What changed in this filing

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Item 1A. Risk Factors

2022-02-24 compared with 2021-02-26 · 94 added, 113 removed, 587 unchanged (26% of the section changed)

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

For instance, disruptions in the supply of adhesives may negatively impact our procurement of fiberglass travel trailers.

● 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.

● As of December 31, 2021 and 2020, we had temporarily closed one and two locations, respectively, as a result of COVID-19 and branding changes.

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.

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

● 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.

We have taken 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.

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

● 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.

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● 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.

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, at times, 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.

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

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.

As of December 31, 2021, we had up to $1.7 billion in maximum borrowing capacity under our Eighth Amended and Restated Credit Agreement for floor plan financing (see Note 4 ─ Inventories and Floor Plan Payables 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.

Furthermore, many of our customers finance their RV purchases.

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● lower consumer confidence or discretional consumer spending;

● higher inflation rates;

● uncertainty or changes in tax policies and tax rates;

● uncertainty due to national or international security concerns;

● other general economic conditions, including inflation, deflation and recessions.

● other general economic conditions, including deflation and recessions.

We also rely on our retail locations to attract and retain customers and to build our customer database.

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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.

As described above, during the COVID-19 pandemic, we experienced significant acceleration in our in-store traffic and revenue trends in May 2020 continuing into the quarter ended June 30, 2021 and demand in new and used vehicles remained elevated through the remainder of 2021 and into the beginning of 2022.

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.

These trends may not continue in the future.

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.

From 2015 to 2020, new vehicle travel trailer units as a percent of total new vehicles increased from 62% to 74% of total new vehicle unit sales and the average selling price of a new vehicle unit has declined from $39,853 to $36,277.

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.

From 2015 to 2021, new vehicle travel trailer units as a percent of total new vehicles increased from 62% to 72% of total new vehicle unit sales and from 2015 to 2020 our average selling price of a new vehicle unit had decreased from $39,853 to $36,277.

However, over the past twelve months due to lower industry supply of travel trailers and motorhomes, both average cost and average sales price have increased.

Should the supply chain correct itself over the next twelve months, average sales price may again decline and impact our same store revenue.

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.

The markets for services, protection plans, products and resources targeting RV owners and 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.

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● 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;

● distributors of RV furniture and accessories;

● online retailers;

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Moreover, some of our mass merchandising competitors do not currently compete in many of the product categories we offer, but may choose to offer a broader array of competing products in the future.

Particularly in the larger outdoor goods and services market outside the RV market, our competitors may have a larger number of stores and greater market presence, name recognition and financial, distribution and marketing resources than us.

Moreover, some of our competitors may build new stores in or near our existing locations.

Some of our competitors may build new stores in or near our existing locations and certain RV and accessory manufacturers may choose to expand their direct to consumer offerings.

In addition, an increase in the number of aggregator and price comparison sites for insurance products may negatively impact our sales of these products.

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Our inability to compete effectively with existing or potential competitors could have a material adverse effect on our business, financial condition and results of operations.

Our expansion into new, unfamiliar markets, businesses, products lines or categories presents increased risks that may prevent us from being profitable in these new markets, businesses, product lines or categories.

Our expansion into new, unfamiliar markets, businesses, product lines or categories presents increased risks that may prevent us from being profitable in these new markets, businesses, product lines or categories.

Delays in opening or acquiring new retail locations could have a material adverse effect on our business, financial condition and results of operations.

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

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.

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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Failure to maintain the strength and value of our brands could have a material adverse effect on our business, financial condition and results of operations.

Our success depends on the value and strength of our key brands, including Good Sam, Camping World, Gander Outdoors, and Gander RV.

Our success depends on the value and strength of our key brands, including Good Sam, Camping World, and Gander RV.

These brands are integral to our business as well as to the implementation of our strategies for expanding our business.

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Our success depends upon our ability to successfully manage our inventory and to anticipate and respond to merchandise trends and consumer demands in a timely manner.

Our products appeal to consumers who are, or could become, RV owners and/or outdoor and active sports enthusiasts across North America.

Our products appeal to consumers who are, or could become, RV owners and enthusiasts across North America.

The preferences of these consumers cannot be predicted with certainty and are subject to change.

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

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.

