Camping World Holdings Inc

Previous wording

Camping World Holdings, Inc. (together with its subsidiaries) is the world’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 services and plans uniquely enables us to connect with our customers as stewards of the RV lifestyle. On June 30, 2024, we operated a total of 215 locations, with all of them selling and/or servicing RVs. See Note 1 – Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Current wording

Camping World Holdings, Inc. (together with its subsidiaries) is the world’s largest retailer of RVs and related products and services. Through our Camping World and Good Sam brands, our vision is to build a business that makes RVing and other outdoor adventures fun and easy. 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 highly specialized services and plans, including roadside assistance, protection plans and insurance, uniquely enables us to connect with our customers as stewards of an outdoor and recreational lifestyle. On September 30, 2024, we operated a total of 207 locations, with all of them selling and/or servicing RVs. See Note 1 – Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Previous wording

According to the RV Industry Association’s (“RVIA”) survey of manufacturers, which almost entirely focuses on North America, wholesale shipments of new RVs for 2023 were 313,174 units, 36.5% less than in 2022. The June 2024 issue ofRV RoadSigns, the quarterly forecast prepared by ITR Economics for the RVIA projected RV wholesale shipments to climb into the mid-300,000 unit range by year-end 2024, before climbing higher in 2025. RV wholesale shipments for the first six months of 2024 were 178,596 units, up 8.4% compared to the same timeframe last year per the June 2024 survey of manufacturers prepared by the RVIA.

Current wording

According to the RV Industry Association’s (“RVIA”) survey of manufacturers, which almost entirely focuses on North America, wholesale shipments of new RVs for 2023 were 313,174 units, 36.5% less than in 2022. The September 2024 issue of RVRoadSigns, the quarterly forecast prepared by ITR Economics for the RVIA, projected RV wholesale shipments to be approximately 324,000 in 2024, or 3.5% higher than 2023, and approximately 346,000 in 2025, or 6.8% higher than forecasted 2024. RV wholesale shipments for the first nine months of 2024 were 256,412 units, up 7.7% compared to the same timeframe last year per the September 2024 survey of manufacturers prepared by the RVIA.

Previous wording

Since certain of our RV manufacturers had indicated that they expected new towable vehicle average manufacturer selling prices to decline by up to 10% for 2024 model year vehicles, we focused on clearing out a significant portion of our pre-2024 model year new vehicles primarily during the fourth quarter of 2023 and early 2024 to improve the mix of our new vehicle inventory toward the lower cost 2024 model year vehicles. These new vehicle cost decreases further decreased average selling prices of new vehicles in 2024. However, for the three months ended June 30, 2024, overall new vehicle gross margins remained relatively unchanged at 15.3% as the average selling price decreases and average cost decreases mostly offset.

Current wording

Since certain of our RV manufacturers had indicated that they expected new towable vehicle average manufacturer selling prices to decline by up to 10% for 2024 model year vehicles, we focused on clearing out a significant portion of our pre-2024 model year new vehicles primarily during the fourth quarter of 2023 and early 2024 to improve the mix of our new vehicle inventory toward the lower cost 2024 model year vehicles. These new vehicle cost decreases further decreased average selling prices of new vehicles in 2024. For the three months ended September 30, 2024, overall new vehicle gross margins decreased 162 basis points to 13.5%, as our average selling price per vehicle decreased 7.4% while our average cost per vehicle decreased 5.6%.

Previous wording

Additionally, these new vehicle price pressures have resulted, and may continue to result, in a decline in residual values of used vehicles, which led us to discount used vehicle pricing in order to maintain used vehicles as a lower cost alternative to new vehicles, which has negatively impacted used vehicle gross margins. We also experienced lower used vehicle inventory levels in 2024 as we slowed procurement to allow RV owner pricing expectations to adjust as a result of 2024 model year pricing declines.

Current wording

Additionally, these new vehicle price pressures have resulted, and may continue to result, in a decline in residual values of used vehicles, which led us to discount used vehicle pricing in order to maintain used vehicles as a lower cost alternative to new vehicles, which has negatively impacted used vehicle gross margins. We have also experienced lower used vehicle inventory levels in 2024 as we slowed procurement to allow RV owner pricing expectations to adjust as a result of 2024 model year pricing declines.

