Camping World Holdings, Inc.

Good afternoon and welcome to Camping World Holdings conference call to discuss financial results for the fourth quarter and fiscal year of 2020. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the company. Participating in the call today are Marcus Limones, Chairman and Chief Executive Officer, Brent Moody, President, Karen Bell, Chief Financial Officer, and Matthew Wagner, Executive Vice President. I will now turn the call over to Mr. Moody to get us started.

Thank you, and good afternoon, everyone. A press release covering the company's fourth quarter and year-ended December 31, 2020 financial results was issued this morning, and a copy of that press release can be found in the investor relations section on the company's website. Management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks may include statements regarding the impact of COVID-19 on our business, financial results, and financial condition, our business goals, plans, abilities, and opportunities, industry and customer trends, our 2019 strategic shift, increases in our borrowings, our liquidity, and future compliance with our financial covenants and anticipated financial performance. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section in our Form 10-K, our Form 10-Q, and other reports on file with the SEC. Any forward-looking statements, including statements regarding our long-term plans and costs related to these strategic shifts, represent our views only as of today, and we undertake no obligation to update them. Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as EBITDA, adjusted EBITDA, and adjusted earnings per share diluted, which we believe may be important to investors to assess our operating performance. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release and on our website. All comparisons of our 2020 fourth quarter results are made against the 2019 fourth quarter results unless otherwise noted. I'll now turn the call over to Marcus.

Thanks, Brent. Good afternoon, everybody, and thanks for joining us today. We also have Tamara Ward, our Chief Operating Officer, joining us on the call as well today. We had a very good 2020, and I'm pleased to share those results. Today's call is going to be broken into two primary sections. First, a high-level financial summary. with additional supporting information available both in today's earning release and our soon-to-be-posted 10K from 2020. The second section will go into some of our initiatives and our updates on those initiatives, including expanding the leverage of our national infrastructure, tapping into our 48-state goal march, our advantage around full sales and service facilities, including the regulatory and licensing process around the sale and distribution of recreational products, both online and in-store. Businesses remain strong for the 2021 first quarter, at least so far, with positive trends continuing into February. Adjusted EBITDA for Q4 was $91 million, a meaningful improvement over Q4 of 2019. excuse me, adjusted EBITDA for the year ended December 31st, 2020 was $565 million. Continued strong demand resulted in revenue of 1.1 billion for the quarter and 5.4 billion for the year. Our balance sheet remains strong and we continue to be pleased with our liquidity position. The end of the quarter was 300 million of cash broken up between $166 million of cash and equivalents and an additional $134 million of cash in our floor plan offset account. Our working capital is very healthy at $459 million at the end of the year, which is up from $395 million at the end of 2019. Our net debt leverage was 1.80 to 1 at the end of 2020. As we think about our initiatives and updates, we continue to grow and enhance our online and our digital initiatives with investments in new and proprietary tools and technologies to not only make our company more profitable, but more efficient. Website activity across all brands continues to experience significant growth. For the year ended December 31st, 2020, user sessions grew to 187 million. and improvement of over 47 million sessions. The development of an online technology platform that would allow for the consumer online transaction of an RV to be completed along with paperless financing, that process is finished and it will continue with home delivery, similar to what you see with other exclusive online auto retailers. Our difference would be within our 48 states that we would have the ability to sell both new and used RVs anywhere in America totally online with no in-person visit required. Proud to announce that today we have successfully beta tested the ability for a consumer to buy an RV totally online at campingworld.com by simply adding the unit to their cart along with other soft goods and check out entirely with a few simple clicks. We are in the final stages of launching our beta testing of our peer-to-peer network. That will go live in late April, early May, and will reside in beta testing for up to 60 days while we test. We measure and we focus group before worldwide launch in late summer and early fall. It will be branded Camping World RV Rental, so not only tap into the strong natural search that we receive as a brand, but also the recognition of value and security that RV renters and rentees look for when they're doing this transaction. We'll tap into our 5 million-plus active customers, including our 2 million Good Plus Good Sam members, to procure inventory listings to bolster the launch. We will be launching our beta phase of our mobile service app in May of 2021. The framework and testing is underway, and we're pleased with the progress. We continue the acquisitions and investments into OEM and aftermarket providers to improve both margin and supply chain flow. That's in addition to the dealership acquisitions that we're making consistent with how we have for years. We're also prepared to launch a new concept called Electric World in late summer of 2021, which would provide both the roadmap to the sale and service of the electrification of all things recreation. We'll be using our existing footprint across the country, as well as our online platform and our call center to support those transactions. As we leverage our national footprint, we always believe that for years the database, our customer database, was the most important asset of our company outside of our associates. Over the last 24 months, we have realized with the change in e-commerce, the growing level of installed RVers in need of service and collision, and the growing trend to both buy online and pick up in stores, as well as buy online and ship from stores, that we want to continue the march of growing our footprint. It is important to us that we launch a location in all 48 states by the end of the year, either through the acquisition of the dealership, the development of already owned land, or the contract purchase to own land in those states. At this point today, we're only two states short of that qualification. In closing, I'd like to say that I'm very excited about our prospects for this year. The RV business has been robust for decades. And 2020, well, it proved that. During the third quarter earnings call, we indicated that we expected adjusted EBITDA for the full year 2021 to be roughly 5% greater than 2020. We're actually going to raise those estimates. We now expect our justice EBITDA to be between 640 million on the low side to a high side of 690 million for 2021. I'd like to turn the call over to the operator for Q&A.