CWH - Earnings call transcript Q4 2018 | Camping World Holdings, Inc.

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Operator

Good afternoon and welcome to Camping World Holdings Conference Call to discuss financial results for the Fourth Quarter and Fiscal Year 2018. [Operator Instructions] Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the company. Participating in today’s call is Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Mel Flanigan, Chief Financial Officer; and Tom Wolfe, President of Good Sam Enterprises. I will turn the call over to Mr. Moody to get us started.

Brent Moody

afternoon, good and you everyone. Thank release covering A on fiscal a the fourth in press and company’s website. company’s XXXX press copy Investor financial section that and release year afternoon results quarter this found the was Relations be can of the issued Management’s remarks forward-looking may call statements of meaning the on of Securities Private XXXX. this the Litigation contain within Reform Act our and customer regarding expenses, opportunities, include and and acquisitions remarks statements our and business diversification plans, openings, growth may financial anticipated market of and industry increases in abilities base customer increase borrowings, location share, trends, These goals, performance. in retail our related and the differ and as from various including file of reports Risk results indicated by in in on SEC. factors, materially our Form Factors a may other with section XX-K result these statements the important Actual discussed those those as our no represent statements obligation forward-looking update views them. to undertake Any today only and we of financial Please investors also today’s we our we referring as will maybe call diluted, be note performance. certain operating that assess EBITDA to adjusted important share earnings measures believe such which per on to adjusted and non-GAAP to on included to our of measures non-GAAP financial directly earnings are website. Reconciliations comparable these release GAAP most the measures financial and our in fourth comparisons quarter against the otherwise year and unless quarter XXXX fiscal our All of results XXXX noted. fourth fiscal and are made year results over call Marcus. to turn the I will now

Marcus Lemonis

company, Camping XX% up XXXX, year. afternoon We revenue, from and In everyone. in appreciate World. good previous and our company time the Thanks or billion generated your the million $XXX in $X.X interest

sales year. second of moderate in RVs very XX,XXX quarter vehicles began the years to XXXX. several also of of salesforce XXX,XXX RV sold RVs RV to last new Our strong growth, our in After compared

every end of While this of in used year, the RVs last accelerated year. up were through quarter sales trend the

lowering reacted demand for quarters, and softened inventory by new throughout RVs second RV new we the third As levels.

to material inventory the excess the levels fourth a the made to XXXX. for margin margin continued year to inventory quarter, at lead we implement inventory prepared the sales be compression. market reduce opportunistic trends the to better as aggressive in more in purchases the industry softening strategy and As decision of throughout quarter, and expense the In progressed, RV the further soften to

result will ended our strategy, on effects help RV a sales a this in-stock As dealership and on there year more always our be of down we than in with a of XX% a we RV Look, full RV on the same-store basis million inventory, $XXX have basis. of inventory fluctuations. mitigate new the these business to model fluctuations expense the built sale and per variable

transactions and million and and Sam all-time compromised RV Good X.X Club, our up parts That’s the RV company million less from business, members aftermarket experienced X.X service and emphasis of million X.X services. currently historically are used over in market. in our much of products RV have our We outdoor serve RV have XXXX, in and our RV Sam million consumers, than the users XXXX, highs. Consumer primarily we and outdoor X.X up XXXX, RV from collision installed business the of building our base Good X.X both on them Services our Additionally, and active and In put effort generated fluctuations why so and and business thousands Sam across much Plans Club, business, our and our which studios. new over so of and are and Good database million

then various million like ganderoutdoors.com, year calls to campingworld.com, over X.X received and e-commerce your various ganderrv.com, through Flanigan visitor last generated the center and Mel and platforms websites over others. and a XXX,XXX strategic more variety our million call take the our our and back for our and I initiatives media you contacts. will to I take priorities come am going let Additionally, XXX thehouse.com to questions. you social XXXX of e-mails responded And detail approximately sessions numbers, overton.com, goodsam.com, with through around

and as be we’re and have accounting of of was asset January. as part and most more leadership the XX you than appointed He to of to to unbelievable our company has realignment in proven CFO our of background more our pleased of management him brings team, position CFO He know, XX As public already years. very executive an years to group. Mel early finance a than experience part

Mel Flanigan

and Marcus Thanks, afternoon everybody. good

to XX-day XXb-XX required the our that because seriously, our Let which within resulted filing resolve. me not and year numbers window. during numbers clear want that issue are The primarily immaterial in end, in the XXb-XX. prior the the late on start right. identified XX-K. filing work to disclosed we process could by the acknowledging adjustments process I error of was additional take all laser-focused assess normal an this be found and from completed company our we crystal the and that work call be our In Form extremely review end Unfortunately, be the year were of timing getting of booked, the some will simply the that responsibilities

