Business Wire | Aug 5, 2020 04:06PM EDT

Camping World Holdings, Inc. Reports Second Quarter 2020 Results

Aug. 05, 2020

LINCOLNSHIRE, IL--(BUSINESS WIRE)--Aug. 05, 2020--Camping World Holdings, Inc. (NYSE: CWH) (the "Company"), America's largest retailer of recreational vehicles ("RVs") and related services and products, today reported results for the second quarter ended June 30, 2020.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, "I am extremely proud of the way our team has evolved their processes to changing business conditions. Over the past 24 months, we have made significant investments and enhancements in our digital capabilities, which has allowed us to quickly pivot and handle the surge in web traffic, call center volume and lead volume that we have seen since mid-April for our products and services. Through our enhanced platform, we have been successful in engaging new and existing customers in all areas of our business, including customer service, tech support, RV unit selection and demonstration, RV service assistance, retail product selection and installation, and the sale of Good Sam protection plans and services such as roadside assistance, extended warranties, insurance and travel assistance. In addition, our team has done an amazing job at managing our supply chain and replenishing inventory levels in key products and categories. As a result, we are very pleased with our year-to-date and quarterly results, and the prospects for the future."

Second quarter operating highlights and year-over-year comparisons:

* Revenue increased 9.0%, or $132.4 million, to $1.607 billion; * Gross profit increased 19.2% to $488.6 million and gross margin increased 260 basis points to 30.4%; * Selling, general and administrative expenses decreased 10.5% to $271.6 million and selling, general and administrative expenses as a percentage of gross profit were 56% for the second quarter and 68% for the six-month period ended June 30, 2020; * Net income increased 210.2% to $163.2 million and net income margin was 10.2% for the second quarter and 5.7% for the six-month period ended June 30, 2020; * Adjusted EBITDA(1) increased 122.5% to $220.7 million and adjusted EBITDA margin was 13.7% for the second quarter and 9.7% for the six-month period ended June 30, 2020; and * Cash and cash equivalents, maintained in our primary cash accounts, was $227.9 million on June 30, 2020 and we also maintained an additional $216.9 million of cash in our floorplan interest offset account on June 30, 2020.

________________ Adjusted EBITDA is a non-GAAP measure. For a reconciliation of this^ non-GAAP measure to the most directly comparable GAAP measure, see the(1) "Non-GAAP Financial Measures" section later in this press release.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company's second quarter 2020 financial results is scheduled for today, August 5, 2020, at 4:00 p.m. Central Time. Investors and analysts can participate on the conference call by dialing (800) 289-0438 or (323) 794-2423 and using conference ID# 2353595. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company's website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days. In addition, a live stream of the Company's second quarter conference call will be broadcast by Marcus Lemonis on Facebook and Twitter using Mr. Lemonis' Facebook and Twitter accounts and their respective Live streaming features. Mr. Lemonis also uses his Facebook and Twitter accounts as a means for personal communications and observations.

Presentation

This press release presents historical results for the periods presented of the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP"), unless noted as a non-GAAP financial measure. The Company's initial public offering ("IPO") and related reorganization transactions ("Reorganization Transactions") that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC ("CWGS, LLC"), with sole voting power in and control of the management of CWGS, LLC. Despite its position as sole managing member of CWGS, LLC, the Company has a minority economic interest in CWGS, LLC. As of June 30, 2020, the Company owned 42.3% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results of the second quarter ended June 30, 2020 to our financial results from the second quarter ended June 30, 2019.

About Camping World Holdings, Inc.

Camping World Holdings, Inc. (together with its subsidiaries) is America's largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and stockholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry's most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle.

For more information, please visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about our business plans and goals, including the impact of COVID-19 on our business, financial results and financial condition, demand for our products, our liquidity and working capital, and our beliefs regarding our competitive position and prospects for the future. These forward-looking statements are based on management's current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: risks related to the COVID-19 pandemic and its impact on our business, financial results and financial condition; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store revenue; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on four fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure.

