What changed in this filing

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Item 1A. Risk Factors

2021-02-26 compared with 2020-02-28 · 191 added, 231 removed, 509 unchanged (45% of the section changed)

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Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition and results of operations.

Risks Related to the COVID-19 Pandemic

The COVID-19 pandemic has had, and could have in the future, certain negative impacts on our business, and such impacts may have a material adverse effect on our results of operations, financial condition and cash flows.

The public health crisis caused by the COVID-19 pandemic and the measures being taken by governments, businesses, including us and our vendors, and the public at large to limit COVID-19's spread have had, and could again have in the future, certain negative impacts on our business including, without limitation, the following:

● We have faced, and may continue to face, delays in the delivery of certain products from our vendors as a result of shipping delays due to, among other things, additional safety requirements imposed by governmental authorities and capacity constraints experienced by our transportation contractors.

● Some of our vendors have experienced, and may experience in the future, temporary facility closures, production slowdowns and disruption to operations as a result of the impact of the COVID-19 pandemic on their respective businesses, such as Thor Industries, Inc.’s temporary closure of its North American production facilities from late March to early May 2020.

● Disruptions in supply chains may place constraints on our ability to source products, which may increase our product costs or lead to shortages.

● When governmentally mandated or voluntary stay-at-home guidelines have been put in place, we have experienced a decrease in traffic at our retail locations, which resulted in a decrease in the sales of certain of our products and services at our retail locations.

If stay-at-home or shelter-in-place orders are reinstated, we may again experience negative impacts on our sales that could be more prolonged and more severe than what we have experienced to date.

As stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic, lead generation, and revenue trends in May continuing throughout the remainder of 2020 and early indications appear to show favorable trends continuing into 2021.

The industry has seen an influx of new first-time participants because RVs allow people to travel in a safe and socially distant manner during the COVID-19 crisis.

These trends may not continue in the future, in particular if the cruise line, air travel and hotel industries begin to recover.

Accordingly, investors are cautioned not to unduly rely on the historical information in this Form 10-K regarding our business, results of operations, financial condition or liquidity.

● National parks and RV parks temporarily closed and may in the future close again in response to the COVID-19 pandemic, which could cause consumers to use their RVs less frequently and be less inclined to need or renew certain of our services or purchase products through our e-commerce websites.

● As of December 31, 2020, we temporarily closed two dealerships as a result of COVID-19 and branding changes.

We anticipate re-opening these the locations in 2021.

To the extent the COVID-19 pandemic intensifies or governmental orders change, we may be forced to temporarily close more locations in the future.

● Deteriorating economic conditions as a result of the COVID-19 pandemic, such as increased unemployment, decreases in disposable income, declines in consumer confidence, or economic slowdowns or recessions, could cause a decrease in demand for our products and services.

● We have made temporary changes to our operating procedures at our retail locations and offices.

We are taking measures to protect our customers, employees and facilities, which include, but are not limited to, social distancing, providing employees with face coverings and/or other protective clothing as required, and implementing additional cleaning and sanitization routines.

These measures may not be sufficient to prevent the spread of COVID-19 among our employees and, therefore, we may face labor shortages including key positions.

Additionally, our employees may not be as efficient while operating under these temporary procedures, which could result in additional labor costs.

● Our ability to increase our borrowing capacity may be limited as a result of the COVID-19 pandemic and, if the conditions in the credit markets worsen, our ability to refinance credit arrangements as they mature may also be limited.

As a result, there is no guarantee that we will be able to access additional capital on commercially reasonable terms or at all.

● The current uncertain market conditions and their actual or perceived effects on our results of operations and financial condition, along with the current unfavorable economic environment in the United States, may increase the likelihood that one or more of the major independent credit agencies will further downgrade our credit ratings, which could have a negative effect on our borrowing costs.

● Governmental authorities in the United States may increase or impose new income taxes or indirect taxes, or revise interpretations of existing tax rules and regulations, as a means of financing the costs of stimulus and other measures enacted or taken, or that may be enacted or taken in the future, to protect populations and economies from the impact of the COVID-19 pandemic.

Such actions could have an adverse effect on our results of operations and cash flows.

● We rely on third-party service providers and business partners, such as cloud data storage and other information technology service providers, suppliers, distributors, contractors, and other external business partners, for certain functions or for services in support of key portions of our operations.

These third-party service providers and business partners are subject to risks and uncertainties related to the COVID-19 pandemic, which may interfere with their ability to fulfill their respective commitments and responsibilities to us in a timely manner and in accordance with the agreed-upon terms.

● The financial impact of the COVID-19 pandemic may cause one or more of our counterparty financial institutions to fail or default on their obligations to us, which could cause us to incur significant losses.

● Deteriorations in our financial results and financial condition as a result of the COVID-19 pandemic could cause us to default on one or multiple of our credit agreements, including any of the subjective acceleration clauses in such agreements.

If this occurs, our obligations under the relevant agreement may be accelerated which would have a material adverse impact on our business, liquidity position and financial position.

● We may be required to record significant impairment charges with respect to noncurrent assets, including goodwill, other intangible assets, and other long-lived assets whose fair values may be negatively affected by the effects of the COVID-19 pandemic on our operations.

Also, we may be

required to write off excess or obsolete inventory as a result of the COVID-19 pandemic’s damaging impacts on our business.

● As a result of the COVID-19 pandemic, including related governmental guidance or directives, we have required most office-based employees to work remotely.

We may experience reductions in productivity and disruptions to our business routines and heightened cybersecurity risks while our remote work policy remains in place.

● Actions we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemic may result in legal claims or litigation against us.

The resumption of normal business operations after the disruptions caused by the COVID-19 pandemic may be delayed or constrained by its lingering effects on our consumers, vendors or third-party service providers.

Risks Related to Our Business

We may not successfully execute or achieve the expected benefits of our 2019 Strategic Shift and this program may result in further asset impairment charges and adversely affect the Company's business.

In the third fiscal quarter of 2019, we announced a plan to strategically shift business away from locations where we do not have the ability or where it is not feasible to sell and/or service recreational vehicles (the “2019 Strategic Shift”).

In the third fiscal quarter of 2019, we announced the 2019 Strategic Shift.

Implementation of the program may be costly and disruptive to our business.

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In addition, the Company may need to incur further impairment charges to its long-lived assets, including its operating lease assets, as a result of the 2019 Strategic Shift.

The 2019 Strategic Shift has required, and may continue to require, a significant amount of management's and other employees' time and focus, which may divert attention from effectively operating and growing our business.

Our business is affected by the availability of financing to us and our customers.

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Generally, RV dealers, including us, finance their purchases of inventory with financing provided by lending institutions.

As of December 31, 2019, we had up to $1.38 billion in maximum borrowing capacity under our Seventh Amended and Restated Credit Agreement for floor plan financing (as further amended, the “Floor Plan Facility”) of which $848.0 million was outstanding and, after deducting $87.0 million of flooring line aggregate interest reduction account, $8.0 million for approved purchases that were in process at the manufacturers and $27.9 million of borrowings included in accounts payable for sold inventory, the available line for future inventory purchases as of December 31, 2019 was $408.8 million.

On December 4, 2018, FreedomRoads, LLC entered into a First Amendment to the Floor Plan Facility Amendment which increased the maximum

amount outstanding under the revolving line of credit to $60.0 million from $35.0 million, and $40.9 million of borrowings were outstanding under the revolving line of credit as of December 31, 2019.

On October 8, 2019, FreedomRoads, LLC entered into a Second Amendment to the Seventh Amended and Restated Credit Agreement which reduced the total commitment under the Floor Plan Facility to $1.38 billion, and extends the maturity date of the Floor Plan Facility to March 15, 2023, among other immaterial changes.

As of December 31, 2019, approximately 99.1% of the invoice cost of new RV inventory and no used RV inventory was financed under the Floor Plan Facility.