and will total evaluate Simply and the address Consolidated as $X.X process those year the XX.X% gross The evaluation a XX% to million, year, in $X.X With We down in for and we and resource mix. accounting product documentation billion As over profit a policies controls financial re-mediated last revenue, a valuation internal better trading from toward open largely support existed the at of related with our identified was of gross over The communication attributable is at compression deferred up press reduction from change disclose inventory adjusted negatively very we EBITDA of related performance tax XXb-XX to respect identified the internal of new up to our means RV be if billion tax XXXX. high to the we among our financial overall continue remediation. our last in sufficiency and the that of and weakness ago. consolidated liabilities a Pricing to XX.X% functions with possible. compression in billion things balances resources other additional store expeditiously process and $XXX filing locations, in of company. we issue December a of release add to all-time gross certain the material plan corporate in income along technical the income strong our basis, and XX, in evaluation year was needs, related to margin our We’ve the within XX% our accounting new business. XXXX, stated, specifically On percentage reporting, margin X.X% and profitability. and billion, came last accounting related controls $X.X the units finished as needs to impacted year. in from to dealership the in the diligently and accounting associated the new $X.X compared internal to this a finance reporting business, begun issues last investments have with of working week documentation margin we work controls margin the weaknesses to organization. year. decrease the RVs Consolidated personnel remains component

profit inter-segment RV of segment, $XXX transactions posting Services Plans grew million after of Gross revenues up X.X% from in In of $X.X million Sam year. $XXX $XXX Consumer segment revenues X.X% after last year. was Turning increased to billion $XXX well, to to inter-segment do million revenue. elimination segments, profit dealership XXXX $X XX.X% our up gross revenues, and of or continues transactions dealership elimination of and billion XXXX, million from to in XX.X% RV last Good X.X% XX.X% or and the

RV from of million, primarily inter-segment retail elimination segment to revenue, outdoor Our was Gander XX% up our transactions, contributions and driven by after $XXX openings.

XX%, from outdoor and with revenues, RV $XXX the years last RV in profit come. cohabited store year our XXX retail million stage of million and ending gross the over or outdoor up increased the setting we to growth was XXXX, locations of $XXX or XX.X% footprint total standalone and year. retail a for by During

million at year. positioning and $XX losses and from for year. retail our This in fourth Consolidated margin promotions EBITDA ago. the compared consolidated revenue quarter, $XXX in $XXX million, gross at was a profit from from dealership RV represents million, segment. was For margin the our year in percentage to a basis, from an last XX.X% was fourth high Consolidated to adjusted X.X% down On our $XX improve $XXX year outdoor a XX.X%, last million company. up and up fast-growing RV all-time late by quarter from quarter came inventory the the million, total XX.X% $XXX was ago aggressive gross some more of driven million compression primarily

the billion fourth for $XX about by billion. The of million $XX increase Good up as our dealership million from fourth revenues, goodwill down was RV driven Services and transactions nearly locations increase of more dealership or Gross more increase annual Sam with reserves million and outdoor came a and more $XXX year, retail but write-down goodwill As the fourth wages, in testing. gross and I $XXX inter-segment the Sam end, QX, overhead RV million TRA Marcus retail outdoor retail change were million additional Plans a outdoor fourth up mentioned insurance the RV million at costs increased operating past also operating after and million XX.X% profit in a the million expenses and year. elimination X.X% XXXX down in and areas. positions inventories inter-segment opened quarter. $XX of with year, operations, RV of an a last in basis XX% profit were $XXX in amortization, many the at outdoor was our elimination attributable X.X% segment, quarter, to including up RV and store a the $X hard million down totaled gross retail with depreciation transactions, Services by in in fourth year. revenues market was was profit Other selling the segment $XX million wrote revenues from last Good assumptions. the our $XX these to and took took the than costs million X.X% $XXX current Plans million XX.X% of down Consolidated XX.X% $X.X inter-segment by closings. also year’s down increased quarter, $X.X expense fourth elimination transactions, related expenses uncertainties, of In $XX Dealership million related reserve after RV year. over $XX outdoor associated incremental $XX year. earlier, $XX same-store XX.X% or liability product reserves is a other by quarter, ended RV to retail SG&A and In million quarter this in we XX% on million, of expenses million, in And at from $XXX insurance X.X% the measured compared result income than we $XXX retail in increased revenue, from look discussed, increase million, inventory from $XXX we with year. year’s Consumer and RV of inventory million In locations $XXX million, million $XX primarily in various and revenues to XX.X% $XX in last booked adjustment quarter. after associated last quarter inventory, the pre-opening million. to were last in XXXX. given and per compared $X Consumer last of impacted impairment last

interest $X.XX year average the and EBITDA and combined increased Adjusted and in plan share a ended XX, other and adjusted year. were was $XXX million per $XX borrowings. up Net was XXXX to earnings rates $XX XXXX. the share, December floor due higher was earnings Additionally, per income expense, $X.XX both million was borrowing million for for

overall real senior the payable of $X.X to floor new XX, RV was on revolving $X.X December from loans of estate million million equivalents opening we secured outdoor working floor of year At plan to the XX% per of or floor of cash of facility. $XXX due ago. notes credit, under borrowings our million million up cash Total dealership plan was $XX a a facility, of the locations in year under ended term with and balance the outstanding outstanding decline offset from XX, by billion and facility, and The had $XXX and an Turning inventories part retail XXXX. of decrease sheet, net basis billion, plan partially under million. X.X% and the vehicle in December under $XXX $XXX capital XX.X% million increase RV XXXX, new we credit a $XX inventory our line facility’s

also by faced and that has we ahead, XXXX, late naturally our the first accelerating softness have into of over some Looking spilled challenges the industry quarter. in

expectations need year. and think XXXX, for we especially want our the impacting the factor uncertainties to be So in as about our in we cautious early to this markets,

initial $X.X range to and total $XXX of in Our of revenues the billion million. million outlook XXXX for in for $XXX range $X.X adjusted is to EBITDA the billion

to me a into more call Looking to note coming QX, which after the With typical seasonal expect particularly Marcus. we’d at is out seasonality, tough we comp over bleed QX the expect quarterly kick trends that, back we and let see to uncertainty in. QX turn that XXXX of would