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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In addition, unusually severe weather conditions in some geographic areas may impact demand.

On average, over the three years ended December 31, 2020, we have generated 29.9% and 28.9% of our annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer months.

On average, over the three years ended December 31, 2021, we have generated 29.8% and 28.9% of our annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer

We have historically incurred additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs.

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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 $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.

We cannot assure you that our cash flow from operations or cash available under our financing agreements, including our $65.0 million revolving credit facility (the “Revolving Credit Facility”) or our floor plan financing through the Eighth 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 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.

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.

Certain of our indebtedness, such as our Senior Secured Credit Facilities (as defined below) bears interest at variable interest rates based on the London Inter-bank Offered Rate (“LIBOR”).

Although we expect that the capital and debt markets will cease to use LIBOR as a benchmark in the near future and the administrator of LIBOR has announced its intention to extend the publication of most tenors of LIBOR for U.S.

dollars through June 30, 2023, we cannot predict whether or when all tenors of U.S.

dollar LIBOR will actually cease to be available, at which point the Secured Overnight Funding Rate, or SOFR, will become the market benchmark in its place or what impact such a transition may have on our interest rates, business, financial condition and results of operations

Our Senior Secured Credit Facilities and our Floor Plan Facility contain restrictive covenants that may impair our ability to access sufficient capital and operate our business.

Our Senior Secured Credit Facilities and our Floor Plan Facility contain various provisions that limit our ability to, among other things:

Our senior secured credit facilities, comprised of our $65.0 million revolving credit facility (“the Revolving Credit Facility”) and our $1.4 billion term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”) and our floor plan financing through our Eighth Amended and Restated Credit Agreement, as amended (the “Floor Plan Facility”) contain various provisions that limit our ability to, among other things:

● incur additional indebtedness;

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

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

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 consolidated financial statements included in Item 8 of Part II of this Form 10-K.

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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 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.

We primarily rely on six 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 six fulfillment and distribution facilities (see “Item 2.

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

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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.

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 product shortages and reduced 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.

The public health crisis caused by the COVID-19 pandemic and the measures 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 product shortages and reduced customer demand for our products.

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

To the extent these events also impact one or more of our key suppliers or result in the closure of one or more of our distribution centers or our corporate headquarters, we may be unable to maintain inventory balances, maintain delivery schedules or provide other support functions to our stores.

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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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If we lose one or more key vendors or are unable to promptly replace a vendor that is unwilling or unable to satisfy our requirements with a vendor providing equally appealing products at comparable prices, we may not be able to offer products that are important to our merchandise assortment.

We also are subject to risks, such as the price and availability of raw materials, labor disputes, union organizing activity, strikes, inclement weather, natural disasters, war and terrorism and adverse general economic and political conditions that might limit our vendors’ ability to provide us with quality merchandise on a timely and cost-efficient basis.

We also are subject to risks, such as the price and availability of raw materials, shipping delays, labor disputes, union organizing activity, strikes, inclement weather, natural disasters, war and terrorism and adverse general economic and political conditions that might limit our vendors’ ability to provide us with quality merchandise on a timely and cost-efficient basis.

We may not be able to develop relationships with new vendors, and products from alternative sources, if any, may be of a lesser quality and more expensive than those we currently purchase.

Additionally, our sale of firearms generally, may have an adverse effect on our relationships with one or more of our third-party providers, or key suppliers or vendors, and could negatively impact our results.

Any delay or failure in offering quality products and services to our customers could have a material adverse effect on our business, financial condition and results of operations.

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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.

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.

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Contracts in transit are included in current assets in our consolidated financial statements included in Item 8 of Part II of this Form 10-K and totaled $57.7 million and $48.2 million as of December 31, 2021 and December 31, 2020, respectively.

Any defaults on these retail installment sales contracts could have a material adverse effect on our business, financial condition and results of operations.

Any defaults on these retail

installment sales contracts could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to retain senior executives and attract and retain other qualified employees, our business might be adversely affected.

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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

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

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

Our operations are subject to varying degrees of federal, state and local regulation, including our RV sales, firearms sales, RV financing, outbound telemarketing, direct mail, roadside assistance programs, insurance activities, and the sale of extended service contracts.

