Q1 2021 Camping World Holdings Inc Earnings Call
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Okay.
Yeah.
Good morning, everyone and welcome to the camping World Holdings Conference call to discuss financial results results for the first quarter of fiscal year 2021.
At this time all participants are in a listen only mode and later, we will conduct the question and answer section and instructions will follow at that time line.
Be advised at the call is being reported and the.
For the reproduction of this call is not permitted without prior written authorization from the company.
Participating on the call today are Marcus Lamar on us.
Chairman and Chief Executive Officer, Karen Bell, Chief Financial Officer, Tamara Ward, Chief operating Officer.
Wagner Executive Vice President and this is Brent Moody of the company's president.
The press release covering the company's first quarter 2021 financial results was issued this morning, and a copy of that press release can be bad and 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 vs.
And these remarks may include statements regarding the impact of COVID-19, and on our finance on our business financial results and financial condition.
Our business goals plans and abilities and opportunities industry.
The industry and customer trends, our 2000 and liked to strategic shift increases at 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 and the risk factors section and on form 10-K, our form 10, Qs and other reports on file with the SEC and.
Any forward looking statements include including statements regarding our long term plans and costs related to the strategic shift represent our views only as of today and we undertake no obligation to update them.
He is also of note that we will be referring to of 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 2021 first quarter results are made against the 2021st quarter results unless otherwise noted.
I'll now turn the call over to Marcus and Thanks, Brad and good morning, everybody and thanks for joining us today.
And we're really pleased with Q1 results, especially since a good chunk of the country has opened up for business.
Clear that people are out and about let me start by reinforcing that our business continues to have explosive growth.
We expect our trajectory over the next 10 years to be similar to what we experienced over the last 10 years at the management team. We are laser focused on how we get our company to a billion dollars of annualized earnings Here's how we plan to get there.
We will continue to expand our footprint with strategic acquisitions and new Greenfield locations.
We will continue to focus on and grow our high margin installed base oriented revenue similar to our existing good Sam businesses through the expansion of our service collision and renovation centers.
We recently acquired the campground reservation system and trip planner. This technology will support our core good Sam annuity businesses.
Good day and parts of that work and enhance our data ecosystem the.
These new platforms and combination will also differentiate our soon to launch peer to peer marketplace.
We have and will continue to invest.
And money and the RV and outdoor enthusiasts oriented and technology Fintech and other vertical integration of the supply chain and and efforts to drive innovation and mostly enhance our margins.
And since our last earnings call today will be broken up into two primary sections.
Let's start with our high level of financial summary.
The additional supporting information and detail available on todays earnings release, and our soon to be filed 10-K from Q1 2021.
Consumer demand was and continues to be strong.
Net income for Q1 was 147 4 million.
$161 6 million dollar improvement.
Third the Q1 2020.
Adjusted EBITDA for Q1 was $189 3 million.
And $153 3 million of increase over the same quarter last year on.
Our revenue for the quarter was $1.558 billion.
One of the most important metrics for us at the management team at.
Is the strength of our balance sheet, which continues to improve at.
And at the end of the quarter, our working capital was at $541 million.
We had $393 million 5 million of cash $393 5 million of cash broken up between $256 9 million of cash and equivalents on our balance sheet and.
And in addition of $136 6 million of cash and our floor plan offset account.
I'm pleased to announce at our net beverage we're pleased to announce that our net debt leverage is one three times at the end of the floor.
With respect to our operational initiatives and performance.
Website activity across all brands continues to experience significant growth.
For the recent quarter ending website user sessions grew to 48 million sessions and.
And the improvement of nearly 50 per cent compared to Q1 of 2020.
We have successfully launched our good Sam RV value at or tool and we've already provided 30000 customers their respective values. This tool and shoes and ensures that our viewers will receive greater value for their units plus guarantee of the company's long term ability to source used inventory.
And as a matter of fact for example, as of today, we are sitting with north of $200 million of used inventory compared to $142 million around the same time last year.
And I'm thrilled to announce that we have launched buy online and pick up from store as well as buy online and ship from store.