Marcus Lemonis

we have on and are to you glad board. Mel Thanks, all

and network outdoor and and a variety and dealership will widen consumers our wallet and and us ways locations we share increase have the prominent RV assets dealership Gander expanding ways sector. This RV acquisitions, into two of our and continuously also service includes allows networks and engage building in building and one a the in includes developing comprehensive number our product It Our new our that RV outdoor customer marketplace. offerings RV to offerings. of of the are with to to outdoor footprint brand us allow funnel number through expanding across

and last RV more process transact have and expecting that several communication, start more information, into their that shopping We consumers deeper gone online, the in have process, learned recently more digital that ability the over to process. years

and the a within market. trade have buying We choices digital defining clearly seen benefits customers experiences of different given and areas offering

new While network am of dealer our size, and better is a bring in number team us and has in made importance Good ranked brand, the of the to RV renewed Flanigan the was beginning fill Tom organization to of President to around initiatives. Sam renewed changes Enterprises initiatives. XX this desire number Good some Good we existing markets led Camping brand two new the as to customers knowledge and the than clear very to the Sam the using executive, position. became CFO is the products President World’s senior these been Tom Sam a important more of leading the years about digital CFO segment business, services. one find tell our footprints gives Sam company serving our new business Good leadership who online year, create with to Wolfe, who scale the to for let and the continue I realize At of number to our grow organizational you also to of appointment Enterprises and a nation. going streamline Mel and of the and focus Tom’s develop hired

Tom Wolfe

been RV Services and The as The and afternoon everyone. Thank lifestyle. back products XX unique the Plans than you, itself more focused Sam to Consumer and segment developing dates Club years its Plans services and of way came got enhance resources start good on RV Marcus about Good business. has together to Consumer the sharing on core ideas That our heritage group of is fellow who Services share and bringing road. and a assist we and to members people original the ideas together, think still owners always

products and is RV outdoor the membership base. we broaden world the largest The the extend and as leveraging XX% as Camping well and and discounts. our club member-only shipping Our variety offerings to core Good such into XX% other are and Sam and our benefits our to World, online across services free as a Club infrastructure businesses Outdoors of members everyday Overton’s club in competencies membership special up Gander community save to on

we are blogs, publications, recreational outdoor discounts, include content of the Beyond websites around more our all and broadening activities. to

trails, with home variety to access outdoor and hunting trailer regular activities. our our example, Good launches, information and a run features on products features now For parks magazines motor hiking boat life and areas Sam and on directory of

be program. our co-brand financing by that we months, Within the expanding program customer few a our credit complements options private rolling out next existing card label card new will credit

both to and additional benefits and will receive the cards royalty customers offerings, to points addition financing allow In build discounts.

club additional and personalize on around Club the within we continue to our roadside turn center X.X outdoor customers extended our that and will are side, across and patterns comments. these members. auto extending back Sam we And tremendous the spending have And developing reach extend Good and and of closing business offerings broadening opportunity the his Marcus to category, Within X.X our active the buying and a over RV marketing leveraging interest and and to our assistance are our X With the habits of our unique now, offerings the communications IT programs time, while Services the Consumer both call the for million platform, focused X at Plans reach million we analyzing members call on to into the services community. same I infrastructure.

Marcus Lemonis

XX the its more this potential. Over and years, last in long-term have industry more I grown confident growth and

our This XXXX, As for staff time on entire achieving your Thanks is everyone Mel team our concludes forecast those today. prepared outlined our management results. for focused our and remarks.

question-and-answer the session. We are now ready for

Operator

Thank We Stephens. with from ahead. our you. [Operator go Instructions] take first Please will Nelson question Rick

Rick Nelson

saw Marcus, early seeing December the going chats you could quarter, RV sales year difficult see how think afternoon. of suggesting on and XXXX, were the comment of our are you Good and during if Thanks. unfolding? that you I you trends what some quite got the

Marcus Lemonis

half fourth didn’t it really the had the fell a back us really the for of we was October a about odd in bounce started traffic got last by first but rough then the softening surprise, And online out. have we that mild we just softening not and catch Yes. November but bottom I and have December, seen mean, quarter XXXX or because compared what it, a of seen preparing XXXX, foot then generation was quarter to transactions. in lead October,

first so They December and quarter solid And come, ‘XX, of year. March last that the of were we of to big quarter they February of are January good. first the really of ‘XX ‘XX, hopeful were was ‘XX, a half

In fact, it days. it was our call XX best XX,

a small the our have to seen return of stabilization We though degree, a margins. Rick,

We the are And will inventory we October, margin be channel of isn’t some while half we and to it’s December. be were it of be, back our is we with erosion think the and we not seeing it it inventory. de-stocked think sort kind where margin the better that of in November experienced the of XXXX we want so with improve. to that that in de-stocking our that positioned and fact buys aggressively able opportunistic We

Rick Nelson

inventory store is your down a inventory It like XX% cleaned basis, channel on also levels are with the you you sounds getting think comfortable per up?