As of December 31, 2020, we had up to $1.38 billion in maximum borrowing capacity under our Seventh Amended and Restated Credit Agreement for floor plan financing (see Note 4 ─ Inventories, net and Notes Payable ─ Floor Plan, net to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

A decrease in the availability of this type of wholesale financing or an increase in the cost of such wholesale financing could prevent us from carrying adequate levels of inventory, which may limit product offerings and could lead to reduced sales and revenues.

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Our dealer agreements with manufacturers are generally made on a location-by-location basis, and each retail location typically enters into multiple dealer agreements with multiple manufacturers.

These dealer agreements may contain affirmative obligations that we must comply with.

Our dealer agreements also generally provide for a one-year term, which is typically renewed annually.

The terms of our dealer agreements are typically subject to:

● our meeting all the requirements and conditions of the manufacturer’s applicable programs;

● our maintaining certain minimum inventory requirements and meeting certain retail sales objectives;

● us performing services and repairs for all owners of the manufacturer’s RVs (regardless from whom the RV was purchased) that are still under warranty and us carrying the manufacturer’s parts and accessories needed to service and repair the manufacturer’s RVs in stock at all times;

● us actively advertising and promoting the manufacturer’s RVs;

● us indemnifying the manufacturer under certain circumstances.

For more information on our dealer arrangements, see “Item 1.

Business ─ Vehicle Sourcing and Dealer Arrangements” under Part I of this Form 10-K.

In addition, certain of our dealer agreements contain stocking level requirements and certain of our dealer agreements contain contractual provisions concerning minimum advertised product pricing for current model year units.

Wholesale pricing is generally established on a model year basis and is subject to change in the manufacturer’s sole discretion.

Wholesale pricing is generally established on a model year basis and is subject to change at the manufacturer’s sole discretion.

In certain cases, manufacturers have, and may continue to establish a suggested retail price, below which we cannot advertise that manufacturer’s RVs.

Any change, non-renewal, unfavorable renegotiation or termination of these arrangements for any reason could adversely affect product availability and cost and our financial performance.

Our business model is impacted by general economic conditions in our markets, and ongoing economic and financial uncertainties has caused a decline in consumer spending that has adversely affected our business, financial condition and results of operations.

Our business model is impacted by general economic conditions in our markets, 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.

As a business that relies on consumer discretionary spending, we have in the past and may in the future be adversely affected if our customers reduce, delay or forego their purchases of our services, protection plans, products and resources as a result of:

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If we close retail locations, are unable to open or acquire new retail locations due to general economic conditions or otherwise, or experience declines in customer transactions in our existing retail locations due to general economic conditions or otherwise, our ability to maintain and grow our customer database and our Active Customers will be limited, which could have a material adverse effect on our business, financial condition and results of operation.

Decreases in Active Customers, average spend per customer, or retention and renewal rates for our Good Sam services and plans would negatively affect our financial performance, and a prolonged period of

depressed consumer spending could have a material adverse effect on our business.

Promotional activities and decreased demand for consumer products have also affected our profitability and margins, particularly in recent quarters, and this negative impact could continue or worsen in future periods.

In prior years, promotional activities and decreased demand for consumer products affected our profitability and margins, and this negative impact could return or worsen in future periods.

In addition, adverse economic conditions may result in an increase in our operating expenses due to, among other things, higher costs of labor, energy, equipment and facilities, as well as higher tariffs.

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Any of the foregoing factors could have a material adverse effect on our business, financial condition and results of operations.

In addition, the success of our recurring Good Sam services and plans depends, in part, on our customers’ use of certain RV sites and/or the purchase of services, protection plans, products and resources through participating merchants, as well as the health of the RV industry generally.

In addition, the success of our recurring Good Sam services and plans depends, in part, on our customers’ use of certain RV websites and/or the purchase of services, protection plans, products and resources through participating merchants, as well as the health of the RV industry generally.

In addition, we have faced, and may continue to face, increased competition from other businesses with similar product and service offerings during recent periods.

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These factors could have a material adverse effect on our business, financial condition and results of operations.

Changes in consumer preferences for our products or our failure to gauge those preferences could lead to reduced sales and have increased our cost of sales and selling, general and administrative expenses.

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 cannot be certain that historical consumer preferences for RVs in general, and any related products, will remain unchanged.

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Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase our products.

As described above, during the COVID-19 pandemic, we have seen significant acceleration in our in-store traffic, lead generation, and revenue trends in May continuing throughout the remainder of 2020 and early indications appear to show favorable trends continuing into 2021.

The industry has seen an influx of new first-time participants because RVs allow people to travel in a safe and socially distant manner during the COVID-19 crisis.

These trends may not continue in the future, in

particular if the cruise line, air travel and hotel industries begin to recover.

Over the past several years, we have seen a shift in our overall sales mix towards new travel trailer vehicles, which has led to declines in our average selling price of a new vehicle unit.

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The increased popularity of new travel trailer vehicles and the lower price points of these units compared to other new vehicle classes, such as motorhomes and fifth wheels, could continue to lower our average selling price of a new vehicle unit and impact our ability to grow same store revenue.

However, after several years of strong growth, the overall RV industry experienced decelerating demand for new vehicles in 2018 which continued in 2019.

According to the RV Industry Association, wholesale shipments of new RV vehicles declined 4.1% for 2018 and 16.0% for 2019 on a period-over-period comparable period basis.

Decelerating industry trends in 2018 and 2019 have also negatively impacted our same store revenue trends during those periods.

These factors have negatively impacted our results of operations and may continue to negatively impact our results of operations in the future, which could have a material adverse effect on our business, financial condition and results of operations.

Competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast could reduce our revenues and profitability.

The markets for services, protection plans, products and resources targeting RV, outdoor and active sports enthusiasts are highly fragmented and competitive.

Major competitive factors that drive the RV, outdoor and active sports markets are price, product and service features, technology, performance,

reliability, quality, availability, variety, delivery and customer service.

Major competitive factors that drive the RV, outdoor and active sports markets are price, product and service features, technology, performance, reliability, quality, availability, variety, delivery and customer service.

We compete directly or indirectly with the following types of companies:

● major national insurance and warranty companies, providers of roadside assistance and providers of extended service contracts;

● other dealers of new and used RVs;

● independent, local specialty stores, such as “mom & pops”;

● other large-format outdoor and active sports goods stores and chains, such as Academy Sports + Outdoors, REI, Bass Pro Shops (including Cabela’s) and Sportsman’s Warehouse;

● multi-channel retailers and mass merchandisers, warehouse clubs, discount stores, department stores and online retailers, such as Amazon, Target and Wal-Mart;

● other RV dealers selling new and used RVs;

● major national insurance and warranty companies, providers of roadside assistance and providers of extended vehicle service contracts;

● multi-channel retailers and mass merchandisers, warehouse clubs, discount stores, department stores and other retailers, such as Wal-Mart, Target and Amazon;

● other specialty retailers that compete with us across a significant portion of our merchandising categories through retail, catalog or e-commerce businesses, such as Bass Pro Shops (including Cabela's), Sportsman's Warehouse and REI;

● distributors of assembled RV furniture;

● online retailers;

● independent, local specialty stores.

Additional competitors may enter the businesses in which we currently operate.

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In the past, we have acquired new retail locations in new markets and new businesses, product lines or product categories.

For example, in 2017 we acquired certain assets of Gander Mountain and Overton’s, and in 2018 we acquired several other specialty retail businesses.

As a result of this and any future expansion, we may have less familiarity with local consumer preferences and less business, product or category knowledge with respect to new businesses, product lines or categories, and could encounter difficulties in attracting customers due to a reduced level of consumer familiarity with our brands or reduced product or category knowledge, including due to recent acquisitions noted above.

As a result of this and any future expansion, we may have less familiarity with local consumer preferences and less business, product or category knowledge with respect to new businesses,

product lines or categories, and could encounter difficulties in attracting customers due to a reduced level of consumer familiarity with our brands or reduced product or category knowledge.