As we rollout of these features we expect to drive more revenue improve our delivery times and reduce shipping costs.
Utilizing our digital footprint, we have progressed nicely and launching over 60 unique RV models that can be purchased totally online and ship anywhere in the country.
We see massive potential as we allow customers to buy nationwide finance and take delivery without actually stepping and foot two of physical location.
With regards to the expansion of our national infrastructure and to all 40 and contiguous states and.
Proud to announce the we currently own the facility or and the process of acquiring the dealership land or building the facility and.
And 45 of the targeted 48 states.
We will complete the sits on the recent time, we have made significant progress with the development of our good Sam services network. This one of the kind of proprietary marketplace will be comprised of independent service operators, both mobile service providers and folks that operate at brick and mortar locations.
As well as our own facilities.
Specific test markets will launch in the early fall.
And so you mentioned earlier on.
Collision business continued to experience significant revenue growth in Q1 of 2020 with very strong margins.
We currently operate 46 collision centers, it's part of our current footprint of locations and plans at for collision and renovation centers to over 20 additional locations.
Based on all of the things that we've just talked about we are increasing our full year adjusted EBITDA estimates to between $770 million on the low side two.
To the high side of the $810 billion.
Before I turn the call over to the operator for Q&A you may have seemed at last week, we increased our annualized dividend to a dollar of share.
While the days of our Q2 dividend has not been announced we notice that of at least one brokerage firm is showing and ex dividend date of may 7th and the payment date of may 21st for now.
We have no idea of where this came from but we haven't yet declared the X dividend or payment date for our Q2 dividend.
We will announce when declared by our board of directors and turn the call back over to the operator for Q&A.
Thank you Sir.
Ladies and gentlemen, if you would like to ask the question the Cigna by pressing star one on your telephone keypad.
Using a speaker phone. Please make sure your mute function is turned off for a longer signals for each of our equipment.
Once again the press star one to ask the question of pause for a brief moment to allow everyone an opportunity at the signal for questions.
Yeah.
As a reminder, at other star one to queue for question and Star one.
We will move on to our first question from Rick Nelson of Stephens. Please go ahead. Your line is open your line is open.
Terry the script book.
Congrats on the great a great start for 2020 one.
Mark and it's like to address the P M at.
Towards the scripts the waves and I see your inventories are down 35 per cent.
On a per dealer at low teens.
And I hope you could speak to the flu.
So we have inventory when you would expect so.
So part of it to catch up with gum and.
He is outside of it was true per user journey today.
And where where do you see those trending as inventories and Peru.
Yeah look there's no doubt that there is and inventory shortage based on the explosive demand that we're seeing every single day that we wake up and I think of lot of people thought that the demand was solely tied to a COVID-19 reaction, but you know for the last several months. Many many parts of the country have been opened up and people are.
The business and the demand doesn't seem to be taking the breadth.
We're disappointed that we don't have more new inventory, but because of the strength of our balance sheet because of our RV evaluated tool because of the size of our database, we're able to tap into other unique proprietary systems that allow us to grow our inventory on the used side, which is up about 20%.
We have no idea, where the manufacturers are going to land for the 2021 year as it relates to shipments, but we're confident that they're doing everything they can to produce products at a rate that is as good as it can be to keep up with demand and where there are some shortages on the raw material.
I think we're hearing that and every industry in America are the <unk>.
Good news is is that we placed our order of 678 months in advance and we probably have a competitive advantage and receiving the new inventory.
As we look at the margin as Rick it's really important to understand that while the margins are at an all time high there a function of a simple supply and demand curve. So if the.
The supply was greater we'd be meeting that demand and the margins may come down and so we feel like we're either going to trade volume and we're gonna trade margins out of the per unit basis, but keep in mind that when we talk about margins. There are two components to margin. There's the margin that we make on the front end of the year and if that's the gross profit directly at <unk>.
Tribute to the unit itself and there's the the margin that we make on the back end and that's the financing portion and so as volume increases and we start to get more inventory. We may have a smaller at front end margin, but will have a larger back end margin. So the combination of the two will be and a similar range.