Marcus Lemonis

to Well, channel. I can’t speak the

quarter particularly perfect the business opportunity that’s year, levels moment any used in this We the a basis new our XX-hour since time, us inventory our trends to comfortable we think for up are inventory or adjust are side, our inventory any stay sales but in where that that, on we monitoring used are looking on not At side, on last a on to previous the based new was at if trends, from decrease to literally we aggressively on after the making sure increase going the orders, inventory pursuing are any side. we softness sales we see morning our mitigate and day the quarter dip real-time. every are have, with

Rick Nelson

Okay.

and the could Outdoors about are update the in quantify loss of on the I performing. they RV how an Finally, if period just you if the and magnitude stores Gander ask could

Marcus Lemonis

we I closed will would opened. monitoring take Mel then but locations X, always we I as said know how and break those. today half half. XX obviously second have have We first the we and are answer we Gander we don’t it only Outdoor the out,

those are locations to We XX to the XX next approximately selling into half RVs. close of all having pretty days

We are the snow literally as melts. opening

retail that no World’s are stores management parts We are consolidated accessories mind Gander in we noticing have so that we Outdoors team adding to RV and and RVs also longer managing RV Camping the keep full assortment. separately. business and The outdoor has are and the been

We have that’s team the that. one management individual doing with

all X weren’t Additionally, down and that dealerships we profitable Camping and that online X of addition and distribution locations consolidate is World that X Gander Gander the in To-date we Ganders, we closed Outdoors World Oracle campingworld.com the consolidated businesses now centers are locations X in to inventory profitable weren’t our of Gander X. and all and retail the closing to and all Outdoors Camping selling RV the the both products.

than assortments looking are really we at are to saying the I and full will with modest well-positioned drive transaction they question. holistically some complementary RV now to have outdoor categories, be but RV of traffic Mel now more different are counts. both So and this the address to drive business throttle with they not other Gander businesses accessories

Mel Flanigan

Yes.

filing be think put of we I and within segment where XX-K we that’s next couple our of days the all information. will will So out the

think I think driver able And the to more will cover we are business over but you it a be And includes I year. we to see you in obviously again, a footprint overhead retail turn, going the XX% the in to safe things increase losses are in I significant the Gander more loss. the big to K. as see of we segment it hope efficiently segment locations, sales, it’s to will everybody was start up overall, year. everybody of and disclosures least is that talking in added was ramp that a Gander understands a which number for that about though significant at that But and understands there the say

Marcus Lemonis

includes now to adjustments significant decision as made – we goodwill correct? loss as may well And a think include and that the the reserve, increase I inventory

Mel Flanigan

course. Yes, of Yes. sure,

Marcus Lemonis

Rick, important, that. to That’s important. that’s note So

Rick Nelson

Gander EBITDA, assume about Yes. in to $XXX And million million the $XXX XXXX? would of that what guidance

Marcus Lemonis

Gander in we a So specifically at not looking vacuum. are

looking segment, and both same our our RV and at been retail both we because outdoor at at not because way. has and segment. RV And looking because are are and and collapsed now are dealership it RVs our have outdoor segments we everything RV products, the retail We looking sell

We specific come location back more will information. you little a do to for you and research looking if are

Rick Nelson

luck. good and Thanks

Operator

our Craig will Kennison from question ahead. Baird. next We go with Please take

Craig Kennison

Hey, good afternoon. for question. Thanks taking my

Just us a follow-up EBITDA you excluded any to Rick’s on is question sort guidance, to on your can adjusted costs help what get else Gander, understand your anything to of from related EBITDA number?

Marcus Lemonis

For XXXX or for XXXX?

Craig Kennison

For XXXX.

Marcus Lemonis

There the in number, the is now open. add-backs no XXXX because stores are

So business. in $XXX add-backs. all that our number, dealership with all range of the It centers, in no expenses, of million the includes to payroll, operating everything million, all of of includes that $XXX the distribution

Craig Kennison

And that drag I include Gander? pre-opening XXXX a costs know in was to related that would

Marcus Lemonis

that no for can pre-opening costs there I XXXX of number. Yes, think are the

Mel Flanigan

Marcus. correct, That’s

Craig Kennison

then your you And SG&A? further to margin give for Okay. feel and are guidance, maybe can your expectations gross XXXX unpack for us a what

Marcus Lemonis

over because guidance. this believe compression at of comfortable that expect with we have the inventory. We at our will inventory don’t we manage XXXX to are that like we time improve liquidation this of are that associated moment, we providing do we if not margins level Yes, the margin our

to contribute high margin for special buys our the prepare spring, retail able both the more margins to and to to business continue in our summer Sam for business and with buys we expect we time and business. our Additionally, one-time and fall are to prepare seasons, builders Good better