Other factors that may impact our ability to open or acquire new retail locations in new markets and to operate them profitably or acquire new businesses, product lines or categories, many of which are beyond our control, include:

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● regional economic and other factors in the geographic areas where we expand;

● general economic and business conditions affecting consumer confidence and spending and the overall strength of our business.

Our expansion into new markets, businesses, products or categories may not be supported adequately by our current resources, personnel and systems, and may also create new distribution and merchandising challenges, including additional strain on our distribution centers, an increase in information to be processed by our management information systems and diversion of management attention from existing operations.

Our expansion into new markets, businesses, products or categories such as a purchase of an RV furniture distributor, may not be supported adequately by our current resources, personnel and systems, and may also create new distribution and merchandising challenges, including additional strain on our distribution centers, an increase in information to be processed by our management information systems and diversion of management attention from existing operations.

To the extent that we are not able to meet these additional challenges, our sales could decrease, and our operating expenses could increase, which could have a material adverse effect on our business, financial condition and results of operations.

Finally, the size, timing, and integration of any future new retail location openings or acquisitions or the acquisition of new businesses, product lines or categories may cause substantial fluctuations in our results of operations from quarter to quarter.

In particular, our lack of operating history with the newly acquired businesses, particularly the Gander RV and Outdoors locations, could cause the ramp up and profitability levels of these locations to be slower and lower than our traditional greenfield location openings which could negatively impact the margins of the RV and Outdoor Retail segment.

Also, the large number of immature RV locations operating under the Gander RV and Outdoor brands may not achieve similar levels of profitability as our Camping World RV locations and could negatively impact our future profitability.

Our products, service and other gross margin was impacted in 2019 and 2018 by the opening of a net 30 Gander Outdoors locations.

Consequently, our results of operations for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year.

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Any of these events could result in decreases in revenues.

Further, maintaining, enhancing, promoting and positioning our brands image may require us to make substantial investments in areas such as merchandising, marketing, store operations, community relations, store graphics and employee training, which could adversely affect our cash flow, and which may ultimately be unsuccessful.

Further, maintaining, enhancing, promoting and positioning our brands’ image may require us to make substantial investments, which could adversely affect our cash flow, and which may ultimately be unsuccessful.

These factors could have a material adverse effect on our business, financial condition and results of operations.

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We typically order merchandise well in advance of the following selling season making it difficult for us to respond rapidly to new or changing product trends, increases or decreases in consumer demand or changes in prices.

discount excess inventory, either of which could have a material adverse effect on our business, financial condition and results of operations.

If we misjudge either the market for our merchandise or our consumers’ purchasing habits in the future, our revenues may decline significantly, and we may not have sufficient quantities of merchandise to satisfy consumer demand or sales orders, or we may be required to discount excess inventory, either of which could have a material adverse effect on our business, financial condition and results of operations.

For example, in the normal course of business, we periodically will implement discounting to reduce our excess RV inventory.

In addition, we have exited or are exiting certain non-RV retail categories because we felt those categories did not have sufficient demand or sales margins to justify our inventory levels.

In addition, we have exited certain non-RV retail categories because we felt those categories did not

have sufficient demand or sales margins to justify our inventory levels.

These activities have negatively impacted our gross margin, operating margin and selling, general and administrative expenses.

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Our same store revenue may vary from quarter to quarter.

A number of factors have historically affected, and will continue to affect, our same store revenue results, including:

● changes or anticipated changes to regulations related to some of the products we sell;

● consumer preferences, buying trends and overall economic trends;

● our ability to identify and respond effectively to local and regional trends and customer preferences;

In addition to the above risk factors a number of additional factors have historically affected, and will continue to affect, our same store revenue results, including:

● changes or anticipated changes to regulations related to some of the products we sell or to the localities in which we operate;

● our ability to provide quality customer service that will increase our conversion of shoppers into paying customers;

● competition in the regional market of a store;

● atypical weather patterns;

● changes in our product mix;

● changes to local or regional regulations affecting our stores;

● changes in sales of Good Sam services and plans and retention and renewal rates for our annually renewing Good Sam services and plans;

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We prefer to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the location to be re-modeled and to ramp up operations ahead of the spring and summer months.

The timing of our acquisitions in the first and fourth quarters, coupled with generally lower revenue in these quarters has resulted in SG&A expenses as a percentage of gross profit being higher in these quarters.

Due to our seasonality, the possible adverse impact from other risks associated with our business, including atypical weather, consumer spending levels and general business conditions, is potentially greater if any such risks occur during our peak sales seasons.

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(See “Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Senior Secured Credit Facilities and Floor Plan Facility” in Item 7 of Part II of this Form 10-K).

We cannot assure you that our cash flow from operations or cash available under our financing agreements, including our Revolving Credit Facility or our Floor Plan Facility, will be sufficient to meet our needs.

We cannot assure you that our cash flow from operations or cash available under our financing agreements, including our $35.0 million revolving credit facility (the “Revolving Credit Facility”) or our floor plan financing through the Seventh Amended and Restated Credit Agreement, as amended (“Floor Plan Facility”), will be sufficient to meet our needs.

If we are unable to generate sufficient cash flows from operations in the future, and if availability under our Revolving Credit Facility or our Floor Plan Facility is not sufficient, or if additional borrowings under our Real Estate Facility are unavailable, we may have to obtain additional financing.

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If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations.

In addition, the United Kingdom’s Financial Conduct Authority, which regulates the London Inter-bank Offered Rate (“LIBOR”), has announced that intends to stop encouraging or requiring banks to submit LIBOR rates after 2021, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

In addition, the United Kingdom’s Financial Conduct Authority, which regulates the London Inter-bank Offered Rate (“LIBOR”), has announced that it intends to stop encouraging or requiring banks to submit LIBOR rates after 2021 and in some cases, by mid-2023, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

We currently have the option to determine our interest rate using a formula that includes either the LIBOR rate or an alternate base rate.

If LIBOR ceases to exist or the methods of calculating LIBOR change from their current form, we may no longer have the ability to elect the LIBOR rate under our Floor Plan Facility or Senior Secured Credit Facilities or our current or future indebtedness may be adversely affected.

When LIBOR ceases to exist or the methods of calculating LIBOR change from their current form, we may no longer have the ability to elect the LIBOR rate under our Floor Plan Facility, Revolving Credit Facility or our term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility (the “Senior Secured Credit Facilities”) or our current or future indebtedness may be adversely affected.

This could impact our interest costs and our ability to borrow additional funds.

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● enter into agreements restricting our subsidiaries’ ability to pay dividends.

In addition, the restrictive covenants in our Senior Secured Credit Facilities and our Floor Plan Facility require us to maintain specified financial ratios and provide for acceleration of the indebtedness thereunder in the case of certain events of default, which could have a material adverse effect on our business, financial condition and results of operations.

See “Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Senior Secured Credit Facilities and Floor Plan Facility” in Item 7 of Part II of this Form 10-K and Note 9 — Long-Term Debt to our audited consolidated financial statements included in Item 8 of Part II of this Form 10-K.

the case of certain events of default, which could have a material adverse effect on our business, financial condition and results of operations.

See “Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Senior Secured Credit Facilities and Floor Plan Facility” in Item 7 of Part II of this Form 10-K and Note 9 — Long-Term Debt to our consolidated financial statements included in Item 8 of Part II of this Form 10-K.

Our ability to comply with those financial ratios may be affected by events beyond our control, and our failure to comply with these ratios could result in an event of default.

In an event of default, we may not have sufficient funds available, or we may not have access to sufficient capital from other sources, to repay any accelerated debt and our lenders could foreclose on liens which cover substantially all of our assets.

We primarily rely on five fulfillment and distribution centers for our retail, e-commerce and catalog businesses, and, if there is a natural disaster or other serious disruption at either facility, we may be unable to deliver merchandise effectively to our stores or customers.

We currently rely on five distribution and fulfillment centers located in Bakersfield, California;

two in Greenville, North Carolina;

Lebanon, Indiana;

Paul, Minnesota for our retail, e-commerce and catalog businesses.

The Company plans to close the two Greenville, North Carolina distribution centers during the first half of 2020.