Previous wording

As noted in “Industry Trends” above, we have experienced deflation with respect to new vehicles and, as a byproduct of the new vehicle pricing decrease, used vehicles. New and used vehicles regularly represent a majority of our costs. However, inflationary factors, such as increases to our other product and overhead costs, may adversely affect our operating results if the selling prices of our products and services do not increase proportionately with those increased costs or if demand for our products and services declines as a result of price increases to address inflationary costs. Additionally, our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Further, the cost of remodeling acquired RV dealership locations and constructing new RV dealership locations is subject to inflationary increases in the costs of labor and material, which results in higher rent expense on new RV dealership locations. Finally, our credit agreements include interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

Current wording

As noted in “Industry Trends” above, we have experienced reduced cost and average selling prices with respect to new vehicles and, as a byproduct of the new vehicle pricing decrease, used vehicles. New and used vehicles regularly represent a majority of our costs. However, inflationary factors, such as increases to our other product and overhead costs, may adversely affect our operating results if the selling prices of our products and services do not increase proportionately with those increased costs or if demand for our products and services declines as a result of price increases to address inflationary costs. Additionally, our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Further, the cost of remodeling acquired RV dealership locations and constructing new RV dealership locations is subject to inflationary increases in the costs of labor and material, which results in higher rent expense on new RV dealership locations. Finally, our credit agreements include interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

Previous wording

In 2019, we made a strategic decision to refocus our business around our core RV competencies (the “2019 Strategic Shift”), which was substantially complete by December 31, 2021. On March 1, 2023, our management determined to implement plans (the “Active Sports Restructuring”) to exit and restructure operations of our indirect subsidiary, Active Sports, LLC, a specialty products retail business (“Active Sports”), which was substantially complete by December 31, 2023. For the 2019 Strategic Shift and Active Sports Restructuring, the remaining potential ongoing charges related to lease termination costs and other associated costs relating to the leases of certain previously closed locations and facilities. The timing of sublease and/or termination negotiations will vary as both are contingent on landlord approvals. We expect that the ongoing lease-related costs relating to the 2019 Strategic Shift and Active Sports Restructuring, net of associated sublease income, will be less than $4.0 million and $1.1 million per year, respectively. See Note 4 — Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Current wording

In 2019, we made a strategic decision to refocus our business around our core RV competencies (the “2019 Strategic Shift”), which was substantially complete by December 31, 2021. On March 1, 2023, our management determined to implement plans (the “Active Sports Restructuring”) to exit and restructure operations of our indirect subsidiary, Active Sports, LLC, a specialty products retail business (“Active Sports”), which was substantially complete by December 31, 2023. For the 2019 Strategic Shift, the remaining potential ongoing charges related to lease termination costs and other associated costs relating to the leases of certain previously closed locations and facilities. The timing of sublease and/or termination negotiations will vary as both are contingent on landlord approvals. We expect that the ongoing lease-related costs relating to the 2019 Strategic Shift, net of associated sublease income, will be less than $3.5 million per year. During the three months ended September 30, 2024, the Company terminated the final significant lease under the Active Sports Restructuring that included a $1.5 million lease termination fee that was paid on October 1, 2024. The Company does not expect any further costs under the Active Sports Restructuring beyond insignificant lease costs of less than $0.2 million per year. See Note 4 — Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Previous wording

New vehicle gross margins in the second quarter of 2024 were relatively similar to second quarter of 2023 and slightly above the range of gross margins for the pre-COVID-19 pandemic periods presented in the table below. Additionally, used vehicle gross margins were negatively impacted in the second quarter of 2024 from the discounting necessary to maintain used vehicles as a lower cost alternative for our customers. Beginning primarily in the fourth quarter of 2023, we adjusted our acceptable procurement cost of used vehicles to reflect the lower average market price of RVs that was driven by the lower cost 2024 models.

Current wording

New vehicle gross margins in the third quarter of 2024 were within the range of gross margins for the pre-COVID-19 pandemic periods presented in the table below. Additionally, used vehicle gross margins were negatively impacted in the third quarter of 2024 from the discounting necessary to maintain used vehicles as a lower cost alternative for our customers. Beginning primarily in the fourth quarter of 2023, we adjusted our acceptable procurement cost of used vehicles to reflect the lower average market price of RVs that was driven by the lower cost 2024 models.

