Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 08, 2018 | |
Entity Registrant Name | Camping World Holdings, Inc. | |
Entity Central Index Key | 1,669,779 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 36,930,617 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 50,706,629 | |
Class C common stock | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 331,301 | $ 224,163 |
Contracts in transit | 97,778 | 46,227 |
Accounts receivable, net | 84,328 | 79,881 |
Inventories, net | 1,574,059 | 1,415,915 |
Prepaid expenses and other assets | 34,668 | 32,721 |
Total current assets | 2,122,134 | 1,798,907 |
Property and equipment, net | 281,712 | 198,022 |
Deferred tax assets, net | 154,553 | 155,551 |
Intangibles assets, net | 37,707 | 38,707 |
Goodwill | 353,958 | 348,387 |
Other assets | 24,450 | 21,903 |
Total assets | 2,974,514 | 2,561,477 |
Current liabilities: | ||
Accounts payable | 246,215 | 125,616 |
Accrued liabilities | 134,437 | 101,929 |
Deferred revenues and gains | 73,440 | 77,669 |
Current portion of capital lease obligations | 608 | 844 |
Current portion of Tax Receivable Agreement liability | 8,093 | 8,093 |
Current portion of long-term debt | 11,991 | 9,465 |
Notes payable - floor plan, net | 939,759 | 974,043 |
Other current liabilities | 26,717 | 22,510 |
Total current liabilities | 1,441,260 | 1,320,169 |
Capital lease obligations, net of current portion | 9 | 23 |
Right to use liability | 10,155 | 10,193 |
Tax Receivable Agreement liability, net of current portion | 131,451 | 129,596 |
Revolving line of credit | 24,403 | |
Long-term debt, net of current portion | 1,153,497 | 907,437 |
Deferred revenues and gains | 65,530 | 64,061 |
Other long-term liabilities | 58,232 | 39,161 |
Total liabilities | 2,884,537 | 2,470,640 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, par value $0.01 per share - 20,000,000 shares authorized; none issued and outstanding as of March 31, 2018 and December 31, 2017 | ||
Additional paid-in capital | 52,110 | 49,941 |
Retained earnings | 5,025 | 6,192 |
Total stockholders' equity attributable to Camping World Holdings, Inc. | 57,509 | 56,505 |
Non-controlling interests | 32,468 | 34,332 |
Total stockholders' equity | 89,977 | 90,837 |
Total liabilities and stockholders' equity | 2,974,514 | 2,561,477 |
Class A common stock | ||
Stockholders' equity: | ||
Common stock | 369 | 367 |
Total stockholders' equity | 369 | 367 |
Class B common stock | ||
Stockholders' equity: | ||
Common stock | 5 | 5 |
Total stockholders' equity | $ 5 | $ 5 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders' equity (deficit) | ||
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 (deficit) | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 36,939,436 | 36,758,233 |
Common stock, outstanding | 36,930,269 | 36,749,072 |
Class B common stock | ||
Stockholders' equity (deficit) | ||
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 | 50,706,629 | 50,836,629 |
Class C common stock | ||
Stockholders' equity (deficit) | ||
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Total revenue | $ 1,061,566 | $ 881,635 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 756,790 | 629,706 |
Operating expenses: | ||
Selling, general, and administrative | 245,114 | 175,490 |
Debt restructure expense | 424 | |
Depreciation and amortization | 9,400 | 6,853 |
Loss (gain) on sale of assets | 85 | (318) |
Total operating expenses | 255,023 | 182,025 |
Income from operations | 49,753 | 69,904 |
Other income (expense): | ||
Floor plan interest expense | (10,743) | (5,302) |
Other interest expense, net | (12,839) | (9,404) |
Loss on debt restructure | (1,676) | |
Tax Receivable Agreement liability adjustment | 17 | |
Total other income (expense) | (25,258) | (14,689) |
Income before income taxes | 24,495 | 55,215 |
Income tax expense | (7,219) | (5,592) |
Net income | 17,276 | 49,623 |
Less: net income attributable to non-controlling interests | (14,095) | (42,101) |
Net income attributable to Camping World Holdings, Inc. | $ 3,181 | $ 7,522 |
Weighted average shares of Class A common stock outstanding: | ||
Dividends declared per share | $ 0.1532 | $ 0.1532 |
Class A common stock | ||
Other income (expense): | ||
Net income | $ 17,276 | $ 49,623 |
Less: net income attributable to non-controlling interests | $ (14,095) | $ (42,101) |
Earnings per share of Class A common stock: | ||
Basic | $ 0.09 | $ 0.40 |
Diluted | $ 0.08 | $ 0.38 |
Weighted average shares of Class A common stock outstanding: | ||
Basic | 36,816 | 18,946 |
Diluted | 88,646 | 83,772 |
Consumer services and plans | ||
Revenue: | ||
Total revenue | $ 53,808 | $ 50,246 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 22,725 | 21,147 |
Retail | ||
Revenue: | ||
Total revenue | 1,007,758 | 831,389 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 734,065 | 608,559 |
Retail | New vehicles | ||
Revenue: | ||
Total revenue | 579,510 | 503,304 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 503,884 | 435,062 |
Retail | Used vehicles | ||
Revenue: | ||
Total revenue | 172,091 | 145,819 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 134,293 | 111,902 |
Retail | Parts, services and other | ||
Revenue: | ||
Total revenue | 164,308 | 116,223 |
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): | ||
Total costs applicable to revenue | 95,888 | 61,595 |
Retail | Finance and insurance, net | ||
Revenue: | ||
Total revenue | $ 91,849 | $ 66,043 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Additional Paid-in Capital | Retained Earnings (Deficit) | Non-controlling Interest | Class A common stock | Class B common stock | Class C common stock | Total |
Increase (Decrease) in Members' Equity (Deficit) | |||||||
Adoption of accounting standard (see Note 1 - Summary of Significant Accounting Policies) | ASU 2014-09 | $ 1,310 | $ 2,476 | $ 3,786 | ||||
Balance at Dec. 31, 2017 | $ 49,941 | 6,192 | 34,332 | $ 367 | $ 5 | 90,837 | |
Balance (in shares) at Dec. 31, 2017 | 36,749,072 | 50,836,629 | 1 | ||||
Increase (Decrease) in Members' Equity (Deficit) | |||||||
Equity-based compensation | 3,218 | 3,218 | |||||
Exercise of stock options | 137 | 137 | |||||
Exercise of stock options (in shares) | 6 | ||||||
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options | (77) | 77 | |||||
Vesting of restricted stock units (in shares) | 2 | ||||||
Redemption of LLC common units for Class A common stock | 1,847 | (116) | $ 2 | 1,733 | |||
Redemption of LLC common units for Class A common stock (in shares) | 173,000 | (130,000) | |||||
Distributions to holders of LLC common units | (19,938) | (19,938) | |||||
Dividends | (5,658) | (5,658) | |||||
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability | (1,414) | (1,414) | |||||
Non-controlling interest adjustment | (1,542) | 1,542 | |||||
Net income | 3,181 | 14,095 | $ 17,276 | 17,276 | |||
Balance at Mar. 31, 2018 | $ 52,110 | $ 5,025 | $ 32,468 | $ 369 | $ 5 | $ 89,977 | |
Balance (in shares) at Mar. 31, 2018 | 36,930,269 | 50,706,629 | 1 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net income | $ 17,276 | $ 49,623 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 9,400 | 6,853 |
Equity-based compensation | 3,218 | 719 |
Loss on debt restructure | 1,676 | |
Loss (gain) on sale of assets | 85 | (318) |
Provision for (recovery of) losses on accounts receivable | 106 | (20) |
Accretion of original issue discount | 229 | 257 |
Non-cash interest expense | 1,274 | 1,169 |
Deferred income taxes | 2,736 | 1,068 |
Tax Receivable Agreement liability adjustment | (17) | |
Change in assets and liabilities, net of acquisitions: | ||
Receivables and contracts in transit | (56,104) | (44,263) |
Inventories | (150,918) | (61,336) |
Prepaid expenses and other assets | 1,675 | 1,350 |
Accounts payable and other accrued expenses | 123,987 | 31,709 |
Payment pursuant to tax receivable agreement | (7) | |
Accrued rent for cease-use locations | (416) | 121 |
Deferred revenue and gains | (2,959) | (2,555) |
Other, net | 524 | 2,622 |
Net cash used in operating activities | (48,218) | (13,018) |
Investing activities | ||
Purchases of property and equipment | (52,021) | (10,029) |
Purchase of real property | (24,426) | (6,024) |
Purchases of businesses, net of cash acquired | (12,484) | (75,448) |
Proceeds from sale of property and equipment | 513 | 379 |
Net cash used in investing activities | (88,418) | (91,122) |
Financing activities | ||
Proceeds from long-term debt | 319,913 | 94,762 |
Payments on long-term debt | (70,714) | (1,850) |
Net (payments) borrowings on notes payable ? floor plan, net | (962) | 98,140 |
Borrowings on revolver | 24,403 | |
Payments of principal on capital lease obligations | (250) | (357) |
Payments of principal on right to use liability | (38) | (36) |
Payment of debt issuance costs | (3,119) | (1,171) |
Dividends on Class A common stock | (5,658) | (2,903) |
Proceeds from exercise of stock options | 137 | |
Members' distributions | (19,938) | (21,907) |
Net cash provided by financing activities | 243,774 | 164,678 |
Increase in cash | 107,138 | 60,538 |
Cash at beginning of the year | 224,163 | 114,196 |
Cash at end of the year | $ 331,301 | $ 174,734 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
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 months ended March 31, 2018 are unaudited. The condensed consolidated balance sheet as of December 31, 2017 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, 2017 (the “Annual Report”) filed with the SEC on March 13, 2018. 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 March 31, 2018, CWH owned 41.7% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. 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 and used recreational vehicles (“RV”); parts and service, including RV accessories and supplies; camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, 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 March 31, 2018, the Company operated 141 Camping World retail locations, of which 126 locations sell new and used RVs, and offer financing, ancillary services, protection plans, and other products for the RV purchaser and outdoor enthusiasts; twenty-eight Gander Outdoors locations offering outdoor products and services; one Overton’s location offering marine and watersports products; two TheHouse.com locations offering skiing, snowboarding, bicycling, and skateboarding products; two W82 location offering skiing, snowboarding, and skateboarding products; and five Uncle Dan’s locations offering outdoor products and services. In addition, on January 30, 2018 we acquired certain assets of EARTH SPORTS LLC, dba Erehwon Mountain Outfitter (“Erehwon”), a leading Midwest specialty retailer of outdoor gear and apparel with four retail locations. We closed one Overton’s location in January 2018. We closed the Rogers, Minnesota Camping World retail store in the first quarter of 2018 and expect to open an Overton’s store at the location in the coming months. 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 May 2014, the FASB issued ASU No. 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 is 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 Company adopted the amendments of this ASU on January 1, 2018, and the adoption did not materially impact its consolidated financial statements or results of operations (see Note 2 — Revenue for further details). 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”). This ASU 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 Company adopted the amendments of this ASU on January 1, 2018, and the adoption did not materially impact its consolidated financial statements or results of operations Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The FASB has subsequently issued ASU No. 2018-01 that provides a practical expedient relating to land easements, which is effective upon the adoption of 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 the adoption will have on its consolidated balance sheet and statement of income. However, the Company expects that the adoption of the provisions of this ASU will have a significant impact on its consolidated balance sheet by reporting a right-to-use lease asset and corresponding lease obligation, 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. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Revenue | 2. Revenue Adoption of Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under ASC 605. The following table details the cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of ASC 606 (in thousands): Balance at Adjustments Balance at December 31, Due to January 1, 2017 ASU 2014-09 2018 Assets Inventories, net $ 1,415,915 $ (2,634) $ 1,413,281 Prepaid expenses and other assets 32,721 7,062 39,783 Deferred tax assets, net 155,551 (443) 155,108 Liabilities Accrued liabilities 101,929 1,021 102,950 Deferred revenues and gains, current 77,669 667 78,336 Deferred revenues and gains, non-current 64,061 (1,489) 62,572 Equity Retained earnings 6,192 1,310 7,502 Non-controlling interests 34,332 2,476 36,808 The adjustments above related primarily to i) the deferral of sales commissions expenses relating to multiyear consumer services and plans and the recording of such expenses over the same period as the recognition of the related revenues, ii) reclassification of estimated product returns from inventory to prepaid expenses and other assets, iii) reclassification of expected refunds previously included in deferred revenues and gains to accrued liabilities, and iv) reclassification and adjustment of the point obligation for the Coast to Coast service from accrued liabilities to deferred revenues and gains. The following table details the impact of the adoption of ASC 606 on the consolidated balance sheet as of March 31, 2018 (in thousands): March 31, 2018 As Balances Without Effect of Change Reported Adoption of ASC 606 Higher/(Lower) Assets Inventories, net $ 1,574,059 $ 1,576,699 $ (2,640) Prepaid expenses and other assets 34,668 27,322 7,346 Deferred tax assets, net 154,553 154,996 (443) Liabilities Accrued liabilities 134,437 133,311 1,126 Deferred revenues and gains, current 73,440 72,765 675 Deferred revenues and gains, non-current 65,530 67,090 (1,560) Equity Retained earnings 5,025 3,633 1,392 Non-controlling interests 32,468 29,838 2,630 The following table details the impact of the adoption of ASC 606 on the consolidated statement of operations for the three months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 As Balances Without Effect of Change Reported Adoption of ASC 606 Higher/(Lower) Revenue Consumer services and plans $ 53,808 $ 53,822 $ (14) Costs applicable to revenue Consumer services and plans 22,725 22,712 13 Operating and income tax expenses Selling, general, and administrative 245,114 245,405 (291) Income tax expense 7,219 7,191 28 Net income Net income 17,276 17,040 236 Less: net income attributable to non-controlling interests (14,095) (13,941) (154) Net income attributable to Camping World Holdings, Inc. 3,181 3,099 82 For the three months ended March 31, 2018, basic earnings per share of Class A common stock would have been $0.08 per share without the adoption of ASC 606 compared to the as-reported amount of $0.09 per share. For the three months ended March 31, 2018, the adoption of ASC 606 had no impact on diluted earnings per share of Class A common stock. Revenue Recognition Revenues are recognized by the Company when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes collected from the customer concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The Company presents disaggregated revenue on its consolidated statements of operations. Consumer Services and Plans revenue consists of revenue from membership clubs, publications, consumer shows, and marketing and royalty fees from various consumer services and plans. Certain Consumer Services and Plans revenue is generated from annual, multiyear and lifetime memberships. The revenue and expenses associated with these memberships are deferred and amortized over the membership period. Unearned revenue and profit are subject to revisions as the membership progresses to completion. Revisions to membership period estimates would change the amount of income and expense amortized in future accounting periods. For lifetime memberships, an 18 year period is used, which is the actuarially determined estimated fulfillment period. Roadside Assistance (“RA”) revenues are deferred and recognized over the contractual life of the membership. RA claim expenses are recognized when incurred. Royalty revenue is earned under the terms of an arrangement with a third party credit card provider based on a percentage of the Company’s co-branded credit card portfolio retail spending with such third party credit card provider. Marketing fees for finance, insurance, extended service and other similar products are recognized as variable consideration, net of estimated cancellations, if applicable, when a product contract payment has been received or financing has been arranged. Promotional expenses, consisting primarily of direct mail advertising expenses, are deferred and expensed over the period of expected future benefit, typically three months based on historical actual response rates. Renewal expenses are expensed at the time related materials are mailed. Newsstand sales of publications and related expenses are recorded as variable consideration at the time of delivery, net of estimated returns. Subscription sales of publications are reflected in income over the lives of the subscriptions. The related selling expenses are expensed as incurred. Advertising revenues and related expenses are recorded at the time of delivery. Subscription and newsstand revenues and expenses related to annual publications are deferred until the publications are distributed. Revenue and related expenses for consumer shows are recognized when the show occurs. Retail revenue consists of sales of new and used recreational vehicles, commissions on related finance and insurance contracts, and sales of parts, services and other products. Revenue from the sale of recreational vehicles is recognized upon completion of the sale to the customer. Conditions to completing a sale include having an agreement with the customer, including pricing, whereby the sales price must be reasonably expected to be collected and having control transferred to the customer. Revenue from parts, services and other products sales is recognized upon the delivery of the part or completion of the service. Finance and insurance revenue is recognized when a finance and insurance product contract payment has been received or financing has been arranged. The proceeds the Company receives for arranging financing contracts, and selling insurance and service contracts, are subject to chargebacks if the customer terminates the respective contract earlier than a stated period. These proceeds are recorded as variable consideration, net of estimated chargebacks. The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers or using the adjusted market assessment approach. Deferred Revenues The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance, net of estimated refunds that are presented separately as a component of accrued liabilities. The decrease in the deferred revenue balance for the three months ended March 31, 2018 was primarily driven by $27.9 million of revenues recognized that were included in the deferred revenue balance at the beginning of the period, partially offset by cash payments received or due in advance of satisfying the Company’s performance obligations. As of March 31, 2018, the Company has unsatisfied performance obligations relating to multiyear plans for its Good Sam Club, RA, Coast to Coast memberships, and magazine publication revenue streams. The total unsatisfied performance obligation for these revenue streams at March 31, 2018 and the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands): As of March 31, 2018 2018 $ 55,970 2019 34,477 2020 15,507 2021 7,168 2022 3,880 Thereafter 6,518 Total $ 123,520 The Company’s payment terms vary by the type and location of its customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Practical Expedients and Exemptions The Company does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period of time between payment and transfer of the promised goods or services will be one year or less. The Company expenses sales commissions when incurred in cases where the amortization period of those otherwise capitalized sales commissions would have been one year or less. We do not disclose the value of unsatisfied performance obligations for revenue streams for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Inventories, Net and Floor Plan
Inventories, Net and Floor Plan Payable | 3 Months Ended |
Mar. 31, 2018 | |
Inventories, Net and Floor Plan Payable | |
Inventories, Net and Floor Plan Payable | 3. Inventories, Net and Floor Plan Payable Inventories consisted of the following (in thousands): March 31, December 31, 2018 2017 New RV vehicles $ 1,132,962 $ 1,113,178 Used RV vehicles 98,213 106,210 Parts, accessories and miscellaneous 342,884 196,527 $ 1,574,059 $ 1,415,915 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 bore interest at one-month London Interbank Offered Rate (“LIBOR”) plus 2.50% as of March 31, 2018 and 2.15% as of December 31, 2017. LIBOR, as defined, was 1.66% at March 31, 2018 and 1.36% as of December 31, 2017. 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 (as further amended, “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. On December 12, 2017, FR entered into a Seventh Amended and Restated Credit Agreement (the “Floor Plan Facility Amendment”), which amended the previous credit agreement governing our Floor Plan Facility and allows FR to borrow (a) up to $1.415 billion under a floor plan facility, (b) up to $15.0 million under a letter of credit facility and (c) up to a maximum amount outstanding of $35.0 million under the revolving line of credit, which maximum amount outstanding will decrease by $1.75 million on the last day of each fiscal quarter, commencing with the fiscal quarter ending March 31, 2019. In addition, the maturity of the Floor Plan Facility was extended to December 12, 2020. 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. As a result of using 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 March 31, 2018 and December 31, 2017. The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of March 31, 2018 and December 31, 2017 (in thousands): March 31, December 31, 2018 2017 Floor Plan Facility Notes payable - floor plan: Total commitment $ 1,415,000 $ 1,415,000 Less: borrowings, net (939,759) (974,043) Less: flooring line aggregate interest reduction account (162,720) (106,055) Additional borrowing capacity 312,521 334,902 Less: accounts payable for sold inventory (64,633) (31,311) Less: purchase commitments (30,346) (77,144) Unencumbered borrowing capacity $ 217,542 $ 226,447 Revolving line of credit: $ 35,000 $ 35,000 Less borrowings (24,403) — Additional borrowing capacity $ 10,597 $ 35,000 Letters of credit: Total commitment $ 15,000 $ 15,000 Less: outstanding letters of credit (9,369) (9,369) Additional letters of credit capacity $ 5,631 $ 5,631 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill The following is a summary of changes in the Company’s goodwill by reportable segments for the three months ended March 31, 2018 (in thousands): Consumer Services and Plans Retail Consolidated Balance as of December 31, 2017 $ 49,944 $ 298,443 $ 348,387 Acquisitions — 5,571 5,571 Balance as of March 31, 2018 $ 49,944 $ 304,014 $ 353,958 (1) See Note 10 — 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 March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 14,303 $ (549) $ 13,754 Membership and customer lists 28,988 (8,969) 20,019 Websites 4,174 (240) 3,934 $ 47,465 $ (9,758) $ 37,707 December 31, 2017 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 14,187 $ (312) $ 13,875 Membership and customer lists 28,988 (8,194) 20,794 Websites 4,174 (136) 4,038 $ 47,349 $ (8,642) $ 38,707 The trademarks and trade names have useful lives of fifteen years. The membership and customer lists have weighted-average useful lives of approximately five years. The websites have useful lives of ten years. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt. | |
