Camping World Holdings, Inc.

Good morning and welcome to Camping World Holdings conference call to discuss financial results for the third quarter of fiscal year 2023. 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 all or in part, is not permitted without written authorization from the company. Joining on the call today are Marcus Limones, Chairman and Chief Executive Officer, Brent Moody, President, Karen Bell, Chief Financial Officer, Matthew Wagner, Chief Operating Officer, Lindsay Christen, Chief Administrative and Legal Officer, Tom Kern, Chief Accounting Officer, Will Colling, Executive Vice President, Good Sam, and Brett Andres, Senior Vice President, Investor Relations. I will turn the call over to Ms. Christen to get us started.

Thank you, and good morning, everyone. A press release covering the company's third quarter 2023 financial results was issued yesterday afternoon, 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 are business plans and goals, industry and customer trends, inventory expectations, the expected impact of inflation, interest rates, and market conditions, acquisition pipeline and plans, future dividend payments and capital allocation, and anticipated financial performance. Actual results may differ materially from those indicated by these remarks as a result of various important factors, including those discussed in the risk factors section in our Form 10-K, our Form 10-Qs, and other reports on file with the SEC. Any forward-looking statements 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 statements are included in our earnings release and on our website. All comparisons of our 2023 third quarter results are made against the 2022 third quarter results unless otherwise noted. I'll now turn the call over to Marcus.

Good morning, and thanks for joining us for Camping World's 2023 third quarter earnings call. I'm joined in the room today by members of our senior management team, but participating on today's call is Matthew Wagner, Camping World's chief operating officer, and Lindsay Kristen, Camping World's chief administrative officer. The last 48 months was the fastest and most profitable growth period our company had ever experienced. During that period, we generated over $2.4 billion of adjusted EBITDA. Look, while we recognize the cyclicality of our business, we also stand strong in recognizing how the business performs consistently over time. Early last year, we boldly forecasted the industry slowdown we saw coming. We immediately canceled over $900 million of new RV orders and further accelerated our shift towards the used business to help bolster revenue and gross profit. To start this year out, our company had over 16,000 model year 2022s in stock. Today, we have less than 100. Today, we're also sitting with less than 11,700 new model year 23s. And we're on track to be around 9,000 by the end of December, a significant improvement year over year. And with the new model year 2024 is quickly arriving, the cost of those units in our core segments are coming in more than 12% less. And we must remain steadfast in this model year elimination strategy. The execution of rigorous inventory management, however, comes at a short-term cost. higher wages to maintain the stability of our top performers, higher digital marketing costs to generate the activity, and compressed front end margins. This management mandated strategy will likely result in fourth quarter, historically our industry's toughest quarter, with an EBITDA in the neighborhood of break even to slightly negative. Our investment in that, our team feels, is absolutely necessary. We believe this prudent approach to managing our inventory sets us up for market share and earnings growth in 2024. As a management team, we are adamant that this strategy will set us up for the next 48 months. We want to materially outpace our competitors and gain market share. We want to build strong alliances with manufacturers around the proper inventory levels and forecasting for them and us. We want to maximize the return of working capital to continue our supercharged acquisition plan. We want to increase the velocity of our turns in this higher floor plan interest environment. And lastly, we want to continue to build our active buyer file to bolster Good Sam's unprecedented growth. Speaking of Good Sam, our high margin recurring revenue business, it set records in many categories. It will be the first time in its company's history that it exceeds $100 million in contribution to the overall business, driven by our roadside assistance product, extended warranties, and vehicle insurance. Our leader, Will Colling, has done an outstanding job over the last three years of streamlining the operation, launching the company's first loyalty program, and renegotiating agreements with partners. We feel strongly that the Good Sam products and programs are both undervalued and underappreciated for its contribution and consistency to our company. When I think about our company's most greatest achievements, I land on one in particular, the tenure and strength of our team. In order for our company to achieve the growth I expect, we must continue to build, train, and promote our leaders. Going forward, you will be hearing from more of them. New and innovative ideas, fresh perspectives, and a bench that is built for several decades. Truth be told, it's the most exciting part of my assignment here. Most of you know Matthew Wagner, our Chief Operating Officer. For a little color, before I hand the call over to Matt, Matt has been with our company since 2007. He began as an intern and over the last five years in particular has been one of the most instrumental members of our team. And I could not be more proud to turn the call over to him to cover the financial results as well as his perspective on the future of the business. Matthew?