Previous wording

comprised predominately of Subchapter C corporations (“C-Corps”) and/or lacking significant non-controlling interests with holdings through limited liability companies or partnerships. Typically, most of our income tax expense is recorded at the CWH level, our public holding company, based on its allocation of taxable income from CWGS, LLC.

Current wording

Our corporate structure is commonly referred to as an “Up-C” structure and typically results in a different relationship between income before income taxes and income tax expense than would be experienced by most public companies with a more traditional corporate structure. More traditional structures are typically comprised predominately of Subchapter C corporations (“C-Corps”) and/or lacking significant non-controlling interests with holdings through limited liability companies or partnerships. Typically, most of our income tax expense is recorded at the CWH level, our public holding company, based on its allocation of taxable income from CWGS, LLC.

Previous wording

More specifically, CWH is organized as a C-Corp and, as of June 30, 2024, is a 53.0% owner of CWGS, LLC. CWGS, LLC is organized as a limited liability company and treated as a partnership for U.S. federal and most applicable state and local income tax purposes and, as such is generally not subject to any U.S. federal entity-level income taxes (“Pass-Through”), with the exception of Americas Road and Travel Club, Inc. and FreedomRoads RV, Inc., and their wholly-owned subsidiaries, which are C-Corps embedded within the CWGS, LLC structure.

Current wording

More specifically, CWH is organized as a C-Corp and, as of September 30, 2024, is a 53.1% owner of CWGS, LLC. CWGS, LLC is organized as a limited liability company and treated as a partnership for U.S. federal and most applicable state and local income tax purposes and, as such is generally not subject to any U.S. federal entity-level income taxes (“Pass-Through”), with the exception of Americas Road and Travel Club, Inc. and FreedomRoads RV, Inc., and their wholly-owned subsidiaries, which are C-Corps embedded within the CWGS, LLC structure.

Previous wording

CWH receives an allocation of its share of the net income (loss) of CWGS, LLC based on CWH’s weighted-average ownership of CWGS, LLC for the period. CWH recognizes income tax expense on its pre-tax income including its portion of this income allocation from CWGS, LLC primarily relating to Pass-Through entities. The income tax relating to the net income (loss) of CWGS, LLC allocated to CWH that relates to separately taxed C-Corp entities is recorded within the consolidated results of CWGS, LLC. No income tax expense is recognized by the Company for the portion of net income of CWGS, LLC allocated to non-controlling interest other than income tax expense recorded by CWGS, LLC. Rather, tax distributions are paid to the non-controlling interest holders which are recorded as distributions to holders of LLC common units in the condensed consolidated statements of cash flows. CWH is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income of CWGS, LLC and is taxed at the prevailing corporate tax rates. For the three months ended June 30, 2024 and 2023, the Company used effective income tax rate assumptions of 25.0% and 25.3%, respectively, for income adjustments applicable to CWH when calculating the adjusted net income (loss) attributable to Camping World Holdings, Inc. ─ basic and diluted (see “Non-GAAP Financial Measures” in Part I, Item 2 of this Form 10-Q). CWGS, LLC may be liable for various other state and local taxes.

Current wording

CWH receives an allocation of its share of the net income of CWGS, LLC based on CWH’s weighted-average ownership of CWGS, LLC for the period. CWH recognizes income tax expense on its pre-tax income including its portion of this income allocation from CWGS, LLC primarily relating to Pass-Through entities. The income tax relating to the net income of CWGS, LLC allocated to CWH that relates to separately taxed C-Corp entities is recorded within the consolidated results of CWGS, LLC. No income tax expense is recognized by the Company for the portion of net income of CWGS, LLC allocated to non-controlling interest other than income tax expense recorded by CWGS, LLC. Rather, tax distributions are paid to the non-controlling interest holders which are recorded as distributions to holders of LLC common units in the condensed consolidated statements of cash flows. CWH is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income of CWGS, LLC and is taxed at the prevailing corporate tax rates. For the three months ended September 30, 2024 and 2023, the Company used blended statutory tax rate assumptions of 25.0% and 25.1%, respectively, for income adjustments applicable to CWH when calculating the adjusted net income attributable to Camping World Holdings, Inc. ─ basic and diluted (see “Non-GAAP Financial Measures” in Part I, Item 2 of this Form 10-Q). CWGS, LLC may be liable for various other state and local taxes.