These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K filed for the year ended December 31, 2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Camping World Holdings, Inc. and SubsidiariesConsolidated Statements of Operations (unaudited)(In Thousands Except Per Share Amounts) Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Revenue:Good Sam Services $ 44,519 $ 44,694 $ 91,727 $ 91,660 and PlansRV and OutdoorRetailNew vehicles 898,175 778,870 1,395,492 1,308,447

Used vehicles 274,910 245,749 481,575 425,757

Products, service 231,172 264,426 403,795 469,302 and otherFinance and 147,318 128,225 239,774 220,116 insurance, netGood Sam Club 10,651 12,383 21,655 23,834

Subtotal 1,562,226 1,429,653 2,542,291 2,447,456

Total revenue 1,606,745 1,474,347 2,634,018 2,539,116

Costs applicable torevenue (exclusiveof depreciation andamortization shownseparately below):Good Sam Services 15,234 18,746 37,093 39,477 and PlansRV and OutdoorRetailNew vehicles 752,570 681,399 1,179,012 1,144,443

Used vehicles 208,829 192,681 372,622 335,527

Products, service 139,341 168,607 249,610 304,711 and otherGood Sam Club 2,133 2,924 4,380 6,641

Subtotal 1,102,873 1,045,611 1,805,624 1,791,322

Total costs 1,118,107 1,064,357 1,842,717 1,830,799 applicable torevenue Gross profit:Good Sam Services 29,285 25,948 54,634 52,183 and PlansRV and OutdoorRetailNew vehicles 145,605 97,471 216,480 164,004

Used vehicles 66,081 53,068 108,953 90,230

Products, service 91,831 95,819 154,185 164,591 and otherFinance and 147,318 128,225 239,774 220,116 insurance, netGood Sam Club 8,518 9,459 17,275 17,193

Subtotal 459,353 384,042 736,667 656,134

Total gross profit 488,638 409,990 791,301 708,317

Operating expenses:Selling, general, 271,591 303,366 539,247 571,431 and administrativeDepreciation and 12,567 13,946 26,645 27,540 amortizationLong-lived asset - - 6,569 - impairmentLease termination 868 - 1,452 -

Loss on disposal of 272 2,374 783 2,160 assetsTotal operating 285,298 319,686 574,696 601,131 expenses Income from 203,340 90,304 216,605 107,186 operations Other income(expense):Floor plan interest (5,098 ) (11,269 ) (13,702 ) (22,879 )expenseOther interest (14,547 ) (18,211 ) (29,205 ) (35,854 )expense, netTax Receivable - - - 8,477 Agreement liabilityadjustmentTotal other income (19,645 ) (29,480 ) (42,907 ) (50,256 )(expense) Income before 183,695 60,824 173,698 56,930 income taxesIncome tax expense (20,473 ) (8,201 ) (24,605 ) (31,114 )

Net income 163,222 52,623 149,093 25,816

Less: net incomeattributable to (105,145 ) (34,606 ) (99,176 ) (27,194 )non-controllinginterestsNet incomeattributable to $ 58,077 $ 18,017 $ 49,917 $ (1,378 )Camping WorldHoldings, Inc. Earnings per shareof Class A commonstock:Basic $ 1.54 $ 0.48 $ 1.33 $ (0.04 )

Diluted $ 1.54 $ 0.46 $ 1.32 $ (0.04 )

Weighted averageshares of Class Acommon stockoutstanding:Basic 37,635 37,239 37,585 37,217

Diluted 89,689 88,925 89,578 37,217





Camping World Holdings, Inc.Supplemental Data Three Months Ended June 30, Increase Percent

2020 2019 (decrease) Change

Unit sales

New vehicles 27,168 22,906 4,262 18.6 %

Used vehicles 11,618 10,809 809 7.5 %

Total 38,786 33,715 5,071 15.0 %

Average selling priceNew vehicles $ 33,060 $ 34,003 $ (943 ) (2.8 %)

Used vehicles $ 23,662 $ 22,736 $ 927 4.1 %



Same store unit salesNew vehicles 24,628 21,413 3,215 15.0 %

Used vehicles 10,610 10,365 245 2.4 %

Total 35,238 31,778 3,460 10.9 %



Same store revenue ($ in 000's)New vehicles $ 818,865 $ 736,661 $ 82,204 11.2 %

Used vehicles 255,201 238,822 16,379 6.9 %

Products, service 151,406 147,713 3,693 2.5 %and otherFinance and 135,844 122,264 13,580 11.1 %insurance, netTotal $ 1,361,316 $ 1,245,460 $ 115,856 9.3 %



