What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 187 added, 159 removed, 522 unchanged (40% of the section changed)

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The occurrence of any of the following risks may materially and adversely affect our business, financial condition, results of operations and future prospects.

In these circumstances, the market price of our Class A common stock could decline.

In these circumstances, the market price of our Class A common

stock could decline.

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

Risks Related to the COVID-19 Pandemic

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

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

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

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

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

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.

● 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, 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, 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 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 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.

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

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

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

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

● As a result of the COVID-19 pandemic, including related governmental guidance or directives, we have required, 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.

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

Risks Related to Our Business

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

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

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

We may not be able to realize the benefits initially anticipated and the expected costs may be greater than expected.

A variety of factors could cause the Company not to realize some or all of the expected benefits or incur greater costs, including, among others, delays in the anticipated timing of activities related to the 2019 Strategic Shift, unexpected costs associated with executing the 2019 Strategic Shift, or the Company's ability to achieve the benefits contemplated by the program.

Further, any cost savings that the Company realizes may be offset, in whole or in part, by a reduction in revenues or through increases in other expenses.

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

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

Our business model is impacted by general economic conditions in our markets, including inflation and interest rates, and ongoing economic and financial uncertainties could cause a decline in consumer spending that could adversely affect our business, financial condition and results of operations.

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

● job losses, lower income levels or other population and employment trends;

● bankruptcies;

● higher consumer debt and interest rates;

● reduced access to credit;

● higher energy and fuel costs;

● relative or perceived cost, availability and comfort of RV use versus other modes of travel, such as air travel and rail;

● falling home prices;

● 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 deflation and recessions.

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

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

Decreases in Active Customers, average spend per customer, or retention and renewal rates for our Good Sam services and plans would negatively affect our financial performance, and a prolonged period of depressed consumer spending could have a material adverse effect on our business.

For instance, our Active Customers declined in 2022, at least in part as a result of the retail locations that were closed in 2020 relating to our 2019 Strategic Shift.

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

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

Due to fluctuations in the U.S.

economy, our sales, operating and financial results for a particular period are difficult to predict, making it difficult to forecast results for future periods.

Additionally, we are subject to economic fluctuations in local

markets that may not reflect the economic conditions of the U.S.

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

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

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

For example, our competitors have listed RVs at or below cost and we have had little visibility into our competitors or manufacturers’ inventories.

As a result, we have responded and may need to further respond by establishing pricing, marketing and other programs or by seeking out additional strategic alliances or acquisitions that may be less favorable to us than we could otherwise establish or obtain in more favorable economic environments.

Such programs have adversely impacted our gross margin, operating margin and selling, general and administrative expenses.

In addition, declines in the national economy could cause merchants who participate in our programs to go out of business.

Should the number of merchants entering bankruptcy rise, it is likely that the number of uncollectible accounts would also rise.

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

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

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

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

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.

As of December 31, 2022, we had up to $1.7 billion in maximum borrowing capacity under our Eighth Amended and Restated Credit Agreement for floor plan financing (the “Floor Plan Facility”) (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 revenues.

Furthermore, many of our customers finance their RV purchases.

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There continue to be fewer lenders, more stringent underwriting and loan approval criteria, and greater down payment requirements than in the past.

If credit conditions or the credit worthiness of our customers worsen, and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in the sales of our products and have a material adverse effect on our business, financial condition and results of operations.

Deteriorating economic conditions as a result of federal government action to control inflation, such as higher interest rates, increased unemployment, financial market uncertainty, decreases in disposable income, declines in consumer confidence, economic slowdowns or recessions may negatively impact credit conditions or credit worthiness of our customers, and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates.

This could result in a decrease in sales of our products and have a material adverse effect on our business, financial condition and results of operations.

Fuel shortages, or high prices for fuel, could have a negative effect on our business.

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We depend on our manufacturers to provide us with products that compare favorably with competing products in terms of quality, performance, safety and advanced features.

