I****NDEX
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| PART I |
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| Item 1 | Business | 7 |
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| Item 1A | Risk Factors | 15 |
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| Item 1B | Unresolved Staff Comments | 46 |
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| Item 1C | Cybersecurity | 46 |
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| Item 2 | Properties | 48 |
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| Item 3 | Legal Proceedings | 49 |
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| Item 4 | Mine Safety Disclosures | 49 |
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| PART II |
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| Item 5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 52 |
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| Item 6 | [Reserved] | 55 |
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| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 55 |
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| Item 7A | Quantitative and Qualitative Disclosures About Market Risk | 83 |
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| Item 8 | Financial Statements and Supplementary Data | 85 |
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| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 145 |
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| Item 9A | Controls and Procedures | 145 |
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| Item 9B | Other Information | 148 |
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| Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 148 |
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| | PART III | |
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| Item 10 | Directors, Executive Officers and Corporate Governance | 149 |
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| Item 11 | Executive Compensation | 149 |
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| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 149 |
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| Item 13 | Certain Relationships and Related Transactions, and Director Independence | 150 |
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| Item 14 | Principal Accountant Fees and Services | 150 |
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| | PART IV | |
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| Item 15 | Exhibits and Financial Statement Schedules | 151 |
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| Signatures | 155 | |
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Summary of Principal Risk Factors
We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. In evaluating our company, you should consider carefully this summary of risks and uncertainties described below together with the other information included in this Annual Report on Form 10-K (“Form 10-K”), including our consolidated financial statements and related notes included in Part II, Item 8, “Financial Statements and Supplementary Data” in this Form 10-K. The occurrence of any of the following risks may materially and adversely affect our business, financial condition, results of operations and future prospects:
| ● | Our business model is impacted by general economic conditions in our markets, including inflation and interest rates, as well as the health of the RV industry, and ongoing economic and financial uncertainties could cause a decline in consumer spending that could adversely affect our business, financial condition and results of operations. |
| ● | Our business is affected by the availability and cost of financing to us and our customers. |
| ● | Fuel shortages, high prices for fuel, or changes in energy sources could have a negative effect on our business. |
| ● | Our success depends to a significant extent on the well-being, as well as the continued popularity and reputation for quality, of our manufacturers, particularly Thor Industries, Inc. and Forest River, Inc. |
| ● | Changes in consumer preferences for our products or our failure to gauge those preferences could lead to reduced sales and increased cost of sales and selling, general and administrative expenses. |
| ● | We have announced a strategic review of our Good Sam business, and any resulting transaction may introduce significant risks and uncertainties. |
| ● | Competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast could reduce our revenues and profitability. |
| ● | Our expansion into new, unfamiliar markets, businesses, product lines or categories presents increased risks that may prevent us from being profitable in these new markets, businesses, product lines or categories. Delays in opening or acquiring new store locations, on anticipated timelines or at all, could have a material adverse effect on our business, financial condition and results of operations. |
| ● | Unforeseen expenses, difficulties, and delays encountered in connection with acquisitions could inhibit our growth and negatively impact our profitability. |
| ● | Failure to maintain the strength and value of our brands could have a material adverse effect on our business, financial condition and results of operations. |
| ● | Our failure to successfully order and manage our inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends has, and may continue to have, an adverse effect on our business, financial condition and results of operations. |
| ● | Our same store revenue may fluctuate and may not be a meaningful indicator of future performance. |
| ● | Our business is seasonal and this leads to fluctuations in revenues. |
| ● | Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the availability of adequate capital. |
| ● | Our Senior Secured Credit Facilities and our Floor Plan Facility contain restrictive covenants that may impair our ability to access sufficient capital and operate our business. |
| ● | We may not successfully execute or achieve the expected benefits of our cost cutting or restructuring initiatives. The restructuring initiatives may result in further asset impairment charges and adversely affect the Company’s business. |
| ● | We primarily rely on our fulfillment and distribution centers for our retail, e-commerce and catalog businesses, and, if there is a natural disaster or other serious disruption at any such facility, we may be unable to deliver merchandise effectively to our stores or customers. |
| ● | Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise adversely affect our financial performance. |
| ● | We depend on our relationships with third-party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations could have an adverse effect on our business and results of operations. |
| ● | Because certain of the products that we sell are manufactured abroad, we may face delays, new or increased tariffs, increased cost or quality control deficiencies in the importation of these products, which could reduce our net sales and profitability. |
| ● | A portion of our net income is related to financing, insurance and extended service contracts, which depend on third-party lenders and insurance companies. We cannot assure you that third-party lending institutions will continue to provide financing for RV purchases. |