Average gross profit per unitNew vehicles $ 5,359 $ 4,255 $ 1,104 25.9 %

Used vehicle $ 5,688 $ 4,910 $ 778 15.9 %

Finance and $ 3,798 $ 3,803 $ (5 ) (0.1 %)insurance, net pervehicle unitTotal vehicle $ 9,256 $ 8,268 $ 988 11.9 %front-end yield^(1)

Gross margin

Good Sam Services 65.8 % 58.1 % 772 bpsand PlansNew vehicles 16.2 % 12.5 % 370 bps

Used vehicles 24.0 % 21.6 % 244 bps

Products, service 39.7 % 36.2 % 349 bpsand otherFinance and 100.0 % 100.0 % unch. bpsinsurance, netGood Sam Club 80.0 % 76.4 % 359 bps

Subtotal RV and 29.4 % 26.9 % 254 bpsOutdoor RetailTotal gross margin 30.4 % 27.8 % 260 bps



Inventories ($ in 000's)New vehicles $ 711,164 $ 1,000,977 $ (289,813 ) (29.0 %)

Used vehicles 126,687 121,744 4,943 4.1 %

Products, parts, 214,357 424,756 (210,399 ) (49.5 %)accessories andmisc.Total RV and $ 1,052,208 $ 1,547,477 $ (495,269 ) (32.0 %)Outdoor Retailinventories

Vehicle inventory per location ($ in000's)New vehicle $ 4,679 $ 6,629 $ (1,950 ) (29.4 %)inventory perdealer locationUsed vehicle $ 833 $ 806 $ 27 3.4 %inventory perdealer location

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

Retail locations

RV dealerships 152 151 1 0.7 %

RV service & 10 14 (4 ) (28.6 %)retail centersSubtotal 162 165 (3 ) (1.8 %)

Other retail 2 62 (60 ) (96.8 %)storesTotal 164 227 (63 ) (27.8 %)



Other data

Active customers^ 5,220,367 5,251,874 (31,507 ) (0.6 %)(3)Good Sam Club 2,067,253 2,177,743 (110,490 ) (5.1 %)membersFinance andinsurance gross 12.6 % 12.5 % 4 n/a profit as a % oftotal vehiclerevenueSame store 143 n/a n/a n/a locations

^ Front end yield is calculated as gross profit from new vehicles, used(1) vehicles and finance and insurance (net), divided by combined new and used retail units sold.

^ Inventory turnover calculated as vehicle costs applicable to revenue(2) divided by average vehicle inventory.

^ An Active Customer is a customer who has transacted with us in any of the(3) eight most recently completed fiscal quarters prior to the date of measurement.

Camping WorldHoldings, Inc.Supplemental Data Six Months Ended June 30, Increase Percent

2020 2019 (decrease) Change

Unit salesNew vehicles 41,376 37,922 3,454 9.1 %

Used vehicles 20,300 18,986 1,314 6.9 %

Total 61,676 56,908 4,768 8.4 %

Average sellingpriceNew vehicles $ 33,727 $ 34,504 $ (777 ) (2.3 %)

Used vehicles $ 23,723 $ 22,425 $ 1,298 5.8 %

Same store unitsalesNew vehicles 37,382 35,681 1,701 4.8 %

Used vehicles 18,521 18,303 218 1.2 %

Total 55,903 53,984 1,919 3.6 %

Same store revenue($ in 000's)New vehicles $ 1,269,206 $ 1,245,892 $ 23,314 1.9 %

Used vehicles 447,863 414,978 32,885 7.9 %

Products, service 263,955 261,088 2,867 1.1 %and otherFinance and 220,224 211,166 9,058 4.3 %insurance, netTotal $ 2,201,248 $ 2,133,124 $ 68,124 3.2 %

Average grossprofit per unitNew vehicles $ 5,232 $ 4,325 $ 907 21.0 %

Used vehicle $ 5,367 $ 4,752 $ 615 12.9 %

Finance and $ 3,888 $ 3,868 $ 20 0.5 %insurance, net pervehicle unitTotal vehicle $ 9,164 $ 8,335 $ 829 9.9 %front-end yield^(1) Gross marginGood Sam Services 59.6 % 56.9 % 263 bpsand PlansNew vehicles 15.5 % 12.5 % 298 bps