Previous wording

The following table presents the allocation of CWGS, LLC’s C-Corp and Pass-Through net income (loss) to CWH, the allocation of CWGS, LLC’s net income (loss) to non-controlling interests, income tax (expense) benefit recognized by CWH, and other items:

Current wording

The following table presents the allocation of CWGS, LLC’s C-Corp and Pass-Through net income to CWH, the allocation of CWGS, LLC’s net income to non-controlling interests, income tax expense recognized by CWH, and other items:

Previous wording

The following table presents further information on income tax (expense) benefit:

Current wording

The following table presents further information on income tax expense:

Previous wording

The following table sets forth information comparing the components of net income for the three months ended June 30, 2024 and 2023:

Current wording

Unless otherwise indicated, all financial comparisons in this section of Results of Operations compare our financial results for the three months ended September 30, 2024 to our financial results from the three months ended September 30, 2023. The following table sets forth information comparing the components of net income for the three months ended September 30, 2024 and 2023:

Previous wording

Good Sam Services and Plans revenue increased primarily from increased contracts in force for our Good Sam Insurance Agency programs, partially offset by reduced contracts in force for our extended vehicle warranty programs and reduced advertising revenue for our annual directory.

Current wording

Good Sam Services and Plans revenue increased primarily from increased underwriting profit sharing from extended vehicle warranty programs, partially offset by reduced contracts in force for the extended vehicle warranty programs, and increased contracts in force for our Good Sam Insurance Agency programs.

Previous wording

New vehicles revenue increased primarily due to a 16.9% increase in new vehicles sold, partially offset by a 9.5% decrease in the average selling price per new vehicle sold driven primarily by the lower cost 2024 model year travel trailers and discounting of pre-2024 model year new vehicles. On a same store basis, new vehicles revenue decreased 0.8% to $761.5 million with an increase in new vehicles sold of 9.7%, primarily due to a reduced average sales price per vehicle sold.

Current wording

New vehicles revenue increased primarily due to a 31.2% increase in new vehicles sold, partially offset by a 7.4% decrease in the average selling price per new vehicle sold driven primarily by the lower cost 2024 model year travel trailers and discounting of pre-2024 model year new vehicles. On a same store basis, new vehicles revenue increased 19.2% to $737.1 million from an increase in new vehicles sold of 28.8%, which was partially offset by a 7.4% decrease in the average selling price per new vehicle sold.

Previous wording

Used vehicles revenue decreased primarily due to both an 11.7% reduction in used vehicles sold and a 12.6% decrease in the average selling price per used vehicle sold. The decrease in used vehicles sold was due in large part to slowed procurement of used vehicles. This reduced availability and decrease in average selling price of used vehicles were driven largely as a byproduct of the lower cost and selling price of 2024 model year new vehicles, which impacted used vehicles as discussed in “Industry Trends” above. On a same store basis, used vehicles revenue decreased 27.7% to $436.1 million and used vehicles sold decreased 17.0%.

Current wording

Used vehicles revenue decreased primarily due to both a 17.9% reduction in used vehicles sold and a 7.7% decrease in the average selling price per used vehicle sold. The decrease in used vehicles sold was due in large part to slowed procurement of used vehicles. This reduced availability and decrease in average selling price of used vehicles was largely a byproduct of the lower cost and selling price of 2024 model year new vehicles, which impacted used vehicles as discussed in “Industry Trends” above. On a same store basis, used vehicles revenue decreased 27.6% to $399.5 million from a decrease in used vehicles sold of 20.5% and a 8.9% decrease in average sales price per used vehicle sold.

Previous wording

Used vehicles gross profit decreased primarily due to the used vehicle revenue decrease described above, partially offset by an 8.2% decrease in the average cost per used vehicle sold. Used vehicle gross

Current wording

Used vehicles gross profit decreased primarily due to the decrease in used vehicles sold and the lower gross profit per used vehicle. The lower gross profit per used vehicle and 76 basis point decrease in used

Previous wording

Products, service and other revenue decreased primarily due to a reduction in sales activity resulting from our Active Sports Restructuring and fewer used vehicles sold leading to a decline in retail product attachment to vehicle sales, partially offset by increases in RV service revenue. On a same store basis, products, service and other revenue decreased 6.9% to $184.8 million for the three months ended June 30, 2024 from the three months ended June 30, 2023.