We handle almost all of our e-commerce and catalog orders and distribution to our retail stores through these five facilities.

Any natural disaster or other serious disruption at either facility due to fire, tornado, earthquake, flood or any other cause could damage our on-site inventory or impair our ability to use such distribution and fulfillment center.

We primarily rely on five 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.

We handle almost all of our e-commerce and catalog orders and distribution to our retail stores through five fulfillment and distribution facilities (see “Item 2.

Properties” under Part I of this Form 10-K).

Any natural disaster or other serious disruption at any such facility due to fire, tornado, earthquake, flood or any other cause could damage our on-site inventory or impair our ability to use such distribution and fulfillment center.

While we maintain business interruption insurance, as well as general property insurance, the amount of insurance coverage may not be sufficient to cover our losses in such an event.

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Natural disasters including tornadoes, hurricanes, floods, hailstorms and earthquakes may damage our stores or other operations, which may materially adversely affect our consolidated financial results.

In particular, there is currently significant uncertainty relating to the potential effect of the novel coronavirus outbreak on our business.

Infections may become more widespread, including to the United States, which could lead to product shortages and reduce customer demand for our products.

In addition to business interruption, our retailing business is subject to substantial risk of property loss due to the concentration of property at our retail locations.

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Our business depends in part on developing and maintaining productive relationships with third-party providers of services, protection plans, products and resources that we market to our customers.

During the year ended December 31, 2019 we sourced our products from approximately 2,400 domestic and international vendors.

During the year ended December 31, 2020, we sourced our products from over 2,000 domestic and international vendors.

Additionally, we rely on certain third-party providers to support our services, protection plans, products and resources, including insurance carriers for our property and casualty insurance and extended service contracts, banks and captive financing companies for vehicle financing and refinancing, Comenity Capital Bank as the issuer of our co-branded credit card and a tow provider network for our roadside assistance programs.

We cannot accurately predict when, or the extent to which, we will experience any disruption in the supply of products from our vendors or services from our third-party providers.

We cannot accurately predict when, or the extent to which, we will experience any disruption in the supply of

products from our vendors or services from our third-party providers.

Any such disruption could negatively impact our ability to market and sell our services, protection plans, products and resources, which could have a material adverse effect on our business, financial condition and results of operations.

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With respect to the insurance programs that we offer, we are dependent on the insurance carriers that underwrite the insurance to obtain appropriate regulatory approvals and maintain compliance with insurance regulations.

If such carriers do not obtain appropriate state regulatory approvals or comply with such changing regulations, we may be required to use an alternative carrier or change our insurance products or cease marketing certain insurance related products in certain states, which could have a material adverse effect on our business, financial condition and results of operations.

If we are required to use an alternative insurance carrier or change our insurance related products, it may materially increase the time required to bring an insurance related product to market.

If such carriers are out of compliance, we may be required to use an alternative carrier or products or cease marketing certain products in certain states, which could have a material adverse effect on our business, financial condition and results of operations.

If we are required to use an alternative carrier or change our products, it may materially increase the time required to bring an insurance related product to market.

Any disruption in our service offerings could harm our reputation and result in customer dissatisfaction.

Additionally, we provide financing to qualified customers through a number of third-party financing providers.

replace the current third-party providers upon the occurrence of one or more of the foregoing events, it could have a material adverse effect on our business, financial condition and results of operations.

We also offer a co-branded credit card issued by Comenity Capital Bank, a third-party bank that manages and directly extends credit to our customers.

The cardholders can earn promotional points on a variety of qualifying purchases, such as purchases at our RV and Outdoor Retail locations, on Good Sam purchases and at private campgrounds across the United States and Canada.

We earn incentive payments from our card network partner based on the use of the credit card.

A decrease in the popularity and use of our co-branded credit card could reduce our ability to earn incentive payment income as part of the program and could have a material adverse effect on our business, financial condition and results of operations.

If one or more of these third-party providers ceases to provide financing to our customers, provides financing to fewer customers or no longer provides financing on competitive terms, or if we were unable to replace the current third-party providers upon the occurrence of one or more of the foregoing events, it could have a material adverse effect on our business, financial condition 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.

Like many other outdoor and active sports-oriented retailers, a portion of the products that we purchase for resale, including those purchased from domestic suppliers, is manufactured abroad in China and other countries.

A portion of the products that we purchase for resale, including those purchased from domestic suppliers, is manufactured abroad in China and other countries.

In addition, we believe most of our private label merchandise is manufactured abroad.

Trade tensions between the United States and China, and other countries have been escalating in recent years.

Trade tensions between the United States and China, and other countries escalated in recent years.

tariff impositions against Chinese exports have generally been followed by retaliatory Chinese tariffs on U.S.

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We may not be able to mitigate the impacts of any future tariffs, and our business, results of operations and financial position would be materially adversely affected.

As a result, our foreign imports, in particular imports from China, subject us to the risks of changes in, or the imposition of new import tariffs, duties or quotas, new restrictions on imports, loss of “most favored nation” status with the United States for a particular foreign country, antidumping or countervailing duty orders, retaliatory actions in response to illegal trade practices, work stoppages, delays in shipment, freight expense increases, product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties.

increases, product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties.

If any of these or other factors were to cause a disruption of trade from the countries in which the suppliers of our vendors are located or impose additional costs in connection with the purchase of our products, we may be unable to obtain sufficient quantities of products to satisfy our requirements and our results of operations could be adversely affected.

In addition, our suppliers and/or the manufacturers of certain of our products have been and may continue to be adversely impacted by the recent novel coronavirus outbreak originating in China.

As a result, we may face delays or difficulty sourcing products, which could negatively affect our financial results.

Even if we are able to find alternate sources for such products, they may cost more, which could affect our profitability and financial condition.

At this time, there is significant uncertainty relating to the potential effect of the novel coronavirus on our business.

Infections may become more widespread, including to other countries where we source products or have operations, which would have a negative impact on our business, financial condition and results of operations.

To the extent that any foreign manufacturers which supply products to us directly or indirectly utilize quality control standards, labor practices or other practices that vary from those legally mandated or commonly accepted in the United States, we could be hurt by any resulting negative publicity or, in some cases, face potential liability.

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Our revenues from financing fees and vehicle service contract fees are recorded net of a reserve for estimated future chargebacks based on historical operating results.

Lending institutions may change the criteria or terms they use to make loan decisions, which could reduce the number of customers for whom we

can arrange financing, or may elect to not continue to provide these products with respect to RVs.

Lending institutions may change the criteria or terms they use to make loan decisions, which could reduce the number of customers for whom we can arrange financing, or may elect to not continue to provide these products with respect to RVs.

Our customers may also use the internet or other electronic methods to find financing alternatives.

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Retail installment sales contracts are typically assigned by us to third-party lenders simultaneously with the execution of the retail installment sales contracts.

Contracts in transit represent amounts due from third-party lenders from whom pre-arranged assignment agreements have been determined, and to whom the retail installment sales contract have been assigned.

We recognize revenue from the sale of new and used vehicles upon completion of the sale to the customer.

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The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition.

Additionally, certain members of our management team, including Mr.

Additionally, certain members of our management team, including

Lemonis, currently pursue and may continue to pursue other business ventures, which could divert their attention from executing on our business plan and objectives.

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We are subject to risks associated with leasing substantial amounts of space.

We lease substantially all of the real properties where we have operations, including 161 of our 175 RV and Outdoor Retail locations.

In addition, we lease seven locations with administrative staff, information systems functions, Good Sam Services and Plans operations and our customer contact and service center, and three distribution centers as of December 31, 2019.

We lease substantially all of the real properties where we have retail operations as well as certain corporate offices and distribution centers.

Our leases generally provide for fixed monthly rentals with escalation clauses and range from five to twenty years.

The profitability of our business is heavily dependent on operating our current store base with favorable margins, opening and operating new stores at reasonable profit, renewing leases for stores in desirable locations and, if necessary, identifying and closing underperforming stores or potentially relocating these stores to alternative locations in a cost-effective manner.

