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RVIA Economic Impact Study

The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.

Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .

Camping World Announces 10.8 Percent Increase in First Quarter

Fri May 5, 2017

145434773794726.pngLINCOLNSHIRE, Illinois - Camping World Holdings Inc. has reported results for the quarter ended March 31 with a total revenue increase of nearly 11 percent.

-Total revenue increased 10.8 percent to $883.8 million;
-Gross profit increased 13.3 percent to $251.8 million and gross margin increased 62 basis points to 28.5 percent;
-Income from operations increased 24.5 percent to $69.8 million and operating margin increased 87 basis points to 7.9 percent;
-Net income increased 30.9 percent to $49.4 million, net income margin increased 86 basis points to 5.6 percent; and adjusted pro forma net income increased 46.2 percent to $31.6 million;
-Basic and diluted earnings per share for the first quarter of 2017 were $0.39 and $0.37, respectively, and adjusted pro forma earnings per fully exchanged and diluted share for the quarter increased 47.2 percent to $0.38; and
-Adjusted EBITDA increased 24.9 percent to $71.7 million and adjusted EBITDA margin increased 92 basis points to 8.1 percent.

Units and Average Selling Prices

New vehicle units sold increased 30.9 percent to 13,763 and the average selling price of a new vehicle decreased 5.9 percent to $36,663 in the first quarter of fiscal 2017. The increase in new vehicle units sold was primarily driven by strong consumer demand for new vehicles and a shortage of supply of used vehicles, according to a press release. The decrease in the average selling price of a new vehicle was driven by a higher mix of lower-priced towable units.

Used vehicle units sold decreased 18.8 percent to 6,516 and the average selling price of a used vehicle increased 0.9 percent to $22,479 in the first quarter of fiscal 2017. The decrease in used vehicle units sold was primarily driven by reduced inventory availability and the disposition of the automobile unit business as a result of the distribution of the AutoMatch business in the second quarter of 2016.

Revenue

Total revenue increased 10.8 percent to $883.8 million from $797.7 million in the first quarter of fiscal 2016.

Consumer Services and Plans revenue increased 11.7 percent to $50.2 million from $45 million in the first quarter of fiscal 2016. The increase was primarily driven by increases in consumer show exhibit and admissions revenue, club memberships, roadside assistance contracts and vehicle insurance written premiums.

Retail revenue increased 10.7 percent to $833.6 million from $752.8 million in the first quarter of fiscal 2016. Within the Retail segment, new vehicle revenue increased 23.2 percent to $504.6 million, used vehicle revenue decreased 18.1 percent to $146.5 million, parts, services and other revenue increased 2.4 percent to $116.2 million and finance and insurance revenue increased 29.9 percent to $66.3 million. Strong consumer demand for recreational vehicles combined with a shortage of supply of used vehicles benefited new vehicle and finance and insurance sales and decreased used vehicle sales. Finance and insurance net revenue as a percentage of total new and used vehicle revenue increased to 10.2 percent from 8.7 percent in the first quarter of fiscal 2016, and benefited from a sales mix shift toward new lower-priced towable units and higher penetration rates.

Same store sales of the 115 retail locations that were open both at the beginning of the preceding fiscal year and at the end of the first quarter of 2017 increased 9.6 percent to $771.7 million. The increase in same store sales at retail locations was primarily driven by a 26.1 percent increase in finance and insurance same store sales and an 18.1 percent increase in new vehicle same store sales, partially offset by a 1.1 percent decrease in parts, services and other same store sales, and a 10.5 percent decrease in used vehicle same store sales.

The company operated a total of 126 retail locations as of March 31, compared to 120 retail locations at March 31, 2016.

Gross Profit

Gross profit increased 13.3 percent to $251.8 million and gross margin increased 62 basis points to 28.5 percent from the first quarter of fiscal 2016. Consumer Services and Plans gross profit increased 15.9 percent to $29.1 million and gross margin increased 210 basis points to 57.9 percent of segment revenue from the first quarter of fiscal 2016. The increase in Consumer Services and Plans gross margin was primarily driven by an increase in roadside assistance contracts in force with a reduction in claim costs, an increase in vehicle insurance and TravelAssist programs due to increased policies in force, an increase in consumer shows from five acquired shows and one new show, and an increase in ancillary product sales. Retail gross profit increased 12.9 percent to $222.7 million and gross margin increased 52 basis points to 26.7 percent of segment revenue from the first quarter of fiscal 2016. The increase in Retail gross margin was driven primarily by an increase in the finance and insurance penetration rate to 10.2 percent of vehicle sales from 8.7 percent of vehicle sales in the first quarter of fiscal 2016, and a 528 basis point increase in gross margin from used vehicle unit sales.

Operating Expenses

Total operating expenses increased 9.5 percent to $182 million from the first quarter of fiscal 2016. Selling, general and administrative expenses increased 9.4 percent to $175.5 million from $160.4 million in the first quarter of fiscal 2016. The increase in SG&A expenses was driven by a $9.1 million increase in wage-related expenses, primarily related to increased vehicle unit sales and the additional acquired and greenfield locations, $2.6 million of additional variable selling expense, $1.5 million of additional lease expense, and $1.9 million of store and corporate overhead expenses. As a percentage of total gross profit, SG&A expenses declined 245 basis points to 69.7 percent. Depreciation and amortization expense increased 16.3 percent to $6.9 million.

Interest & Other Expenses

Floor plan interest expense increased to $5.3 million from $5.1 million in the first quarter of 2016. The increase was primarily attributable to higher average inventory from the new dealerships added compared to the prior year period partially offset by a 7 basis point decrease in the average floor plan borrowing rate. Other interest expense decreased to $9.4 million from $12.7 million in the first quarter last year. The decrease was primarily attributable to a lower interest rate and amount of borrowings under the company's existing term loan facility than under its previous term loan facility as a result of the Nov. 8, 2016 refinancing.

Net Income, Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share

Net income increased 30.9 percent to $49.4 million and adjusted pro forma net income increased 46.2 percent to $31.6 million from $21.6 million in the first quarter of fiscal 2016. Adjusted pro forma earnings per fully exchanged and diluted share increased 47.2 percent to $0.38 from $0.26 in the first quarter of fiscal 2016.

Adjusted EBITDA

Adjusted EBITDA increased 24.9 percent to $71.7 million from $57.4 million and adjusted EBITDA margin increased 92 basis points to 8.1 percent from 7.2 percent in the first quarter of fiscal 2016.

Select Balance Sheet and Cash Flow Items

The company's working capital and cash and cash equivalents balance at March 31 were $332.2 million and $174.7 million, respectively, compared to $266.8 million and $114.2 million, respectively, at Dec. 31, 2016. On March 17, CWGS Group, LLC entered into an amendment to the existing senior secured credit facilities to increase the existing term loan facility by $95 million to $740 million. At the end of the first quarter of 2017, the company had no borrowings under its $35 million revolving credit facility, $738.2 million of term loan principal outstanding under its senior secured credit facilities and $695.5 million of floor plan notes payable outstanding under its floor plan financing facility. Inventory at the end of the first quarter of fiscal 2017 increased 9.8 percent to $998.6 million compared to $909.3 million at Dec. 31, 2016.