Current wording

Products, service and other revenue decreased primarily due to a reduction in sales activity resulting from the divestiture of our RV furniture business and fewer used vehicles sold leading to a decline in retail product attachment to vehicle sales. On a same store basis, products, service and other revenue decreased 2.3% to $182.2 million.

Previous wording

Products, service and other gross profit increased primarily due to the Active Sports Restructuring and higher labor billing rates. The increase in products, service and other gross margin was primarily due to higher labor billing rates on warranty service, the divestiture of our RV furniture business, and improvements to the pricing for aftermarket accessories.

Current wording

Products, service and other gross profit increased primarily due to higher labor billing rates and a higher proportion of billable labor. The increase in products, service and other gross margin was primarily due to higher labor billing rates on warranty service, a higher proportion of billable labor, the divestiture of our RV furniture business, and improvements to the pricing for aftermarket accessories.

Previous wording

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue increased $12.1 million, which was primarily a result of an increased number of contracts sold and an increase in revenue per contract. Finance and insurance, net revenue as a percentage of new and used vehicle revenue was 13.5% for the three months ended June 30, 2024, an increase from 11.7% for the three months ended June 30, 2023. On a same store basis, finance and insurance, net revenue decreased 0.2% versus the three months ended June 30, 2023.

Current wording

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue increased $2.6 million, which was primarily a result of an increased number of contracts sold resulting from increased vehicles sold and an increase in revenue per contract. Finance and insurance, net revenue as a percentage of new and used vehicle revenue was 13.1%, an increase from 12.9%. On a same store basis, finance and insurance, net revenue decreased 1.8%.

Previous wording

Good Sam Club revenue and gross margin decreased slightly primarily from the 7.7% decrease in Good Sam Club members, excluding free basic plan members, partially offset by an increased rate per annual membership and increased Good Sam co-branded credit card royalty fees. The decrease in Good Sam Club members resulted from an increase in the standard membership price and the introduction of the free basic plan in late 2023 that provides for limited participation in the loyalty point program without access to the remaining member benefits. For the remainder of 2024, we expect to continue to see declines in the Good Sam Club members as a result of this price increase and the availability of the free basic plan.

Current wording

Good Sam Club revenue and gross profit decreased slightly primarily from the 12.1% decrease in Good Sam Club members, excluding free basic plan members, partially offset by an increased rate per annual membership and higher Good Sam co-branded credit card royalty fees. The 335 basis point increase in Good Sam Club gross margins was primarily from the increased rate per annual membership. The decrease in Good Sam Club members resulted from an increase in the standard membership price and the introduction of the free basic plan in late 2023 that provides for limited participation in the loyalty point program without access to the remaining member benefits. For the remainder of 2024, we expect to continue to see declines in the Good Sam Club members as a result of this price increase and the availability of the free basic plan.

Previous wording

As discussed in Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $10.4 million of long-lived asset impairments that were unrelated to restructuring activities during the six months ended June 30, 2024 compared to $7.5 million of long-lived asset impairments for the six months ended June 30, 2023 that related primarily to the Active Sports Restructuring.

Current wording

As discussed in Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $1.9 million of long-lived asset impairments, an increase of $0.2 million. These long-lived asset impairments related to closed or underperforming store locations, which included the evaluation of decreases in market rental rates or market value of real property for closed store locations.

Previous wording

The significant increase in floor plan interest expense was primarily due to a higher average floor plan balance and, to a lesser extent, an 85 basis point increase in the average floor plan borrowing rate. The average interest rate for the Floor Plan Facility for the three months ended June 30, 2024 and 2023 was 7.84% and 6.99%, respectively.

Current wording

The increase in floor plan interest expense was primarily due to a higher average floor plan notes payable balance and, to a lesser extent, a 46 basis point increase in the average floor plan borrowing rate. The average interest rate for the Floor Plan Facility for 2024 and 2023 was 7.82% and 7.36%, respectively.

Previous wording

Other interest expense, net increased primarily due to a 46 basis point increase in the Term Loan Facility average interest rate and a higher average principal balance from additional borrowings on the Company’s Real Estate Facilities and the revolving line of credit under the Floor Plan Facility (see Note 7 – Long-Term Debt and Note 3 – Inventories and Floor Plan Payables to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). The average interest rate for the Term Loan Facility for the three months ended June 30, 2024 and 2023 was 7.96% and 7.50%, respectively.