Long-Term Debt | 5. Long-Term Debt Long-term debt consists of the following (in thousands): March 31, December 31, 2018 2017 Term Loan Facility (1) $ 1,165,488 $ 916,902 Less: current portion (11,991) (9,465) $ 1,153,497 $ 907,437 (1) Net of $6.2 million and $6.0 million of original issue discount at March 31 ,2018 and December 31, 2017, respectively, and $15.4 million and $14.2 million of finance costs at March 31 ,2018 and December 31, 2017, respectively. Senior Secured Credit Facilities On November 8, 2016, CWGS Group, LLC (the “Borrower”), a wholly owned subsidiary of CWGS, LLC, entered into a credit agreement (as amended from time to time, the “Credit Agreement”) for a new $680.0 million senior secured credit facility (the “Senior Secured Credit Facilities”) and used the proceeds to repay its previous senior secured credit facilities. The Senior Secured Credit Facilities, prior to the amendments described below, consisted of a seven-year $645.0 million Term Loan Facility (the “Term Loan Facility”) and a five-year $35.0 million revolving credit facility (the “Revolving Credit Facility”). On March 17, 2017, the borrower entered into a First Amendment to the Credit Agreement to increase the Term Loan Facility by $95.0 million to $740.0 million. The Term Loan Facility included mandatory amortization at 1.00% per annum in equal quarterly installments. On October 6, 2017, the Borrower entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. The Second Amendment, among other things, (i) increased the Borrower’s Term Loan Facility by $205.0 million to an outstanding principal amount of $939.5 million, (ii) amended the applicable margin to 2.00% from 2.75% per annum, in the case of base rate loans, and to 3.00% from 3.75% per annum, in the case of LIBOR loans, and (iii) increased the quarterly amortization payment to $2.4 million. On March 28, 2018, the Borrower entered into a Third Amendment (the “Third Amendment”) to the Credit Agreement. The Third Amendment, among other things, (i) reduced the applicable interest margin by 25 basis points to 1.75% from 2.00% per annum, in the case of base rate loans, and to 2.75% from 3.00% per annum, in the case of LIBOR loans, effective on April 6, 2018, (ii) increased the Borrower’s term loan facility by $250 million to a principal amount of $1.19 billion outstanding as of March 28, 2018, and (iii) increased the quarterly amortization payment to $3.0 million. The Term Loan Facility includes mandatory amortization at 1.01% per annum in equal quarterly installments. Interest on the Term Loan Facility effective April 6, 2018 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 2.75%, or b) an Alternate Base Rate (“ABR”) equal to 1.75% per annum plus the greater of: (i) the prime rate published by The Wall Street Journal (the “WSJ Prime Rate”), (ii) federal funds effective rate plus 0.50%, or (iii) one-month Adjusted LIBOR Rate plus 1.00%, subject to a 1.75% floor. Interest on borrowings under the 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 Senior Secured Credit Facilities. The Company also pays a commitment fee of 0.5% per annum on the unused amount of the Senior Secured Credit Facility. Reborrowings under the Term Loan Facility are not permitted. The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $1.9 million starting March 31, 2017 through September 30, 2017, $2.4 million on December 31, 2017 and $3.0 million thereafter. The March 31, 2018 installment was paid on April 3, 2018, per the agreement. 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 Credit Agreement, for such fiscal year. The required percentage prepayment of excess cash flow is reduced to 25% if the total leverage ratio, as defined in the Credit Agreement, 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 Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023. The funds available under the Revolving Credit Facility may be utilized for borrowings or letters of credit; however, a maximum of $15.0 million may be allocated to such letters of credit. As of March 31, 2018, the average interest rate on the term loan debt was 4.50%. As of March 31, 2018 and December 31, 2017, the Company had available borrowings of $32.2 million and $31.8 million, respectively, and letters of credit in the aggregate amount of $2.8 million and $3.2 million outstanding, respectively, under the Revolving Credit Facility. As of March 31, 2018 and December 31, 2017, the principal balance of $1,187.1 million and $937.1 million, respectively, was outstanding under the Term Loan Facility and no amounts were outstanding on the Revolving Credit Facility in either period. CWGS, LLC and CWGS Group, LLC have no revenue-generating operations of their own. Their ability to meet the financial obligations associated with the 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 Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR and its subsidiaries. The Credit Agreement contains certain restrictive covenants 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 March 31, 2018 and December 31, 2017. |
Right to Use Assets and Liabili
Right to Use Assets and Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Right to Use Assets and Liabilities | |
Right to Use Liabilities | 6. Right to Use Assets and 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): March 31, December 31, 2018 2017 Right to use assets $ 10,673 $ 10,673 Accumulated depreciation (991) (926) $ 9,682 $ 9,747 The following is a schedule by year of the future changes in the right to use liabilities as of March 31, 2018 (in thousands): 2018 $ 365 2019 486 2020 486 2021 487 2022 487 Thereafter (1) 13,326 Total minimum lease payments 15,637 Amounts representing interest (5,482) Present value of net minimum right to use liability payments $ 10,155 (1) Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 7. Fair Value Measurements Accounting guidance for fair value measurements establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. For cash and cash equivalents; accounts receivable; other current assets; accounts payable; notes payable — floor plan, net; and other current liabilities the amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates. There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during 2018 and 2017 of assets and liabilities that are not measured at fair value on a recurring basis. The following table presents the reported carrying value and fair value information for the Company’s debt instruments. The fair values shown below for the Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2). Fair Value 3/31/2018 12/31/2017 ($ in thousands) Measurement Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility Level 2 $ 1,165,488 $ 1,197,988 $ 916,902 $ 953,269 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 8. 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 | 3 Months Ended |
Mar. 31, 2018 | |
Statements of Cash Flows | |
Statements of Cash Flows | 9. Statement of Cash Flows Supplemental disclosures of cash flow information for the following periods (in thousands): Three Months Ended March 31, March 31, 2018 2017 Cash paid during the period for: Interest $ 20,333 $ 15,810 Income taxes 830 38 Non-cash investing activities: Vehicles transferred to property and equipment from inventory 618 1,227 Landlord paid tenant improvements on behalf of the Company 16,461 — |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Acquisitions | |
Acquisitions | 10. Acquisitions During the three months ended March 31, 2018 and 2017, subsidiaries of the Company acquired the assets of multiple dealership locations. The Company used a combination of cash, floor plan financing, proceeds from the May 2017 Public Offering (defined and described in Note 14 — Stockholders’ Equity), and additional borrowing on the Term Loan Facility in March 2017 (see Note 5 — 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 three months ended March 31, 2018, and March 31, 2017, the Company did not purchase any real properties from parties related to the sellers of the dealership businesses or sell any real properties to a third party. The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships and retail locations consist of the following: Three Months Ended March 31, ($ in thousands) 2018 2017 Tangible assets (liabilities) acquired (assumed): Inventory $ 6,609 $ 29,625 Property and equipment 281 467 Other assets 55 3 Accrued liabilities (148) (479) Total tangible net assets acquired 6,797 29,616 Intangible assets acquired: Membership and customer lists 116 — Total intangible assets acquired 116 — Goodwill 5,571 45,832 Purchase price 12,484 75,448 Inventory purchases financed via floor plan (4,222) (16,805) Cash payment net of floor plan financing $ 8,262 $ 58,643 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 for the three months ended March 31, 2018 and 2017 is expected to be deductible for tax purposes. Included in the three months ended March 31, 2018 and 2017 consolidated financial results were $0.9 million and $11.5 million of revenue, respectively, and $0.2 million of pre-tax loss and $0.5 million of pre-tax income, respectively, of the acquired dealerships and retail locations from the applicable acquisition dates. |
Exit Activities
Exit Activities | 3 Months Ended |
Mar. 31, 2018 | |
Exit Activities | |
Exit Activities | 11. Exit Activities The Company closed certain retail locations in previous periods and, in March 2017, the Company subleased a portion of a leased premises 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 the tenants under the subleases over the remainder of the lease terms, which expire on various dates through 2033. 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 as of March 31, 2018 and December 31, 2017, and is included in other current liabilities. The liability outstanding was $2.4 million and $2.8 million as of March 31 ,2018 and December 31, 2017, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes. | |
Income Taxes | 12. Income Taxes CWH is organized as a Subchapter C corporation and, as of March 31, 2018, is a 41.7% owner of CWGS, LLC (see Note 14 — Stockholders’ Equity and Note 15 — Non-Controlling Interests). CWGS, LLC is organized as a limited liability company and treated as a partnership for federal tax purposes, with the exception of Americas Road and Travel Club, Inc., Camping World and FreedomRoads RV, Inc. (“FRRV”) and their wholly-owned subsidiaries, which are Subchapter C corporations. The Company is subject to federal and state income taxes. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating the Company’s provision and accruals for these taxes. In addition, a number of jurisdictions in which the Company is subject to tax are actively pursuing changes to their tax laws applicable to corporate taxpayers, such as the recently enacted U.S. tax reform legislation commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). The 2017 Tax Act was signed into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21% and eliminating certain deductions. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. As of March 31, 2018, the Company had not completed its accounting for the tax effects of the enactment of the 2017 Tax Act on its tax accruals. However, the Company has reasonably estimated the effects of the 2017 Tax Act and recorded provisional amounts in its financial statements as of March 31, 2018 and December 31, 2017. The final impact of the 2017 Tax Act may differ from these estimates, due to, among other things, changes in interpretations, analysis and assumptions made by management, additional guidance that may be issued by the U.S. Department of the Treasury and the Internal Revenue Service, and any updates or changes to estimates the Company has utilized to calculate the transition impact. Therefore, the Company’s accounting for the elements of the 2017 Tax Act is incomplete. However, the Company was able to make reasonable estimates of the effects of the 2017 Tax Act. Pursuant to the SEC Staff Accounting Bulletin No. 118 (“SAB 118”), the Company's measurement period for implementing the accounting changes required by the 2017 Tax Act will close before December 22, 2018 and the Company anticipates completing the accounting under ASC Topic 740, Income Taxes, in a subsequent reporting period within the measurement period. On December 22, 2017, SAB 118 was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. In accordance with SAB 118, the Company has determined that the $118.4 million of the deferred tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities during the three months ended December 31, 2017 was a provisional amount and a reasonable estimate at December 31, 2017 and March 31, 2018. As the Company completes its analysis of the 2017 Tax Act, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may make adjustments to the provisional amounts. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. For the three months ended March 31, 2018 and 2017, the Company’s effective income tax rate was 29.5% and 10.1%, respectively. The amount of income tax expense and the effective income tax rate increased in 2018 partially due to operating losses recorded by its retail segment for which no tax benefit was recognized on account of the valuation allowance recorded against such losses, and partially due to an increased ownership percentage of CWGS, LLC for which the Company is subject to U.S., federal and state taxes on its allocable share of income of CWGS, LLC. The Company's effective tax rate for the three months ended March 31, 2018 was higher than the federal statutory rate of 21.0% partially due to the valuation allowance discussed above, and partly due to the effect of state taxes. The Company's effective tax rate for the three months ended March 31, 2017 was significantly lower than the federal statutory rate of 35.0% primarily because no federal income taxes were 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 March 31, 2018 and December 31, 2017, the Company determined that all of its deferred tax assets, except those pertaining to Camping World 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 Camping World, 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 March 31, 2018 and December 31, 2017, the Company had no uncertain tax positions. The Company did not recognize any interest or penalties relating to income taxes for the three months ended March 31, 2018 and 2017. 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. During the three months ended March 31, 2018 and 2017, 173,286 and 10,000 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 March 31, 2018 and December 31, 2017, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $139.5 million and $137.7 million, respectively, of which $8.1 million and $8.1 million, respectively, were included in current portion of the Tax Receivable Agreement liability in the Consolidated Balance Sheets. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | 13. Related Party Transactions Transactions with Directors, Equity Holders and Executive Officers FreedomRoads leases various retail locations from managers and officers. During the three months ended March 31, 2018 and 2017, the related party lease expense for these locations was $0.4 million and $0.4 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 A. Lemonis, the Company’s Chairman and Chief Executive Officer, has personally guaranteed both leases. During the three months ended March 31, 2018 and 2017, we made payments of approximately $178,000 and $176,000, respectively, in connection with the Original Lease, which includes approximately $79,000 and $79,000, 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. The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, $0.1 million and $0 during the three months ended March 31, 2018 and 2017, respectively. Other Transactions The Company does business with certain companies in which Mr. Lemonis has a direct or indirect material interest. The Company purchased fixtures for interior store sets at the Company’s retail locations from Precise Graphix, LLC (“Precise Graphix”). Mr. Lemonis has a 33% economic interest in Precise Graphix and the Company paid Precise Graphix $1.6 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively. The Company purchased point of purchase and visual merchandise displays from JD Custom Design (“JD Custom”) for use in Camping World’s retail store operations. Mr. Lemonis is a holder of 52% of the combined voting power in JD Custom and the Company paid JD Custom $0.1 million and $0 for the three months ended March 31, 2018 and 2017, respectively. The Company does business with certain companies in which Stephen Adams, a member of the Company’s board of directors, has a direct or indirect material interest. The Company from time to time purchases advertising services from Adams Radio of Fort Wayne LLC (“Adams Radio”), in which Mr. Adams has an indirect 90% interest. The Company paid Adams Radio $0.1 million and $0 for the three months ended March 31, 2018 and 2017, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 14. 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 15 — 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. May 2017 Public Offering On May 31, 2017, the Company completed a public offering (the “May 2017 Public Offering”) in which the Company sold 4,000,000 shares of the Company’s Class A common stock at a public offering price of $27.75 per share. The Company received $106.6 million in proceeds, net of underwriting discounts and commissions, which were used to purchase 4,000,000 newly-issued common units from CWGS, LLC at a price per unit equal to the public offering price per share of Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions. In addition, on June 5, 2017, the underwriters exercised their option to purchase an additional 600,000 shares of Class A common stock. On June 9, 2017, the Company closed on the purchase of the additional 600,000 shares of Class A common stock and received $16.0 million in additional proceeds, net of underwriting discounts and commissions, which were used to purchase 600,000 newly-issued common units from CWGS, LLC at a price per unit equal to the public offering price per share of Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions. In connection with the May 2017 Public Offering, CVRV Acquisition LLC and CVRV Acquisition II LLC (“May 2017 Selling Stockholders”), each affiliates of Crestview, sold 5,500,000 shares of the Company’s Class A common stock at the same public offering price of $27.75 per share. CVRV Acquisition LLC redeemed 4,323,083 common units of CWGS, LLC for 4,323,083 shares of Class A common stock, which it sold in the May 2017 Public Offering along with 1,176,917 shares of Class A shares that CVRV Acquisition II LLC already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 4,323,083 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, on June 5, 2017, the underwriters exercised their option to purchase an additional 825,000 shares of Class A common stock from the May 2017 Selling Stockholders, in conjunction with their exercise of their option to purchase the additional 600,000 shares from the Company as described above. On June 9, 2017, the May 2017 Selling Stockholders closed on the sale of the additional 825,000 shares of Class A common stock. CVRV Acquisition LLC redeemed 648,462 common units of CWGS, LLC for 648,462 shares of Class A common stock, which it sold in the May 2017 Public Offering along with 176,538 shares of Class A shares that CVRV Acquisition II LLC already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 648,462 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. The Company did not receive any proceeds relating to the sale of the May 2017 Selling Stockholders’ shares. October 2017 Public Offering On October 30, 2017, the Company completed a public offering (the “October 2017 Public Offering”) in which, CVRV Acquisition LLC, CVRV Acquisition II LLC and Crestview Advisors, LLC, each affiliates of Crestview, and CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by each of Stephen Adams, a member of Camping World’s board of directors, and Marcus Lemonis, Camping World’s Chairman and Chief Executive Officer (“October 2017 Selling Stockholders”) sold 6,700,000 shares of the Company’s Class A common stock at a public offering price of $40.50 per share. CVRV Acquisition LLC redeemed 4,715,529 common units of CWGS, LLC for 4,715,529 newly-issued shares of Class A common stock, which it sold in the October 2017 Public Offering along with 1,283,756 and 715 shares of Class A shares that CVRV Acquisition II LLC and Crestview Advisors, LLC, respectively, already held as a result of the Reorganization Transactions. Additionally, CWGS Holding, LLC redeemed 700,000 common units of CWGS, LLC for 700,000 shares of Class A common stock, which it sold in the October 2017 Public Offering. Pursuant to the terms of the LLC Agreement, 4,715,529 and 700,000 shares of the Company’s Class B common stock registered in the names of CVRV Acquisition LLC and CWGS Holding, LLC, respectively, were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, the underwriters exercised their option to purchase an additional 963,799 shares of Class A common stock from the October 2017 Selling Stockholders, in conjunction with their exercise of their option to purchase up to an additional 1,005,000 shares from the October 2017 Selling Stockholders. On November 1, 2017, the October 2017 Selling Stockholders closed on the sale of the additional 963,799 shares of Class A common stock. CVRV Acquisition LLC and CWGS Holding, LLC redeemed 678,331 and 100,695 common units of CWGS, LLC, for 678,331 and 100,695 newly issued shares of Class A common stock, respectively, which they sold in the October 2017 Public Offering along with 184,669 and 104 shares of Class A shares that CVRV Acquisition II LLC and Crestview Advisors, LLC, respectively, already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 678,331 and 100,695 shares of the Company’s Class B common stock registered in the names of CVRV Acquisition LLC and CWGS Holding, LLC, respectively, 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 October 2017 Public Offering |
Non-Controlling Interests
Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2018 | |
Non-Controlling Interests | |
Non-Controlling Interests | 15. Non-Controlling Interests In connection with the Reorganization Transactions, described in Note 14 — 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 the amount recorded as non-controlling interest and increase additional paid-in capital. As of March 31, 2018 and December 31, 2017, there were 88,647,478 and 88,639,567 common units of CWGS, LLC outstanding, respectively, of which CWH owned 36,930,269 and 36,749,072 common units of CWGS, LLC, respectively, representing 41.7% and 41.5% ownership interests in CWGS, LLC, respectively, and the Continuing Equity Owners owned 51,717,209 and 51,890,495 common units of CWGS, LLC, respectively, representing 58.3% and 58.5% 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 March 31, ($ in thousands) 2018 2017 Net income attributable to Camping World Holdings, Inc. $ 3,181 $ 7,522 Transfers to non-controlling interests: Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options (77) — Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC 1,847 150 Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests $ 4,951 $ 7,672 |
Equity-based Compensation Plans
Equity-based Compensation Plans | 3 Months Ended |
Mar. 31, 2018 | |
Equity-based Compensation Plans | |
Equity-based Compensation Plans | 16. Equity-based Compensation Plans The following table summarizes the equity-based compensation that has been included in the following line items within the consolidated statements of operations during: Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Equity-based compensation expense: Costs applicable to revenue $ 175 $ 92 Selling, general, and administrative 3,043 627 Total equity-based compensation expense $ 3,218 $ 719 The following table summarizes stock option activity for the three months ended March 31, 2018: Stock Options (in thousands) Outstanding at December 31, 2017 953 Granted — Exercised (6) Forfeited (14) Cancelled — Outstanding at March 31, 2018 933 Options exercisable at March 31, 2018 179 The following table summarizes restricted stock unit activity for the three months ended March 31, 2018: Restricted Stock Units (in thousands) Outstanding at December 31, 2017 1,247 Granted — Vested (2) Forfeited (3) Outstanding at March 31, 2018 1,242 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