Any adverse change in the production efficiency, product development efforts, technological advancement, marketplace acceptance, reputation, marketing capabilities or financial condition of our manufacturers, particularly Thor Industries, Inc.

particularly Thor Industries, Inc.

and Forest River, Inc., could have a substantial adverse impact on our business.

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

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

● job losses, lower income levels or other population and employment trends;

● bankruptcies;

● higher consumer debt and interest rates;

● reduced access to credit;

● higher energy and fuel costs;

● relative or perceived cost, availability and comfort of RV use versus other modes of travel, such as air travel and rail;

● falling home prices;

● 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 deflation and recessions.

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

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

Due to fluctuations in the U.S.

economy, our sales, operating and financial results for a particular period are difficult to predict, making it difficult to forecast results for future periods.

Additionally, we are subject to economic fluctuations in local markets that may not reflect the economic conditions of the U.S.

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

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

For example, our competitors have listed RVs at or below cost and we have had little visibility into our competitors or manufacturers’ inventories.

Such programs have adversely impacted our gross margin, operating margin and selling, general and administrative expenses.

In addition, declines in the national economy could cause merchants who participate in our programs to go out of business.

It is likely that, should the number of merchants entering bankruptcy rise, the number of uncollectible accounts would also rise.

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

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

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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 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.

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 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.

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 saw 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 have slowed and 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, prior to the COVID-19 pandemic, had led to declines in our average selling price of a new vehicle unit.

From 2015 to 2022, new vehicle travel trailer units as a percent of total new vehicles increased from 62% to 76% of total new vehicle unit sales but from 2015 to 2022 our average selling price of a new vehicle unit increased from $39,853 to $45,834.

As a result of the lower industry supply of travel trailers and motorhomes for much of 2021, both average cost and average sales price have increased.

If supply chain costs decline 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 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.

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

availability, variety, delivery and customer service.

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

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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 any future expansion into new, unfamiliar markets, businesses, product lines or categories, we may have less familiarity with local consumer preferences and less business, product or category knowledge with respect to new businesses, product lines or categories, and could encounter difficulties in attracting customers due to a reduced level of consumer familiarity with our brands or reduced product or category knowledge.

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

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

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

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

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

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As a result of these and other factors, a number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements and are not consummated.

In addition, we may have disagreements with potential acquisition targets, which could lead to litigation.

In addition, we may have disagreements with

potential acquisition targets, which could lead to litigation.

Any of these factors or outcomes could result in a material adverse effect on our business, financial condition and results of operations.

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, and Gander RV.

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

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 enthusiasts across North America.

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

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

For example, in the normal course of business, we periodically will implement discounting to reduce our excess RV inventory and, during the fourth quarter of 2022, we used clearance and discounted pricing on certain categories within our products, services, and other offerings to reduce our retail 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.

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

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

● changes or anticipated changes to regulations related to some of the products we sell or to the localities in which we operate, such as the regulations passed in December 2021 by the California Air Resources Board that will prohibit the sale of gas-powered generators in California beginning in 2028;

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

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An unanticipated decline in revenues or same store revenue may cause the price of our Class A common stock to fluctuate significantly.

Our business is seasonal and this leads to fluctuations in sales and revenues.

Our business is seasonal and this leads to fluctuations in revenues.

We have experienced, and expect to continue to experience, variability in revenue, net income and cash flows as a result of annual seasonality in our business.

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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, 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

On average, over the three years ended December 31, 2022, we have generated 31.0% and 29.0% of our annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer months.

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 $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.

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 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 Facilities (as defined in Note 9 — Long-Term Debt to our consolidated financial statements included in Item 8 of Part II of this Form 10-K) are unavailable, we may have to obtain additional financing.

If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted.

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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.

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 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.

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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, 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:

Our senior secured credit facilities, comprised of our 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 Facility contain various provisions that limit our ability to, among other things:

● incur additional indebtedness;

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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 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.

Other future pandemics or health crises may have similar material adverse impacts on our business.