We expect that as the balance of the year progresses, we're going to have to continue to be aggressive and are used for procurement and we're gonna have to do the best we can at managing every single transaction and every single dealership every single day to maximize the opportunity we are not in a volume game.
And we are at and they make a lot of money game.
And so I didn't know if that helps address that.
The Hertz.
I appreciate the color of acquisition.
Net.
And so I really ramping up at their talent and 17 acquired stores or Greenfield openings are today, and if you could speak to the acquisition environment and the pipeline.
And what's your same in terms of valuations that'd be helpful.
You know we have always said that we wanted to acquire are open the eight to 10, new stores, a year and when the opportunity presents itself and it's attractive and accretive to our business will obviously accelerate that the acceleration of the value of those tempered with our ability to.
Absorb that kind of the human capital standpoint, you know, we obviously want to continue to improve that process as we continue to invest and more technology platforms and more systems, it's making it easier for us to integrate and open and operate at these locations at a quicker pace and we were able to let's say 10 years ago our ability.
The buy stores, it's probably a more robust and I can remember seeing at maybe other than the 2010 coming right out of the euro and the recession.
We have not seen any dramatic movement in the overall blended multiples that we're paying for these deals.
In some cases, we are quite surprised that we're seeing a high volume of of calls coming in as opposed to us going out of people looking to sell their business. I think people are struggling the smaller dealers are struggling to get the kind of inventory they need to be successful and we're saying we're sensing that we're seeing a little bit.
And more of that.
Our game play and is very clear and very focused and we wanted to make sure that we're in the top 150 markets or more we want to make sure that we're achieving our goal of being in the 48 and contiguous states and we want to make sure that we're buying businesses or building locations and markets that we believe are ripe for.
For gross particularly in the outdoor space and.
And so as we and told you about all of the deals that we've announced there are a series of additional transactions that have either been signed but not announced or in discussions and that side as well as land, it's under a contract or about to be under contract. So you can expect over the next couple of months there'll be and.
Additional cadence of announcements will probably take a slight pause as we go through the summer, which as everybody knows our T. Selling season, and then we will get back at at late summer and anticipation of adding new locations and the back half of the year and at the beginning of 2020 two as we said earlier my goal of the team.
Goal is to try to find our way to a billion dollars of earnings and while there are organic things that we can do to grow our margins and to grow our business and each location and to grow our technology and to grow out of good Sam business and add peer to peer and grow our collision network's acquisition still are the biggest <unk>.
Generator of revenue Pops on the quarter by quarter basis, We think we're the best and the business at at and will continue to execute at in the foreseeable future.
That's great. Thanks.
Thanks, and good luck.
Thank you.
And we'll now move onto our next question from broad saw flow of PAA Research. Please go ahead. Your line is open.
Thanks for taking my questions and really had to the first.
On the rental platform.
You've provided us with some some rough timeline can you talk about the level of investment that will be required as you ramp up and then how youre thinking about the notion of economics of that business as it grows.
And we're not going to be disclosing any information regarding the peer to peer and until we launch we know that this has become very competitive space. We know that some of these competitors are out and the market.
Trying to do different things with their business and we're going to keep our cards very close to the vest, but here's what I will tell you we.
We are gonna used every single corner of our business at <unk>.
Watch this company and we are going to use every resource inside of our tool belt to ensure that our cost of acquisition or retention and all of the resources that our consumers have are made readily available we are of different business because of our 360 degree ability to reach into many different.
And boxes and whether that's the campground reservation platform that we purchased whether that's our 200 existing roughly 200 existing locations that we have that we operate whether that's our mobile service platform, whether that's our two call centers nationwide, whether that's the or.
Buy online ship from store pickup and store whatever it may be I think at the marketplace. You can expect us to tap into every one of those we don't expect the adventure to be profitable in the first couple of years, but we have already factored into our guidance both for at <unk>.
We had done previously and what we have done for the balance of 2020, one the costs associated with launching it.
And to be clear, it's not of death, defying number and the reason that it's a lot easier for us the launch of business like this.
