What changed in this filing

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Item 9A. Controls and Procedures

2021-02-26 compared with 2020-02-28 · 20 added, 38 removed, 168 unchanged (26% of the section changed)

5 unchanged sentences

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the "Exchange Act,") as of the end of the period covered by this Annual Report on Form 10-K.

Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2019, our disclosure controls and procedures were effective at the reasonable assurance level.

Remediation of Material Weakness

Throughout the year ended December 31, 2019, the Company undertook remediation measures related to the previously reported material weaknesses in internal control over financial reporting.

We completed these remediation measures in the quarter ended December 31, 2019, including testing of the design and concluding on the operating effectiveness of the related controls.

Specifically, we undertook the following remediation measures:

We enhanced the controls surrounding the review of our reserves related to certain dealership insurance product cancellation provisions, including review of a third-party actuarial analysis to assist in determining the estimated cancellation rate to be used in the reserve and review of data inputs to the calculations.

The enhanced controls have operated for a sufficient period of time in order for management to conclude, through testing, that these controls are designed and operating effectively.

We assessed our accounting resource requirements across the Company and as a result have hired additional experienced accounting personnel and have taken steps to improve the overall control effectiveness and efficiency of our accounting and reporting processes.

Our assessment was performed early enough in the year to allow for the hiring of additional personnel to have a sufficient period of time to operate relevant controls.

In addition to these resources, we have enhanced the design of our existing controls and implemented certain new controls over the following areas:

(1) the review of asset activity and valuations;

(2) the appropriate assignment of resources for the review of certain accounting analyses and associated journal entries;

and (3) the financial statement presentation and disclosure review process.

The enhanced controls have operated for a sufficient period of time in order for management to conclude, through testing, that these controls are designed and operating effectively.

We have also established a regular process to monitor accounting resource sufficiency by performing quarterly meetings to evaluate the current state of the business and expected impacts of changes in the business, and to take future actions necessary to maintain that sufficiency.

We enhanced the design of our existing tax controls to include additional review of the analysis to determine the amount of our income tax liabilities and related deferred income tax balances, and the ability to realize deferred tax assets, including additional review over the computation process for the determination of the allocation of basis between the Continuing Equity Owners and the Company.

We have engaged specialized resources for the review of the basis allocations and the related computations surrounding our income tax liabilities and related deferred income tax balances.

The enhanced controls have operated for a sufficient period of time in order for management to conclude, through testing, that these controls are designed and operating effectively.

Based on these procedures, we believe that the previously reported material weaknesses have been remediated.

However, completion of remediation procedures for these material weaknesses does not provide assurance that our modified controls will continue to operate properly or that our financial statements will be free from error.

Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020.

Management’s Annual Report on Internal Control over Financial Reporting

1 unchanged sentence

Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Our management has excluded from its assessment of internal control over financial reporting at December 31, 2019 the internal control over financial reporting of several of our recently acquired businesses in 2019, comprised of three dealerships (the “Excluded Acquisitions”).

Our management has excluded from its assessment of internal control over financial reporting at December 31, 2020 the internal control over financial reporting of several of our recently acquired businesses in 2020, comprised of nine dealerships and an RV furniture distributor (the “Excluded Acquisitions”).

The Excluded Acquisitions constituted $35.7 million and $17.5 million of total assets and net assets, respectively, as of December 31, 2020, and $10.1 million and $0.5 million of revenues and net loss, respectively, for the year then ended.

2 unchanged sentences

Changes in Internal Control over Financial Reporting

Other than described above in this Item 9A, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the fiscal quarter ended December 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended December 31, 2020, we completed the process of incorporating the internal controls for the businesses we acquired in 2019, comprised of three dealerships (the “2019 Excluded Acquisitions”), into our internal control over financial reporting and extending our Section 404 compliance program under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations under such Act to include the 2019 Excluded Acquisitions.