| ● | If we are unable to retain senior executives and attract and retain other qualified employees, our business might be adversely affected. |
| ● | We are subject to risks associated with leasing substantial amounts of space. |
| ● | Our private brand offerings expose us to various risks. |
| ● | We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets. |
| ● | Our business is subject to numerous federal, state and local regulations and litigation risks, and we have been named in litigation, which has resulted in substantial costs and may result in reputational harm and divert management’s attention and resources. |
| ● | A failure in our e-commerce operations, security breaches and cybersecurity risks could disrupt our business and lead to reduced sales and growth prospects and reputational damage. |
| ● | If we are unable to maintain or upgrade our information technology systems or if we are unable to convert to alternate systems in an efficient and timely manner, our operations may be disrupted or become less efficient. |
| ● | Disruptions or breaches involving our or our third-party providers’ IT Systems or Confidential Information (as defined herein) could interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions and costly response measures and could have a material adverse effect on our business, financial condition and results of operations. |
| ● | We are subject to risks associated with our organizational structure. |
| ● | There are risks associated with ownership of our Class A common stock. |
BASIS OF PRESENTATION
As used in this Form 10-K, unless the context otherwise requires, references to:
| ● | “we,” “us,” “our,” the “Company,” “Camping World,” “Good Sam” and similar references refer to Camping World Holdings, Inc., and, unless otherwise stated, all of its subsidiaries, including CWGS Enterprises, LLC, which we refer to as “CWGS, LLC” and, unless otherwise stated, all of its subsidiaries. |
| ● | "Active Customer" refers to a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. Unless otherwise indicated, the date of measurement is December 31, 2023, our most recently completed fiscal quarter. |
| ● | “Continuing Equity Owners” refers collectively to ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profits Unit Holders and each of their permitted transferees that own common units in CWGS, LLC and who may redeem at each of their options their common units for, at our election (determined solely by our independent directors within the meaning of the rules of the New York Stock Exchange who are disinterested), cash or newly-issued shares of our Class A common stock. Direct exchanges of common units in CWGS, LLC by the Continuing Equity Owners with CWH for Class A common stock are included in the reference to “redemptions” in relation to common units in CWGS, LLC. |
| ● | “Crestview” refers to Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P. |
| ● | “CWGS LLC Agreement” refers to CWGS, LLC’s amended and restated limited liability company agreement, as amended. |
| ● | “Former Equity Owners” refers to those Original Equity Owners controlled by Crestview Partners II GP, L.P. that have exchanged their direct or indirect ownership interests in CWGS, LLC for shares of our Class A common stock in connection with the consummation of our initial public offering (“IPO”). |
| ● | “Former Profits Unit Holders” refers collectively to Brent L. Moody and Karin L. Bell, who are executive officers, Andris A. Baltins and K. Dillon Schickli, who are members of our Board of Directors, and certain other current and former non-executive employees, former executive officers, and former directors, in each case, who held common units of CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to our IPO and received common units of CWGS, LLC in exchange for their profits units in CWGS, LLC. |
| ● | “ML Acquisition” refers to ML Acquisition Company, LLC, a Delaware limited liability company, indirectly controlled by our Chairman and Chief Executive Officer, Marcus Lemonis. |
| ● | “ML Related Parties” refers to ML Acquisition and its permitted transferees of common units. |
| ● | “ML RV Group” refers to ML RV Group, LLC, a Delaware limited liability company, wholly-owned by our Chairman and Chief Executive Officer, Marcus Lemonis. |
| ● | “Original Equity Owners” refers to the direct and certain indirect owners of interests in CWGS, LLC, collectively, prior to the Reorganization Transactions and Recapitalization (as defined in Note 1 – Summary of Significant Accounting Policies and Note 19 – Stockholders’ Equity to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, respectively) conducted in conjunction with our IPO, including ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profits Unit Holders. |
| ● | “RV” refers to recreational vehicles. |
| ● | “Tax Receivable Agreement” refers to the tax receivable agreement that the Company entered into with CWGS, LLC, each of the Continuing Equity Owners and Crestview Partners II GP, L.P. in connection with the Company’s IPO. |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-K may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding the timeline for and benefits of our restructuring activities; expected new store location openings and closures, including greenfield locations and acquired locations; the impact of COVID-19 on our business; the impact of the February 2022 cybersecurity incident; sufficiency of our sources of liquidity and capital and potential need for additional financing; our stock repurchase program; future capital expenditures and debt service obligations; refinancing, retirement or exchange of outstanding debt; expectations regarding industry trends and consumer behavior and growth; our ability to capture positive industry trends and pursue growth; our product offerings and strategy; inventory management; volatility in sales and potential impact of miscalculating the demand for our products or our product mix; expectations regarding increase of certain expenses in connection with our growth; cost reduction initiatives and expected cost savings; enhancements of wages and benefits of employees; expectations regarding our pending litigation, and our plans related to dividend payments, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including the important factors described in this Form 10-K under Item 1A. Risk Factors and in our other filings with the Securities and Exchange Commission (“SEC”), that may cause our actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.
Any forward-looking statements made herein speak only as of the date of this Form 10-K, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Form 10-K or to conform these statements to actual results or revised expectations. Additionally, our discussion of ESG issues herein is informed by various standards (including standards for the measurement of underlying data), and the interests of various stakeholders. As such, this discussion may not necessarily be “material” under the federal securities laws for SEC reporting purposes. Furthermore, parts of this information are subject to methodological considerations or information, including from third-parties, that are still evolving and subject to change. For example, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control.