Earnings Per Share | 17. Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. 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 Ended March 31, (In thousands except per share amounts) 2018 2017 Numerator: Net income $ 17,276 $ 49,623 Less: net income attributable to non-controlling interests (14,095) (42,101) Net income attributable to Camping World Holdings, Inc. — basic 3,181 7,522 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 4,352 23,963 Net income attributable to Camping World Holdings, Inc. — diluted $ 7,533 $ 31,485 Denominator: Weighted-average shares of Class A common stock outstanding — basic 36,816 18,946 Dilutive common units of CWGS, LLC that are convertible into Class A common stock 51,830 64,826 Weighted-average shares of Class A common stock outstanding — diluted 88,646 83,772 Earnings per share of Class A common stock — basic $ 0.09 $ 0.40 Earnings per share of Class A common stock — diluted $ 0.08 $ 0.38 For the three months ended March 31, 2018, 0.9 million stock options and 1.2 million restricted stock units, respectively, were excluded from the weighted-average in the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive. For the three months ended March 31, 2017, 1.1 million stock options and 0.1 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. 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
Segments Information | 3 Months Ended |
Mar. 31, 2018 | |
Segments Information | |
Segments Information | 18. Segments Information 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 and used RVs; parts and service; finance and insurance; and skiing, snowboarding, bicycling, skateboarding, 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 March 31, March 31, ($ in thousands) 2018 2017 Revenue: Consumer Services and Plans $ 53,808 $ 50,246 Retail 1,007,758 831,389 Total consolidated revenue $ 1,061,566 $ 881,635 Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Segment income: (1) Consumer Services and Plans $ 28,124 $ 26,253 Retail 22,007 46,143 Total segment income 50,131 72,396 Corporate & other (1,297) (941) Depreciation and amortization (9,400) (6,853) Other interest expense, net (12,839) (9,404) Tax Receivable Agreement liability adjustment — 17 Loss and expense on debt restructure (2,100) — Income from operations before income taxes $ 24,495 $ 55,215 (1) Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense. Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Depreciation and amortization: Consumer Services and Plans $ 772 $ 996 Retail 8,628 5,857 Total depreciation and amortization $ 9,400 $ 6,853 Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Other interest expense, net: Consumer Services and Plans $ (1) $ 2 Retail 1,819 1,592 Total 1,818 1,594 Corporate & other 11,021 7,810 Total interest expense $ 12,839 $ 9,404 March 31, December 31, ($ in thousands) 2018 2017 Assets: Consumer Services and Plans $ 131,892 $ Retail 2,401,209 Total 2,533,101 Corporate & other 441,413 Total assets $ 2,974,514 $ |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 months ended March 31, 2018 are unaudited. The condensed consolidated balance sheet as of December 31, 2017 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, 2017 (the “Annual Report”) filed with the SEC on March 13, 2018. 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 March 31, 2018, CWH owned 41.7% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. The Company does not have any components of other comprehensive income recorded within its consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements. |
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 and used recreational vehicles (“RV”); parts and service, including RV accessories and supplies; camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, 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 March 31, 2018, the Company operated 141 Camping World retail locations, of which 126 locations sell new and used RVs, and offer financing, ancillary services, protection plans, and other products for the RV purchaser and outdoor enthusiasts; twenty-eight Gander Outdoors locations offering outdoor products and services; one Overton’s location offering marine and watersports products; two TheHouse.com locations offering skiing, snowboarding, bicycling, and skateboarding products; two W82 location offering skiing, snowboarding, and skateboarding products; and five Uncle Dan’s locations offering outdoor products and services. In addition, on January 30, 2018 we acquired certain assets of EARTH SPORTS LLC, dba Erehwon Mountain Outfitter (“Erehwon”), a leading Midwest specialty retailer of outdoor gear and apparel with four retail locations. We closed one Overton’s location in January 2018. We closed the Rogers, Minnesota Camping World retail store in the first quarter of 2018 and expect to open an Overton’s store at the location in the coming months. |
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 May 2014, the FASB issued ASU No. 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 is 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 Company adopted the amendments of this ASU on January 1, 2018, and the adoption did not materially impact its consolidated financial statements or results of operations (see Note 2 — Revenue for further details). 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”). This ASU 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 Company adopted the amendments of this ASU on January 1, 2018, and the adoption did not materially impact its consolidated financial statements or results of operations Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The FASB has subsequently issued ASU No. 2018-01 that provides a practical expedient relating to land easements, which is effective upon the adoption of 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 the adoption will have on its consolidated balance sheet and statement of income. However, the Company expects that the adoption of the provisions of this ASU will have a significant impact on its consolidated balance sheet by reporting a right-to-use lease asset and corresponding lease obligation, 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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of total unsatisfied performance obligation for these revenue streams, that the Company expects to recognize the amounts as revenue | The total unsatisfied performance obligation for these revenue streams at March 31, 2018 and the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands): As of March 31, 2018 2018 $ 55,970 2019 34,477 2020 15,507 2021 7,168 2022 3,880 Thereafter 6,518 Total $ 123,520 |
ASU 2014-09 | |
Summary of cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of ASC 606 and impact of the adoption of ASC 606 on the consolidated balance sheet and statement of operations | The following table details the cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet for the adoption of ASC 606 (in thousands): Balance at Adjustments Balance at December 31, Due to January 1, 2017 ASU 2014-09 2018 Assets Inventories, net $ 1,415,915 $ (2,634) $ 1,413,281 Prepaid expenses and other assets 32,721 7,062 39,783 Deferred tax assets, net 155,551 (443) 155,108 Liabilities Accrued liabilities 101,929 1,021 102,950 Deferred revenues and gains, current 77,669 667 78,336 Deferred revenues and gains, non-current 64,061 (1,489) 62,572 Equity Retained earnings 6,192 1,310 7,502 Non-controlling interests 34,332 2,476 36,808 The adjustments above related primarily to i) the deferral of sales commissions expenses relating to multiyear consumer services and plans and the recording of such expenses over the same period as the recognition of the related revenues, ii) reclassification of estimated product returns from inventory to prepaid expenses and other assets, iii) reclassification of expected refunds previously included in deferred revenues and gains to accrued liabilities, and iv) reclassification and adjustment of the point obligation for the Coast to Coast service from accrued liabilities to deferred revenues and gains. The following table details the impact of the adoption of ASC 606 on the consolidated balance sheet as of March 31, 2018 (in thousands): March 31, 2018 As Balances Without Effect of Change Reported Adoption of ASC 606 Higher/(Lower) Assets Inventories, net $ 1,574,059 $ 1,576,699 $ (2,640) Prepaid expenses and other assets 34,668 27,322 7,346 Deferred tax assets, net 154,553 154,996 (443) Liabilities Accrued liabilities 134,437 133,311 1,126 Deferred revenues and gains, current 73,440 72,765 675 Deferred revenues and gains, non-current 65,530 67,090 (1,560) Equity Retained earnings 5,025 3,633 1,392 Non-controlling interests 32,468 29,838 2,630 The following table details the impact of the adoption of ASC 606 on the consolidated statement of operations for the three months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 As Balances Without Effect of Change Reported Adoption of ASC 606 Higher/(Lower) Revenue Consumer services and plans $ 53,808 $ 53,822 $ (14) Costs applicable to revenue Consumer services and plans 22,725 22,712 13 Operating and income tax expenses Selling, general, and administrative 245,114 245,405 (291) Income tax expense 7,219 7,191 28 Net income Net income 17,276 17,040 236 Less: net income attributable to non-controlling interests (14,095) (13,941) (154) Net income attributable to Camping World Holdings, Inc. 3,181 3,099 82 |
Inventories, Net and Floor Pl27
Inventories, Net and Floor Plan Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory | |
Schedule of inventories | Inventories consisted of the following (in thousands): March 31, December 31, 2018 2017 New RV vehicles $ 1,132,962 $ 1,113,178 Used RV vehicles 98,213 106,210 Parts, accessories and miscellaneous 342,884 196,527 $ 1,574,059 $ 1,415,915 |
Floor Plan Facility | |
Inventory | |
Schedule of outstanding amounts and available borrowing | The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of March 31, 2018 and December 31, 2017 (in thousands): March 31, December 31, 2018 2017 Floor Plan Facility Notes payable - floor plan: Total commitment $ 1,415,000 $ 1,415,000 Less: borrowings, net (939,759) (974,043) Less: flooring line aggregate interest reduction account (162,720) (106,055) Additional borrowing capacity 312,521 334,902 Less: accounts payable for sold inventory (64,633) (31,311) Less: purchase commitments (30,346) (77,144) Unencumbered borrowing capacity $ 217,542 $ 226,447 Revolving line of credit: $ 35,000 $ 35,000 Less borrowings (24,403) — Additional borrowing capacity $ 10,597 $ 35,000 Letters of credit: Total commitment $ 15,000 $ 15,000 Less: outstanding letters of credit (9,369) (9,369) Additional letters of credit capacity $ 5,631 $ 5,631 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 three months ended March 31, 2018 (in thousands): Consumer Services and Plans Retail Consolidated Balance as of December 31, 2017 $ 49,944 $ 298,443 $ 348,387 Acquisitions — 5,571 5,571 Balance as of March 31, 2018 $ 49,944 $ 304,014 $ 353,958 (1) See Note 10 — Acquisitions. |
Finite-lived intangible assets and related accumulated amortization | Finite-lived intangible assets and related accumulated amortization consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 14,303 $ (549) $ 13,754 Membership and customer lists 28,988 (8,969) 20,019 Websites 4,174 (240) 3,934 $ 47,465 $ (9,758) $ 37,707 December 31, 2017 Cost or Accumulated Fair Value Amortization Net Trademarks and trade names $ 14,187 $ (312) $ 13,875 Membership and customer lists 28,988 (8,194) 20,794 Websites 4,174 (136) 4,038 $ 47,349 $ (8,642) $ 38,707 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt. | |
Long-Term debt | Long-term debt consists of the following (in thousands): March 31, December 31, 2018 2017 Term Loan Facility (1) $ 1,165,488 $ 916,902 Less: current portion (11,991) (9,465) $ 1,153,497 $ 907,437 (1) Net of $6.2 million and $6.0 million of original issue discount at March 31 ,2018 and December 31, 2017, respectively, and $15.4 million and $14.2 million of finance costs at March 31 ,2018 and December 31, 2017, respectively. |
Right to Use Assets and Liabi30
Right to Use Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Right to Use Assets and 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): March 31, December 31, 2018 2017 Right to use assets $ 10,673 $ 10,673 Accumulated depreciation (991) (926) $ 9,682 $ 9,747 |