Current wording

Other interest expense, net increased primarily due to a higher average principal balance from the revolving line of credit under the Floor Plan Facility (see Note 7 – Long-Term Debt and Note 3 – Inventories and Floor Plan Payables to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). The average interest rate for the Term Loan Facility for 2024 and 2023 was 7.92% and 7.87%, respectively. The average interest rate on the M&T Real Estate Facility for 2024 and 2023 was 7.93% and 7.83%, respectively.

Previous wording

The reduction of income tax expense was primarily due to lower income generated from CWGS, LLC for which the Company is subject to U.S. federal and state taxes on its allocable share.

Current wording

The reduction of income tax expense to an income tax benefit was primarily due to lower income generated from CWGS, LLC for which the Company is subject to U.S. federal and state taxes on its allocable share.

Previous wording

Good Sam Services and Plans revenue increased slightly primarily from increased contracts in force for our Good Sam Insurance Agency programs, partially offset by reduced contracts in force for our extended vehicle warranty programs and reduced advertising revenue for our annual directory.

Current wording

Good Sam Services and Plans revenue increased primarily from increased underwriting profit sharing from extended vehicle warranty programs, partially offset by reduced contracts in force for the extended vehicle warranty programs, and increased contracts in force for our Good Sam Insurance Agency programs.

Previous wording

Good Sam Services and Plans segment income decreased primarily due to increased general and administrative expenses, resulting from increased employee compensation expenses. Segment income margin decreased 94 basis points to 50.5% primarily due to increased general and administrative expenses, most notably employee compensation expenses.

Current wording

Good Sam Services and Plans segment income margin decreased to 45.0% from 65.3%. This segment income margin decrease and the decrease in Good Sam Services and Plans segment income was primarily due to a $5.5 million prior year exit arrangement with a service partner, incremental roadside assistance claims costs in 2024, and increased general and administrative expenses, resulting from increased employee compensation expenses, partially offset by increased underwriting profit sharing for the extended vehicle warranty programs, and reduced marketing costs.

Previous wording

RV and Outdoor Retail segment revenue decreased primarily due to a $142.4 million, or 22.8%, decrease in used vehicles revenue, and an $11.8 million, or 4.8%, decrease in products, service and other revenue, partially offset by a $46.5 million, or 5.8%, increase in new vehicles revenue, and a $12.1 million, or 7.2%, increase in finance and insurance, net revenue.

Current wording

RV and Outdoor Retail segment revenue decreased primarily due to a $143.3 million, or 24.2%, decrease in used vehicles revenue, and a $10.8 million, or 4.6%, decrease in products, service and other revenue, partially offset by a $146.1 million, or 21.5%, increase in new vehicles revenue, and a $2.5 million, or 1.5%, increase in finance and insurance, net revenue.

Previous wording

RV and Outdoor Retail segment income decreased primarily due to decreased segment gross profit of $25.6 million primarily relating to reduced volume and average sales price of used vehicles sold, which was partially offset by improved margins for products, service and other; an $8.1 million increase in loss on sale or disposal of assets that was driven primarily by the divestiture of our RV furniture business that resulted in a $7.1 million loss (see Note 5 – Assets Held for Sale and Business Divestiture to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q); a $7.1 million increase in floor plan interest expense; and a $4.1 million increase in long-lived asset impairment; partially offset by a $3.0 million decrease in selling, general and administrative expenses (see discussion of selling, general and administrative expenses above for the similar drivers of this change). RV and Outdoor Retail segment income margin decreased 208 basis points to 3.6% for the three months ended June 30, 2024 from the three months ended June 30, 2023 primarily due a lower volume of used vehicles sold and a lower average price per vehicle sold, in addition to the increased loss on sale or disposal of assets.

Current wording

RV and Outdoor Retail segment income decreased primarily due to decreased segment gross profit of $16.0 million primarily relating to reduced volume and average sales price of used vehicles sold; a $2.6 million increase in floor plan interest expense; and a $0.2 million increase in long-lived asset impairment; partially offset by a $3.3 million decrease in selling, general and administrative expenses (see discussion of selling, general and administrative expenses above for the similar drivers of this change), a $3.0 million reduction in lease termination expense, and a $0.1 million decrease in loss on sale or disposal of assets. RV and Outdoor Retail segment income margin decreased 72 basis points to 2.6%, which was primarily due a lower volume of used vehicles sold and a lower average price per vehicle sold.

