreciation and amortization | (1,005) | (932) | (2,001) | (1,851) |
Other interest expense, net | (2) | (4) | (4) | (8) |
Retail | Operating Segments | ||||
Segments Information | ||||
Total segment income | 117,042 | 82,908 | 163,185 | 118,114 |
Depreciation and amortization | (6,464) | (5,102) | (12,321) | (10,074) |
Other interest expense, net | $ (1,360) | $ (1,376) | $ (2,952) | $ (2,768) |
Segments Information (Restate67
Segments Information (Restated) - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segments Information | ||||
Depreciation and amortization | $ 7,584 | $ 6,034 | $ 14,437 | $ 11,925 |
Operating Segments | ||||
Segments Information | ||||
Depreciation and amortization | 7,469 | 6,034 | 14,322 | 11,925 |
Corporate, Non-Segment | ||||
Segments Information | ||||
Depreciation and amortization | 115 | 115 | ||
Consumer services and plans | Operating Segments | ||||
Segments Information | ||||
Depreciation and amortization | 1,005 | 932 | 2,001 | 1,851 |
Retail | Operating Segments | ||||
Segments Information | ||||
Depreciation and amortization | $ 6,464 | $ 5,102 | $ 12,321 | $ 10,074 |
Segments Information (Restate68
Segments Information (Restated) - Other Interest Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segments Information | ||||
Other interest expense, net | $ 10,557 | $ 12,577 | $ 19,961 | $ 25,325 |
Operating Segments | ||||
Segments Information | ||||
Other interest expense, net | 1,362 | 1,380 | 2,956 | 2,776 |
Corporate, Non-Segment | ||||
Segments Information | ||||
Other interest expense, net | 9,195 | 11,197 | 17,005 | 22,549 |
Consumer services and plans | Operating Segments | ||||
Segments Information | ||||
Other interest expense, net | 2 | 4 | 4 | 8 |
Retail | Operating Segments | ||||
Segments Information | ||||
Other interest expense, net | $ 1,360 | $ 1,376 | $ 2,952 | $ 2,768 |
Segment Information (Restated)
Segment Information (Restated) - Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Segments Information | ||
Assets | $ 2,123,968 | $ 1,455,777 |
Operating Segments | ||
Segments Information | ||
Assets | 1,873,454 | 1,381,396 |
Corporate, Non-Segment | ||
Segments Information | ||
Assets | 250,514 | 74,381 |
Consumer services and plans | Operating Segments | ||
Segments Information | ||
Assets | 116,233 | 152,689 |
Retail | Operating Segments | ||
Segments Information | ||
Assets | $ 1,757,221 | $ 1,228,707 |