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 March 31, 2018 (in thousands): 2018 $ 365 2019 486 2020 486 2021 487 2022 487 Thereafter (1) 13,326 Total minimum lease payments 15,637 Amounts representing interest (5,482) Present value of net minimum right to use liability payments $ 10,155 (1) Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Summary of aggregate carrying value and fair value of fixed rate debt | Fair Value 3/31/2018 12/31/2017 ($ in thousands) Measurement Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility Level 2 $ 1,165,488 $ 1,197,988 $ 916,902 $ 953,269 |
Cash Flows (Tables)
Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Statements of Cash Flows | |
Supplemental disclosures of cash flow information | Supplemental disclosures of cash flow information for the following periods (in thousands): Three Months Ended March 31, March 31, 2018 2017 Cash paid during the period for: Interest $ 20,333 $ 15,810 Income taxes 830 38 Non-cash investing activities: Vehicles transferred to property and equipment from inventory 618 1,227 Landlord paid tenant improvements on behalf of the Company 16,461 — |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Assets Or Stock Of Multiple Dealership Locations Acquired | |
Acquisitions | |
Summary of the purchase price allocations | Three Months Ended March 31, ($ in thousands) 2018 2017 Tangible assets (liabilities) acquired (assumed): Inventory $ 6,609 $ 29,625 Property and equipment 281 467 Other assets 55 3 Accrued liabilities (148) (479) Total tangible net assets acquired 6,797 29,616 Intangible assets acquired: Membership and customer lists 116 — Total intangible assets acquired 116 — Goodwill 5,571 45,832 Purchase price 12,484 75,448 Inventory purchases financed via floor plan (4,222) (16,805) Cash payment net of floor plan financing $ 8,262 $ 58,643 |
Non-Controlling Interest (Table
Non-Controlling Interest (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Non-Controlling Interests | |
Schedule of effects of change in ownership | Three Months Ended March 31, ($ in thousands) 2018 2017 Net income attributable to Camping World Holdings, Inc. $ 3,181 $ 7,522 Transfers to non-controlling interests: Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options (77) — Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC 1,847 150 Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests $ 4,951 $ 7,672 |
Equity-based Compensation Pla35
Equity-based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity-based Compensation Plans | |
Schedule of equity-based compensation expense classified with the consolidated statements of operations | Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Equity-based compensation expense: Costs applicable to revenue $ 175 $ 92 Selling, general, and administrative 3,043 627 Total equity-based compensation expense $ 3,218 $ 719 |
Summary of stock option activity | Stock Options (in thousands) Outstanding at December 31, 2017 953 Granted — Exercised (6) Forfeited (14) Cancelled — Outstanding at March 31, 2018 933 Options exercisable at March 31, 2018 179 |
Summary of restricted stock unit activity | Restricted Stock Units (in thousands) Outstanding at December 31, 2017 1,247 Granted — Vested (2) Forfeited (3) Outstanding at March 31, 2018 1,242 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share | |
Schedule of reconciliations of the numerators and denominators used to compute basic and diluted earnings | Three Months Ended March 31, (In thousands except per share amounts) 2018 2017 Numerator: Net income $ 17,276 $ 49,623 Less: net income attributable to non-controlling interests (14,095) (42,101) Net income attributable to Camping World Holdings, Inc. — basic 3,181 7,522 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 4,352 23,963 Net income attributable to Camping World Holdings, Inc. — diluted $ 7,533 $ 31,485 Denominator: Weighted-average shares of Class A common stock outstanding — basic 36,816 18,946 Dilutive common units of CWGS, LLC that are convertible into Class A common stock 51,830 64,826 Weighted-average shares of Class A common stock outstanding — diluted 88,646 83,772 Earnings per share of Class A common stock — basic $ 0.09 $ 0.40 Earnings per share of Class A common stock — diluted $ 0.08 $ 0.38 |
Segments Information (Tables)
Segments Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segments Information | |
Reportable segment revenue | Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Revenue: Consumer Services and Plans $ 53,808 $ 50,246 Retail 1,007,758 831,389 Total consolidated revenue $ 1,061,566 $ 881,635 |
Reportable segment income | Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Segment income: (1) Consumer Services and Plans $ 28,124 $ 26,253 Retail 22,007 46,143 Total segment income 50,131 72,396 Corporate & other (1,297) (941) Depreciation and amortization (9,400) (6,853) Other interest expense, net (12,839) (9,404) Tax Receivable Agreement liability adjustment — 17 Loss and expense on debt restructure (2,100) — Income from operations before income taxes $ 24,495 $ 55,215 (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 March 31, March 31, ($ in thousands) 2018 2017 Depreciation and amortization: Consumer Services and Plans $ 772 $ 996 Retail 8,628 5,857 Total depreciation and amortization $ 9,400 $ 6,853 Three Months Ended March 31, March 31, ($ in thousands) 2018 2017 Other interest expense, net: Consumer Services and Plans $ (1) $ 2 Retail 1,819 1,592 Total 1,818 1,594 Corporate & other 11,021 7,810 Total interest expense $ 12,839 $ 9,404 |
Reportable segment assets | March 31, December 31, ($ in thousands) 2018 2017 Assets: Consumer Services and Plans $ 131,892 $ Retail 2,401,209 Total 2,533,101 Corporate & other 441,413 Total assets $ 2,974,514 $ |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Description of Business (Details) | Mar. 31, 2018store | Oct. 06, 2016 | Jan. 31, 2018store | Mar. 31, 2018segmentstore | Dec. 31, 2017 | Jan. 30, 2018store |
Segments Information | ||||||
Number of primary businesses | segment | 2 | |||||
Number of Camping World retail locations | 141 | 141 | ||||
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 | 126 | 126 | ||||
Marine and Watersports Products | ||||||
Segments Information | ||||||
Number of locations related to marine and water sports products | 1 | 1 | ||||
Gander Mountain | ||||||
Segments Information | ||||||
Number of locations related to outdoor products and services | 28 | 28 | ||||
TheHouse.com | ||||||
Segments Information | ||||||
Number of locations related to skiing, snowboarding, bicycling and skateboarding products | 2 | 2 | ||||
W82 | ||||||
Segments Information | ||||||
Number of stores related to skiing, snowboarding, and skateboarding products | 2 | 2 | ||||
Uncle Dan's | ||||||
Segments Information | ||||||
Number of locations related to outdoor products and services | 5 | 5 | ||||
Overton's | ||||||
Segments Information | ||||||
Number of stores closed | 1 | |||||
Erehwon | ||||||
Segments Information | ||||||
Number of locations related to outdoor gear and apparel | 4 | |||||
CWH | CWGS, LLC | ||||||
Segments Information | ||||||
Ownership interest | 41.70% | 22.60% | 41.70% | 41.50% |
Revenue - ASC 606 - Cumulative
Revenue - ASC 606 - Cumulative effect and consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Inventories, net | $ 1,574,059 | $ 1,413,281 | $ 1,415,915 |
Prepaid expenses and other assets | 34,668 | 39,783 | 32,721 |
Deferred tax assets, net | 154,553 | 155,108 | 155,551 |
Liabilities | |||
Accrued liabilities | 134,437 | 102,950 | 101,929 |
Deferred revenues and gains, current | 73,440 | 78,336 | 77,669 |
Deferred revenues and gains, non-current | 65,530 | 62,572 | 64,061 |
Stockholders' equity: | |||
Retained earnings | 5,025 | 7,502 | 6,192 |
Non-controlling interests | 32,468 | 36,808 | $ 34,332 |
Balances Without Adoption of ASC 606 | |||
Assets | |||
Inventories, net | 1,576,699 | ||
Prepaid expenses and other assets | 27,322 | ||
Deferred tax assets, net | 154,996 | ||
Liabilities | |||
Accrued liabilities | 133,311 | ||
Deferred revenues and gains, current | 72,765 | ||
Deferred revenues and gains, non-current | 67,090 | ||
Stockholders' equity: | |||
Retained earnings | 3,633 | ||
Non-controlling interests | 29,838 | ||
Adjustment/Effect due to ASU 2014-09 | |||
Assets | |||
Inventories, net | (2,640) | (2,634) | |
Prepaid expenses and other assets | 7,346 | 7,062 | |
Deferred tax assets, net | (443) | (443) | |
Liabilities | |||
Accrued liabilities | 1,126 | 1,021 | |
Deferred revenues and gains, current | 675 | 667 | |
Deferred revenues and gains, non-current | (1,560) | (1,489) | |
Stockholders' equity: | |||
Retained earnings | 1,392 | 1,310 | |
Non-controlling interests | $ 2,630 | $ 2,476 |
Revenue - ASC 606 - Statement o
Revenue - ASC 606 - Statement of Operation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating and income tax expenses | ||
Selling, general, and administrative | $ 245,114 | $ 175,490 |
Income tax expense | 7,219 | 5,592 |
Net income | ||
Net income | 17,276 | 49,623 |
Less: net income attributable to non-controlling interests | (14,095) | (42,101) |
Net income attributable to Camping World Holdings, Inc. | 3,181 | 7,522 |
Class A common stock | ||
Net income | ||
Net income | 17,276 | 49,623 |
Less: net income attributable to non-controlling interests | $ (14,095) | $ (42,101) |
Basic | $ 0.09 | $ 0.40 |
Consumer services and plans | ||
Impact of the adoption of ASC 606 on the consolidated statement of operations | ||
Revenue | $ 53,808 | |
Costs applicable to revenue | 22,725 | |
Balances Without Adoption of ASC 606 | ||
Operating and income tax expenses | ||
Selling, general, and administrative | 245,405 | |
Income tax expense | 7,191 | |
Net income | ||
Net income | 17,040 | |
Less: net income attributable to non-controlling interests | (13,941) | |
Net income attributable to Camping World Holdings, Inc. | $ 3,099 | |
Balances Without Adoption of ASC 606 | Class A common stock | ||
Net income | ||
Basic | $ 0.08 | |
Balances Without Adoption of ASC 606 | Consumer services and plans | ||
Impact of the adoption of ASC 606 on the consolidated statement of operations | ||
Revenue | $ 53,822 | |
Costs applicable to revenue | 22,712 | |
Adjustment/Effect due to ASU 2014-09 | ||
Operating and income tax expenses | ||
Selling, general, and administrative | (291) | |
Income tax expense | 28 | |
Net income | ||
Net income | 236 | |
Less: net income attributable to non-controlling interests | (154) | |
Net income attributable to Camping World Holdings, Inc. | 82 | |
Adjustment/Effect due to ASU 2014-09 | Consumer services and plans | ||
Impact of the adoption of ASC 606 on the consolidated statement of operations | ||
Revenue | (14) | |
Costs applicable to revenue | $ 13 |
Revenue - Revenue Recognition (
Revenue - Revenue Recognition (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue | |
Lifetime membership period | 18 years |
Promotional expenses, expected future benefit based on historical actual response rates | 3 months |
Deferred Revenues | |
Revenues recognized that were included in the deferred revenue balance | $ 27.9 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Performance obligation | |
Total | $ 55,970 |
Unsatisfied performance obligation, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Performance obligation | |
Total | $ 34,477 |
Unsatisfied performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Performance obligation | |
Total | $ 15,507 |
Unsatisfied performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Performance obligation | |
Total | $ 7,168 |
Unsatisfied performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Performance obligation | |
Total | $ 3,880 |
Unsatisfied performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Performance obligation | |
Total | $ 6,518 |
Unsatisfied performance obligation, period |
Revenue - Practical Expedients
Revenue - Practical Expedients and Exemptions (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Period of time between payment and transfer of the promised goods or services, amount of consideration for the effects of a significant financing component if the Company expects, at contract inception. | true |
Amortization period of those otherwise capitalized sales commissions when incurred | true |
Unsatisfied performance obligations for revenue streams with an original expected length | true |
Inventories, Net and Floor Pl44