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 the impact of COVID-19 had, and could again have in the future, certain negative impacts on our business including, without limitation, the following:

● delays in the delivery of certain products from our vendors as a result of shipping delays;

● temporary facility closures, production slowdowns and disruption to operations;

● increased product costs or shortages;

● traffic at our retail locations or reduced demand for our products and services;

● labor shortages including for key positions;

● financial impacts that could cause one or more of our counterparty financial institutions to fail or default on their obligations to us or for us to default on one or more of our credit agreements;

● potential significant impairment charges with respect to noncurrent assets, including goodwill, other intangible assets, and other long-lived assets, as well as inventory whose fair values may be negatively affected ;

● heightened cybersecurity risks during periods of increased remote working.

Other future pandemics or health crises may have similar material adverse impacts on our business.

We may not successfully execute or achieve the expected benefits of our 2019 Strategic Shift or cost cutting or restructuring initiatives.

The 2019 Strategic Shift may result in further asset impairment charges and adversely affect the Company's business.

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

As of December 31, 2022, the activities under the 2019 Strategic Shift have been completed with the exception of certain lease termination costs and other associated costs relating to the leases of previously closed locations under the 2019 Strategic Shift.

The process of identifying subtenants and negotiating lease terminations had been delayed in part due to the COVID-19 pandemic and is expected to continue.

The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals and the costs may be greater than expected.

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

As of December 31, 2022, the Company had 11 leases relating to the 2019 Strategic Shift that had not been terminated or sublet.

In addition, from time to time, we engage in cost cutting or restructuring initiatives to try to streamline our organizational footprint.

These initiatives may not have the intended benefits and may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees impacted by any reduction in force, and decreased morale among our remaining employees.

If we are unable to realize the anticipated benefits from our cost cutting or restructuring initiatives, or if we experience significant adverse consequences from such initiatives, our business, financial condition, and results of operations may be materially adversely affected.

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

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

We closed one of these fulfillment and distribution facilities in January 2023.

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

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Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise adversely affect our financial performance.

The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, floods, hail storms and earthquakes, unusual weather conditions, epidemic outbreaks such as Ebola, Zika virus, novel coronavirus or measles, terrorist attacks or disruptive political events in certain regions where our stores are located could adversely affect our business and result in lower sales.

The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, droughts, floods, hail storms and earthquakes, unusual weather conditions, epidemic outbreaks such as Ebola, Zika virus, novel coronavirus or measles, terrorist attacks or disruptive political events in certain regions where our stores are located could adversely affect our business and result in lower sales.

Severe weather, such as heavy snowfall or extreme temperatures, may discourage or restrict customers in a particular region from traveling to our stores or utilizing our products, thereby reducing our sales and profitability.

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.

Natural disasters including tornadoes, hurricanes, droughts, 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 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.

Climate change may impact the frequency and/or intensity of such events as well as cause chronic changes, such as changes in temperature or precipitation patterns or sea-level rise, that may also have an adverse impact on our operations, including but not limited to a change in consumer behavior.

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.

Our insurance coverage may also be insufficient to cover all losses related to such events.

Our insurance coverage may also be insufficient to cover all losses related to such events, or changing climatic conditions may make it so that we are not able to obtain sufficient insurance coverage on terms that we find acceptable.

Any of these events could have a material adverse effect on our business, financial condition and results of operations.

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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.

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.

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

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

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

exports to China.

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

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.

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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.

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

Additionally, there are increasing expectations that companies monitor the environmental and/or social performance of their suppliers, including compliance with a variety of labor practices.

There is also increased attention regarding the end of life considerations for products like ours, and we could experience increased expectations and regulations that effect our ability to manufacture and sell our products.

Compliance with emerging expectations and regulations can be costly, require us to establish or augment programs to diligence or monitor our suppliers, or, in the case of legislation such as the Uyghur Forced Labor Prevention Act, to design supply chains to avoid certain regions altogether.

