Camping world holdings, inc. reports record second quarter revenue and second strongest second quarter earnings since inception
Lincolnshire, il--(business wire)--camping world holdings, inc. (nyse: cwh) (the “company” or “cwh”), america’s recreation dealer, today reported results for the second quarter ended june 30, 2022. marcus lemonis, chairman and ceo of camping world holdings, inc. stated, “we are pleased with the sale of almost 39,000 new and used rvs which contributed to record revenues for the second quarter. we believe our team has both the focus and experience to navigate our business through changes in market conditions as evidenced by our solid financial results.” second quarter operating highlights revenue was a record $2.2 billion for the second quarter, an increase of $106.8 million, or 5.2%. gross profit was $716.8 million, a decrease of $43.1 million, or 5.7%, and gross margin was 33.1%, a decrease of 380 basis points driven primarily by the higher cost of new vehicles. net income was $198.0 million, a decrease of $48.1 million, or 19.5%. diluted earnings per share of class a common stock was $2.01 in 2022 versus $2.33 in 2021. adjusted earnings per share - diluted(1) of class a common stock was $2.16 in 2022 versus $2.51 in 2021. adjusted ebitda(1) was $277.7 million, a decrease of $55.6 million, or 16.7%. new and used vehicle inventories were $1.7 billion, an increase of $782.5 million from june 30, 2021. this increase was driven primarily by the easing of new vehicle supply chain constraints in our core categories experienced in much of the prior year. to a lesser extent, the increase was also driven by the strategic growth of our used vehicle business and an additional three locations. on june 29, 2022, the company paid our regular quarterly dividend of $0.625 per share of class a common stock, or $2.50 per share on an annualized basis. ________________________ (1) adjusted earnings per share – diluted and adjusted ebitda are non-gaap measures. for a reconciliation of these non-gaap measures to the most directly comparable gaap measures, see the “non-gaap financial measures” section later in this press release. earnings conference call and webcast information a conference call to discuss the company’s second quarter 2022 financial results is scheduled for august 3, 2022, at 7:30 am central time. investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference id# 13730725. interested parties can also listen to a live webcast or replay of the conference call by logging on to the investor relations section on the company’s website at http://investor.campingworld.com. the replay of the conference call webcast will be available on the investor relations website for approximately 90 days. presentation this press release presents historical results for the periods presented for the company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the united states (“gaap”), unless noted as a non-gaap financial measure. the company’s initial public offering (“ipo”) and related reorganization transactions (“reorganization transactions”) that occurred on october 6, 2016 resulted in the company as the sole managing member of cwgs enterprises, llc (“cwgs, llc”), with sole voting power in and control of the management of cwgs, llc. the company’s position as sole managing member of cwgs, llc includes periods where the company has held a minority economic interest in cwgs, llc. as of june 30, 2022 and december 31, 2021, the company owned 49.8% and 51.2%, respectively, of cwgs, llc. accordingly, the company consolidates the financial results of cwgs, llc and reports a non-controlling interest in its consolidated financial statements. unless otherwise indicated, all financial comparisons in this press release compare our financial results for the second quarter ended june 30, 2022 to our financial results from the second quarter ended june 30, 2021. about camping world holdings, inc. camping world holdings, inc., headquartered in lincolnshire, il, (together with its subsidiaries) is america’s largest retailer of rvs and related products and services. our vision is to build a long-term legacy business that makes rving fun and easy, and our camping world and good sam brands have been serving rv consumers since 1966. we strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of rv products and services with a national network of rv dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the rv lifestyle, and the communities in which we operate. we also believe that our good sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the rv enthusiast community and the rv lifestyle. with over 185 locations in 42 states, camping world has grown to become prime destinations for everything