Inventories, Net and Floor Plan Payable - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventories | |||
Inventories | $ 1,574,059 | $ 1,413,281 | $ 1,415,915 |
New RV vehicles | |||
Inventories | |||
Inventories | 1,132,962 | 1,113,178 | |
Used RV vehicles | |||
Inventories | |||
Inventories | 98,213 | 106,210 | |
Parts, accessories and miscellaneous | |||
Inventories | |||
Inventories | $ 342,884 | $ 196,527 |
Inventories, Net and Floor Pl45
Inventories, Net and Floor Plan Payable - Floor Plan Payable (Details) $ in Thousands | Jul. 01, 2016USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 12, 2017USD ($) | Jun. 30, 2016USD ($) |
Floor Plan Facility | |||||
Floor Plan Payable | |||||
Maximum borrowing capacity | $ 1,415,000 | $ 1,415,000 | $ 1,415,000 | ||
Quarterly reduction in maximum borrowing capacity | 1,750 | ||||
Letters of credit | Floor Plan Facility | |||||
Floor Plan Payable | |||||
Maximum borrowing capacity | 15,000 | ||||
Line of Credit | Floor Plan Facility | |||||
Floor Plan Payable | |||||
Maximum borrowing capacity | $ 35,000 | $ 35,000 | $ 35,000 | ||
Line of Credit | Notes Payable to Banks | Floor Plan Facility | |||||
Floor Plan Payable | |||||
Maximum borrowing capacity | $ 1,180,000 | $ 880,000 | |||
Line of Credit | Notes Payable to Banks | Floor Plan Facility, floor plan notes | London Interbank Offered Rate (LIBOR) | |||||
Floor Plan Payable | |||||
Variable rate spread (as a percent) | 2.50% | 2.15% | |||
Variable rate basis (as a percent) | 1.66 | 1.36 | |||
Line of Credit | 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% | ||||
Line of Credit | 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% | ||||
Line of Credit | Notes Payable to Banks | Floor Plan Facility, floor plan notes | Base Rate | Minimum | |||||
Floor Plan Payable | |||||
Variable rate spread (as a percent) | 0.55% | ||||
Line of Credit | Notes Payable to Banks | Floor Plan Facility, floor plan notes | Base Rate | Maximum | |||||
Floor Plan Payable | |||||
Variable rate spread (as a percent) | 1.00% |
Inventories, Net and Floor Pl46
Inventories, Net and Floor Plan Payable - Floor Plan Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 12, 2017 | |
Floor Plan Payable | |||
Less: borrowings | $ (24,403) | ||
Floor Plan Facility | |||
Floor Plan Payable | |||
Total commitment | 1,415,000 | $ 1,415,000 | $ 1,415,000 |
Less: borrowings, net | (939,759) | (974,043) | |
Less: flooring line aggregate interest reduction account | (162,720) | (106,055) | |
Additional borrowing capacity | 312,521 | 334,902 | |
Less: accounts payable for sold inventory | (64,633) | (31,311) | |
Less: purchase commitments | (30,346) | (77,144) | |
Unencumbered borrowing capacity | 217,542 | 226,447 | |
Line of Credit | Floor Plan Facility | |||
Floor Plan Payable | |||
Total commitment | 35,000 | 35,000 | $ 35,000 |
Less: borrowings | (24,403) | ||
Additional borrowing capacity | 10,597 | 35,000 | |
Letters of credit | Floor Plan Facility | |||
Floor Plan Payable | |||
Total commitment | 15,000 | 15,000 | |
Less: outstanding letters of credit | (9,369) | (9,369) | |
Additional borrowing capacity | $ 5,631 | $ 5,631 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets - Change in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill | |
Balance | $ 348,387 |
Acquisitions | 5,571 |
Balance | 353,958 |
Consumer services and plans | |
Goodwill | |
Balance | 49,944 |
Balance | 49,944 |
Retail | |
Goodwill | |
Balance | 298,443 |
Acquisitions | 5,571 |
Balance | $ 304,014 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets - Finite-lived Intangible Assets and Related Accumulated Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets | ||
Cost or Fair Value | $ 47,465 | $ 47,349 |
Accumulated Amortization | (9,758) | (8,642) |
Net | 37,707 | 38,707 |
Trademarks and trade names | ||
Intangible Assets | ||
Cost or Fair Value | 14,303 | 14,187 |
Accumulated Amortization | (549) | (312) |
Net | $ 13,754 | 13,875 |
Useful lives (in years) | 15 years | |
Membership and customer lists | ||
Intangible Assets | ||
Cost or Fair Value | $ 28,988 | 28,988 |
Accumulated Amortization | (8,969) | (8,194) |
Net | 20,019 | 20,794 |
Websites | ||
Intangible Assets | ||
Cost or Fair Value | 4,174 | 4,174 |
Accumulated Amortization | (240) | (136) |
Net | $ 3,934 | $ 4,038 |
Useful lives (in years) | 10 years | |
Weighted Average | Membership and customer lists | ||
Intangible Assets | ||
Useful lives (in years) | 5 years |
Long-Term Debt - Tabular Disclo
Long-Term Debt - Tabular Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Long-Term Debt | ||
Term Loan Facility | $ 1,165,488 | $ 916,902 |
Less: current portion | (11,991) | (9,465) |
Long-term debt, net of current maturities | 1,153,497 | 907,437 |
Unamortized discount | 6,200 | 6,000 |
Finance costs | $ 15,400 | $ 14,200 |
Long-Term Debt - Borrowings (De
Long-Term Debt - Borrowings (Details) - Secured Debt - USD ($) $ in Millions | Mar. 28, 2018 | Oct. 06, 2017 | Mar. 17, 2017 | Nov. 08, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
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 | $ 1,190 | $ 939.5 | $ 645 | ||||
Term | 7 years | ||||||
Maximum borrowing capacity, increase in capacity | $ 250 | 205 | |||||
Mandatory amortization of new credit facility (as a percent) | 1.01% | ||||||
Principal payment frequency | quarterly | ||||||
Quarterly amortization payment | $ 3 | $ 2.4 | |||||
Revolving Credit Facility | |||||||
Long-Term Debt | |||||||
Quarterly amortization payment | $ 3 | $ 2.4 | $ 1.9 | ||||
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 - USD ($) $ in Millions | Apr. 06, 2018 | Mar. 28, 2018 | Mar. 27, 2018 | Oct. 06, 2017 | Nov. 08, 2016 | Sep. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Line of Credit | ||||||||
Long-Term Debt | ||||||||
Reduction in variable rate spread (as a percent) | 25.00% | |||||||
Line of Credit | Interest on Debt Instrument, Option One | ||||||||
Long-Term Debt | ||||||||
Variable rate basis floor (as a percent) | 1.75% | 2.00% | ||||||
Variable rate spread (as a percent) | 2.00% | 2.75% | ||||||
Line of Credit | Interest on Debt Instrument, Option Two | London Interbank Offered Rate (LIBOR) | ||||||||
Long-Term Debt | ||||||||
Variable rate spread (as a percent) | 2.75% | 3.00% | 3.00% | 3.75% | ||||
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% | |||||||
Excess cash flow offer | $ 0 | |||||||
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) | 2.75% | |||||||
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) | 1.75% | |||||||
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 | Mar. 31, 2018 | Dec. 31, 2017 | Nov. 08, 2016 |
Long-Term Debt | |||
Amount outstanding | $ 1,165,488 | $ 916,902 | |
Secured Debt | Line of Credit | Existing Senior Secured Credit Facility, Term Loan Facility | |||
Long-Term Debt | |||
Average interest rate (as a percent) | 4.50% | ||
Amount outstanding | $ 1,187,100 | 937,100 | |
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 | 32,200 | 31,800 | |
Amount outstanding | 0 | 0 | |
Secured Debt | Letters of credit | Senior Secured Credit Facility, Letters of Credit | |||
Long-Term Debt | |||
Available borrowings | $ 2,800 | $ 3,200 |
Right to Use Assets and Liabi53
Right to Use Assets and Liabilities - Right to Use Assets (Details) - Right To Use Assets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Right to Use Assets | ||
Right to use assets | $ 10,673 | $ 10,673 |
Accumulated depreciation | (991) | (926) |
Total | $ 9,682 | $ 9,747 |
Right to Use Assets and Liabi54
Right to Use Assets and Liabilities - Future Changes in the Right to Use Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)lease | |
Right to Use Liabilities | |
Scheduled derecognition of right to use liability due to reductions in the lease deposit to less than two months rent | $ 5,000 |
Number of month's rent the lease deposit is less than | lease | 2 |
Right to Use Liabilities | |
Right to Use Liabilities | |
2,018 | $ 365 |
2,019 | 486 |
2,020 | 486 |
2,021 | 487 |
2,022 | 487 |
Thereafter | 13,326 |
Total minimum lease payments | 15,637 |
Amounts representing interest | (5,482) |
Present value of net minimum right to use liability payments | $ 10,155 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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 | 1,165,488 | 916,902 |
Level 2 | Fair Value | ||
Fair Value Measurements | ||
Term Loan Facility | $ 1,197,988 | $ 953,269 |
Cash Flows (Details)
Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash paid during the period for: | ||
Interest | $ 20,333 | $ 15,810 |
Income taxes | (830) | (38) |
Non-cash investing activities: | ||
Vehicles transferred to property and equipment from inventory | 618 | $ 1,227 |
Landlord paid tenant improvements on behalf of the Company | $ 16,461 |
Acquisitions - Assets (Liabilit
Acquisitions - Assets (Liabilities) Acquired (Assumed) at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Assets (liabilities) acquired (assumed) at fair value: | |||
Goodwill | $ 353,958 | $ 348,387 | |
Cash paid for acquisition, net of cash acquired | 12,484 | $ 75,448 | |
Assets Or Stock Of Multiple Dealership Locations Acquired | |||
Assets (liabilities) acquired (assumed) at fair value: | |||
Inventory | 6,609 | 29,625 | |
Property and equipment | 281 | 467 | |
Other assets | 55 | 3 | |
Accrued liabilities | (148) | (479) | |
Total tangible net assets acquired | 6,797 | 29,616 | |
Intangible assets acquired | 116 | ||
Goodwill | 5,571 | 45,832 | |
Purchase price | 12,484 | 75,448 | |
Inventory purchases financed via floor plan | (4,222) | (16,805) | |
Cash payment net of floor plan financing | 8,262 | $ 58,643 | |
Assets Or Stock Of Multiple Dealership Locations Acquired | Membership and customer lists | |||
Assets (liabilities) acquired (assumed) at fair value: | |||
Intangible assets acquired | $ 116 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - Assets Or Stock Of Multiple Dealership Locations Acquired - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Acquisitions | ||
Goodwill for tax purposes | $ 5,571 | $ 45,832 |
Revenue | 900 | 11,500 |
Pre-tax income (loss) | $ 200 | $ 500 |
Exit Activities (Details)
Exit Activities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Exit activities | ||
Liability outstanding | $ 2.4 | $ 2.8 |
Other current liabilities | Facility closure | ||
Exit activities | ||
Current portion of the liability | $ 0.3 |
Income Taxes - Federal Tax purp
Income Taxes - Federal Tax purpose (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Oct. 06, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
U.S. Federal income tax rate (as a percent) | 21.00% | 35.00% | 35.00% | ||
Deferred tax expense | $ 118,400 | ||||
Effective tax rate | 29.50% | 10.10% | |||
Uncertain tax positions | $ 0 | $ 0 | 0 | ||
Interest or penalties relating to income taxes | 0 | 0 | |||
Current portion of liabilities under tax receivable agreement | $ 8,093 | $ 8,093 | $ 8,093 | ||
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% | ||||
CWGS, LLC | Tax receivable agreement | |||||
Units issued in exchange | 173,286 | 10,000 | |||
CWH | CWGS, LLC | |||||
Ownership interest | 41.70% | 22.60% | 41.70% | 41.50% | |
Units held | 36,930,269 | 36,930,269 | 36,749,072 | ||
Crestview Partners II GP LP | Tax receivable agreement | |||||
Liability under tax receivable agreement | $ 139,500 | $ 139,500 | $ 137,700 | ||
Current portion of liabilities under tax receivable agreement | $ 8,100 | $ 8,100 | $ 8,100 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stephen Adams | ||
Related party transactions | ||
Payments to related party for purchasing advertising services | $ 100,000 | $ 0 |
Kaplan, Strangis and Kaplan PA | ||
Related party transactions | ||
Related party expense | 100,000 | 0 |
Related Party Agreement | Precise Graphix | ||
Related party transactions | ||
Related party expense | 1,600,000 | 300,000 |
FreedomRoads | Lease Agreement | Managers and Officers | ||
Related party transactions | ||
Related party expense | $ 400,000 | 400,000 |
FreedomRoads | Lease Agreement | Mr. Lemonis | Original Lease | ||
Related party transactions | ||
Term of lease | 132 months | |
Base rent | $ 29,000 | |
Lease payments | 178,000 | 176,000 |
Common area maintenance payments | $ 79,000 | 79,000 |
FreedomRoads | Lease Agreement | Mr. Lemonis | Expansion Lease | ||
Related party transactions | ||
Term of lease | 132 months | |