Used vehicles 22.6 % 21.2 % 143 bps

Products, service 38.2 % 35.1 % 311 bpsand otherFinance and 100.0 % 100.0 % unch. bpsinsurance, netGood Sam Club 79.8 % 72.1 % 764 bps

Subtotal RV and 29.0 % 26.8 % 217 bpsOutdoor RetailTotal gross margin 30.0 % 27.9 % 215 bps

Inventories ($ in000's)New vehicles $ 711,164 $ 1,000,977 $ (289,813 ) (29.0 %)

Used vehicles 126,687 121,744 4,943 4.1 %

Products, parts, 214,357 424,756 (210,399 ) (49.5 %)accessories andmisc.Total RV and $ 1,052,208 $ 1,547,477 $ (495,269 ) (32.0 %)Outdoor Retailinventories Vehicle inventoryper location ($ in000's)New vehicle $ 4,679 $ 6,629 $ (1,950 ) (29.4 %)inventory perdealer locationUsed vehicle $ 833 $ 806 $ 27 3.4 %inventory perdealer location Vehicle inventoryturnover^(2)New vehicle 2.3 2.1 0.2 9.6 %inventory turnoverUsed vehicle 4.7 5.0 (0.3 ) (5.2 %)inventory turnover Retail locationsRV dealerships 152 151 1 0.7 %

RV service & 10 14 (4 ) (28.6 %)retail centersSubtotal 162 165 (3 ) (1.8 %)

Other retail 2 62 (60 ) (96.8 %)storesTotal 164 227 (63 ) (27.8 %)

Other dataActive customers^ 5,220,367 5,251,874 (31,507 ) (0.6 %)(3)Good Sam Club 2,067,253 2,177,743 (110,490 ) (5.1 %)membersFinance andinsurance gross 12.8 % 12.7 % 8 n/a profit as a % of bpstotal vehiclerevenueSame store 143 n/a n/a n/a locations

^ Front end yield is calculated as gross profit from new vehicles, used(1) vehicles and finance and insurance (net), divided by combined new and used retail units sold.

^ Inventory turnover calculated as vehicle costs applicable to revenue(2) divided by average vehicle inventory.

^ An Active Customer is a customer who has transacted with us in any of the(3) eight most recently completed fiscal quarters prior to the date of measurement.

Camping World Holdings, Inc. and SubsidiariesConsolidated Balance Sheets (unaudited)($ in Thousands Except Per Share Amounts) June 30, December 31,

2020 2019

AssetsCurrent assets:Cash and cash equivalents $ 227,902 $ 147,521

Contracts in transit 171,437 44,947

Accounts receivable, net 84,493 81,847

Inventories 1,052,222 1,358,539

Prepaid expenses and other assets 55,974 57,827

Total current assets 1,592,028 1,690,681

Property and equipment, net 325,053 314,374

Operating lease assets 789,539 807,537

Deferred tax asset, net 126,097 129,710

Intangibles assets, net 28,101 29,707

Goodwill 387,049 386,941

Other assets 16,684 17,290

Total assets $ 3,264,551 $ 3,376,240

Liabilities and stockholders' deficitCurrent liabilities:Accounts payable $ 232,989 $ 106,959

Accrued liabilities 184,751 130,316

Deferred revenues 84,286 87,093

Current portion of operating lease liabilities 60,315 58,613

Current portion of Tax Receivable Agreement 6,909 6,563 liabilityCurrent portion of long-term debt 15,828 14,085

Notes payable - floor plan, net 470,871 848,027

Other current liabilities 61,391 44,298

Total current liabilities 1,117,340 1,295,954

Operating lease obligations, net of current 823,929 843,312 portionTax Receivable Agreement liability, net of 101,702 108,228 current portionRevolving line of credit 20,885 40,885