The profitability of our business is in part dependent on renewing leases for stores in desirable locations and, if necessary, identifying and closing underperforming stores or relocating these stores to alternative locations in a cost-effective manner.

Typically, a large portion of a store’s operating expense is the cost associated with leasing the location.

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Although we have the right to terminate some of our leases under specified conditions by making certain payments, we may not be able to terminate a particular lease if or when we would like to do so.

If we decide to close stores, we are generally required to either continue to pay rent and

operating expenses for the balance of the lease term or, for certain locations, pay exercise rights to terminate, which in either case could be expensive.

If we decide to close stores, we are generally required to either continue to pay rent and operating expenses for the balance of the lease term or, for certain locations, pay exercise rights to terminate, which in either case could be expensive.

Even if we are able to assign or sublease vacated locations where our lease cannot be terminated, we may remain liable on the lease obligations if the assignee or sublessee does not perform.

If we are unable to service our lease expenses or are unable to, on favorable terms, negotiate renewals of leases at desirable locations or identify and close underperforming locations, we may be forced to seek alternative sites in our target markets, which may be difficult and have a material adverse effect on our business, financial condition and results of operations.

Our private brand offerings expose us to various risks.

We expect to continue to grow our exclusive private brand offerings through a combination of brands that we own and brands that we license from third parties.

We have invested in our development and procurement resources and marketing efforts relating to these private brand offerings.

Although we believe that our private brand products offer value to our customers at each price point and provide us with higher gross margins than comparable third-party branded products we sell, the expansion of our private brand offerings also subjects us to certain specific risks in addition to those discussed elsewhere in this section, such as:

● potential mandatory or voluntary product recalls;

● our ability to successfully protect our proprietary rights (including defending against counterfeit, knock offs, grey-market, infringing or otherwise unauthorized goods);

● our ability to successfully navigate and avoid claims related to the proprietary rights of third parties;

● our ability to successfully administer and comply with obligations under license agreements that we have with the licensors of brands, including, in some instances, certain minimum sales requirements that, if not met, could cause us to lose the licensing rights or pay damages;

● other risks generally encountered by entities that source, sell and market exclusive branded offerings for retail.

An increase in sales of our private brands may also adversely affect sales of our vendors’ products, which may, in turn, adversely affect our relationship with our vendors.

Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.

We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets.

We have a significant amount of goodwill, intangible assets and other long-lived assets.

At least annually, we review goodwill for impairment.

Long-lived assets, operating lease assets, identifiable intangible assets and goodwill are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable from future cash flows.

These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.

Our determination of future cash flows, future recoverability and fair value of our long-lived assets as well as the reporting unit fair value used in our goodwill analysis include significant estimates and assumptions.

Changes in those estimates or assumptions or lower than anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material.

See Note 5 — Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Item 8 of Part II of this Form 10-K for a discussion of impairment charges for the year ended December 31, 2020.

We may in the future identify additional impairment charges and any such charges could adversely affect our business, financial condition and results of operations.

Risks related to Regulation and Litigation

Our business is subject to numerous federal, state and local regulations.

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For example, the California Consumer Privacy Act (“CCPA”) establishes a new privacy framework that expands the definition of personal information, establishes new data privacy rights for consumers residing in the State of California, imposes special rules on the collection of consumer data from minors, creates new notice obligations and new limits on the sale of personal information, and creates a new and potentially severe statutory damages framework for (i) violations of the CCPA and (ii) businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

Additionally, a new ballot initiative, the California Privacy Rights Act (“CPRA”), recently passed in California.

The CPRA will impose additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.

The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.

We are also subject to federal and numerous state consumer protection and unfair trade practice laws and regulations relating to the sale, transportation and marketing of motor vehicles, including so-called “lemon laws.” Federal, state and local laws and regulations also impose upon vehicle operators various restrictions on the length and width of motor vehicles that may be operated in certain jurisdictions or on certain roadways.

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Compliance with these laws and others may be onerous and costly, at times, and may be inconsistent from jurisdiction to jurisdiction which further complicates compliance efforts.

Furthermore, our property and casualty insurance programs that we offer through third-party insurance carriers are subject to various state laws and regulations governing the business of insurance, including, without limitation, laws and regulations governing the administration, underwriting, marketing, solicitation or sale of insurance programs.

Furthermore, our property and casualty insurance programs, and our extended service contracts that we offer through third-party insurance carriers are subject to various federal and state laws and regulations governing the business of insurance, including, without limitation, laws and regulations governing the administration, underwriting, marketing, solicitation, liability obligations or sale of insurance programs.

Any failure by us or our third-party insurance providers to comply with current licensing and approval requirements could result in such regulators denying their initial or renewal applications for such licenses, modifying the terms of licenses or revoking licenses that they currently possess, which could severely inhibit our ability to market these products.

Additionally, certain state laws and

regulations govern the form and content of certain disclosures that must be made in connection with the sale, advertising or offer of any insurance program to a consumer.

Additionally, certain state laws and regulations govern the form and content of certain disclosures that must be made in connection with the sale, advertising or offer of any insurance program to a consumer.

If we fail to comply with these regulations, we may be ordered to pay fines or penalties by regulators or to discontinue certain products.

We offer extended service contracts that may be purchased as a supplement to the original purchaser’s warranty.

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Without the protection of state dealer laws, it may also be more difficult for our dealerships to renew their dealer agreements upon expiration.

We are also subject to the rules and regulations of the Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF”).

If we fail to comply with ATF rules and regulations, the ATF may limit our growth or business activities, levy fines against us or, ultimately, revoke our license to do business.

Our business, as well as the business of all producers and marketers of ammunition and firearms, is also subject to numerous federal, state, local and foreign laws, regulations and protocols.

Applicable laws:

require the licensing of all persons manufacturing, exporting, importing or selling firearms and ammunition as a business;

• require background checks for purchasers of firearms;

• impose waiting periods between the purchase of a firearm and delivery of a firearm;

prohibit the sale of firearms to certain persons, such as those below a certain age and persons with criminal records;

• regulate the use and storage of gun powder or other energetic materials;

• regulate the interstate sale of certain firearms;

• prohibit the interstate mail-order sale of firearms;

• regulate our employment of personnel with criminal convictions;

restrict access to firearm manufacturing facilities for individuals from other countries or with criminal convictions.

In addition, in connection with the sale of firearms in our stores, we must comply with a number of federal and state laws and regulations related to the sale of firearms and ammunition, including the federal Brady Handgun Violence Prevention Act.

If we fail to comply with Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF”) rules and regulations, the ATF may limit our growth or business activities, levy fines against us or, ultimately, revoke our license to do business.

Several states currently have laws in effect that are similar to, and in certain cases, more restrictive than, these federal laws.

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If enacted, such legislation could effectively ban or severely limit the sale of affected firearms or ammunition.

In addition, if such restrictions are enacted and are incongruent, we could find it difficult, expensive or even practically impossible to comply with them, which could impede new product development and the distribution of existing products.

In addition, if such restrictions are enacted and are incongruent, we could find it difficult, expensive or even practically impossible to comply with them, which could impede the sale of firearms.

We cannot assure you that the regulation of our business activities will not become more restrictive in the future and that any such restriction will not have a material adverse effect on our business.

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Additionally, because we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard (the “PCI Standard”), issued by the Payment Card Industry Security Standards Council.

The PCI Standard contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing and transmission of cardholder data.

We are currently in compliance with the PCI Standard, however, complying with the PCI Standard and implementing related procedures, technology and information security measures requires significant resources and ongoing attention.

Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology such as those necessary to maintain compliance with the PCI Standard or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations.

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We rely on the integrity, security and successful functioning of our information technology systems and network infrastructure across our operations.

We use information technology systems to support our Good Sam services and plans, manage procurement and our supply chain, track inventory information at our retail locations, communicate customer information and aggregate daily sales, margin and promotional information.