Base rent | $ 2,500 | |
Lease payments | $ 8,000 | 8,000 |
Mr. Lemonis | Precise Graphix | ||
Related party transactions | ||
Economic interest (as a percent) | 33.00% | |
Mr. Lemonis | JD Custom | Mr. Lemonis | ||
Related party transactions | ||
Related party expense | $ 100,000 | $ 0 |
Economic interest (as a percent) | 52.00% | |
Stephen Adams | Adams Radio | Stephen Adams | ||
Related party transactions | ||
Indirect interest | 90.00% |
Stockholder's Equity - (Details
Stockholder's Equity - (Details) | Mar. 31, 2018shares | Nov. 01, 2017USD ($)shares | Oct. 30, 2017USD ($)$ / sharesshares | Jun. 09, 2017USD ($)shares | Jun. 05, 2017shares | May 31, 2017USD ($)$ / sharesshares | Oct. 06, 2016classshares | May 31, 2017$ / sharesshares | Mar. 31, 2018shares | Dec. 31, 2017shares |
Common Stock | ||||||||||
Number of classes of common stock | class | 3 | |||||||||
Proceeds from issuance of common stock | $ | $ 16,000,000 | |||||||||
Over allotment | October 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Shares issued by selling stockholders | 1,005,000 | |||||||||
Class A common stock | ||||||||||
Common Stock | ||||||||||
Common stock, outstanding | 36,930,269 | 36,930,269 | 36,749,072 | |||||||
Number of shares issued | 4,000,000 | |||||||||
Offering price (in dollars per share) | $ / shares | $ 27.75 | $ 27.75 | ||||||||
Proceeds from issuance of common stock | $ | $ 106,600,000 | |||||||||
Class A common stock | May 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Offering price (in dollars per share) | $ / shares | $ 27.75 | $ 27.75 | ||||||||
Shares issued by selling stockholders | 825,000 | 5,500,000 | 5,500,000 | |||||||
Class A common stock | CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 4,715,529 | |||||||||
Shares of common stock redeemed for shares of common stock | 648,462 | 4,323,083 | 4,323,083 | |||||||
Class A common stock | CVRV Acquisition II LLC | ||||||||||
Common Stock | ||||||||||
Shares sold that were previously held | 184,669 | 1,283,756 | 176,538 | 1,176,917 | ||||||
Class A common stock | October 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Number of shares issued | 6,700,000 | |||||||||
Offering price (in dollars per share) | $ / shares | $ 40.50 | |||||||||
Shares issued by selling stockholders | 963,799 | |||||||||
Class A common stock | Crestview Advisors LLC | ||||||||||
Common Stock | ||||||||||
Shares sold that were previously held | 104 | 715 | ||||||||
Class A common stock | CWGS Holding, LLC and CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 678,331 | |||||||||
Shares of common stock redeemed for shares of common stock | 678,331 | |||||||||
Class A common stock | Over allotment | ||||||||||
Common Stock | ||||||||||
Number of shares issued | 600,000 | 600,000 | ||||||||
Class A common stock | Over allotment | May 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Shares issued by selling stockholders | 825,000 | |||||||||
Class A common stock | Over allotment | October 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Shares issued by selling stockholders | 963,799 | |||||||||
Class B common stock | ||||||||||
Common Stock | ||||||||||
Common stock, outstanding | 50,706,629 | 50,706,629 | 50,836,629 | |||||||
Consideration for redemption of shares | $ | $ 0 | |||||||||
Class B common stock | May 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Consideration for redemption of shares | $ | $ 0 | $ 0 | ||||||||
Class B common stock | CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Number of common stock cancelled | 678,331 | 648,462 | 4,323,083 | 4,323,083 | ||||||
Class B common stock | October 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Consideration for redemption of shares | $ | $ 0 | |||||||||
Class B common stock | CWGS Holding LLC | ||||||||||
Common Stock | ||||||||||
Number of common stock cancelled | 100,695 | 700,000 | ||||||||
Class C common stock | ||||||||||
Common Stock | ||||||||||
Common stock, outstanding | 1 | 1 | 1 | |||||||
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, LLC | ||||||||||
Common Stock | ||||||||||
Purchase of newly-issued common units | 600,000 | 4,000,000 | 4,000,000 | |||||||
CWGS, LLC | Class A common stock | CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 4,323,083 | |||||||||
Shares of common stock redeemed for shares of common stock | 4,715,529 | |||||||||
CWGS, LLC | Class A common stock | October 2017 Selling Stockholders | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 700,000 | |||||||||
CWGS, LLC | Class A common stock | CWGS Holding, LLC and CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 100,695 | 700,000 | ||||||||
Shares of common stock redeemed for shares of common stock | 100,695 | |||||||||
CWGS, LLC | Class B common stock | CVRV Acquisition LLC | ||||||||||
Common Stock | ||||||||||
Redemption of common stock by selling shareholders | 648,462 | |||||||||
CWGS, LLC | CWH BR Merger | ||||||||||
Common Stock | ||||||||||
Common stock, outstanding | 7,063,716 | |||||||||
CWH | CWGS, LLC | ||||||||||
Common Stock | ||||||||||
Units held | 36,930,269 | 36,930,269 | 36,749,072 | |||||||
Ownership interest | 41.70% | 22.60% | 41.70% | 41.50% | ||||||
Merged Entity | CWGS, LLC | ||||||||||
Common Stock | ||||||||||
Units held | 7,063,716 | |||||||||
Continuing Equity Owners | CWGS, LLC | ||||||||||
Common Stock | ||||||||||
Units held | 51,717,209 | 51,717,209 | 51,890,495 | |||||||
Percentage of ownership | 58.30% | 77.40% | 58.30% | 58.50% |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Oct. 06, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Summarizes the effects of change in ownership: | |||||
Net income attributable to Camping World Holdings, Inc. | $ 3,181 | $ 7,522 | |||
Transfers to non-controlling interests: | |||||
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests | 4,951 | 7,672 | |||
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 with proceeds from the exercise of stock options | (77) | ||||
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC | $ 1,847 | $ 150 | |||
CWGS, LLC | |||||
Non-Controlling Interests | |||||
LLC outstanding | 88,647,478 | 88,647,478 | 88,639,567 | ||
CWH | CWGS, LLC | |||||
Non-Controlling Interests | |||||
Units held | 36,930,269 | 36,930,269 | 36,749,072 | ||
Ownership interest | 41.70% | 22.60% | 41.70% | 41.50% | |
Continuing Equity Owners | CWGS, LLC | |||||
Non-Controlling Interests | |||||
Units held | 51,717,209 | 51,717,209 | 51,890,495 | ||
Percentage of ownership | 58.30% | 77.40% | 58.30% | 58.50% |
Equity-based Compensation Pla64
Equity-based Compensation Plans - Summary of Equity-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity-based compensation expense: | ||
Equity based compensation expense | $ 3,218 | $ 719 |
Costs applicable to revenue | ||
Equity-based compensation expense: | ||
Equity based compensation expense | 175 | 92 |
Selling, general, and administrative | ||
Equity-based compensation expense: | ||
Equity based compensation expense | $ 3,043 | $ 627 |
Equity-based Compensation Pla65
Equity-based Compensation Plans - Stock Options (Details) - Stock options shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Stock Options | |
Outstanding at December 31, 2017 (in shares) | 953 |
Exercised (in shares) | (6) |
Forfeited (in shares) | (14) |
Outstanding at March 31, 2018 (in shares) | 933 |
Options exercisable at March 31, 2018 (in shares) | 179 |
Equity-based Compensation Pla66
Equity-based Compensation Plans - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Restricted Stock Units | |
Outstanding at December 31, 2017 (in shares) | 1,247 |
Vested (in shares) | 2 |
Forfeited (in shares) | (3) |
Outstanding at March 31, 2018 (in shares) | 1,242 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net income | $ 17,276 | $ 49,623 |
Less: net income attributable to non-controlling interests | (14,095) | (42,101) |
Class A common stock | ||
Numerator: | ||
Net income | 17,276 | 49,623 |
Less: net income attributable to non-controlling interests | (14,095) | (42,101) |
Net income attributable to Camping World Holdings, Inc. - basic | 3,181 | 7,522 |
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 | 4,352 | 23,963 |
Net income attributable to Camping World Holdings, Inc. - diluted | $ 7,533 | $ 31,485 |
Denominator: | ||
Weighted-average shares of Class A common stock outstanding - basic | 36,816 | 18,946 |
Dilutive common units of CWGS, LLC that are convertible into Class A common stock | 51,830 | 64,826 |
Weighted-average shares of Class A common stock outstanding - diluted | 88,646 | 83,772 |
Earnings per share of Class A common stock - basic | $ 0.09 | $ 0.40 |
Earnings per share of Class A common stock - diluted | $ 0.08 | $ 0.38 |
Class A common stock | Stock Option | ||
Antidilutive securities excluded from the computation of diluted earnings per share | 900 | 1,100 |
Class A common stock | Restricted Stock Units (RSUs) | ||
Antidilutive securities excluded from the computation of diluted earnings per share | 1,200 | 100 |
Segments Information - General
Segments Information - General Information (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segments Information | |
Number of reportable segments | 2 |
Segments Information - Revenue
Segments Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segments Information | ||
Revenue | $ 1,061,566 | $ 881,635 |
Consumer services and plans | ||
Segments Information | ||
Revenue | 53,808 | 50,246 |
Retail | ||
Segments Information | ||
Revenue | $ 1,007,758 | $ 831,389 |
Segments Information - Segment
Segments Information - Segment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segments Information | ||
Total segment income | $ 49,753 | $ 69,904 |
Selling, general, and administrative expense | (245,114) | (175,490) |
Depreciation and amortization | (9,400) | (6,853) |
Other interest expense, net | (12,839) | (9,404) |
Tax Receivable Agreement liability adjustment | 17 | |
Loss and expense on debt restructure | (2,100) | |
Income before income taxes | 24,495 | 55,215 |
Operating Segments | ||
Segments Information | ||
Total segment income | 50,131 | 72,396 |
Other interest expense, net | (1,818) | (1,594) |
Corporate, Non-Segment | ||
Segments Information | ||
Selling, general, and administrative expense | (1,297) | (941) |
Other interest expense, net | (11,021) | (7,810) |
Consumer services and plans | Operating Segments | ||
Segments Information | ||
Total segment income | 28,124 | 26,253 |
Depreciation and amortization | (772) | (996) |
Other interest expense, net | 1 | (2) |
Retail | Operating Segments | ||
Segments Information | ||
Total segment income | 22,007 | 46,143 |
Depreciation and amortization | (8,628) | (5,857) |
Other interest expense, net | $ (1,819) | $ (1,592) |
Segments Information - Deprecia
Segments Information - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segments Information | ||
Depreciation and amortization | $ 9,400 | $ 6,853 |
Consumer services and plans | Operating Segments | ||
Segments Information | ||
Depreciation and amortization | 772 | 996 |
Retail | Operating Segments | ||
Segments Information | ||
Depreciation and amortization | $ 8,628 | $ 5,857 |
Segments Information - Other In
Segments Information - Other Interest Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segments Information | ||
Other interest expense, net | $ 12,839 | $ 9,404 |
Operating Segments | ||
Segments Information | ||
Other interest expense, net | 1,818 | 1,594 |
Corporate, Non-Segment | ||
Segments Information | ||
Other interest expense, net | 11,021 | 7,810 |
Consumer services and plans | Operating Segments | ||
Segments Information | ||
Other interest expense, net | (1) | 2 |
Retail | Operating Segments | ||
Segments Information | ||
Other interest expense, net | $ 1,819 | $ 1,592 |
Segments Information - Assets (
Segments Information - Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Segments Information | ||
Assets | $ 2,974,514 | $ 2,561,477 |
Operating Segments | ||
Segments Information | ||
Assets | 2,533,101 | 2,258,830 |
Corporate, Non-Segment | ||
Segments Information | ||
Assets | 441,413 | 302,647 |
Consumer services and plans | Operating Segments | ||
Segments Information | ||
Assets | 131,892 | 180,295 |
Retail | Operating Segments | ||
Segments Information | ||
Assets | $ 2,401,209 | $ 2,078,535 |