Except as otherwise described above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the fiscal quarter ended December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Camping World Holdings, Inc.

To the Stockholders and the Board of Directors of Camping World Holdings, Inc.

and subsidiaries

3 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report dated February 28, 2020, expressed an unqualified opinion on those financial statements and included an explanatory paragraph related to the Company’s change in method of accounting for leases in 2019 due to the adoption of the new lease standard.

As described in Management's Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the Company's recently acquired businesses in 2019, comprised of three dealerships (the "Excluded Acquisitions"), and whose financial statements constitute $20.4 million and $6.1 million of total and net assets, respectively, as of December 31, 2019, and $16.1 million and $(0.5) of revenues and net (loss), respectively, for the year then ended.

As described in Management's Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the Company's recently acquired businesses in 2020, comprised of nine dealerships and an RV furniture distributor (the "Excluded Acquisitions"), and whose financial statements constitute $35.7 million and $17.5 million of total assets and net assets, respectively, as of December 31, 2020, and $10.1 million and $0.5 million of revenues and net loss, respectively, for the year then ended.

Accordingly, our audit did not include the internal control over financial reporting at the Excluded Acquisitions.

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(1) Includes awards granted and available to be granted under our 2016 Incentive Award Plan.

Other information required by this item with respect to security ownership of certain beneficial owners and management will be included under the caption “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our Proxy Statement for our 2020 Annual Meeting of Shareholders and, upon filing, is incorporated herein by reference.

Management” and “Equity Compensation Plan Information” in our Proxy Statement for our 2021 Annual Meeting of Shareholders and, upon filing, is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

35 unchanged sentences

as administrative agent

Third Amendment to Seventh Amended and Restated Credit Agreement dated May 12, 2020 by and among FreedomRoads, LLC as borrower, the lenders party thereto, and Bank of America, N.A.

as administrative agent

Employment Agreement, dated June 10, 2016, by and between CWGS Enterprises, LLC, Camping World Holdings, Inc.

6 unchanged sentences

and Brent Moody

First Amendment to Employment Agreement, by and between the Company and Brent Moody, dated March 25, 2020.

Camping World Holdings, Inc.

9 unchanged sentences

Form of Employee Stock Option Agreement

Form of Employee Restricted Stock Unit Agreement

Form of Director Restricted Stock Unit Agreement

Form of Indemnification Agreement

Incorporated by Reference

2 unchanged sentences

Filed/ Furnished Herewith

Form of Employee Restricted Stock Unit Agreement

Form of Director Restricted Stock Unit Agreement

Form of Indemnification Agreement

Credit Agreement, dated November 8, 2016, by and among CWGS Enterprises, LLC, as holdings, CWGS Group, LLC, as borrower, certain of CWGS Enterprises, LLC's existing and future domestic subsidiaries as subsidiary guarantors, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent

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and Melvin Flanigan, dated January 1, 2019

Amendment to Employment Agreement dated November 8, 2019 by and between Camping World Holdings, Inc.

and Melvin Flanigan

Incorporated by Reference

2 unchanged sentences

Filed/ Furnished Herewith

Consulting Agreement, by and between Camping World Holdings, Inc.

and Thomas F.

Wolfe dated July 2, 2019

Amendment to Employment Agreement dated November 8, 2019 by and between Camping World Holdings, Inc.

and Melvin Flanigan

Employment Agreement, by and between Camping World Holdings, Inc.

and Tamara Ward dated December 19, 2019

Employment Agreement with Karin L.

Bell, dated July 1, 2020

List of Subsidiaries of Camping World Holdings, Inc.

Consent of Independent Registered Public Accounting Firm

Power of Attorney

5 unchanged sentences

Inline XBRL Taxonomy Extension Schema Document

InclineXBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Extension Definition Linkbase Document

16 unchanged sentences

February 26, 2021

/s/ MELVIN L.

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

7 unchanged sentences

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 9A. Controls and Procedures