We use information technology systems to support product sales, our Good Sam services and plans, manage procurement and our supply chain, track inventory information at our retail locations, communicate customer information and aggregate daily sales, margin and promotional information.

We also use information systems to report and audit our operational results.

In connection with sales, we transmit encrypted confidential credit and debit card information.

Although we are currently in compliance with the PCI Standard, there can be no assurance that in the future we will be able to continue to operate our facilities and our customer service and sales operations in accordance with payment card industry or other industry recommended or contractually required practices.

Even if we continue to be compliant with such standards, we still may not be able to prevent security breaches.

We also have access to, collect, or maintain private or confidential information regarding our customers, associates and suppliers, as well as our business.

For example, we have 30.3 million unique contacts in our database as of December 31, 2019.

For example, we have over 30 million unique contacts in our database as of December 31, 2020.

This customer database includes information about our approximately 2.1 million club members and our 5.3 million Active Customers as of December 31, 2020.

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In addition, customers have a high expectation that we will adequately protect their personal information from cyber-attack or other security breaches.

We have procedures in place to safeguard such data and information.

However, a significant breach of club member, customer, employee, supplier, or company data could attract a substantial amount of negative media attention, damage our club member, customer and supplier relationships and our reputation, and result in lost sales, fines and/or lawsuits.

An increasingly significant portion of our sales depends on the continuing operation of our information technology and communications systems, including but not limited to our point-of-sale system and our credit card processing systems.

A significant breach of club member, customer, employee, supplier, or company data could attract a substantial amount of negative media attention, damage our club member, customer and supplier relationships and our reputation, and result in lost sales, fines and/or lawsuits.

Our information technology, communication systems and electronic data may be vulnerable to damage or interruption from earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer and telecommunications failures, computer viruses, loss of data, unauthorized data breaches, usage errors by our associates or our contractors or other attempts to harm our systems, including cyber-security attacks, hacking by third parties, computer viruses or other breaches of cardholder data.

Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities.

The occurrence of a natural disaster, intentional sabotage or other unanticipated problems could result in lengthy interruptions in our service.

Any errors or vulnerabilities in our systems, or damage to or failure of our systems, could result in interruptions in our services and non-compliance with certain regulations or expose us to risk of litigation and liability, which could have a material adverse effect on our business, financial condition and results of operations.

Further, we have centralized the majority of our computer systems in our facilities in Englewood, Colorado and Bowling Green, Kentucky.

It is possible that an event or disaster at our facilities in Englewood, Colorado and Bowling Green, Kentucky could materially and adversely affect the performance of our company and the ability of each of our stores to operate efficiently.

We maintain insurance to cover costs in the event of a breach, interruption of service, or other cyber-security event.

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Some of the products we sell may expose us to product liability claims relating to personal injury, death, or environmental or property damage, and may require product recalls or other actions.

maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.

In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused property damage or personal injury could damage our brand identity and our reputation with existing and potential consumers and have a material adverse effect on our business, financial condition and results of operations.

We have a self-insured retention (“SIR”) for products liability and personal injury matters ranging from $25,000 to $500,000 depending on the product type and when the occurrence took place.

Generally, any occurrence (as defined by our insurance policies) after June 1, 2007 is subject to the $500,000 SIR.

Amounts above the SIR, up to a certain dollar amount, are covered by our excess insurance policy.

Currently, we maintain excess liability insurance aggregating $100.0 million with outside insurance carriers to minimize our risks related to catastrophic claims in excess of our self-insured positions for products liability and personal injury matters.

Any material change in the aforementioned factors could have an adverse impact on our results of operations.

Any increase in the frequency and size of these claims, as compared to our experience in prior years, may cause the premium that we are required to pay for insurance to increase significantly and may negatively impact future SIR levels.

It may also increase the amounts we pay in punitive damages, not all of which are covered by our insurance.

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For example, we were named as a defendant in a class action lawsuit by Camp Coast to Coast club members, which alleged certain violations of California’s Unfair Competition Law at Business and Professions Code and other laws, relating to our sale of trip points and certain advertising and marketing materials.

In addition, we were also named as a defendant in a putative class action lawsuit filed by former employees in the State of California, which alleged various wage and hour claims under the California Labor Code.

We have since settled both actions.

We are currently subject to securities class action litigation and may be subject to similar or other litigation in the future.

Recently, we were also named as a defendant in a putative class action lawsuit filed by two former employees, in the State of California and a former employee in the State of Washington, which alleged various wage and hour claims under the California and Washington Labor Codes.

We have reached the terms of a preliminary settlement.

For information regarding these lawsuits, refer to Note 13, Commitments and Contingencies – Litigation of our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

The results of the securities class action lawsuits, shareholder derivative lawsuit, and any other future legal proceedings cannot be predicted with certainty.

The results of the securities class action lawsuits, shareholder derivative lawsuits, and any other future legal proceedings cannot be predicted with certainty.

Regardless of their subject matter or merits, such legal proceedings have resulted in and are likely to continue to result in significant cost to us, which may not be covered by insurance, may divert the attention of management or may otherwise have an adverse effect on our business, financial condition and results of operations.

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In addition, such legal proceedings may make it more difficult to finance our operations.

Our private brand offerings expose us to various risks.

We expect to continue to grow our exclusive private brand offerings through a combination of brands that we own and brands that we license from third parties.

We have invested in our development and procurement resources and marketing efforts relating to these private brand offerings.

offerings also subjects us to certain specific risks in addition to those discussed elsewhere in this section, such as:

● potential mandatory or voluntary product recalls;

● our ability to successfully protect our proprietary rights (including defending against counterfeit, knock offs, grey-market, infringing or otherwise unauthorized goods);

● our ability to successfully navigate and avoid claims related to the proprietary rights of third parties;

● other risks generally encountered by entities that source, sell and market exclusive branded offerings for retail.

An increase in sales of our private brands may also adversely affect sales of our vendors’ products, which may, in turn, adversely affect our relationship with our vendors.

Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.

We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets.

We have a significant amount of goodwill, intangible assets and other long-lived assets.

At least annually, we review goodwill for impairment.

If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.

Our determination of future cash flows, future recoverability and fair value of our long-lived assets includes significant estimates and assumptions.

See Note 5 — Restructuring and Long-lived Asset Impairment to our audited consolidated financial statements included in Item 8 of Part II of this Form 10-K for a discussion of impairment charges for the year ended December 31, 2019.

We may in the future identify additional impairment charges and any such charges could adversely affect our business, financial condition and results of operations.

We may incur costs from litigation relating to products that we currently sell as a result of the Gander Mountain acquisition and the opening of retail locations, particularly firearms and ammunition, which could adversely affect our total revenue and profitability.

We may incur damages due to lawsuits relating to products we currently sell as a result of the Gander Mountain acquisition and the opening of the rebranded Gander Outdoors retail locations, including, but not limited to, lawsuits relating to firearms, ammunition, tree stands and archery equipment.

We may incur losses due to lawsuits, including potential class actions, relating to our performance of background checks on firearms purchases and compliance with other sales laws as mandated by state and federal law.

We may also incur losses from lawsuits relating to the improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other organizations attempting to recover costs from manufacturers and retailers of firearms and ammunition.

Our insurance coverage and the insurance provided by our vendors for certain products they sell to us may be inadequate to cover claims and liabilities related to products that we sell.

In addition, claims or lawsuits related to products that we sell, or the unavailability of insurance for product liability claims, could result in the elimination of these products from our product line, thereby reducing total revenue.

If one or more successful claims against us are not covered by or exceed our insurance coverage,

or if insurance coverage is no longer available, our available working capital may be impaired, and our operating results could be materially adversely affected.

Even unsuccessful claims could result in the expenditure of funds and management time and could have a negative impact on our profitability and on future premiums we would be required to pay on our insurance policies.

Risks Relating to Our Organizational Structure

Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, has substantial control over us, including over decisions that require the approval of stockholders, and his interests, along with the interests of our other Continuing Equity Owners, in our business may conflict with yours.