Previous wording

Good Sam Services and Plans gross profit and gross margin increased primarily due to increased contracts in force for our Good Sam Insurance Agency Programs and underwriter profit sharing and reduced marketing expenses.

Current wording

Good Sam Services and Plans gross profit and gross margin decreased primarily due to a nonrecurring $5.5 million exit arrangement with a service partner in 2023 and incremental roadside assistance claims costs in 2024, partially offset by increased contracts in force for our Good Sam Insurance Agency Programs, increased extended vehicle warranty underwriter profit sharing, and reduced marketing expenses.

Previous wording

New vehicles revenue increased primarily due to an 18.8% increase in new vehicles sold, partially offset by a 12.6% decrease in the average selling price per new vehicle sold driven primarily by the lower cost 2024 model year travel trailers and discounting of pre-2024 model year new vehicles. On a same store basis, new vehicles revenue decreased 2.1% to $1.4 billion with an increase in new vehicles sold of 12.2%, primarily due to a reduced average sales price per vehicle sold.

Current wording

New vehicles revenue increased primarily due to a 22.7% increase in new vehicles sold, partially offset by a 10.8% decrease in the average selling price per new vehicle sold driven primarily by the lower cost 2024 model year travel trailers and discounting of pre-2024 model year new vehicles. On a same store basis, new vehicles revenue increased 4.4% to $2.1 billion with an increase in new vehicles sold of 17.3%, which was partially offset by an 11.0% decrease in the average selling price per new vehicle sold.

Previous wording

New vehicle gross profit increased primarily due to a 16.9% increase in new vehicle units sold, which was partially offset by the 10.3% lower gross profit per new vehicle that was driven largely by the 9.5% decrease in the average selling price per new vehicle sold discussed above. The new vehicle gross margin remained relatively unchanged with a decrease of only 14 basis points as the decrease in the average selling price of new vehicles was mostly offset by the lower cost per new vehicle sold.

Current wording

New vehicles gross profit increased primarily due to the increase in new vehicles sold, partially offset by the lower gross profit per new vehicle. The lower gross profit per new vehicle and 58 basis point decrease in new vehicle gross margin was driven by the 10.8% decrease in average selling price per new vehicle sold, which was mostly offset by the 10.2% decrease in average cost per new vehicle sold, which was primarily from the lower cost 2024 model year travel trailers.

Previous wording

Used vehicles revenue decreased primarily due to a 12.6% reduction in used vehicles sold and a 12.3% decrease in the average selling price per used vehicle sold. The decrease in used vehicles sold was due in large part to slowed procurement of used vehicles. This reduced availability and decrease in average selling price of used vehicles were driven largely as a byproduct of the lower cost and selling price of 2024 model year new vehicles, which impacted used vehicles as discussed in “Industry Trends” above. On a same store basis, used vehicles revenue decreased 27.8% to $748.6 million, and used vehicles sold decreased 17.1%.

Current wording

Used vehicles revenue decreased primarily due to a 14.5% reduction in used vehicles sold and a 10.7% decrease in the average selling price per used vehicle sold. The decrease in used vehicles sold was due in large part to slowed procurement of used vehicles. This reduced availability and decrease in average selling price of used vehicles were largely a byproduct of the lower cost and selling price of 2024 model year new vehicles, which impacted used vehicles as discussed in “Industry Trends” above. On a same store basis, used vehicles revenue decreased 27.8% to $1.1 billion from a decrease in used vehicles sold of 18.5% and an 11.5% decrease in average sales price per used vehicle sold.

Previous wording

Used vehicles gross profit decreased primarily due to the used vehicle revenue decrease described above, partially offset by a 7.0% decrease in the average cost per used vehicle sold. Used vehicle gross margin decreased primarily due to a lower average selling price per used vehicle sold, partially offset by a 7.0% reduction in cost per used vehicle sold.

Current wording

Used vehicles gross profit decreased primarily due to the decrease in used vehicles sold and the lower gross profit per used vehicle. The lower gross profit per used vehicle and 324 basis point decrease in used vehicle gross margin was driven by the 10.7% decrease in average selling price per used vehicle sold, partially offset by the 7.0% decrease in average cost per used vehicle sold.