rv. for more information, please visit http://www.campingworld.com. forward-looking statements this press release contains forward-looking statements within the meaning of the private securities litigation reform act of 1995. all statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about macroeconomic trends and our business plans and goals, including statements regarding the strength of our business, our long-term plan, potential stock repurchases, future dividend payments and our future financial results. these forward-looking statements are based on management’s current expectations. these statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the covid-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; risks related to the cybersecurity incident announced in february 2022; our ability to execute and achieve the expected benefits of our 2019 strategic shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on six fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers and lending institutions; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure. these and other important factors discussed under the caption “risk factors” in our annual report on form 10-k filed for the year ended december 31, 2021 and our other reports filed with the sec could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. any such forward-looking statements represent management’s estimates as of the date of this press release. while we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. these forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. in addition, this press release references projected annualized dividend payments. future declarations of quarterly dividends are subject to the determination and discretion of the company’s board of directors based on its consideration of various factors, including the company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from cwgs enterprises, llc, its business prospects and other factors that camping world’s board of directors may deem relevant. we intend to use our official facebook, twitter, and instagram accounts, each at the handle @campingworld, as a distribution channel of material information about the company and for complying with our disclosure obligations under regulation fd. the information we post through these social media channels may be deemed material. accordingly, investors should subscribe to these accounts, in addition to following our press releases, sec filings, public conference calls and webcasts. these social media channels may be updated from time to time. three months ended six months ended june 30, june 30, 2022 2021 2022 2021 revenue: good sam services and plans $ 49,593 $ 46,902 $ 94,152 $ 87,773 rv and outdoor retail new vehicles 1,077,252 1,058,778 1,912,211 1,880,754 used vehicles 555,958 460,137 958,990 754,394 products, service and other 278,001 305,554 492,974 556,824 finance and insurance, net 195,407 177,685 348,785 315,939 good sam club 12,421 12,751 23,916 23,904 subtotal 2,119,039 2,014,905 3,736,876 3,531,815 total revenue 2,168,632 2,061,807 3,831,028 3,619,588 costs applicable to revenue (exclusive of depreciation and amortization shown separately below): good sam services and plans 18,958 17,180 35,661 31,604 rv and outdoor retail new vehicles 852,171 758,108 1,496,541 1,401,788 used vehicles 414,169 334,829 716,994 558,022 products, service and other 164,222 189,952 300,382 344,098 good sam club 2,319 1,895 4,455 3,739 subtotal 1,432,881 1,284,784 2,518,372 2,307,647 total costs applicable to revenue 1,451,839 1,301,964 2,554,033 2,339,251 gross profit: good sam services and plans 30,635 29,722 58,491 56,169 rv and outdoor retail new vehicles 225,081 300,670 415,670 478,966 used vehicles 141,789 125,308 241,996 196,372 products, service and other 113,779 115,602 192,592 212,726 finance and insurance, net 195,407 177,685 348,785 315,939 good sam club 10,102 10,856 19,461 20,165 subtotal 686,158 730,121 1,218,504 1,224,168 total gross profit 716,793 759,843 1,276,995 1,280,337 operating expenses: selling, general, and administrative 441,123 432,249 826,438 769,283 debt restructure expense — 9,031 — 9,031 depreciation and amortization 17,627 13,044 43,162 25,745 long-lived asset impairment 2,618 536 2,618 1,082 lease termination 944 — 1,122 1,756 loss (gain) on sale or disposal of assets 381 10 430 (89 ) total operating expenses 462,693 454,870 873,770 806,808 income from operations 254,100 304,973 403,225 473,529 other expense: floor plan interest expense (8,733 ) (3,371 ) (14,999 ) (6,761 ) other interest expense, net (14,935 ) (11,789 ) (29,236 ) (24,012 ) loss on debt restructure — (1,390 ) — (1,390 ) tax receivable agreement liability adjustment — — — (3,520 ) other (expense) income, net (72 ) — (295 ) 45 total other expense (23,740 ) (16,550 ) (44,530 ) (35,638 ) income before income taxes 230,360 288,423 358,695 437,891 income tax expense (32,375 ) (42,347 ) (53,411 ) (44,390 ) net income 197,985 246,076 305,284 393,501 less: net income attributable to non-controlling interests (113,674 ) (136,888 ) (176,243 ) (221,991 ) net income attributable to camping world holdings, inc. $ 84,311 $ 109,188 $ 129,041 $ 171,510 earnings per share of class a common stock: basic $ 2.02 $ 2.37 $ 3.03 $ 3.83 diluted $ 2.01 $ 2.33 $ 3.01 $ 3.74 weighted average shares of class a common stock outstanding: basic 41,737 45,983 42,640 44,790 diluted 42,139 47,550 43,171 90,422 three months ended june 30, increase percent 2022 2021 (decrease) change unit sales new vehicles 23,404 26,181 (2,777 ) (10.6 %) used vehicles 15,555 14,319 1,236 8.6 % total 38,959 40,500 (1,541 ) (3.8 %) average selling price new vehicles $ 46,029 $ 40,441 $ 5,588 13.8 % used vehicles $ 35,741 $ 32,135 $ 3,607 11.2 % same store unit sales(1) new vehicles 21,163 25,000 (3,837 ) (15.3 %) used vehicles 14,307 13,785 522 3.8 % total 35,470 38,785 (3,315 ) (8.5 %) same store revenue(1) ($ in 000's) new vehicles $ 981,826 $ 1,017,141 $ (35,315 ) (3.5 %) used vehicles 516,752 447,648 69,104 15.4 % products, service and other 191,032 232,019 (40,987 ) (17.7 %) finance and insurance, net 180,189 171,916 8,273 4.8 % total $ 1,869,799 $ 1,868,724 $ 1,075 0.1 % average gross profit per unit new vehicles $ 9,617 $ 11,484 $ (1,867 ) (16.3 %) used vehicles $ 9,115 8,751 $ 364 4.2 % finance and insurance, net per vehicle unit $ 5,016 4,387 $ 628 14.3 % total vehicle front-end yield(2) $ 14,433 14,905 $ (473 ) (3.2 %) gross margin good sam services and plans 61.8 % 63.4 % (160 ) bps new vehicles 20.9 % 28.4 % (750 ) bps used vehicles 25.5 % 27.2 % (173 ) bps products, service and other 40.9 % 37.8 % 309 bps finance and insurance, net 100.0 % 100.0 % unch. bps good sam club 81.3 % 85.1 % (381 ) bps subtotal rv and outdoor retail 32.4 % 36.2 % (386 ) bps total gross margin 33.1 % 36.9 % (380 ) bps inventories ($ in 000's) new vehicles $ 1,329,604 $ 645,670 $ 683,934 105.9 % used vehicles 358,060 259,511 98,549 38.0 % products, parts, accessories and misc. 307,789 291,506 16,283 5.6 % total rv and outdoor retail inventories $ 1,995,453 $ 1,196,687 $ 798,766 66.7 % vehicle inventory per location ($ in 000's) new vehicle inventory per dealer location $ 7,346 $ 3,669 $ 3,677 100.2 % used vehicle inventory per dealer location $ 1,978 1,474 $ 504 34.2 % vehicle inventory turnover(3) new vehicle inventory turnover 2.4 3.9 (1.5 ) (38.3 %) used vehicle inventory turnover 3.7 5.0 (1.3 ) (26.6 %) retail locations rv dealerships 181 176 5 2.8 % rv service & retail centers 8 10 (2 ) (20.0 %) subtotal 189 186 3 1.6 % other retail stores 1 1 — 0.0 % total 190 187 3 1.6 % other data active customers(4) 5,460,819 5,482,640 (21,821 ) (0.4 %) good sam club members 2,077,410 2,215,227 (137,817 ) (6.2 %) service bays (5) 2,613 2,485 128 5.2 % finance and insurance gross profit as a % of total vehicle revenue 12.0 % 11.7 % 27 bps n/a same store locations 168 n/a n/a n/a six months ended june 30, increase percent 2022 2021 (decrease) change unit sales new vehicles 42,424 47,614 (5,190 ) (10.9 %) used vehicles 26,531 24,638 1,893 7.7 % total 68,955 72,252 (3,297 ) (4.6 %) average selling price new vehicles $ 45,074 $ 39,500 $ 5,574 14.1 % used vehicles $ 36,146 $ 30,619 $ 5,527 18.1 % same store unit sales(1) new vehicles 38,786 46,143 (7,357 ) (15.9 %) used vehicles 24,556 24,018 538 2.2 % total 63,342 70,161 (6,819 ) (9.7 %) same store revenue(1) ($ in 000's) new vehicles $ 1,759,188 $ 1,826,882 $ (67,694 ) (3.7 %) used vehicles 896,901 738,731 158,170 21.4 % products, service and other 337,243 412,803 (75,560 ) (18.3 %) finance and insurance, net 323,110 308,374 14,736 4.8 % total $ 3,316,442 $ 3,286,790 $ 29,652 0.9 % average gross profit per unit new vehicles $ 9,798 $ 10,059 $ (261 ) (2.6 %) used vehicles 9,121 7,970 1,151 14.4 % finance and insurance, net per vehicle unit 5,058 4,373 685 15.7 % total vehicle front-end yield(2) 14,596 13,720 876 6.4 % gross margin good sam services and plans 62.1 % 64.0 % (187 ) bps new vehicles 21.7 % 25.5 % (373 ) bps used vehicles 25.2 % 26.0 % (80 ) bps products, service and other 39.1 % 38.2 % 86 bps finance and insurance, net 100.0 % 100.0 % unch. bps good sam club 81.4 % 84.4 % (299 ) bps subtotal rv and outdoor retail 32.6 % 34.7 % (205 ) bps total gross margin 33.3 % 35.4 % (204 ) bps inventories ($ in 000's) new vehicles $ 1,329,604 $ 645,670 $ 683,934 105.9 % used vehicles 358,060 259,511 98,549 38.0 % products, parts, accessories and misc. 307,789 291,506 16,283 5.6 % total rv and outdoor retail