Craig Kennison

your are or transactions one would in that then be included any guidance additive? more or acquisitions guidance, And there on

Marcus Lemonis

guidance. There are included no our transactions in

we the at the are stages of country. dealerships standalone acquiring However, process RV different in throughout multiple

As to looking markets like we cash going or company, the b), there in space share are either, said is white feel we as as opportunistic past market available for acquisitions have for have the be in a), where we we long opportunity. a

we heavily are growing so dealership focused on platform. RV still our And

Craig Kennison

you final just in to of about the allocation think related have you. maybe opportunities consolidation that, you as And still front as great. That’s a capital question

historically Is You that’s any trade-off to to there relative at of maybe a where a have acquisitions? a also stock consideration trading been. buyback discount it’s got

Marcus Lemonis

new into draconian bring and principal any So, a would on as approach maintenance there drive taking past one, the no XXXX of in driving initiatives want our And the we that focused three is We number Number level are essentially CapEx very a CapEx are associates. safety do Number customers to retail laser much the our our management for to level. we two focus technology the inventory. is down current to team of enhancements, to investing of obviously why results. back that with shared allow back warehouse ways cash really cash the ensure facilities in then that. resources the we our our maintenance a lot consolidation, Number XXXX two, to the different believe And businesses, in. third that the will along of bring between is our system.

One, space. make company to in And that look for other cash we focus you de-levering As the our think two, in would We debt. that we ways. our definitely on then at business know, want whether as sense put XXXX, reduction like always think about inventory, about reducing of that we flow, it principally using we our cash three flow from in RV to operations will are purely radar from dividends. on Number provided it with when makes sense. excess opportunistic third dealership that acquisitions the fit we or

buybacks will We opportunistic but the moment primarily board the distribution our tax a focus. sees given consideration and this in de-levering are it be appropriate, looking to to for make. And RV company share time, a dealership have then at a if buyback,

Craig Kennison

you great. much. so Well, clear. is That Thank

Operator

question We our take ahead. next Please with Fred will go Wightman Citi. from

Fred Wightman

sort buying selling quarter guys. the inventory. quarter, then progression a It happened. in from promotional, just how Hi sounds internally, Last you terms that But can versus out have you played and of talked more getting then expectations? like both walk aggressive the through your about that of and of

Marcus Lemonis

the making decision included company the our being the operations was fourth me business, Yes. of And facts I specifically time. at managed really RV that the took to how the the restructure to dealership all day-to-day started the We with which I wanted of key in the quarter, favors manages inventory, conscious felt the of do VIN-specific, we on the XXXX. us made type-specific management inventory, certain of in liquidating get promotions, closure the stores, that team with all any to the senior to that and decision going wasn’t inventory manufacturer-specific and

As we cost that, same key to inventory replace provide the and to were some the lower cases. at about manufacturers a with types. working the opportunities to markets our us we were did specific At time, we in very

of And is we with generated we while XXXX, year what significantly lower better ended the fourth with inventory. replaced inventory far think in revenue inventory, of we the so, the in quarter what way we that

off never We the a comes tighter our that focus a day gas. opportunity to more take tighter an a And think of focus. What because progresses, have in way. margins early and those with in our first of the reason I a quarter, an of the is type part is VIN-specific supply our and will managing of foot with the X buy increase the inventory we hopefully, factors. Again, seen calculated stabilization that as year

Fred Wightman

you a But you or perspective has guys for at you’re past, level guide. have XXXX? think a interest in bit. assumptions behind you’ve Can just the explain thoughtful Great. then And rate what going environment to the for I consumer leveled in floor XXXX plan either the from off just mentioned the little baked be your

Marcus Lemonis

think a we lot into our keeping But I like because in did we no XXXX, to we For a factor we hike have a tighter. it. act crystal inventory ball want factored rate in interest don’t

keeping floor on going. not inventory and And expense where reduce speculate the to are we’re trying by our rates tight our so, to looking plan

Fred Wightman

you. Thank Perfect.

Operator

We’ll Tim take question Securities. Wells our ahead. Fargo Please Conder go with next from

Tim Conder

Thank you.

what’s the here. here. a bit Marcus, I in couple a Just little baked on start assumptions will

aboard. Mel, heard if I welcome Mel So, right

to billion $X to $XXX that in EBITDA. $XXX correct? million You million revenue, Was in said adjusted billion $X.X and

Mel Flanigan

Yes, billion. $X.X $X.X billion to

Tim Conder

billion. $X.X Oh,

okay. Okay,

Okay.

up or that, self-cannibalization sales from within ‘XX in but So, better store And acquisitions then to are I bit that’s at state us making focus the the on? you concern here, of maybe and a big think many really been CapEx you off hold on again you just industry is comp it guys with these going basis, minimized, a investors are given to there acquisitions? there ability the maybe honing on focused you gain of be Is consolidating, push share and really and all would least that share what have? are off the acquisitions, a little keeping among

Marcus Lemonis

you but separate to your I think things. issues to you are going am the going I I making good for separate points, thank am So, because questions. are Tim, they

to First on either off, our a maybe is XXXX. that opportunistic didn’t decline they or that that very fire have is present have acquisitions to something see whitespace in a be market a clear opportunity and

we and that XXXX, ask I learned do us when month first even frankly, stores. XXXX in our some in think is of quite what market share, proximity we the people about have of