Each share of our Class B common stock entitles its holders to one vote per share on all matters presented to our stockholders generally provided that, for as long as ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus Lemonis (“ML Acquisition”) and its permitted transferees of common units (the “ML Related Parties”), directly or indirectly, beneficially own in the aggregate 27.5% or more of all of the outstanding common units of CWGS, LLC, the shares of our Class B common stock held by the ML Related Parties entitle the ML Related Parties, and, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition, Marcus Lemonis, to the number of votes necessary such that the ML Related Parties, in the aggregate, cast 47% of the total votes eligible to be cast by all of our stockholders on all matters presented to a vote of our stockholders generally.

Additionally, our one share of Class C common stock entitles ML RV Group, LLC, a Delaware limited liability company, wholly-owned by our Chairman and Chief Executive Officer, Marcus Lemonis (“ML RV Group”) and, through his beneficial ownership of our shares directly or indirectly held by ML RV Group, Marcus Lemonis, to the number of votes necessary such that he casts 5% of the total votes eligible to be cast by all of our stockholders on all matters presented to a vote of our stockholders generally for as long as there is no Class C Change of Control (as defined in our amended and restated certificate of incorporation).

Accordingly, subject to the voting agreement that we entered into with ML Acquisition, ML RV Group, CVRV Acquisition LLC and CVRV Acquisition II LLC in connection with our IPO (the “Voting Agreement”) as described below, Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, may approve or disapprove substantially all transactions and other matters requiring approval by our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors including transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

As discussed in Note 18 ─ Stockholders’ Equity to our consolidated financial statements included in Item 8 of Part II of this Form 10-K, we entered into a voting agreement in connection with our IPO with ML Acquisition Company, LLC, a Delaware limited liability company, which is indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus Lemonis (“ML Acquisition”), ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus Lemonis (“ML RV Group”), CVRV Acquisition LLC and CVRV Acquisition II LLC (the “Voting Agreement”).

Subject to the Voting Agreement, Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, may approve or disapprove substantially all transactions and other matters requiring approval by our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors including transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

In addition, pursuant to the Voting Agreement, Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P.

(“Crestview”) currently has the right to designate two of our directors (the “Crestview Directors”).

Each of ML Acquisition and ML RV Group has agreed to vote, or cause to vote, all of their outstanding shares of our Class A common stock, Class B common stock and Class C common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the Crestview Directors.

(“Crestview”) currently has the right to designate one of our directors (the “Crestview Director”).

which directors are elected, so as to cause the election of the Crestview Director.

In addition, the ML Related Parties also currently have the right to designate four of our directors (the “ML Acquisition Directors”).

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(iii) the individuals designated in accordance with the terms of the Voting Agreement to fill the applicable vacancies on the board of directors;

and (iv) a ML

Acquisition Director or the ML RV Director to be the chairperson of the board of directors (as defined in our amended and restated bylaws).

and (iv) a ML Acquisition Director or the ML RV Director to be the chairperson of the board of directors (as defined in our amended and restated bylaws).

The Voting Agreement allows for the board of directors to reject the nomination, appointment or election of a particular director if such nomination, appointment or election would constitute a breach of the board of directors’ fiduciary duties to the Company’s stockholders or does not otherwise comply with any requirements of our amended and restated certificate of incorporation or our amended and restated bylaws or the charter for, or related guidelines of, the board of directors’ nominating and corporate governance committee.

The Voting Agreement further provides that, for so long as Crestview Partners II GP, L.P., directly or indirectly, beneficially owns, in the aggregate, 22.5% or more of our Class A common stock, or the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 22.5% or more of our Class A common stock (assuming in each such case that all outstanding common units in CWGS, LLC are redeemed for newly-issued shares of our Class A common stock on a one-for-one basis), the approval of Crestview Partners II GP, L.P.

and the ML Related Parties, as applicable, will be required for certain corporate actions.

The Voting Agreement further provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 22.5% or more of our Class A common stock (assuming that all outstanding common units in CWGS, LLC are redeemed for newly-issued shares of our Class A common stock on a one-for-one basis), the approval of the ML Related Parties will be required for certain corporate actions.

These actions include:

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and (5) any change in the size of the board of directors.

The Voting Agreement also provides that, for so long as either Crestview Partners II GP, L.P., directly or indirectly, beneficially owns, in the aggregate, 28% or more of our Class A common stock, or the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 28% or more of our Class A common stock (assuming in each such case that all outstanding common units of CWGS, LLC are redeemed for newly-issued shares of our Class A common stock, on a one-for-one basis), the approval of Crestview Partners II GP, L.P.

and the ML Related Parties, as applicable, will be required for the hiring and termination of our Chief Executive Officer;

provided, however, that the approval of Crestview Partners II GP, L.P., and the ML Related Parties, as applicable, is only required at such time as Marcus Lemonis no longer serves as our Chief Executive Officer.

The Voting Agreement also provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 28% or more of our Class A common stock (assuming that all outstanding common units of CWGS, LLC are redeemed for newly-issued shares of our Class A common stock, on a one-for-one basis), the approval of the ML Related Parties, as applicable, will be required for the hiring and termination of our Chief Executive Officer;

provided, however, that the approval of the ML Related Parties is only required at such time as Marcus Lemonis no longer serves as our Chief Executive Officer.

These rights may prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

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Pursuant to the terms of the Voting Agreement, Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, and certain funds controlled by Crestview Partners II GP, L.P., in the aggregate, have more than 50% of the voting power for the election of directors, and, as a result, we are considered a “controlled company” for the purposes of the New York Stock Exchange (the “NYSE”) listing requirements.

As such, we qualify for, and rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee or to perform annual performance evaluation of the nominating and corporate governance and compensation committees.

As such, we qualify for, and rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee or to perform an annual performance evaluation of the nominating and corporate governance and compensation committees.

The corporate governance requirements and specifically the independence standards are intended to ensure that directors who are considered independent are free of any conflicting interest that could influence their actions as directors.

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Under the terms of the CWGS LLC Agreement, CWGS, LLC is obligated to make tax distributions to holders of its common units, including us, except to the extent such distributions would render CWGS, LLC insolvent or are otherwise prohibited by law or our Senior Secured Credit Facilities, our Floor Plan Facility or any of our future debt agreements.

In addition to tax expenses, we will also incur expenses related to our operations, our interests in CWGS, LLC and related party agreements, including payment obligations under the Tax Receivable Agreement, and expenses and costs of being a public company, all of which could be significant.

We intend, as its managing member, to cause CWGS, LLC to make distributions in an amount sufficient to allow us to pay our taxes and operating expenses, including any ordinary course payments due under the Tax Receivable Agreement.

However, CWGS, LLC’s ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, restrictions on distributions that would either violate any contract or agreement to which CWGS, LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering CWGS, LLC

If CWGS, LLC does not have sufficient funds to pay tax distributions or other liabilities to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders.

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under the Tax Receivable Agreement may be accelerated in certain circumstances and may also significantly exceed the actual tax benefits that we ultimately realize.

The Tax Receivable Agreement provides that if certain mergers, asset sales, other forms of business combination, or other changes of control were to occur, if we materially breach any of our material obligations under the Tax Receivable Agreement or if, at any time, we elect an early termination of the Tax Receivable Agreement, then the Tax Receivable Agreement will terminate and our obligations, or our successor’s

obligations, to make payments under the Tax Receivable Agreement would accelerate and become immediately due and payable.

The amount due and payable in those circumstances is determined based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.

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As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

We are subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

● changes in the valuation of our deferred tax assets and liabilities;

● expected timing and amount of the release of any tax valuation allowances;

● expiration of, or detrimental changes in, research and development tax credit laws;

● tax effects of equity-based compensation;

● costs related to intercompany restructurings;

● changes in tax laws, regulations or interpretations thereof.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S.

federal and state authorities.

Outcomes from these audits could have an adverse effect on our operating results and financial condition.

Our organizational structure may cause us to be subject to IRS audit, which may result in the assessment of interest and penalties.

