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Item 5. Market for Registrant’s Common Equity

2022-02-24 compared with 2021-02-26 · 20 added, 112 removed, 36 unchanged (79% of the section changed)

3 unchanged sentences

Holders of Record

As of February 12, 2021, there were 5 and 41,329 stockholders of record and beneficial holders, respectively, of our Class A common stock.

As of February 11, 2022, there were five and 66,943 stockholders of record and beneficial holders, respectively, of our Class A common stock.

As of February 11, 2022, there were two and one stockholders of record of our Class B common stock and Class C common stock, respectively.

Dividend Policy

CWGS, LLC has made a regular quarterly cash distribution to its common unit holders of approximately $0.08 per common unit between the three months ended December 31, 2016 and the three months ended June 30, 2020.

On July 20, 2020, our Board of Directors approved the increase of the quarterly dividend to $0.09 per share of Class A common stock from $0.08 per share.

Accordingly, during the three months ended September 30, 2020 and December 31, 2020, we paid regular quarterly cash dividends of $0.09 per share of our Class A common stock.

CWGS, LLC intends to continue to make such quarterly cash distributions, to the extent permitted by law.

We have used in the past, and intend to continue to use, to the extent permitted by law, all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend of approximately $0.09 per share on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of our board of directors.

On February 18, 2022, our board of directors approved an increase of the regular quarterly cash dividend on our Class A common stock to $0.625 per share from $0.50 per share, which is funded with a $0.15 per common unit cash distribution from CWGS, LLC and the remainder is funded with all or a portion of the Excess Tax Distribution (as defined below).

Prior to February 18, 2022, our quarterly cash dividend on our Class A common stock was raised in several incremental steps from our first cash dividend of $0.08 per share on December 20, 2016.

Also, prior to 2021, the portion of our cash dividend relating to all or a portion of the Excess Tax Distribution was referred to as a special dividend.

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.

4 unchanged sentences

Based on the current applicable effective tax rates, we expect that (i) the assumed tax rate that will be used for purposes of determining tax distributions from CWGS, LLC will exceed our actual combined federal, state and local tax rate (assuming no changes in corporate tax rates) and (ii) the annual amount of tax distributions paid to us will exceed the sum of (A) our actual annual tax liability and (B) the annual amount payable by us under the Tax Receivable Agreement (assuming no early termination of the Tax Receivable Agreement) (such excess in clauses (A) and (B), collectively referred to herein as the "Excess Tax Distribution").

We 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 cash dividends on our Class A common stock depends 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, restrictions under applicable law, the extent to which such distributions would render CWGS, LLC insolvent, our business prospects and other factors that our

board of directors may deem relevant.

Additionally, our ability to distribute any Excess Tax Distribution will also be contingent on no early termination or amendment of the Tax Receivable Agreement, as well as the amount of tax distributions actually paid to us and our actual tax liability.

Furthermore, because we are a holding company, our ability to pay cash dividends on our Class A common stock depends on our receipt of cash distributions from CWGS, LLC and, through CWGS, LLC, cash distributions and dividends from its operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur.

subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur.

In particular, our ability to pay any cash dividends on our Class A common stock is limited by restrictions on the ability of CWGS, LLC and our other subsidiaries and us to pay dividends or make distributions to us under the terms of our Senior Secured Credit Facilities and Floor Plan Facility.

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(1) On October 30, 2020, our board of directors authorized a stock repurchase program for the repurchase of up to $100.0 million of the Company’s Class A common stock, expiring on October 31, 2022.

In August 2021, our board of directors authorized an increase to the stock repurchase program for the repurchase of up to an additional $125.0 million of the Company’s Class A common stock and an extension of the stock repurchase program to expire on August 31, 2023.

On January 20, 2022, our board of directors authorized an additional increase to the stock repurchase program to allow for the repurchase of an additional $152.7 million of the Company’s Class A common stock and an extension of the stock repurchase program to expire on December 31, 2025.