We already have north of $5 5 million customers and our database 2.2 million of good Sam members and and websites that quite frankly, as we mentioned earlier generate more traffic than most websites combined and the RV space. So whatsapp into all of those things.
But we wanted the very prudent about the launch we want to make sure that the customer experience to load their units onto the system, it's clear and clean and right and we.
We want to make sure that one of the launch at fully nationwide that we've tested and gotten rid of as many bugs as we possibly can before we take control of the market.
Okay. Thanks for the detail and then the second question is more of a high level question and it's one that I speak with investors about frequently and it's really understanding.
What you view as the baseline EBITDA of the company, Let's say you know I don't want to call. It normal because I do think the demand for rvs and the demand for camping experiences is going to continue to grow for a period of time.
And let's just say, we have some retrenchment and demand for whatever reason for a period of time I think of lot of investors want to understand what do you think the baseline EBITDA generation of the company is now given that you've gone through all of these cost changes you have a much bigger dealership base, you've broadened out the recurring revenue streams and you will do so obviously with the rental platform.
And the service network I think having investors understand what you think the.
Baseline EBITDA would be and a year, let's say that shipments are let's say of RV shipments are at 450000 of 400000 instead of what we're seeing currently what is the earnings power of the business and that kind of scenario given all the changes that have happened to the organization.
It's hard for me to predict what that would look like because I don't see RV demand going backwards anytime soon and so my short answer is that the guidance that we've provided we believe is our baseline and we want to grow at from here. When you look at our numbers and you look at the the profitability that we have and our good Sam business and how that continue.
Used to bolster the foundation of this entire company and then you layer on the recurring revenue that we get from that business along with the stable installed base oriented revenue that comes from the service parts and collision or pre owned or finance the risk in our model is simply the.
The sale of new Rovs into the marketplace, assuming that the overall installed community goes down which it never has and the history of the industry.
So we can't really speak to whether the.
The business will go back the 400000 units or not but if you're required me to answer at scientifically I would say look at the new business.
And maybe drop it by 10% just the new business and take out the relevant gross but then assumed at some of that will be made up with used business.
And so for us the forecast of what we think the model would look like if the business dropped.
We just don't have that anywhere in our internal documents because we're planning on what today, it looks like and what tomorrow and looks like.
Okay. Thank you that's great. Thank you I'll turn it over.
Yeah.
We will now move onto our next question from Ryan Brinkman of J P. Morgan. Please go ahead of your line is open.
Hi, Congrats on another strong quarter and thanks for taking my questions. You know just given the materially higher at 21 EBITDA outlook I'm curious if you have any updated view on the outlook for free cash flow or you know for the deployment of that cash flow I'd be interested in particular, if you could maybe delve a little bit more into your opening remarks regarding possible.
And tech acquisitions or supply chain and vertical integration and I realize you did just increase the quarterly dividend, but how are you kind of weighing those type of alternative acquisition opportunities relative to you know still further return of capital to shareholders such as the the opportunistic share repurchase program that I recall at being discussed at the Investor Day.
At.
Okay, I'm going to break that up into two specific answers. Obviously, you know as the management team and as the board. We worked very hard to really figure out what the best and highest use of our free cash flow is and it's clear to me that the.
He has a team one of continued to grow our footprint, but we also want to improve the performance of our existing footprint and so we have spent a disproportionate amount of money and time investing in infrastructure and systems hiring new really qualified people that make our management team quite frankly much better.
And as we look at continuing to invest and that technology. We expect as we mentioned I think two or three calls ago and it was about $30 million that we wanted to really be looking at and investing into that platform and we.
Get the question all the time of about share buyback and it's one of the slippery slope ones. You know we've already issued I think just north of $20 million of the $100 million that was authorized.
The last fall.
But delevering the company.
Making acquisitions that are accretive to the business, both dealerships and non dealerships.
Continuing to improve the amount of cash on our balance sheet. Those types of things are really at the forefront because that doesn't mean that we're rolling out of share buyback, but we want to make sure that we're doing all of the other things and I think the most important thing that we want to continue to do is differentiate ourselves for what the analysts like to call on.