Long-term debt, net of current portion 1,165,227 1,153,551

Deferred revenues 61,928 58,079

Other long-term liabilities 43,479 35,467

Total liabilities 3,334,490 3,535,476

Commitments and contingenciesStockholders' deficit:Preferred stock, par value $0.01 per share -20,000,000 shares authorized; none issued and - - outstanding as of June 30, 2020 and December 31,2019Class A common stock, par value $0.01 per share -250,000,000 shares authorized; 38,018,386 issued 378 375 and 37,773,109 outstanding as of June 30, 2020and 37,701,584 issued and 37,488,989 outstandingas of December 31, 2019Class B common stock, par value $0.0001 per share- 75,000,000 shares authorized; 69,066,445 5 5 issued; and 50,706,629 outstanding as of June 30,2020 and December 31, 2019Class C common stock, par value $0.0001 per share - - - one share authorized, issued and outstanding asof June 30, 2020 and December 31, 2019Additional paid-in capital 52,747 50,152

Retained deficit (44,754 ) (83,134 )

Total stockholders' equity (deficit) attributable 8,376 (32,602 )to Camping World Holdings, Inc.Non-controlling interests (78,315 ) (126,634 )

Total stockholders' deficit (69,939 ) (159,236 )

Total liabilities and stockholders' deficit $ 3,264,551 $ 3,376,240



Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income (loss) 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 (loss) 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 (unaudited):

Three Months Ended Six Months Ended June 30, June 30,

(In thousands except 2020 2019 2020 2019per share amounts)Numerator:Net income $ 163,222 $ 52,623 $ 149,093 $ 25,816

Less: net incomeattributable to (105,145 ) (34,606 ) (99,176 ) (27,194 )non-controllinginterestsNet income (loss)attributable to Camping $ 58,077 $ 18,017 $ 49,917 $ (1,378 )World Holdings, Inc. -basic and dilutedAdd: reallocation ofnet income attributableto non-controllinginterests from the 79,603 22,565 68,383 - assumed exchange ofcommon units of CWGS,LLC for Class A commonstockNet income (loss)attributable to Camping $ 137,680 $ 40,582 $ 118,300 $ (1,378 )World Holdings, Inc. -dilutedDenominator:Weighted-average sharesof Class A common stock 37,635 37,239 37,585 37,217 outstanding - basic anddilutedDilutive restricted 434 17 359 - stock unitsDilutive common unitsof CWGS, LLC that are 51,620 51,669 51,634 - convertible into ClassA common stockWeighted-average shares 89,689 88,925 89,578 37,217 of Class A common stockoutstanding - diluted Earnings (loss) per $ 1.54 $ 0.48 $ 1.33 $ (0.04 )share of Class A commonstock - basicEarnings (loss) per $ 1.54 $ 0.46 $ 1.32 $ (0.04 )share of Class A commonstock - diluted Weighted-averageanti-dilutivesecurities excludedfrom the computation ofdiluted earnings pershare of Class A commonstock:Stock options to 715 804 726 831 purchase Class A commonstockRestricted stock units 620 1,351 658 1,427

Common units of CWGS,LLC that are - - - 51,671 convertible into ClassA common stock

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. - Diluted, Adjusted Earnings Per Share - Basic, and Adjusted Earnings Per Share - Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company's industry. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and they should not be construed as an inference that the Company's future results will be unaffected by any items adjusted for in these Non-GAAP Financial Measures. In evaluating these Non-GAAP Financial Measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of those adjusted in this presentation. The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

We define "EBITDA" as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define "Adjusted EBITDA" as EBITDA further adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, loss (gain) on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define "Adjusted EBITDA Margin" as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors' understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP financial performance measures, which are net income and net income as a percentage of revenue, respectively (unaudited):

Three Months Ended Six Months Ended

June 30, June 30,

($ in thousands) 2020 2019 2020 2019

EBITDA:Net income $ 163,222 $ 52,623 $ 149,093 $ 25,816

Other interest expense, net 14,547 18,211 29,205 35,854

Depreciation and amortization 12,567 13,946 26,645 27,540

Income tax expense 20,473 8,201 24,605 31,114

Subtotal EBITDA 210,809 92,981 229,548 120,324

Long-lived asset impairment (a) - - 6,569 -

Lease termination (b) 868 - 1,452 -

Loss on disposal of assets, net 272 2,374 783 2,160 (c)Equity-based compensation (d) 4,182 3,863 7,494 6,579

Tax Receivable Agreement - - - (8,477 )liability adjustment (e)Restructuring costs (f) 4,591 - 10,873 -

Adjusted EBITDA $ 220,722 $ 99,218 $ 256,719 $ 120,586



Three Months Six Months Ended Ended

June 30, June 30,

(as percentage of total revenue) 2020 2019 2020 2019



EBITDA margin:Net income margin 10.2 % 3.6 % 5.7 % 1.0 %

Other interest expense, net 0.9 % 1.2 % 1.1 % 1.4 %

Depreciation and amortization 0.8 % 0.9 % 1.0 % 1.1 %

Income tax expense 1.3 % 0.6 % 0.9 % 1.2 %

Subtotal EBITDA margin 13.1 % 6.3 % 8.7 % 4.7 %

Long-lived asset impairment (a) - - 0.2 % -

Lease termination (b) 0.1 % - 0.1 % -

Loss on disposal of assets, net (c) 0.0 % 0.2 % 0.0 % 0.1 %

Equity-based compensation (d) 0.3 % 0.3 % 0.3 % 0.3 %

Tax Receivable Agreement liability - - - (0.3 %)adjustment (e)Restructuring costs (f) 0.3 % - 0.4 % -

Adjusted EBITDA margin 13.7 % 6.7 % 9.7 % 4.7 %



Represents long-lived asset impairment charges related to the RV and(a) Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

Represents the loss on the termination of operating leases relating(b) primarily to the 2019 Strategic Shift, net of lease termination fees.

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

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

Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax(e) rate and the transfer of certain assets from GSS Enterprises LLC ("GSS") to Camping World, Inc ("CW").

Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits,(f) incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above.



Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share

We define "Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic" as net income attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, loss on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

We define "Adjusted Net Income Attributable to Camping World Holdings, Inc. - Diluted" as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed exchange, if dilutive, of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World Holdings, Inc.

We define "Adjusted Earnings Per Share - Basic" as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define "Adjusted Earnings Per Share - Diluted" as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the exchange of all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. - Diluted, Adjusted Earnings Per Share - Basic, and Adjusted Earnings Per Share - Diluted because we consider them to be important supplemental measures of our performance and we believe that investors' understanding of our performance is enhanced by including these Non GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. - Diluted, Adjusted Earnings Per Share - Basic, and Adjusted Earnings Per Share - Diluted to the most directly comparable GAAP financial performance measure, which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP financial measures, and weighted-average shares of Class A common stock outstanding - basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands except per 2020 2019 2020 2019share amounts)Numerator:Net income (loss) $ 58,077 $ 18,017 $ 49,917 $ (1,378 )attributable to CampingWorld Holdings, Inc.Adjustments related tobasic calculation:Long-lived assetimpairment (a):Gross adjustment - - 6,569 -

Income tax expense for - - (13 ) - above adjustment (b)Lease termination (c):Gross adjustment 868 - 1,452 -

Income tax expense for (23 ) - (23 ) - above adjustment (b)Loss on disposal ofassets and otherexpense, net (d):Gross adjustment 272 2,374 783 2,160

Income tax (expense) (2 ) (3 ) (3 ) 6 benefit for aboveadjustment (b)Equity-basedcompensation (e):Gross adjustment 4,182 3,863 7,494 6,579

Income tax expense for (383 ) (348 ) (685 ) (569 )above adjustment (b)Tax Receivable Agreementliability adjustment(f):Gross adjustment - - - (8,477 )

Income tax benefit for - - - 2,143 above adjustment (b)Restructuring costs (g):Gross adjustment 4,591 - 10,873 -

