Camping World posts $27 million net loss on 0.6% profit increase

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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
  • Dealerships
  • Retail

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

Greg Gerber

Greg Gerber

A journalist who has covered the recreation vehicle industry since January 2000, Greg Gerber founded RV Daily Report on April Fool's Day in 2009. He also serves as the editor of the publication and website. As an Eagle Scout, he has enjoyed camping for decades and has visited every state except Hawaii. A DODO -- Dad of Daughters Only -- to three young women, he has two grandchildren as well. He currently splits his time between Wisconsin, Texas and Arizona. Greg can be reached at editor@rvdailyreport.com.

Leave a Comment

  • Richard Charron says:

    I thought this company would implode many years ago due to its seemingly reckless acquisitions which I attributed to ego more than common sense. Looking at the numbers reflected in the article it appears that I may have been correct about the reasoning just wrong in when it would happen. As someone who spent decades evaluating my business prowess from month to month based on profit and loss statements, I would not be enjoying my life at this moment if this was my report card.

  • Andy says:

    Ummm. . . I think your headline should refer to a 0.6% revenue increase, not profit increase.

  • Monsour Hanoud says:

    CWH slow start to the yr! however in my experience the 1st quarter was always predicated on weather & general economic conditions. It’s when the spring season starts & business through out the country picks up is when you’ll see sales pick up. As for the flooding and deteriorating weather, people will need RVs to live in during repairs to property.
    Rates, fuel & people are working
    RVing will gain momentum soon. Positive/increase in
    GS memberships!

  • Paul McPhillips says:

    While some have reported bad experiences with CW, I have had multiple good experiences in different locations across the country. I’m no Fanboy, just calling it as I see it. If I was in CW operations, I’d really work on fixing the RV Service sector of the business. I understand it’s an industry-wide problem in which you can’t take a single trade (Auto Mechanic or Plumber) person and expect them to be successful in repairing an RV. There are too many systems to learn to get someone up to speed quickly and efficiently. It takes years of experience to be competent which will come with good mentorship, training and pay. Something lacking. As RV’s get more technology in them, the problem will only get worse unless the suppliers also step up to make the tech’s job easier by making the systems easier to troubleshoot and get the RV’s back on the road. Take care of the customer, and they will take care of you!

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