RV, could don’t of our to so, more Gander customer much transaction we our believe a we capture we be believe. strategy World, we the people stand-alone our at starts to know bifurcating online. part share. differentiate we the that some cannibalization same that know be brands volume, We able in as because that And lead we can between look at And look which as market had and the enough that data is dealership, Camping and as product

directional the market was fact, validated in November. came it don’t that sure think specificity number, towards correct. that that I surveys numbers of it’s December, stats the in the nature. down out down know ever is today audited it the us. but the And that In and validated think I anybody’s stat that, Remember it’s that we was something I’m survey are in directionally, not

and going where we a be industry business and our we the better where and where are, think about is. the of As transaction true manufacturers is results to think we softer, it deliver to standpoint that is from than more and to guide directionally, ‘XX. still it’s find market softer is it it XXXX, a And about ‘XX relative going but is the

the And bifurcation falling. the the the tight Camping do feeling of is World appreciate like we very on so, Gander know and with focusing like necessarily I very, RV comment and brand. focus, we what that have, RV a feel I don’t particularly brand we the we’re sky about have

Tim Conder

your numbers? I you comp expectations to the store for revenue Okay. is industry? have then type what And baked what’s Well, what sales guess, the of in do

Marcus Lemonis

X%. numbers have on in expectation same-store to So, the don’t number predicted industry, X% side sales a we but I of new our negative an the for have

Tim Conder

been was that is on at cost How the company? a or any structure that to see that Gander make? then can changes your And statement variable now lot your okay. said been variable added you has I of time, do the Okay, and you IPO about has roughly on, earlier comments a XX%. How given cost there structure, you think consolidated operations the within now? RV

Marcus Lemonis

a model margins income that I down. the basis the we changes February XXXX. feel line more but saw fruits January in made I revenue made actually variability were feel like how that out up gross ended I XXXX, X softer that bottom was in top months. margins changes last on proved as basis than actually net it I side the than at January days, in I looked And feel about a was thesis of the our much line confident when the softer and to like with related our top on of those was February up line XX than February the or our we January it was in And the the and how I of on the did. of the management expense labor with better.

Tim Conder

end basis. at than store expect a they be would lower how two on basis? to then sales units, look forward to briefly ‘XX, about X your where comp RV you And taking anticipate Okay. thinking may. that inventories if about I year thinking company the we same-store in the X more so Could are year? you’re you If ended down level Do

Marcus Lemonis

more-clear. our that we’ve can think already sort on we’ve accounts is projection will We’ve that. up equivalent, see of a previously we of level mitigate We that convinced in new been be, internally inventory sales our sorry a to I problem’s have inventory I’m assessment new is our our new made believe is not where used I’m that some going that taken dip the made inventory new where Tim, projections the that how have. our should down for of the and the year about that or any levels for matches the percentage a inventory that new the believe pattern, inventory we accordingly, current if by new our to levels projection adjust down, mentioned. we change being we that inventory we And business in I but inventory down

Tim Conder

How Okay. a the kind we X coming to while you margin, a had which mean, of do progressing course, up see seen looking X but that X, there, out And of second if about in with timeframe? the are you was were X%? think seen at the haven’t then if goal X-year that in haven’t you I we that I over should best-case you scenario How a while. EBITDA, about we EBITDA of of related back question take we ‘XX that to take type

Marcus Lemonis

continue I to and SG&A. Brent into will the dial

mentioned speculate obviously get that parts use and because used margin. to side expected those goal our to know would that, gross right feverishly business that it of back I the the Good take and we where margin years mitigate X us We’re Sam our to business, going because, years EBITDA mitigate require our our can I is the obviously, last. raise to things to whether more they of delta now, of on has and doing that service long of softness X me new business it’s trying up that some and some collision can’t business to our higher that I just a belongs. business in and or We how speculate that

high-margin base, you to And a higher if margin. products low have can revenue drive gross going more on you’re so, a

there. inching If mine. X%. ourselves control about our us paper should a now. your below us numbers you personal tell I find right don’t realistic to to That’s of the we have able can want And expenses, are to I in then of goal be be up be that on way what back front

Tim Conder

thank Okay, time. you for the

Operator

We Crespi Chartier Please next ahead. Instructions] with will Hardt. [Operator Jim & Monness, from hear go

Jim Chartier

Thanks taking then that? of of versus at down just evening. It that gross And What there. Can margin for about my modest the you quarter. a Good performance drove decline significantly talk the any XXXX you in may third Gander fourth was kind be just kind for had in assortment retail learnings question. on changed quarter?