Income tax expense for (23 ) - (58 ) - above adjustment (b)Adjustment to net incomeattributable tonon-controlling (5,733 ) (3,624 ) (15,727 ) (5,077 )interests resulting fromthe above adjustments(h)Adjusted net income(loss) attributable to 61,826 20,279 60,579 (4,613 )Camping World Holdings,Inc. - basicAdjustments related todiluted calculation:Reallocation of netincome attributable tonon-controlling - 7 550 - interests from thedilutive effect of stockoptions and restrictedstock units (i)Income tax onreallocation of netincome attributable tonon-controlling - (2 ) (145 ) - interests from thedilutive effect of stockoptions and restrictedstock units (j)Reallocation of netincome attributable tonon-controlling 110,878 - - - interests from thedilutive exchange ofcommon units in CWGS,LLC (i)Income tax onreallocation of netincome attributable tonon-controlling (26,132 ) - - - interests from thedilutive exchange ofcommon units in CWGS,LLC (j)Assumed income taxexpense of combiningC-corporations with fullvaluation allowances (1,708 ) - - - with the income of otherconsolidated entitiesafter the dilutiveexchange of common unitsin CWGS, LLC (k)Adjusted net (loss)income attributable to $ 144,864 $ 20,284 $ 60,984 $ (4,613 )Camping World Holdings,Inc. - basic and dilutedDenominator:Weighted-average Class A 37,635 37,239 37,585 37,217 common sharesoutstanding - basicAdjustments related todiluted calculation:Dilutive exchange ofcommon units in CWGS, 51,620 - - - LLC for shares of ClassA common stock (l)Dilutive restricted 434 17 359 - stock units (l)Adjusted weightedaverage Class A common 89,689 37,256 37,944 37,217 shares outstanding -diluted Adjusted earnings (loss) $ 1.64 $ 0.54 $ 1.61 $ (0.12 )per share - basicAdjusted earnings (loss) $ 1.62 $ 0.54 $ 1.61 $ (0.12 )per share - diluted Anti-dilutive amounts(m):Numerator:Reallocation of netincome attributable tonon-controlling - $ 38,223 $ 114,353 $ 32,271 interests from theanti-dilutive exchangeof common units in CWGS,LLC (i)Income tax onreallocation of netincome attributable tonon-controlling - $ (12,524 ) $ (31,720 ) $ (17,089 )interests from theanti-dilutive exchangeof common units in CWGS,LLC (j)Assumed income taxbenefit of combiningC-corporations with fullvaluation allowances - $ 5,457 $ 6,435 $ 16,024 with the income of otherconsolidated entitiesafter the anti-dilutiveexchange of common unitsin CWGS, LLC (k)Denominator:Anti-dilutive exchangeof common units in CWGS, - 51,669 51,634 51,671 LLC for shares of ClassA common stock (l)Anti-dilutive restricted - - - 12 stock units (l)

Represents long-lived asset impairment charges related to the RV and(a) Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized.(b) This assumption uses an effective tax rate of 25.0% and 25.3% for the adjustments for 2020 and 2019, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

Represents the termination of operating leases relating primarily to the(c) 2019 Strategic Shift, net of lease termination costs.

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

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

Represents an adjustment to eliminate the loss on remeasurement of the Tax(f) Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS to CW.

Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits,(g) incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above.

Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest's weighted(h) average ownership of CWGS, LLC of 57.8% and 58.1% for the three months ended June 30, 2020 and 2019, respectively, and 57.9% and 58.1% for the six months ended June 30, 2020, respectively.

Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC(i) from stock options, restricted stock units, and/or common units of CWGS, LLC.

Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This(j) assumption uses an effective tax rate of 25.0% and 25.3% for the adjustments for 2020 and 2019, respectively.

Represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company's current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. Subsequent to the exchange of all common units in CWGS, LLC, the Company believes certain actions could be taken such(k) that the C-corporations' losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of 25.0% and 25.3% during 2020 and 2019, respectively, for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods are included in these amounts.

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

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



Uses and Limitations of Non-GAAP Financial Measures

Management and our board of directors use the Non-GAAP Financial Measures:

* as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations; * for planning purposes, including the preparation of our internal annual operating budget and financial projections; * to evaluate the performance and effectiveness of our operational strategies; and * to evaluate our capacity to fund capital expenditures and expand our business.

By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use EBITDA to measure our compliance with covenants such as consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our unaudited consolidated financial statements included in this press release as indicators of financial performance. Some of the limitations are:

* such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; * such measures do not reflect changes in, or cash requirements for, our working capital needs; * some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt; * some of such measures do not reflect our tax expense or the cash requirements to pay our taxes; * although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and * other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.

Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these Non-GAAP Financial Measures only supplementally. As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for long-lived asset impairment, lease termination costs, loss on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

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CONTACT: Investors: John Rouleau John.Rouleau@CampingWorld.com

CONTACT: Media Outlets: Karen Porter PR-CWGS@CampingWorld.com