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LINCOLNSHIRE, Ill. — Camping World Holdings reported results last week for the first quarter which ended March 31.
Highlights of the financial report showing year-over-year financial comparisons include:
- Revenue increased 0.6% to $1.065 billion
- Gross profit decreased 1.2% to $298.3 million
- Income from operations was $16.9 million
- Net loss was $26.8 million
- Diluted loss per share of Class A common stock was $0.52
- Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $21.4 million
- Number of active customers increased 31.4% to 5.1 million and the number of Good Sam Club memberships increased 17.1% to approximately 2.15 million. An “active” customer is someone with at least one transaction in the past two years.
“We are excited about the progress we have made in our business. Our financial results for the quarter and the directional trends in our business were essentially in line with our full year guidance expectations,” said Marcus A. Lemonis, chairman and chief executive officer.
“Consistent with our forecast, we have seen an improvement in sales trends since mid-March that has continued into April and early May, and our outlook for the full year remains unchanged,” he added.
Change in segment reporting
Following the resignation of Roger Nuttall Dec. 21 from his position as president of Camping World, the company took steps during the quarter to realign the reporting structure of management and internal reporting.
As a result of these changes, the company has determined that its reportable segments have changed.
The company’s new reportable segments have been identified based on various commonalities among the company’s individual product lines, which Lemonis said is consistent with the company’s operating and associated management structure.
Management evaluates the performance of and allocates resources to these segments based on segment revenues and segment profit, the release explained. The segment reporting for prior comparative periods have been recast to conform to the current period presentation.
The company previously had three reportable segments:
- Consumer services and plans
Following the realignment, the company now has just two reportable segments:
- Good Sam services and plans
- RV and outdoor retail
In conjunction with the first quarter 2019 realignment of the reporting structure, the company combined its prior dealership and retail segments into the RV and outdoor retail segment.
The company has also reclassified a portion of the former consumer services and plans segment, the Good Sam Club and co-branded credit card operations, to the RV and outdoor retail segment, which reflects the synergies of those two programs with the RV and outdoor retail locations, the release explained.
Within the Good Sam Services and plans segment, the company primarily derives revenue from the sale of the following offerings:
- Emergency roadside assistance
- Property and casualty insurance programs
- Travel assist programs
- Extended vehicle service contracts
- Vehicle financing and refinancing
- Shows and events
- Publications and directories
Within the RV and outdoor retail segment, the company primarily derives revenue from:
- The sale of new and used RVs
- Sales of RV products and services, including the sale of parts, accessories, supplies and services for RVs, and equipment, gear and supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport and other outdoor activities
- Commissions on the finance and insurance contracts related to the sale of RVs;
- Good Sam Club memberships and co-branded credit cards.
The company’s chief operating decision maker is a group comprised of the chief executive officer and the president.
First quarter 2019 results
Good Sam services and plans segment:
- Segment revenue increased 4.8% to $47.0 million
- Segment gross profit increased 7.7% to $26.2 million
- Segment gross margin increased 150 basis points to 55.9%
- Segment income increased 3.1% to $22.4 million.
RV and outdoor retail segment:
- Segment revenue increased 0.4% to $1.02 billion
- Same store revenue decreased 11.0% to $847.9 million across the same store base of 139 locations, of which 121 sold new and/or used RV vehicles
- Segment gross profit decreased 2.0% to $272.1 million
- Segment gross margin decreased 64 basis points to 26.7%
- Segment income decreased 101.5% to a segment loss of $0.4 million
- Vehicle units sold decreased 5.5% to 23,193 units
- New vehicle units sold decreased 7.9% to 15,016 units
- Used vehicle units sold decreased 0.9% to 8,177 units
- Average selling price per vehicle unit sold decreased 0.1% to $30,595
- New vehicles decreased 0.8% to $35,268 per unit
- Used vehicles increased 5.5% to $22,014 per unit
- Same store vehicle units sold decreased 12.1% to 21,112 units
- New vehicle same store units sold decreased 15.6% to 13,497 units
- Used vehicle same store units sold decreased 5.2% to 7,615 units
- Gross profit per vehicle sold including finance and insurance increased 2.2% to $8,433
- Finance and insurance revenue as a percentage of total vehicle revenue increased 110 basis points to 12.9%
- New vehicle inventory per dealership location increased 0.1% to $7.2 million from December 31
- Products, service and other revenue increased 24.8% to $204.9 million
- Gross profit increased 0.6% to $68.8 million
- Same store products, service and other revenue decreased 9.6% to $113.0 million
- Good Sam Club revenue increased 27.5% to $11.5 million and gross profit increased 16.2% to $7.7 million
- Good Sam Club memberships increased 17.1% to approximately 2.15 million
As of March 31, the company operated a total of 226 RV and outdoor retail locations, with 147 of these selling new and/or used RVs.
Select balance sheet and cash flow items
The company’s working capital and cash and cash equivalents as of March 31 were $505.1 million and $70.0 million, respectively.
Total inventories increased 4.1% to $1.6 billion as compared to December 31. That was driven by a 5.7% increase in products, parts, accessories and miscellaneous inventory, and a 4.4% increase in new vehicle inventory, the release noted.
It was partially offset by a 3.3% decline in used inventory.
As of March 31, Camping World had $42.6 million of borrowings under its revolving line of credit as part of its floor plan facility, $1,172.1 million of term loans outstanding under the senior secured credit facilities, $9.5 million outstanding under the real estate facility, and $882.3 million of floor plan notes payable under the floor plan facility.
SOURCE: Camping World press release