Marcus Lemonis

as So, two products total than the third sold there outdoor in quarter. comparison of sold products percentage are fourth things, RV the a in more the quarter to

the more we’re that Camping box full assortment RV it. some changes innately volume Gander now and inside has their the volume. mix some that And so and of categories SKUs lower products, The a little has outdoor the with business has the And its margin high that has accelerated. while in to and even install working of of World box, come Gander

Secondly, accelerate I well. made the to the reduction retail decision of as inventory

have XXXX excuse X we that coming as X XXXX, to as nice expect they me, fourth closed closed looking We of well because retail quarter over well. And so, will stores we increase in the those stores margins a liquidate be inventory. won’t

And some were cases, liquidating so, in inventory. we

in ‘XX to where did ‘XX, total when segment didn’t them to in open, you’re total open. have segment Retail margins So, retail comparing stores Gander we we have many stores

a so, product typically the them. customer it’ll of get should on been which same flip on RV them. move at be started really actually margins. World. to names I them look attract That we is in up that these a What stores, eating World played to with more assortment forward. help historical nicely X learned want assortment boxes. Obviously, Gander They get we the some side, think of with we that the we’ve And then from And business we to RV and we that the Camping have at the learned as in out why able to exists Camping better is the lot are outdoor the has to of

Jim Chartier

as saw trends expectation we XXXX? Should for then in expect Great. just in ‘XX? your ASP quickly, declines what’s And similar we

Marcus Lemonis

year like hope that’s what what, customer trailer they a question. ago. great against sales. that buyer it our they the first-time in where of balances of some similarity. first would maintain how to similar look a look XXXX, know pretty You level travel that I X And months really that lives on and used It’ll would out depend

Jim Chartier

Best of luck. thanks. Alright,

Operator

from We’ll ahead. go with our take Please Brinkman JPMorgan. question next Ryan

Ryan Brinkman

the thanks to much appears light demand RVs, held new trend Hi for the RVs? you primary think have including my as demand economy lower for and better of for retail for question. new up demand vehicles What taking the do are to driving relative factors

Marcus Lemonis

one to forget interesting driving make better, and those have shareholders and comparison What’s margins at on would further it red return we it make it give we definitely had never that be we numbers the not on if to myself But we there’s to year. whether macro that to first that that we about of expenses cycles new tariffs we industry, for a think have I and thing bring ‘XX make it be better I our down if just to don’t locations projections pretty company, to And the know investment we to in pretty piece understand to and they’re first-time What red, eliminating and those it. we the on. our I for. speak that as initiatives trade can’t something the do XXXX, to in look the speculate ‘XX the quarter happen, find or a an But by we can’t And I the honest those of the it. don’t as good market, the to is to still year. movements assets hot softening had bring to better by trade and and I’m XXXX market crack record take the the industry. the having have good stock was even code ‘XX. least better have people we a at is I how industry. looking want as definitely a saw year understand affected it in and buyers saw overall affected economist. speak or that the the throughout that is that

Ryan Brinkman

I the decline you unit expected, relative And to And perform X% it I heard your though, World for to unit industry is also X%? to positioned think you new necessarily including that you think or? XXXX. X% industry potentially say expecting thanks. want a steeper same-store view on How, than to your to share, do to in gain Okay that think most because was forecasts to industry Are unit are sales? Camping down in you sales, you X% didn’t express I be XXXX,

Marcus Lemonis

our accelerate in trends business, can some effort used are. used help We’re people say we mitigate expecting believe business what industry of that to our and the the

fruits the of in months X first of that the have We seen the year.

we invest capital goal We to quarter used facility our number, into in is to our were but used. capacity capital plenty the used first margin be months to to have to And the well-positioned new XX-XX business. this was floor maybe on have size, want of new of and the curtailments on because so, retail There we’re and not redeploy opportunistic in in our back year, moments drive some my And not in that business time network, opportunity the compression have side. know as that of because plan think and facility, we to floor X of inventory, Brent’s past the our used we in that our chose side. balance drive where because we drive inventory sheet, room liquidate to fourth used And our because because we for down and plan of our and of our our we of used inventory.

Ryan Brinkman

whole It question. what, you but for profit largest looks etcetera, downside basis there in about last the not be this was Okay, including And or think gross an profit XXXX. dollars general, dealership thanks. one leverage of was your talk that are a in providing parts of EBITDA segment, of business And the I to by Earlier, assumptions are model discussion because lot segment, of in can the the a for wouldn’t on then down? the degradation gross company operating attractive about hasn’t it why breakout you margin the just for downturns. there would you margin presumably margin just pace slow impact once level trends cycle because think trends sales, dealership? How But little in RV we reductions? you unexpected path about the can are margin XXXX. on thought the you get as stabilize do steeper be baking industry of in, XXXX? been in a from than dealership on in of you talk of the the the bit maybe impact then Can that to maybe a some margin industry you the your lower inventory Is like

Marcus Lemonis

by we believe that Our having liquidate And historical you cost internal as in inventory dearly to levels. doing I the gross to management to got by things. us get trouble, dealership principally yourself that that the one, and X that trouble. industry, you Number in ourselves return is inventory. an don’t target do margins

one. so, And that’s step I think

because new I side then We have be think profit. anywhere with and we step its have and is from and churns X we anything And else. used more margins that companies. ground a those strategic transactional are opportunistic River just more on can could focused to third, believe are are on gross to partner in basis, used we sale, think manufacturers a what on X more we make the buying up percentage that and Winnebago some on and two on own, not side points the about Forest

line is be our on dealership’s top gross And believe softer. so, to internally, margins to ground. we shifts, But some levels able returning will historical take mix the teams we their focus as if is our and that the makeup even plans