inventories $ 1,995,453 $ 1,196,687 $ 798,766 66.7 % vehicle inventory per location ($ in 000's) new vehicle inventory per dealer location $ 7,346 $ 3,669 $ 3,677 100.2 % used vehicle inventory per dealer location 1,978 1,474 504 34.2 % vehicle inventory turnover(3) new vehicle inventory turnover 2.4 3.9 (1.5 ) (38.3 %) used vehicle inventory turnover 3.7 5.0 (1.3 ) (26.6 %) retail locations rv dealerships 181 176 5 2.8 % rv service & retail centers 8 10 (2 ) (20.0 %) subtotal 189 186 3 1.6 % other retail stores 1 1 — 0.0 % total 190 187 3 1.6 % other data active customers(4) 5,460,819 5,482,640 (21,821 ) (0.4 %) good sam club members 2,077,410 2,215,227 (137,817 ) (6.2 %) service bays (5) 2,613 2,485 128 5.2 % finance and insurance gross profit as a % of total vehicle revenue 12.1 % 12.0 % 16 bps n/a same store locations 168 n/a n/a n/a (1) our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year. (2) (3) (4) (5) june 30, december 31, 2022 2021 assets current assets: cash and cash equivalents $ 133,957 $ 267,332 contracts in transit 150,929 57,741 accounts receivable, net 125,957 101,644 inventories 1,995,796 1,792,865 prepaid expenses and other assets 61,308 64,295 total current assets 2,467,947 2,283,877 property and equipment, net 688,297 599,324 operating lease assets 711,589 750,876 deferred tax assets, net 182,212 199,321 intangible assets, net 22,943 30,970 goodwill 507,284 483,634 other assets 30,029 24,927 total assets $ 4,610,301 $ 4,372,929 liabilities and stockholders' equity current liabilities: accounts payable $ 249,218 $ 136,757 accrued liabilities 238,941 189,595 deferred revenues 95,730 95,467 current portion of operating lease liabilities 60,816 62,217 current portion of finance lease liabilities 10,563 4,964 current portion of tax receivable agreement liability 11,686 11,322 current portion of long-term debt 15,826 15,822 notes payable – floor plan, net 1,000,808 1,011,345 other current liabilities 86,975 70,834 total current liabilities 1,770,563 1,598,323 operating lease liabilities, net of current portion 735,267 774,889 finance lease liabilities, net of current portion 96,604 74,752 tax receivable agreement liability, net of current portion 159,790 171,073 revolving line of credit 20,885 20,885 long-term debt, net of current portion 1,371,444 1,377,751 deferred revenues 73,076 69,024 other long-term liabilities 82,741 52,338 total liabilities 4,310,370 4,139,035 commitments and contingencies stockholders' equity: preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of june 30, 2022 and december 31, 2021 — — class a common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,855,259 issued and 41,789,323 outstanding as of june 30, 2022 and 47,805,259 issued and 44,130,956 outstanding as of december 31, 2021 476 475 class b common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued as of june 30, 2022 and december 31, 2021; and 41,466,964 outstanding as of june 30, 2022 and december 31, 2021 4 4 class c common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of june 30, 2022 and december 31, 2021 — — additional paid-in capital 127,508 98,113 treasury stock, at cost; 5,781,764 and 3,390,131 shares as of june 30, 2022 and december 31, 2021, respectively (202,561 ) (130,006 ) retained earnings 265,974 189,471 total stockholders' equity attributable to camping world holdings, inc. 191,401 158,057 non-controlling interests 108,530 75,837 total stockholders' equity 299,931 233,894 total liabilities and stockholders' equity $ 4,610,301 $ 4,372,929 earnings per share basic earnings per share of class a common stock is computed by dividing net income attributable to camping world holdings, inc. by the weighted-average number of shares of class a common stock outstanding during the period. diluted earnings per share of class a common stock is computed by dividing net income attributable to camping world holdings, inc. by the weighted-average number of shares of class a common stock outstanding adjusted to give effect to potentially dilutive securities. the following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of class a common stock (unaudited): three months ended june 30, six months ended june 30, (in thousands except per share amounts) 2022 2021 2022 2021 numerator: net income $ 197,985 $ 246,076 $ 305,284 $ 393,501 less: net income attributable to non-controlling interests (113,674 ) (136,888 ) (176,243 ) (221,991 ) net income attributable to camping world holdings, inc. — basic $ 84,311 $ 109,188 129,041 171,510 add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and rsus 405 1,772 738 — add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of cwgs, llc for class a common stock — — — 166,495 net income attributable to camping world holdings, inc. — diluted $ 84,716 $ 110,960 $ 129,779 $ 338,005 denominator: weighted-average shares of class a common stock outstanding — basic 41,737 45,983 42,640 44,790 dilutive options to purchase class a common stock 44 169 66 167 dilutive restricted stock units 358 1,398 465 1,177 dilutive common units of cwgs, llc that are convertible into class a common stock — — — 44,288 weighted-average shares of class a common stock outstanding — diluted 42,139 47,550 43,171 90,422 earnings per share of class a common stock — basic $ 2.02 $ 2.37 $ 3.03 $ 3.83 earnings per share of class a common stock — diluted $ 2.01 $ 2.33 $ 3.01 $ 3.74 weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of class a common stock: restricted stock units 3,256 14 2,448 8 common units of cwgs, llc that are convertible into class a common stock 42,045 43,057 42,045 — non-gaap financial measures to supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the united states (“gaap”), we use the following non-gaap financial measures: ebitda, adjusted ebitda, adjusted ebitda margin, trailing twelve-month (“ttm”) adjusted ebitda, adjusted net income attributable to camping world holdings, inc. – basic, adjusted net income attributable to camping world holdings, inc. – diluted, adjusted earnings per share – basic, and adjusted earnings per share – diluted (collectively the "non-gaap financial measures"). we believe that these non-gaap financial measures, when used in conjunction with gaap financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. these non-gaap financial measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the company’s industry. the presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with gaap, and they should not be construed as an inference that the company’s future results will be unaffected by any items adjusted for in these non-gaap financial measures. in evaluating these non-gaap financial measures, you should be aware that in the future the company may incur expenses that are the same as or similar to some of those adjusted in this presentation. the non-gaap financial measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation. ebitda, adjusted ebitda and adjusted ebitda margin we define “ebitda” as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. we define “adjusted ebitda” as ebitda further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. these items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, tax receivable agreement liability adjustment, restructuring costs related to the 2019 strategic shift, and other unusual or one-time items. we define “adjusted ebitda margin” as adjusted ebitda as a percentage of total revenue. we caution investors that amounts presented in accordance with our definitions of ebitda, adjusted ebitda, and adjusted ebitda margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate ebitda, adjusted ebitda, and adjusted ebitda margin in the same manner. we present ebitda, adjusted ebitda, and adjusted ebitda margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. management believes that investors’ understanding of our performance is enhanced by including these non-gaap financial measures as a reasonable basis for comparing our ongoing results of operations. the following table reconciles ebitda, adjusted ebitda, adjusted ebitda margin, and ttm adjusted ebitda to the most directly comparable gaap financial performance measures, which are net income, net income, net income margin, and net income, respectively (unaudited): three months ended june 30, six months ended june 30, ($ in thousands) 2022 2021 2022 2021 ebitda and adjusted ebitda: net income $ 197,985 $ 246,076 $ 305,284 $ 393,501 other interest expense, net 14,935 11,789 29,236 24,012 depreciation and amortization 17,627 13,044 43,162 25,745 income tax expense 32,375 42,347 53,411 44,390 subtotal ebitda 262,922 313,256 431,093 487,648 long-lived asset impairment (a) 2,618 536 2,618 1,082 lease termination (b) 944 — 1,122 1,756 loss (gain) on sale or disposal of assets, net (c) 381 10 430 (89 ) equity-based compensation (d) 8,968 6,047 20,642 12,156 tax receivable agreement liability adjustment (e) — — — 3,520 restructuring costs (f) 1,854 3,010 3,877 6,077 loss and expense on debt restructure (g) — 10,421 — 10,421 adjusted ebitda $ 277,687 $ 333,280 $ 459,782 $ 522,571 three months ended june 30, six months ended june 30, (as percentage of total revenue) 2022 2021 2022 2021 adjusted ebitda margin: net income margin 9.1 % 11.9 % 8.0 % 10.9 % other interest expense, net 0.7 % 0.6 % 0.8 % 0.7 % depreciation and amortization 0.8 % 0.6 % 1.1 % 0.7 % income tax expense 1.5 % 2.1 % 1.4 % 1.2 % subtotal ebitda margin 12.1 % 15.2 % 11.3 % 13.5 % long-lived asset impairment (a) 0.1 % 0.0 % 0.1 % 0.0 % lease termination (b) 0.0 % — 0.0 % 0.0 % loss (gain) on sale or disposal of assets, net (c) 0.0 % 0.0 % 0.0 % (0.0 %) equity-based compensation (d) 0.4 % 0.3 % 0.5 % 0.3 % tax receivable agreement liability adjustment (e) — — — 0.1 % restructuring costs (f) 0.1 % 0.1 % 0.1 % 0.2 % loss and expense on debt restructure (g) — 0.5 % — 0.3 % adjusted ebitda margin 12.8 % 16.2 % 12.0 % 14.4 % three months ended ttm ended june 30, march 31, december 31, september 30, june 30, ($ in thousands) 2022 2022 2021 2021 2022 adjusted ebitda: net income $ 197,985 $ 107,299 $ 59,266 $ 189,308 $ 553,858 other interest expense, net 14,935 14,301 11,650 11,250 52,136 depreciation and amortization 17,627 25,535 17,121 23,552 83,835 income tax expense 32,375 21,036 8,865 38,869 101,145 subtotal ebitda 262,922 168,171 96,902 262,979 790,974 long-lived asset impairment (a) 2,618 — 1,646 316 4,580 lease termination (b) 944 178 126 329 1,577 loss (gain) on sale or disposal of assets, net (c) 381 49 (583 ) 96 (57 ) equity-based compensation (d) 8,968 11,674 28,867 6,913 56,422 tax receivable agreement liability adjustment (e) — — (707 ) — (707 ) restructuring costs (f) 1,854 2,023 2,262 17,362 23,501 loss and expense on debt restructure (g) — — 3,023 24 3,047 adjusted ebitda $ 277,687 $ 182,095 $ 131,536 $ 288,019 $ 879,337 (a) (b) represents the loss on the termination of operating leases, relating primarily to the 2019 strategic shift, resulting from lease termination fees and the derecognition of the operating lease assets and liabilities. (c) represents an adjustment to eliminate the losses and gains on disposals and sales of various assets. (f) adjusted net income attributable to camping world holdings, inc. and adjusted earnings per share we define “adjusted net income attributable to camping world holdings, inc. – basic” as net income attributable to camping world holdings, inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. these items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, tax receivable agreement liability adjustment, restructuring costs related to the 2019 strategic shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments. we define “adjusted net income attributable to camping world holdings, inc. – diluted” as adjusted net income attributable to camping world holdings, inc. – basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed exchange, if dilutive, of all outstanding common units in cwgs, llc for shares of newly-issued class a common stock of camping world holdings, inc. we define “adjusted earnings per share – basic” as adjusted net income attributable to camping world holdings, inc. - basic divided by the weighted-average shares of class a common stock outstanding. we define “adjusted earnings per share – diluted” as adjusted net income attributable to camping world holdings, inc. – diluted divided by the weighted-average shares of class a common stock outstanding, assuming (i) the exchange of all outstanding common units in cwgs, llc for newly-issued shares of class a common stock of camping world holdings, inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. we present adjusted net income attributable to camping world holdings, inc. – basic, adjusted net income attributable to camping world holdings, inc. – diluted, adjusted earnings per share – basic, and adjusted earnings per share – diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these non-gaap financial measures as a reasonable basis for comparing our ongoing results of operations. the following table reconciles adjusted net income attributable to camping world holdings, inc. – basic, adjusted net income attributable to camping world holdings, inc. – diluted, adjusted earnings per share – basic, and adjusted earnings per share – diluted to the most directly comparable gaap financial performance measure, which is net income attributable to camping world holdings, inc., in the case of the adjusted net income non-gaap financial measures; earnings per share of class a common stock – basic, in the case of adjusted earnings per share – basic; and earnings per share of class a common stock – diluted, in the case of the adjusted earnings per share – diluted: three months ended june 30, six months ended june 30, (in thousands except per share amounts) 2022 2021 2022 2021 numerator: net income attributable to camping world holdings, inc. $ 84,311 $ 109,188 $ 129,041 $ 171,510 adjustments related to basic calculation: loss and expense on debt restructure (a): gross adjustment — 10,421 — 10,421 income tax expense for above adjustment (b) — (1,373) — (1,373) long-lived asset impairment (c): gross adjustment 2,618 536 2,618 1,082 income tax expense for above adjustment (b) (99) — (99) — lease