[noise] peers all of those folks that are trading at 12, and 13 times and the public auto space, we have to differentiate ourselves by having better EBITDA margins and then that the gross margins and then and more importantly, trying to achieve higher.
Return on capital through dividends, and then our than our peers as well. So I don't I don't think we have and answer other than we're always looking at it.
But right now we're very focused on just trying to get to.
The beat our numbers for the year and whatever capital, we need to used to either acquire or invest or by of our used inventory we're going to do that in the short term you asked another question about the type of other investments that we're making and we're really trying to think about ways to enter of the supply chain side to ensure the a world.
Carrying product at a better rate.
And two were getting better margin and three we become part of the landscape of innovation and design into the next generation of Rvs and whether that's through furniture of whether that's through appliances and whether that's through some sort of other technology, we want to be part of that process and we feel like we have a responsibility to be part of that process.
And since we represent the.
Big chunk of the entire industry, we know that we have the ability to take of new idea like and electric vehicle and really set the tone and the pace for the industry.
And we know that we have the ability to set the tone for selling rvs completely online without ever having to step into the dealership. So we made and investments I think it was last fall into a company called loan snap and that's a it's a simple finance platform Fintech platform the teachers.
Customers and end and sellers and how to transact and finance completely on the line, we made that investment largely to learn.
Because we wanted to see what opportunities are out there, but we make other investments and we own the furniture business and we're making a number of other ones and we.
We don't really want our competitors to understand what acquisitions, we're making that are non material to the investment size, but material to the future of our business and so and as.
As we feel the you know the comfort level of disclosing those and we will definitely do that but.
At this point, we're keeping those close to our best.
Okay. Thanks, and then just lastly, you know I remember at the time of the IPO some structural drivers of higher than historical RV demand were being discussed including younger people being more interested and rvs and maybe more emphasis on experiences versus things on the outdoors et cetera, just curious if the experience over the past year, you think might create another.
Other shifts you know if youre thinking any differently about normalized demand for rvs, well beyond the pandemic, perhaps at I don't know maybe people who might not have otherwise purchased and R&D. We're at kind of newly attracted to the lifestyle in 2020 or 2021 and do you have any sort of active plans or our program.
To try to.
Keep these customers for life.
That's a great question so.
We felt over the last five years, maybe even more than that and that the buyer continues to shift younger and to be of different buyer. Then we saw 25 30 years ago. When good Sam is really starting to build momentum.
As we think about how to capture more of the younger buyer, we know that the younger buyer expects a completely different experience and they expect more of the digital experiences and why you hear us talking so much about 48 states and the online platform and our ability to finance without coming into the store, but it also requires us to have.
More innovative products and we've seen a really our appetite to co develop with traditional manufacturers and the RV space and co develop with non traditional manufacturers outside of the RV space, New and innovative products that we think are going to really set the tone for the next decade.
And our goal of getting to $1 billion of earnings there is no way, we get there without finding new buyers and we spend a disproportionate amount of our digital currency, our digital money going out and finding people and so part of our we believe not only attracting those younger buyers those buyers but.
Retaining them is giving them a different experience and whether that's new curated content, both digitally and and print or coming up with new experiences like peer to peer or campground booking systems. We know that we have to do things differently and we made an investment and the audio technology not too long ago, because we know that people.
For what experiential things tied to their purchases and they don't want to just buy something and drive away and they want to know how they're supposed to use at and what recipes are supposed to have and what places you're supposed to visit and we I think you'll ship and see a shift over the next five to 10 years into largely being our core business, but adding content and the nesson.
Saturday platform for our company, both audio and video digital print too to really attract these customers I think lastly, and most importantly, one way that we have to continue to do that is we have to bring in new talent fresh talent to this company as we have demonstrated and the last 90 820 days, let's see.
And as the world differently. The we do that understands things from the experiences from other companies that we have and experience to take us really around the corner into something more modern the RV industry has always been seen as archaic and and we believe that we're sort of setting the trail and the and trying to revolutionize the to attract the one thing I will say to you.
That at that.
And I, Ryan and we talked about when we did go public I want to remind everybody that the new census date of that came out is there's 331 million people in America, and who knows if everybody and even further out there for.
There's only 500000 all of these manufactured and we're sort of raising the roof, because we're selling 500000 and we think that this industry is just scratching the surface.
We're seeing the demand the so robust.
750000 units produce maybe not even satisfy that demand so.
So we don't really know where we're going in terms of how big this can get but we're fairly confident the yeah sure every once in a while there's a slight dip backwards.
That's typical but if you look at at over a five or 10 year period. As you study of our business. Since we went public we don't see any reason why the CAGR of isn't always going to be positive over the long run.
Very helpful. Thank you.
Okay.
Moving now move onto our next question from Bret Jordan of Jefferies. Please go ahead. Your line is open.
Good morning. This is eat at Holly on for Brett. Thank you for taking my questions.
I'm just sort of just one here on the service business, but you're seeing sort of and he pick up on and that business as.
The current RV owners are choosing to sort of fix their older units as opposed to buying new ones.
And excellent question.
At the current RV errors are not only.
Repairing their units, but the renovating them and we're seeing a really accelerated pace for people to want of putting new Florida, the new cabinets and new furniture, largely because they know that the jewel they have and their hand is going to be hard to replace this break and the supply demand curve doesn't just exists for manufacturers selling.
New units at exists with private party transactions and you can see it in the used values growing so rapidly and much like the housing growth people are saying like look I don't want to get rid of my unit my wife's not gonna, let me and my husband's back and the let me, but I'm willing to put three or $4000 into the unit.
About three weeks ago, we launched deferred payments with or without good same credit card and we've seen really nice growth of that overall card and we're seeing people start to take advantage of investing and their RV on wheels or the home on wheels liked the investing at the home and land and so renovations at home depot and low as you're starting to really access.
The rate they have over the last 12 months Youre seeing strong numbers, we're starting to see the same thing, which is resulting in nice improvement in the retail portion of our location business I think more than anything else.
We are seeing that the that the consignment business our ability for people to want to sell them at.
And then a little bit tougher and we're seeing that our ability to procure of units has been a little tougher and we're having to pay up for them because I think the consumer knows the value.
And of their hand today, and if they don't get the price they want and I'll just spend money, taking it up fixed and it up.
Okay, Great and then just one here on sort of any color you can provide on the sales cadence throughout the quarter and.
And then anything sort of you can provide on how things are looking at thus far and Q2.
Overall sales data and you know continues to be strong both for the quarter and you know as we have and the first couple of days of May I think for US. It's as I said earlier, it's really maximizing the profitability of each transaction, we expect that theres going to be you know of diff.
All the time procuring inventory for the next three four months, we think that's a reality, which is why you see on focus on views.
But if I showed you on demand and I leads on the daily basis, they're stunning.
And are on we're frustrated by our inability to take care of every single customer that wants to buy at and I V.
And hopefully over the next several months as the supply chain fixes itself, we'll see a nice uptick hopefully in the third and fourth quarter and and some of those sales numbers, but for the second quarter. We're feeling good about our numbers, we obviously of tempering our tone by the fact that inventory is not as easy to get.
To be clear also that in the guidance that we've provided there's a low end and the high end and we've factored in and the fact that the supply curve the Sip.
Fly cause is you know it's got some pressure on it.
Great and then just the last one here if you don't mind, just sort of of general housekeeping question, but is there any color you can provide on the percentage of sales at our two first time buyers.
We don't track, we don't track it that way internally, it's difficult I mean, we can make assumptions based on the number of trades and you know of.
We've seen them at our system before but we'll work harder to provide more color, but with privacy rules and things like that we don't necessarily collect all of the information that we would like.
Got it got it. Thank you very much for taking my questions.
Sure.
Yeah.
Once again, if you would like to ask the question. Please signal by pressing star followed by one.
We'll take our next question from Gerrick Johnson of BMO capital markets. Please go ahead of your line is open.
Great. Thank you.
New vehicle prices are up 10% does that mix, the bigger vehicles or pricing on your side.