Following the increase in January 2022, approximately $200 million remained available for future repurchases.

This program does not obligate the Company to acquire any particular amount of Class A common stock and the program may be extended, modified, suspended or discontinued at any time at the board’s discretion.

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Stock Performance Graph

The following graph and table illustrate the total return from October 7, 2016, the date our shares began trading on the NYSE, through December 31, 2020, for (i) our Class A common stock, (ii) the Standard and Poor’s (“S&P”) 500 Index, and (iii) the S&P 500 Retailing Index.

The comparisons reflected in the graph and table are not intended to forecast the future performance of our stock and may not be indicative of future

The graph and table assume that $100 was invested on October 7, 2016 in each of our Class A common stock, the S&P 500 Index, and S&P 500 Retailing Index and that any dividends were reinvested.

The following graph and table illustrate the total return for the five years ended December 31, 2021 for (i) our Class A common stock, (ii) the Standard and Poor’s (“S&P”) 500 Index, and (iii) the S&P 500 Retailing Index.

The comparisons reflected in the graph and table are not intended to forecast the future performance of our stock and may not be indicative of future performance.

The graph and table assume that $100 was invested

on December 31, 2016 in each of our Class A common stock, the S&P 500 Index, and S&P 500 Retailing Index and that any dividends were reinvested.

Camping World Holdings, Inc.

2 unchanged sentences

S&P 500 Retailing Index

Zacks Investment Research, Inc.

Used with permission.

Recent Sales of Unregistered Securities

SELECTED FINANCIAL DATA

The following tables present the selected historical consolidated financial and other data for Camping World Holdings, Inc.

The selected consolidated balance sheets data as of December 31, 2020 and 2019 and the selected consolidated statements of operations and statements of cash flows data for each of the years in the three-year period ended December 31, 2020 are derived from our audited consolidated financial statements contained in Part II, Item 8 of this Form 10-K.

The selected consolidated balance sheets data as of December 31, 2018, 2017 and 2016, and the selected consolidated statements of operations and statements of cash flows data for the year ended December 31, 2017 and 2016 have been derived from our audited consolidated financial statements not included herein.

During the year ended December 31, 2019, we had a change to our reportable segments as described in Note 22 — Segment Information in Part II, Item 8 of this Form 10-K.

Accordingly, certain components of revenue and gross profit for the years ended December 31, 2018, 2017 and 2016 have been reclassified to conform to our current segment reporting structure.

Our financial statements for the year ended December 31, 2017 reflect the provisional impact of the U.S.

Tax Cuts and Jobs Act of 2017 that significantly revised the U.S.

corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21% and eliminating certain deductions.

Our financial statements for the year ended December 31, 2018 reflect the adoption of Accounting Standards Codification (“ASC”) No.

606, Revenue from Contracts with Customers as described in Note 2 — Revenue in Part II, Item 8 of this Form 10-K, which also removed the guidance for capitalization of direct response advertising that is now expensed as incurred.

Our financial statements for the year ended December 31, 2019 reflect the adoption of ASC No.

842, Leases as described in Note 1 — Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements in Part II, Item 8 of this Form 10-K.

Additionally, our financial statements for the year ended December 31, 2019 reflect long-lived asset impairments and restructuring charges as described in Note 5 — Restructuring and Long-lived Asset Impairment in Part II, Item 8 of this Form 10-K.

Subsequent to the IPO and the related reorganization transactions, Camping World Holdings, Inc.

has been a holding company whose principal asset is its equity interest in CWGS, LLC.

As the sole managing member of CWGS, LLC, Camping World Holdings, Inc.

operates and controls all of the business and affairs of CWGS, LLC, and, through CWGS, LLC, conducts its business.

As a result, the Company consolidates CWGS, LLC’s financial results and reports a non-controlling interest related to the common units not owned by Camping World Holdings, Inc.