termination (d): gross adjustment 944 — 1,122 1,756 income tax expense for above adjustment (b) — — — (39) loss (gain) on sale or disposal of assets (e): gross adjustment 381 10 430 (89) income tax expense for above adjustment (b) (3) 3 (3) 2 equity-based compensation (f): gross adjustment 8,968 6,047 20,642 12,156 income tax expense for above adjustment (b) (951) (707) (2,288) (1,361) tax receivable agreement liability adjustment (g): gross adjustment — — — 3,520 income tax expense for above adjustment (b) — — — (898) restructuring costs (h) gross adjustment 1,854 3,010 3,877 6,077 income tax expense for above adjustment (b) — (52) — (65) adjustment to net income attributable to non-controlling interests resulting from the above adjustments (i) (7,397) (9,680) (14,224) (15,489) adjusted net income attributable to camping world holdings, inc. – basic 90,626 117,403 141,116 187,210 adjustments related to diluted calculation: reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j) — 2,533 1,110 — income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (k) — (628) (299) — reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in cwgs, llc (j) 121,071 — — 237,480 income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in cwgs, llc (j) (29,735) — — (58,213) assumed income tax expense of combining c-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in cwgs, llc (l) (511) — — (12,693) adjusted net income attributable to camping world holdings, inc. – diluted $ 181,451 $ 119,308 $ 141,927 $ 353,784 denominator: weighted-average class a common shares outstanding – basic 41,737 45,983 42,640 44,790 adjustments related to diluted calculation: dilutive exchange of common units in cwgs, llc for shares of class a common stock (m) 42,045 — — 44,288 dilutive options to purchase class a common stock (m) 44 169 66 167 dilutive restricted stock units (m) 358 1,398 465 1,177 adjusted weighted average class a common shares outstanding – diluted 84,184 47,550 43,171 90,422 adjusted earnings per share - basic $ 2.17 $ 2.55 $ 3.31 $ 4.18 adjusted earnings per share - diluted $ 2.16 $ 2.51 $ 3.29 $ 3.91 anti-dilutive amounts (n): numerator: reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in cwgs, llc (j) $ — $ 144,035 $ 189,357 $ — income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in cwgs, llc (k) $ — $ (35,733) $ (49,986) $ — assumed income tax benefit of combining c-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in cwgs, llc (l) $ — $ 226 $ 5,837 $ — denominator: anti-dilutive exchange of common units in cwgs, llc for shares of class a common stock (m) — 43,057 42,045 — reconciliation of per share amounts: earnings per share of class a common stock - basic $ 2.02 $ 2.37 $ 3.03 $ 3.83 non-gaap adjustments (o) 0.15 0.18 0.28 0.35 adjusted earnings per share - basic $ 2.17 $ 2.55 $ 3.31 $ 4.18 earnings per share of class a common stock - diluted $ 2.01 $ 2.33 $ 3.01 $ 3.74 non-gaap adjustments (o) 0.15 0.18 0.28 0.35 dilutive exchange of common units in cwgs, llc for shares of class a common stock (p) — — — (0.17) dilutive options to purchase class a common stock and/or restricted stock units (p) — — — (0.01) adjusted earnings per share - diluted $ 2.16 $ 2.51 $ 3.29 $ 3.91 (a) (b) represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. this assumption uses an effective tax rate of 25.4% and 25.5% for the adjustments for the 2022 and 2021 periods, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-gaap metric. represents long-lived asset impairment charges related to the rv and outdoor retail segment, which relate to locations affected by the 2019 strategic shift. (d) represents the loss on termination of operating leases, relating primarily to the 2019 strategic shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities. represents an adjustment to eliminate the gains and losses on disposals and sales of various assets. represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the company. represents an adjustment to eliminate the loss on remeasurement of the tax receivable agreement primarily due to changes in our blended statutory income tax rate. (h) represents restructuring costs relating to our 2019 strategic shift. these restructuring costs include other associated costs. these costs exclude lease termination costs, which are presented separately above (see (d) above). (i) represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of cwgs, llc. this adjustment uses the non-controlling interest’s weighted average ownership of cwgs, llc of 50.2% and 48.4% for the three months ended june 30, 2022 and 2021, respectively, and 49.6% and 49.7% for the six months ended june 30, 2022 and 2021, respectively. (j) represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of