Our operations are subject to varying degrees of federal, state and local regulation, including our RV sales, RV financing, outbound telemarketing, direct mail, roadside assistance programs, insurance activities, and the sale of extended service contracts.

New regulatory efforts may be proposed from time to time that have a material adverse effect on our ability to operate our businesses or our results of operations.

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Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business or limit the services we are able to offer.

In the area of information security and data protection, the laws in several states in the United States and most countries require companies to implement specific information security controls and legal protections to protect certain types of personally identifiable information.

In the area of information security and data protection, the laws in several states in the United States and most countries require companies to implement specific privacy and information security controls and legal protections to protect certain types of personally identifiable information and to collect or use it subject to disclosures and certain consent-based requirements.

Likewise, most states in the United States and most countries have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their personally identifiable information.

Any failure on our part to comply with these laws may subject us to significant liabilities.

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.

experience certain types of data breaches.

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

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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.

Several other states are enacting or in the process of proposing legislation that mirrors may aspects of the CCPA and CPRA.

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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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.

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

These products are subject to complex federal and state laws and regulations.

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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.

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.

In addition, in connection with our previous sale of firearms in our stores, we were required to 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 failed to comply with Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF”) rules and regulations during the period we sold firearms, the ATF may levy fines against us.

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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Business—Laws and Regulations” under Part I of this Form 10-K.

Changes in government policies and firearms legislation could adversely affect our financial results.

The sale, purchase, ownership and use of firearms are subject to numerous and varied federal, state and local governmental regulations.

Federal laws governing firearms include the National Firearms Act, the Federal Firearms Act, the Arms Export Control Act and the Gun Control Act of 1968.

These laws generally govern the manufacture, import, export, sale and possession of firearms and ammunition.

Currently, some members of the federal legislature and several state legislatures are considering additional legislation relating to the regulation of firearms and ammunition.

These proposed bills are extremely varied.

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 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.

For more information on the government policies and firearms legislation applicable to our business, see “Item I.

Business— Laws and Regulations” under Part I of this Form 10-K.

Our failure to comply with certain environmental regulations could adversely affect our business, financial condition and results of operations.

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We also own the copyrights to certain articles in our publications.

We believe that our trademark and copyrights have significant value and are important to our marketing efforts.

We believe that our trademarks and copyrights have significant value and are important to our marketing efforts.

If we are unable to continue to protect the trademarks and service marks for our proprietary brands, if such marks become generic or if third parties adopt marks similar to our marks, our ability to differentiate our products and services may be diminished.

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Any material interruptions or failures in our payment-related systems could have a material adverse effect on our business, financial condition and results of operations.

Any disruptions to our information technology systems or breaches of our network security could interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions and costly response measures and could have a material adverse effect on our business, financial condition and results of operations.

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 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.

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

Any disruptions or breaches involving our or our third-party providers’ information technology systems or network security could interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions and costly response measures and could have a material adverse effect on our business, financial condition and results of operations.

We rely on the integrity, security and successful functioning of our information technology systems and network infrastructure (collectively, “IT Systems”) across our operations.

While we own and operate certain parts of our IT Systems, we also rely on critical third-party service providers for an array of software, technologies, tools and services.

We use IT Systems for external and internal functions, such as 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 IT Systems to report and audit our operational results.

In addition, we and our third-party providers have access to, collect, process and maintain private or confidential information regarding our customers, club members, associates and suppliers, as well as our business.

For example, we have over 30 million unique contacts in our database as of December 31, 2021.

This customer database includes information about our approximately 2.1 million club members and our 5.5 million Active Customers as of December 31, 2021.

In addition, the protection of our customer, club member, associate, supplier and company data is critical to us.

The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements across our business.

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

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.

We and our third-party providers experience cyberattacks and security incidents from time to time.

For example, in February 2022, we announced that we were experiencing a cybersecurity incident (the “Cybersecurity Incident”) that resulted in the encryption of certain IT Systems and theft of certain data and information.

The Cybersecurity Incident resulted in our temporary inability to access certain of our IT Systems, caused by the disabling of some of our IT Systems by the threat actor and our temporarily taking certain other IT Systems offline as a precautionary measure.

We engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation, and are working on restoring and enhancing the security of our IT Systems.

We are also coordinating with law enforcement.

We are in the early stages of this incident and have not determined the full scope or content of our lost or stolen data.