To the extent that any foreign manufacturers which supply products to us directly or indirectly utilize quality control standards, labor practices or other practices that vary from those legally mandated or commonly accepted in the United States, we could be hurt by a variety of adverse impacts, including but not limited to any resulting negative publicity or, in some cases, face potential liability or a denial of import for our products.

A portion of our net income is from financing, insurance and extended service contracts, which depend on third-party lenders and insurance companies.

We cannot assure you third-party lending institutions will continue to provide financing for RV purchases.

We cannot assure you that third-party lending institutions will continue to provide financing for RV purchases.

A portion of our net income comes from the fees we receive from lending institutions and insurance companies for arranging financing and insurance coverage for our customers unless customers prepay the financing within a specified period (generally within six months of making the loan), in which case we are required to rebate (or “chargeback”) all or a portion of the commissions paid to us by the lending institution.

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If any of these events occur, we could lose a significant portion of our income and profit.

Our arrangements with lending institutions are typically governed by retail dealer agreements, which are customary in the RV industry.

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

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

Furthermore, new and used vehicles may be sold and financed through retail installment sales contracts entered into between us and third-party purchasers.

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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 $50.3 million and $57.7 million as of December 31, 2022 and December 31, 2021, 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.

Our success depends in part on our ability to attract, hire, train and retain qualified managerial, sales and marketing personnel.

Our success depends in part on our ability to attract, hire, train and retain qualified managerial, sales, marketing, and service personnel.

Competition for these types of personnel is high.

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

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

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

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

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At least annually, we review goodwill for impairment.

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

Long-lived assets, operating lease assets, identifiable intangible

assets and goodwill are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable from future cash flows.

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

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

If we redeem or repurchase shares of our stock in the future, we could be subject to a newly enacted excise tax.

The Inflation Reduction Act of 2022 was recently signed into law, which, among other things, imposed a new 1% excise tax on the fair market value of stock redeemed or repurchased by publicly traded corporations on or after January 1, 2023, subject to certain exceptions.

The Company maintains a stock repurchase program.

If we redeem or repurchase shares of our stock in the future, under our current stock repurchase program or otherwise, we could be subject to this excise tax, unless the redemptions or repurchases qualify for any of the exceptions that are provided in the Inflation Reduction Act or in future regulations or rules.

Any such excise tax would be a liability of the Company and could increase the amount of tax that we are required to pay.

Risks related to Regulation and Litigation

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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

experience certain types of data breaches.

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

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

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

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

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

Additionally, as of January 1, 2023, the majority of the provisions in the California Privacy Rights Act (“CPRA”), went into effect in California.

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

It also creates a new California data protection agency authorized to issue substantive

regulations and could result in increased privacy and information security enforcement.

Additional compliance investment and potential business process changes may continue to be required as additional provisions of the CPRA go into effect.

Several other states, including Colorado and Virginia, have enacted or are 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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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 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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Our failure to comply with certain environmental regulations could adversely affect our business, financial condition and results of operations.

Our operations involve the use, handling, storage and contracting for recycling and/or disposal of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires and propane.

Our operations involve the use, handling, storage and contracting for recycling and/or disposal/discharge of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires and propane.

Consequently, our business is subject to a complex variety of federal, state and local requirements that regulate the environment, public health and safety, and we may incur significant costs to comply with such requirements, which costs may increase if existing laws and regulations are revised or reinterpreted or if new laws and regulations become applicable to our operations.

Certain of our operations may also require permits or other approvals, which may delay our ability to execute on portions of our business strategy.

Our failure to comply with these regulations could cause us to become subject to fines and penalties or otherwise have an adverse impact on our business.

In addition, we have indemnified certain of our landlords for any hazardous waste which may be found on or about property we lease.

Certain environmental laws may prescribe liability to us for environmental contamination without regard to fault or legality of the action at the time of its occurrence.

If any such hazardous waste were to be found on property that we occupy, a significant claim giving rise to our indemnity obligation could have a negative effect on our business, financial condition and results of operations.

Climate change legislation or regulations restricting emission of “greenhouse gases” could result in increased operating costs and reduced demand for the RVs we sell.

Our operations are subject to a series of risks related to climate change and other environmental, social, and governance (“ESG”) matters.

Regulatory, market, and other changes to respond to climate change may adversely impact our business, financial condition, or results of operations.

The United States Environmental Protection Agency has adopted rules under existing provisions of the federal Clean Air Act that require a reduction in emissions of greenhouse gases from motor vehicles.

The adoption of any laws or regulations requiring significant increases in fuel economy requirements or new federal or state restrictions on vehicles and automotive fuels in the United States could adversely affect demand for those vehicles and could have a material adverse effect on our business, financial condition and results of operations.

Additionally, there is increasing environmental consciousness among consumers, which may result in decreased demand for certain of our current product or service offerings.

Developing alternatives that satisfy the market’s evolving expectations of, among other things, vehicle emissions profiles may require us to incur significant costs.

Additionally, there are several competing alternatives to replace petroleum-based fuels for vehicles, including but not limited to:

electricity, hydrogen, and compressed and/or renewable gas.

To the extent potential customers prefer technologies different from those used in the vehicles we offer for sale, then demand for such vehicles may not develop as quickly as we expect, or at all.

Reporting expectations for various ESG topics are also increasing, with a variety of customers, capital providers, and regulators seeking increased information on ESG-related risks.

For example, the Securities and Exchange Commission has proposed a rule that, if finalized, may require us to incur significant costs to assess and disclose on a range of climate-related data and risks.

Increased scrutiny from various parties may also result in increased compliance costs and increased legal risks, whether through enforcement actions or litigation, whether or not such claims have any merit.

While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of our company and/or products, such initiatives or achievements of such commitments may be costly and may not have the desired effect.

Expectations around company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.

If we do not, or are perceived to not, take sufficient action to address ESG matters and related stakeholder expectations, we may suffer reputational damage and may be subject to investor or regulator engagement, even if our efforts are currently voluntary.

All of these risks may also impact our suppliers or customers, which may indirectly impact our business, financial condition, or results of operations.

A failure in our e-commerce operations, security breaches and cybersecurity risks could disrupt our business and lead to reduced sales and growth prospects and reputational damage.

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Various components of our information technology systems, including hardware, networks, and software, are licensed to us by third-party vendors.

We rely extensively on our information technology systems to process transactions, summarize results and manage our business.

rely extensively on our information technology systems to process transactions, summarize results and manage our business.

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

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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 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.

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.

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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.

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

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.

We engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation, which was completed as of September 30, 2022.

We are continuing to take measures to enhance our IT Systems.

Through our investigation, we identified that personal information of approximately 30,000 individuals was acquired without authorization, including, depending on the individual, dates of birth, Social Security numbers, and driver’s license numbers.

We complied with notification obligations in accordance with relevant law and are continuing to cooperate with law enforcement.

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

Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, and regulatory enforcement action.

In December 2022, three putative class action complaints were filed against us and certain of our subsidiaries arising out of the Cybersecurity Incident.

This litigation 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.

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

Some of our systems are not fully redundant, and our

disaster recovery planning cannot account for all eventualities.

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

We expect cyberattacks to accelerate going forward.

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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.

Any remediation measures that we have taken or that we may undertake in the future in response to the Cybersecurity Incident 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.

For example, recent amendments to the Safeguards Rule of the Gramm-Leach-Bliley Act will require covered financial institutions to adopt specific data security measures effective as of June 9, 2023.

In addition, customers have a high expectation that we will adequately protect their personal information from cyberattack 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.

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

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

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

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

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

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

We have been named in litigation, which has resulted in substantial costs and may result in reputational harm and divert management’s attention and resources.

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We have been named in the past, are currently named and may be named in the future as defendants of class action lawsuits.

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

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

We have been subject to securities class action litigation and may be subject to similar

or other litigation in the future.

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.

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”).