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The Continuing Equity Owners (through common units) own interests in CWGS, LLC, and the Continuing Equity Owners have the right to redeem their interests in CWGS, LLC pursuant to the terms of the CWGS LLC Agreement for newly-issued shares of Class A common stock or cash.

At December 31, 2019, we had an aggregate of 212,298,416 shares of Class A common stock authorized but unissued, including approximately 51,669,284 shares of Class A common stock issuable, at our election, upon redemption of CWGS, LLC common units held by the Continuing Equity Owners.

At December 31, 2020, we had an aggregate of 206,916,992 shares of Class A common stock authorized but unissued, including 46,816,787 shares of Class A common stock issuable, at our election, upon redemption of CWGS, LLC common units held by the Continuing Equity Owners.

In connection with our IPO, CWGS, LLC entered into the CWGS LLC Agreement, and subject to certain restrictions set forth therein, the Continuing Equity Owners are entitled to have their common units redeemed from time to time at each of their options for, at our election (determined solely by our independent directors (within the meaning of the rules of the NYSE) who are disinterested), newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case in accordance with the terms of the CWGS LLC Agreement;

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In the future, we may also issue additional securities if we need to raise capital, including, but not limited to, in connection with acquisitions, which could constitute a material portion of our then-outstanding shares of Class A common stock.

Our Class A common stock price may be volatile or may decline regardless of our operating performance.

Volatility in the market price of our Class A common stock may prevent you from being able to sell your shares at or above the price you paid for such shares.

Many factors, which are outside our control, may cause the market price of our Class A common stock to fluctuate significantly, including those described elsewhere in this “Risk Factors” section and this Form 10-K, as well as the following:

● our operating and financial performance and prospects;

● our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

● conditions that impact demand for our services;

● future announcements concerning our business or our competitors’ businesses;

● the public’s reaction to our press releases, other public announcements and filings with the SEC;

● the size of our public float;

● coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

● market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

● strategic actions by us or our competitors, such as acquisitions or restructurings;

● changes in laws or regulations which adversely affect our industry or us;

● changes in accounting standards, policies, guidance, interpretations or principles;

● changes in senior management or key personnel;

● issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

● changes in our dividend policy;

● adverse resolution of new or pending litigation against us;

● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

As a result, volatility in the market price of our Class A common stock may prevent investors from being able to sell their Class A common stock at or above the price they paid for such shares.

These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance.

In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low.

As a result, you may suffer a loss on your investment.

Our ability to pay regular and special dividends on our Class A common stock is subject to the discretion of our board of directors and may be limited by our structure and statutory restrictions.

CWGS, LLC has in the past made a regular quarterly cash distribution to its common unit holders of approximately $0.08 per common unit, and CWGS, LLC intends to continue to make such quarterly cash distributions.

We have used in the past, and intend to continue to use, all of the proceeds from such distributions on our common units to declare cash dividends on our Class A common stock.

Beginning in the third quarter of 2020, CWGS, LLC increased its regular quarterly cash distribution to its common unit holders from approximately $0.08 per common unit to $0.09 per common unit.

CWGS, LLC intends to continue to make such quarterly cash distributions.

We have used in the past, and intend to continue

to use, all of the proceeds from such distributions on our common units to declare cash dividends on our Class A common stock.

CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other operating expenses and other obligations.

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As a consequence of these limitations and restrictions, we may not be able to make, or may have to reduce or eliminate, the payment of dividends on our Class A common stock.

Accordingly, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment.

You may not receive a gain on your investment when you sell your Class A common stock and you may lose the entire amount of the investment.

Additionally, any change in the level of our dividends or the suspension of the payment thereof could adversely affect the market price of our Class A common stock.

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● any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a written consent is signed by the holders of our outstanding shares of common stock representing not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all outstanding shares of common stock entitled to vote thereon, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may not be taken by written consent in lieu of a meeting;

● our amended and restated certificate of incorporation may be amended or repealed by the affirmative vote of a majority of the votes which all our stockholders would be eligible to cast in an election of directors and our amended and restated bylaws may be amended or repealed by a majority vote of our board of directors or by the affirmative vote of a majority of the votes which all our stockholders would be eligible to cast in an election of directors, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, our amended and restated certificate of incorporation and our amended and restated bylaws may be amended or repealed by the affirmative vote of the holders of at least 66 2 / 3 % of the votes which all our stockholders would be entitled to cast in any annual election of directors and our amended and restated bylaws may also be amended or repealed by a majority vote of our board of directors;

our stockholders would be eligible to cast in an election of directors, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, our amended and restated certificate of incorporation and our amended and restated bylaws may be amended or repealed by the affirmative vote of the holders of at least 66 2 / 3 % of the votes which all our stockholders would be entitled to cast in any annual election of directors and our amended and restated bylaws may also be amended or repealed by a majority vote of our board of directors;

● we require advance notice and duration of ownership requirements for stockholder proposals;

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(iii) any action asserting a claim against us, any director or our officers or employees arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws;

or (iv) any action asserting a claim against us, any director or our officers or employees

that is governed by the internal affairs doctrine.

or (iv) any action asserting a claim against us, any director or our officers or employees that is governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock are deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.

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Our amended and restated certificate of incorporation authorizes us to issue one or more series of preferred stock.

Our board of directors will have the authority to determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders.

Our board of directors will have the authority to determine the preferences, limitations and

relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders.

Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our Class A common stock.

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Material weaknesses in our internal control over financial reporting could have a significant adverse effect on our business and the price of our common stock.

As a public reporting company, we are subject to the rules and regulations established from time to time by the SEC and NYSE.

These rules and regulations require, among other things, that we have, and periodically evaluate, procedures with respect to our internal control over financial reporting.

Reporting obligations as a public company are likely to continue to place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.

In addition, as a public company we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.

Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal control over financial reporting.

In connection with the preparation of our financial statements and the audit of our financial results for 2018, we had identified material weaknesses in our internal controls relating to insufficient technical resources to properly design and operate internal controls over financial reporting.

Although the material weaknesses have been remediated as of December 31, 2019, there can be no assurance that we will not identify additional material weaknesses in the future.

In future periods, if our senior management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness of our internal control over financial reporting, or if additional material weaknesses in our internal control over financial reporting are identified, we may be required to restate our financial statements and could be subject to regulatory scrutiny, a loss of public and investor confidence, and to litigation from investors and stockholders, which could have a material adverse effect on our business and the price of our Class A common stock.

In future periods, if additional material weaknesses in our internal control over financial reporting are identified, we may be required to restate our financial statements and could be subject to regulatory scrutiny, a loss of public and investor confidence, and to litigation from investors and stockholders, which could have a material adverse effect on our business and the price of our Class A common stock.

In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and adversely affect our results of operations and financial condition.

Failure to comply with the Sarbanes-Oxley Act could

potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, which would require additional financial and management resources.

Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, which would require additional financial and management resources.

General Risk Factors

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

We are subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

● changes in the valuation of our deferred tax assets and liabilities;

● expected timing and amount of the release of any tax valuation allowances;

● tax effects of equity-based compensation;

● costs related to intercompany restructurings;

● changes in tax laws, regulations or interpretations thereof.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S.

federal and state authorities.

Outcomes from these audits could have an adverse effect on our operating results and financial condition.

Our Class A common stock price may be volatile or may decline regardless of our operating performance.

Volatility in the market price of our Class A common stock may prevent you from being able to sell your shares at or above the price you paid for such shares.

● our operating and financial performance and prospects;

● our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

● conditions that impact demand for our services;

● future announcements concerning our business or our competitors’ businesses;

● the public’s reaction to our press releases, other public announcements and filings with the SEC;

● the size of our public float;

● coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

● market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

● strategic actions by us or our competitors, such as acquisitions or restructurings;

● changes in laws or regulations which adversely affect our industry or us;

● changes in accounting standards, policies, guidance, interpretations or principles;

● changes in senior management or key personnel;

● issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

● changes in our dividend policy;

● adverse resolution of new or pending litigation against us;

If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors