Camping World Holdings, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed February 26, 2024. This is an annual filing. The text does not provide standalone fourth-quarter financial results.
Business context
Camping World operates RV dealerships and service centers, sells new and used RVs and related products, and offers Good Sam memberships, protection plans and services. It reported two segments: RV and Outdoor Retail and Good Sam Services and Plans. At year-end it operated 202 locations in 43 states and reported approximately 5.0 million active customers.
Financial and operating performance
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | $6.23 billion | $6.97 billion |
| Gross profit / gross margin | $1.88 billion / 30.2% | $2.26 billion / 32.5% |
| Operating income / margin | $267.1 million / 4.3% | $568.5 million / 8.2% |
| Net income | $50.6 million | $351.0 million |
| Net income attributable to Camping World Holdings, Inc. | $31.0 million | $136.9 million |
| GAAP diluted EPS | $0.55 | $3.22 |
| Adjusted EBITDA (non-GAAP) | $286.2 million | $653.4 million |
| Cash from operating activities | $310.8 million | $189.8 million |
- Revenue fell 10.6%; same-store revenue declined 15.5% to $5.23 billion. New-vehicle units fell 16.6%, while used-vehicle units rose 10.7%. Average selling prices declined 4.3% for new vehicles and 4.8% for used vehicles.
- New-vehicle gross margin declined to 15.5% from 20.2%; used-vehicle gross margin fell to 20.5% from 24.5%. Management cited discounting, higher vehicle costs and lower selling prices.
- Operating cash flow rose despite lower earnings, largely reflecting a favorable inventory working-capital change. Investing cash outflow was $369.4 million, including $209.5 million for dealership acquisitions and $131.1 million of capital expenditures. Cash declined by $90.5 million to $39.6 million.
- Year-end working capital was $401.3 million, down from $611.3 million. Total debt and finance lease obligations were approximately $3.05 billion, including $1.37 billion of floor-plan payables. Reported available borrowing capacity across facilities was $405.1 million, subject to borrowing-base, collateral and covenant conditions.
- Interest expense increased materially: floor-plan interest was $83.1 million and other interest expense was $135.3 million. The company reported a 7.28% floor-plan rate and a 7.97% average Term Loan Facility rate at year-end.
Material changes, outlook and risks
- On August 1, 2023, the company reduced its quarterly Class A dividend from $0.625 to $0.125 per share, citing capital allocation priorities and expansion opportunities. Dividends remain discretionary and subject to liquidity and debt restrictions.
- Management expects approximately $60 million in annual savings from 2023 headcount reductions and changes to variable compensation, primarily in SG&A. Good Sam Services and Plans gross profit included a nonrecurring $5.5 million benefit from exiting a service-partner arrangement.
- For the next 12 months, management estimated $71.5 million to $114.9 million of dealership acquisition and construction spending, including at least $71.5 million related to acquisitions with signed letters of intent. It stated that liquidity sources were expected to cover operations, growth, dividends and obligations for at least 12 months, while cautioning that additional financing might be needed.
- RV Industry Association wholesale shipments fell 36.5% in 2023. The association projected improving shipments and retail sales in 2024, particularly in the latter half; this is an industry expectation, not company guidance. Manufacturers indicated 2024 new towable selling prices could fall by up to 10%, potentially pressuring vehicle margins and used-RV values.
- On January 17, 2024, Camping World announced a strategic review of Good Sam, which could result in a sale, spin-off or other disposition. No decision or deadline had been set, and the company warned of potential costs and execution, employee-retention and business-disruption risks.
- Active Sports restructuring was substantially completed in 2023, with $5.9 million of associated costs and $6.6 million of related long-lived asset impairment. Remaining lease obligations from this and earlier restructuring initiatives may continue to generate costs.
- Key risks include consumer sensitivity to interest rates and discretionary spending, inventory and pricing volatility, dependence on Thor Industries and Forest River for most new-RV inventory, variable-rate debt and restrictive covenants, seasonality, litigation, and cybersecurity. A 2022 cyber incident exposed personal information of approximately 30,000 individuals; related class-action settlement approval was pending as of the filing. The company also disclosed ongoing litigation and said it could not estimate possible losses for certain matters.
Important facts for investors to verify
- Whether sales volumes, selling prices and gross margins stabilize, and whether the industry’s expected 2024 recovery materializes.
- Cash generation, inventory levels and access to borrowing capacity, including floor-plan and covenant limits; assess debt service against higher interest costs.
- Whether the announced cost savings are realized without impairing sales, service capacity or growth plans.
- Outcome, costs and strategic consequences of the Good Sam review, and any remaining restructuring or litigation liabilities.
- Dividend sustainability, given the reduction, holding-company structure and restrictions on distributions.
- Reconcile GAAP earnings with non-GAAP Adjusted EBITDA and adjusted EPS, including the exclusions and the effect of non-controlling interests. The filing reports unqualified audit opinions and effective internal controls; the 2023 assessment excluded 18 recently acquired dealerships.