Previous wording

Products, service and other revenue decreased primarily due to a reduction in sales activity resulting from our Active Sports Restructuring, the divestiture of our RV furniture business, and fewer used vehicles sold led to a decline in retail product attachment to vehicle sales, partially offset by increases in RV service revenue.

Current wording

Products, service and other revenue decreased primarily due to a reduction in sales activity resulting from our Active Sports Restructuring, the divestiture of our RV furniture business, and fewer used vehicles sold

Previous wording

Products, service and other gross profit increased primarily due to higher labor billing rates. The increase in products, service and other gross margin was primarily due to higher labor billing rates on warranty service, improvements to the pricing for aftermarket accessories, the divestiture of our RV furniture business, and the Active Sports Restructuring.

Current wording

Products, service and other gross profit increased primarily due to higher labor billing rates and a higher proportion of billable labor. The increase in products, service and other gross margin was primarily due to higher labor billing rates resulting from increased demand and increased technician wages, a higher proportion of billable labor, product discounting associated with restructuring of our Active Sports business in 2023, and margin improvement associated with the sale of our furniture business in the second quarter of 2024.

Previous wording

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue increased $17.8 million, which was primarily a result of an increased number of contracts sold and an increase in revenue per contract. Finance and insurance, net revenue as a percentage of new and used vehicle revenue was 13.5% for the six months ended June 30, 2024, an increase from 11.8% for the six months ended June 30, 2023. On a same store basis, finance and insurance, net revenue remained relatively unchanged from the six months ended June 30, 2023.

Current wording

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue increased $20.4 million, which was primarily a result of an increased number of contracts sold from the increased vehicles sold. Finance and insurance, net revenue as a percentage of new and used vehicle revenue was 13.4%, an increase from 12.2%. On a same store basis, finance and insurance, net revenue decreased slightly by 0.7%.

Previous wording

Good Sam Club revenue and gross margin decreased slightly from a 7.7% decrease in Good Sam Club members, excluding free basic plan members, partially offset by an increased rate per annual membership and increased in Good Sam branded credit card fees. The decrease in Good Sam Club members resulted from an increase in the standard membership price and the introduction of the free basic plan in late 2023 that provides for limited participation in the loyalty point program without access to the remaining member benefits. For the remainder of 2024, we expect to continue to see declines in the Good Sam Club members as a result of this price increase and the availability of the free basic plan.

Current wording

Good Sam Club revenue and gross profit decreased slightly from a 12.1% decrease in Good Sam Club members, excluding free basic plan members, partially offset by an increased rate per annual membership and higher Good Sam branded credit card fees. The decrease in Good Sam Club members resulted from an increase in the standard membership price and the introduction of the free basic plan in late 2023 that provides for limited participation in the loyalty point program without access to the remaining member benefits. For the remainder of 2024, we expect to continue to see declines in the Good Sam Club members as a result of this price increase and the availability of the free basic plan.

Previous wording

Selling, general and administrative expenses increased primarily due to $19.8 million of additional advertising expenses and $2.4 million of increased other expenses, partially offset by reduced employee compensation costs of $13.6 million, which included a decrease in equity-based compensation expense of $2.1 million. The decrease in equity-based compensation was driven primarily by fewer average RSUs outstanding and a lower average grant date fair value of those RSUs.

Current wording

Selling, general and administrative expenses increased primarily due to $23.1 million of additional advertising expenses and $5.2 million of increased outside professional services, partially offset by reduced employee compensation costs of $18.9 million, which included a decrease in equity-based compensation expense of $1.9 million, and a $5.5 million reduction in nonbillable RV service work expense.

Previous wording

As discussed in Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $4.6 million of long-lived asset impairments that were unrelated to restructuring activities during the three months ended June 30, 2024 compared to $0.5 million of long-lived asset impairments for the three months ended June 30, 2023 that related primarily to the Active Sports Restructuring.

Current wording

As discussed in Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $12.4 million of long-lived asset impairments, an increase of $3.1 million. These long-lived asset impairments generally related to closed or underperforming store locations, which included the evaluation of decreases in market rental rates or market value of real property for closed store locations. However, $6.6 million of the 2023 long-lived asset impairment related to the Active Sports Restructuring.