cwgs, llc from stock options, restricted stock units, and/or common units of cwgs, llc. (k) represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. this assumption uses an effective tax rate of 25.4% and 25.5% for the adjustments for 2022 and 2021 periods, respectively. (l) typically represents adjustments to reflect the income tax benefit of losses of consolidated c-corporations that under the company’s current equity structure cannot be used against the income of other consolidated subsidiaries of cwgs, llc. however, for the three and six months ended june 30, 2021, this adjustment included the reversal of the $0.1 million expense and $14.8 million benefit, respectively, from changes in the valuation allowance for camping world, inc. subsequent to the exchange of all common units in cwgs, llc, the company believes certain actions could be taken such that the c-corporations’ losses could offset income of other consolidated subsidiaries. the adjustment reflects the income tax benefit assuming effective tax rate of 25.4% and 25.5% during the 2022 and 2021 periods, respectively, for the losses experienced by the consolidated c-corporations for which valuation allowances have been recorded. no assumed release of valuation allowance established for previous periods were included in these amounts and the $14.8 million release of valuation allowance during the six months ended june 30, 2021 was considered to be reversed and excluded from adjusted net income attributable to camping world holdings, inc. – diluted for purposes of this calculation. represents the impact to the denominator for stock options, restricted stock units, and/or common units of cwgs, llc. the below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive. represents the per share impact of the non-gaap adjustments to net income detailed above (see (a) through (h) above). (p) represents the per share impact of stock options, restricted stock units, and/or common units of cwgs, llc from the difference in their dilutive impact between the gaap and non-gaap earnings per share calculations. our “up-c” corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure. there can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in cwgs, llc are considered dilutive or anti-dilutive for a given period. to improve comparability of our financial results, users of our financial statements may find it useful to review our earnings per share assuming the full exchange of common units in cwgs, llc for all periods, even when those common units would be anti-dilutive. the relevant numerator and denominator adjustments have been provided under “anti-dilutive amounts” in the table above (see (m) above). uses and limitations of non-gaap financial measures management and our board of directors use the non-gaap financial measures: as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations; for planning purposes, including the preparation of our internal annual operating budget and financial projections; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to fund capital expenditures and expand our business. by providing these non-gaap financial measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. in addition, our senior secured credit facilities use adjusted ebitda, as calculated for our subsidiary cwgs group, llc, to measure our compliance with covenants such as the consolidated leverage ratio. the non-gaap financial measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our unaudited consolidated financial statements included elsewhere in this press release as indicators of financial performance. some of the limitations are: such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; such measures do not reflect changes in, or cash requirements for, our working capital needs; some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt; some of such measures do not reflect our tax expense or the cash requirements to pay our taxes; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures. due to these limitations, the non-gaap financial measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. we compensate for these limitations by relying primarily on our gaap results and using these non-gaap financial measures only supplementally. as noted in the tables above, certain of the non-gaap financial measures include adjustments for loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, tax receivable agreement liability, restructuring costs related to the 2019 strategic shift, other unusual or one-time items, and the income tax expense effect described above, as applicable. it is reasonable to expect that certain of these items will occur in future periods. however, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.