Ryan Brinkman

Okay.

are segment retail in soft, quite be into potentially? So most that backing the dealership the suggest does that will likely, margins XXXX

Marcus Lemonis

or make not assessment would assumption. that that I

As range. Mel go. We where be to in the want don’t our pointed going out, market’s cautious we know to

as on we in Sam the past, driving focused people. very business, which a as an margin gives talk transaction are feeds and to focused our RV said salesforce our very have opportunity on we cost to which Good transaction We But count also driving company. are

deals need XXX,XXX to number. Obviously, a miss that will told a units did that are and we’re work goals we’re that, take be are. We under I year. draw internal miss slimmer. telling to that understand because deals case-by-case or trades a I in we circumstance, staff assumptions you sell make line I’m we guidance. basis, our that anybody our on giving work we as And people last segment the exceed I’ve ideal. that sand on make basis, there my I case-by-case just But and not not not So, a any sure here. is that may a don’t I goal little will deal what a, want to

Ryan Brinkman

you Thank okay. it, very Got much.

Operator

next question will David from Goldman we Tamberrino And Sachs. with take our

David Tamberrino

taking for thanks Okay our question.

bit expense pointed variable one weaker you curious, are what results, the Just but in us, up than look XX, from cost or you in if kept to occurred expecting, Gander able that elevated a X code. there spend that quarter in I that’s is bit have elevated if of react? wondering X or anything think, to because that am particular XX, zip would I the little that sales weren’t and the a model business was were nicely people out you SG&A know year-over-year, fourth have. least as I quite that just I’m quarter I at through the

Marcus Lemonis

Yes.

great you. question, a Thank So that’s Dave.

our the gross decision to that locations on XXXX. our than in focused addition it impacted and lower on through metric So, our the is in were SG&A always the outdoor what to is also is we December because inventory. in opened, we in profit in of is severely dealerships our was that more reason metric, we strategically what true gross percentage up profit had were we that did books that and XXXX up we’re of a XX as we And our

some XXXX we and think I ‘XX, acquisition, RV, of in be of to pleased the into with they significant Keep when profit. newness variability show what like feel confident called the move associated the plan to have paid or of made we with we scale in that addition Gander of brand-new As XXXX mind I very XXXX, costs you’ll and model. World as allow ratios have some newness a make SG&A our them, But dealerships, we an gross whether percentage Camping you look there have are in to that called are our them. modifications expenses that compared

David Tamberrino

question Mountain, troubled now was just Okay. be times And would then Gander couple Outdoors. of second Gander a on before. our retailer a It

have helm. Now you your under it

business, these just handful to not? stores them. didn’t sold down franchise, shut is that think a unprofitable with What that create products you that stores I inside it a see within locations, or continues the this you legacy of the has created way about unprofitable forward store, that are or

Marcus Lemonis

Well, the how understand I don’t answer I’m don’t sorry, the I know to question, question. Dave.

David Tamberrino

They I the used if am of Mountain, out you me Correct like stores. Gander or a bankruptcy. acquired XXX wrong, to XXX stores but have

You to going open. have XX are

You’ve...

Marcus Lemonis

X. no, No, closed XX have actually, we open. We

David Tamberrino

Correct.

asking you business X you’ve closed is found I’m that those able have what it So, profitable? was the what to with the from make weren’t that issues you

Marcus Lemonis

I Look, great that’s think a question.

our in markets, same and that that that the But in the consumer I products, Camping that our of looked And feel markets World. XXX voids is path and late whether nice is at certain we Camping think business the to ones to Gander of when we for them, we in had and is wait for us to on had want that’s that profitability stores RV specific strongly that World, one inside a react and other didn’t already RV allowed believe pretty only for monitoring to felt or were markets, locations, and in feel we into offering are club Gander the locations, outdoor I integrate or growth, too for Outdoors path growth the there locations where geographic that the them. filled looks we we and to database were always RV were didn’t a I states I these whether looking a that’s the looking clear. certain similar. complement

at campingworld.com campingworld.com If to the you and see Camping similar. to on of visit look the you the of went you started now World locations, would some locations that offering or some

and products business locations in will that Camping RV for be RV company over If company club their are the and RV second. our right, and fruits we for our that business, and from outdoor is now both we but multiple driven and members, know by seen driven own sell a that in company which Gander at ultimately, accessory the But our them. for outdoor locations RVs, RV Our have in markets. X.X RVs is and is we World have profitable have close of the that don’t don’t to club service an first RVs clean goal. sell went do products look our outdoor principally the million not business to believe Sam, and will one which database, We can’t why time an principally which by an business, that and we big and baked or is X.X box million have annuity we its is we RV them, wanted of sale we Good not financing retailer. never and That be

David Tamberrino

time. Thank Alright. you for the

Operator

question-and-answer today’s or I the session. to any Lemonis like concludes to That would call Mr. you. Thank turn over additional for closing remarks.

Marcus Lemonis

the results forward and Thanks to future. for look we quarter first near speaking Take with our your care. time today releasing and in you

Operator

for your conclude conference. today’s that does Thank again, participation. you Once

lines. your disconnect phone may now You

Camping World (CWH) 8 Mar 192018 Q4 Earnings call transcript