We have and expect to continue to incur incremental costs for the investigation, containment and remediation of the Cybersecurity Incident, including legal and other professional fees, and investments to enhance the security of our IT Systems.

The containment, investigation, remediation, legal and other costs may exceed our insurance policy limits or may not be covered by insurance at all.

We have not yet determined if the Cybersecurity Incident will cause future disruptions to our business or how long such disruption could last.

We have also not yet been able to estimate the incremental costs resulting from the Cybersecurity Incident, which are expected to adversely impact our future financial results.

Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, regulatory enforcement action, and litigation that could result in financial judgments or the payment of settlement amounts and disputes with insurance carriers concerning coverage.

Despite our security controls and measures, we are vulnerable to threats resulting from malware (for example, ransomware), viruses, misconduct by external or inside actors, social engineering, human error by associates and contractors, as well as from bugs, misconfigurations and vulnerabilities in our software code.

We are also vulnerable to further successful cyberattacks, security breaches and disruptions to our IT Systems and our electronic data and information assets, in addition to damage or interruption from earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer and telecommunications failures and similar incidents.

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

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.

The COVID-19 pandemic has also presented additional operational and cybersecurity risks due to the prevalence of work-from-home arrangements.

We expect cyberattacks to accelerate going forward.

Threat actors are becoming more sophisticated and difficult to anticipate or deflect as they increasingly use tools and techniques designed to circumvent security controls, to avoid detection, and to remove forensic evidence that may be needed to effectively identify, investigate and remediate attacks.

Any errors or vulnerabilities in our IT Systems, damage to or failure of our IT Systems, or significant breach of club member, customer, employee, supplier, or company data, could result in interruptions in our services, noncompliance with certain regulations, substantial negative media attention, damage to our club member, customer and supplier relationships and our reputation, exposure to litigation (including class actions), regulatory investigations, and lost sales, fines, penalties, lawsuits, and increased remediation costs, any or all of which could have a material adverse effect on our business, financial condition and results of operations.

Any remediation measures that we have taken or that we may undertake in the future in response to the security incident announced in February 2022 or other security breaches may be insufficient to prevent future attacks.

In addition, the regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements across our business.

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

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, and new laws such as the CCPA impose statutory damages for certain types of data breaches that affect the personal information of consumers.

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

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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.

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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.

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”).

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.

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

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

Additionally, pursuant to the Voting Agreement, we are required to take commercially reasonable action to cause (i) the Board of Directors to be comprised at least of nine directors;

Additionally, pursuant to the Voting Agreement, we are required to take commercially reasonable action to cause (i) the Board of Directors to be comprised at least of nine directors absent an appropriate waiver or approval to increase or decrease the size of the Board (which the Company obtained to set the Board at eight directors);

(ii) the individuals designated in accordance with the terms of the Voting Agreement to be included in the slate of nominees to be elected to the board of directors at the next annual or special meeting of stockholders of the Company at which directors are to be elected and at each annual meeting of stockholders of the Company thereafter at which a director’s term expires;

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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

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.

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Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, which tax reporting positions are subject to challenge by taxing authorities.

Any payments made by us to the Continuing Equity Owners and Crestview Partners II GP, L.P.

Any payments made by us to the

Continuing Equity Owners and Crestview Partners II GP, L.P.

under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us.

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will be netted against any future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement.

However, a challenge to any tax benefits initially claimed by us may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments from which to net against.

However, a challenge to any tax benefits initially claimed by us may not arise for

a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments from which to net against.

The applicable U.S.

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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 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.

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.

In addition, we have paid, and currently intend to pay, a special cash dividend of all or a portion of the Excess Tax Distribution to the holders of our Class A common stock from time to time, subject to the discretion of our board of directors.

Our ability to pay 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.

We have paid a regular cash dividend using distributions from CWGS, LLC, including all or a portion of the Excess Tax Distribution, to the holders of our Class A common stock from time to time, subject to the discretion of our board of directors.

However, the payment of future dividends on our Class A common stock will be subject to our discretion as the sole managing member of CWGS, LLC, the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our board of directors may deem relevant.

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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 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 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;

● 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.

(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.

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 the past we have identified material weakness in our internal control over financial reporting.

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.

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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