Such consolidation has been reflected for all periods presented.

Our selected historical consolidated financial and other data does not reflect what our financial position, results of operations and cash flows would have been had we been a separate, stand-alone public company during those periods.

Our selected historical consolidated financial and other data may not be indicative of our future results of operations or future cash flows.

You should read the information set forth below in conjunction with our historical consolidated financial statements and the notes to those statements, “Item 1A.

– Risk Factors,” and “Item 7.

– Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

Fiscal Year Ended

($ in thousands)

Consolidated Statements of Operations Data:

Good Sam Services and Plans

RV and Outdoor Retail

Used vehicles

Products, service and other

Finance and insurance, net

Good Sam Club

Total revenue

Gross profit:

Good Sam Services and Plans

RV and Outdoor Retail

Used vehicles

Products, service and other

Finance and insurance, net

Good Sam Club

Total gross profit

Operating expenses:

Selling, general and administrative

Debt restructure expense

Depreciation and amortization

Goodwill impairment

Long-lived asset impairment

Lease termination

Loss (gain) on disposal of assets

Total operating expenses

Operating income

Other income (expense):

Floor plan interest expense

Other interest expense, net

Loss on debt restructure

Tax Receivable Agreement liability adjustment

Total other income (expense)

Income (loss) before income taxes

Income tax expense

Net income (loss)

net (income) loss attributable to non-controlling interests

Net income (loss) attributable to Camping World Holdings, Inc.

Earnings per share of Class A common stock (1):

Cash dividends declared per share of Class A common stock

Consolidated Statements of Cash Flows Data:

Net cash provided by (used in) operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Selected Other Data:

Adjusted EBITDA (2)

Net income (loss) margin

Adjusted EBITDA Margin (2)

Selected Other Operating Data:

Active Customers (3)

Dealership locations (4)

Fiscal Year Ended

($ in thousands)

Consolidated Balance Sheets Data (at period end):

Cash and cash equivalents

Total debt (5)

Total noncurrent liabilities

Total stockholders' equity (deficit)

(1) Basic and diluted earnings per Class A common stock is applicable only for periods after the Company’s IPO.

Prior to the IPO, the CWGS, LLC membership structure included membership units, preferred units, and profits units.

During the period of September 30, 2014 to October 6, 2016, there were 70,000 preferred units outstanding that received a total preferred return of $2.1 million per quarter in addition to their proportionate share of distributions made to all members of CWGS, LLC.

The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements.

Therefore, earnings per share information has not been presented for periods prior to the IPO on October 6, 2016.

The basic and diluted earnings per share period for the year ended December 31, 2016 represents only the period of October 6, 2016 to December 31, 2016.

See Note 21 — Earnings Per Share to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(2) EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net income, net income margin, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity.

See “Non-GAAP Financial Measures” in Part II, Item 7 of this Form 10-K for additional information and a reconciliation to the most directly comparable GAAP financial measure.

(3) We define an “Active Customer” as a unique customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.

(4) Dealership location acquisitions have contributed to the growth in revenues.

See Note 15 — Acquisitions to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(5) Total debt consists of borrowings under our Senior Secured Credit Facilities, finance leases, the Company’s prior credit facilities, the revolving line of credit under our Floor Plan Facility, and the Real Estate Facility with CIBC Bank USA, as applicable, net of unamortized original issue discount and capitalized finance costs as of December 31, 2020, 2019, 2018, 2017 and 2016 of $3.2 million and $7.9 million, $4.3 million and $10.9 million, $5.4 million and $13.6 million, $6.0 million and $14.2 million, and $6.3 million and $11.9 million, respectively (as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in Part II, Item 7 of this Form 10-K).

See our consolidated financial statements included in Part II, Item 8 of this Form 10-K, which include all liabilities, including amounts outstanding under our Floor Plan Facility .

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 5. Market for Registrant’s Common Equity