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

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

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

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

The Voting Agreement allows for the Board of Directors to reject the nomination, appointment or election of a particular director if such nomination, appointment or election would constitute a breach of the

Board of Directors’ fiduciary duties to the Company’s stockholders or does not otherwise comply with any requirements of our amended and restated certificate of incorporation or our amended and restated bylaws or the charter for, or related guidelines of, the Board of Directors’ Nominating and Corporate Governance Committee.

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

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

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

As such, we qualify for, and rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our Board of Directors, an entirely independent Nominating and Corporate Governance Committee, an entirely

independent Compensation Committee or to perform an annual performance evaluation of the Nominating and Corporate Governance and Compensation Committees.

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

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in exchange for Class A common stock in connection with the consummation of the IPO and the related corporate reorganization transactions and any future redemptions that are funded by Camping World Holdings, Inc.

or exchanges of common units and (ii) certain other tax benefits attributable to payments under the Tax Receivable Agreement.

or redemption of common units and (ii) certain other tax benefits attributable to payments under the Tax Receivable Agreement.

The amount of the cash payments that we may be required to make under the Tax Receivable Agreement could be significant.

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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maintaining a continued ownership interest in CWGS, LLC.

Additional liabilities under the Tax Receivable Agreement may be required to be recorded when CWGS, LLC units are exchanged in the future.

Such amounts of cash payments that the Company may be required to make under the Tax Receivable Agreement for such future exchanges could be significant.

The amount of liabilities to be recorded in the future for such exchanges is dependent on a variety of factors including future stock prices, tax rates in effect, and the Company’s ability to utilize the tax benefits created as a result of the futures of CWGS, LLC units.

Additional liabilities under the Tax Receivable Agreement may be required to be recorded when CWGS, LLC units are redeemed in the future.

Such amounts of cash payments that the Company may be required to make under the Tax Receivable Agreement for such future redemptions could be significant.

The amount of liabilities to be recorded in the future for such redemptions is dependent on a variety of factors including future stock prices, tax rates in effect, and the Company’s ability to utilize the tax benefits created as a result of the futures of CWGS, LLC units.

The significance of these factors and related uncertainty associated with the related liabilities makes estimation of future potential amounts under the Tax Receivable Agreement impractical to determine.

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As a result of the foregoing, (i) we could be required to make cash payments to the Continuing Equity Owners and Crestview Partners II GP, L.P.

that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) we would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits.

that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) we

would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits.

In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control.

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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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At December 31, 2022, we had an aggregate of 202,428,913 shares of Class A common stock authorized but unissued, including 42,044,536 shares of Class A common stock issuable, at our election, upon redemption of CWGS, LLC common units held by the Continuing Equity Owners.

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

the NYSE) who are disinterested), newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case in accordance with the terms of the CWGS LLC Agreement;

provided that, at our election (determined solely by our independent directors (within the meaning of the rules of the NYSE) who are disinterested), we may effect a direct exchange of such Class A common stock or such cash, as applicable, for such common units.

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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.

We have paid a regular cash dividend using distributions from CWGS, LLC, including all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of this Form 10-K), 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.

Additionally, our ability to distribute any Excess Tax Distribution will also be subject to 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, which will be affected by the conversion of certain subsidiaries, including Camping World, Inc., to limited liability companies (see Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

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

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● 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;

● we require advance notice for stockholder proposals and nominations;

● we have opted out of Section 203 of the Delaware General Corporation Law of the State of Delaware (the “DGCL”), however, our amended and restated certificate of incorporation contains provisions that are similar to Section 203 of the DGCL (except with respect to ML Acquisition and Crestview and any of their respective affiliates and any of their respective direct or indirect transferees of Class B common stock).

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These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you desire, including actions that you may deem advantageous, or negatively affect the trading price of our Class A common stock.

In addition, because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

In addition, because our Board of Directors is responsible for appointing the members of our

management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

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

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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;

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

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

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

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

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

Failure to comply with the Sarbanes-Oxley Act could potentially subject us

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

General Risk Factors

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federal and state authorities.

Certain subsidiaries are currently under U.S.

federal audit (see Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

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

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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