I would say, it's the combination of two things it's margin improvement and are in addition to margin improvement we have seen.
And the manufacturers be required to pass through some of those commodity increases you know when the supply curve is broken and prices go up both on metal wood and things of that nature, we've been working very closely with end to.
To ensure and they've been very focused on it to ensure that we're not studying the customer and we're not shoving all of those through our through the channel, but it's the combination of both margin improvement and some commodity price increases.
Okay and.
Curious on the used vehicle inventory if you had a number and units you gave us the dollar amount, but wondering what that looks like and units.
Used.
And how many we sold for the quarter, how many we have and stock.
Oh, well the comparison year over year, let's put it that way your inventories on used were up 26% and dollars, but what would that look like and and units.
And in terms of our revenue being up or down I don't think we've reported no no no net revenue inventory and inventory used inventory.
We have 8000 units and stock right now.
And that's at all is that right. We were a 100 and 141 million approximately the same time last year, we're north of 200 million today.
And so our count is up one thing that we are starting to do is expand our pre owned B C class a business. So the average costs, maybe up by 1000 or two as we continue to destock on the new diesel side.
Largely based on the allocation with a friend of the manufacturers.
Okay. So your your used vehicle inventory is up year over year.
$141 million last year 200 million today.
Okay and lastly.
Wondering what the treat and rates has been on your new unit sales last quarter. You said it was about 25% up from 18% over the summer wondering what it looks like in the poster.
Most recent quarter.
28 per cent.
Perfect. Thank you.
Yes, Sir thank you.
Okay.
And we'll move on to my next question from Brent <unk> of Keybanc capital markets. Please go ahead of your line is open.
Hi, Good morning, I hopped on late so apologies if these are redundant but.
With the new vehicle inventory per location down 35% do you feel like you lost any sales in.
In the quarter and is there any weight and maybe quantify what you left on the table.
I don't think we can quantify it but the answer is definitively yes, we definitely did but we also in some cases made that decision on their own while we're holding margin right. So when you have of valuable commodity that you don't know if you can get replaced readily we're looking at every single transaction to maximize.
And the profitability, how do we had more inventory and who would have sold more and.
And clearly, but I don't know what we actually left on the table I think we'll have a better indication of that as we get through the balance of the year.
And the only thing that we essentially see right now.
We have a tremendous tremendous amount of demand and we're really struggling to try to figure out how to satisfy at which is why you see this heavy lean and and then you'll see of continued lean and on a on pre owned.
Got it Okay, and then as we look at the updated guidance is there any way to frame up what the contribution is from the recent dealer acquisitions that you've made.
Are you know at no actually not not really today and the and part of the challenge and I know you can appreciate this and we make the acquisition announcement, but they fade in the overtime and so some of the ones that we've announced are going to be closing and the next 30 to 60 days and unfortunately.
With the DMV and some of the last 12 months working from home the ability to get licensing has been a much longer process what used to be 60 days now it could be 120 days. So it's hard for us to really map out what that looks like but we think it's we think it's meaningful.
But as we get through the latter part of the year I think we'll be able to provide more color on that because they'll have been baked in.
For the go for a period of time, So we'll do our best to try and give you clarity maybe end of the third or fourth quarter.
Got it so as soon as at May be safe to say that you don't really have much baked into your guidance from those right now.
No we havent baked into our guidance I, just I'm not prepared to give you exactly what the breakdown is.
Got it okay. Thank.
Thank you.
Yes, Sir.
Okay.
Once again on the Star one of if you wish to queue for question and Star one on World.
Take our next questioner for my cohorts of Alder Lane of please go ahead. Your line is open.
Oh, well done Marcus very well done.
Is it one way.
To answer <unk> question is that things are very different now.
That the demand has far outpaced anything that people can manufacture and and this window of shortages it's at.
Huge plus for the top end of your funnel.
I think ultimately low demand is clearly materially outpacing.
And the manufacturer's ability to produce and it isn't just a material shortages because of those who will resolve itself. I think we are dealing with manufacturers of at least on our end that are.
Responsible and the way the growing.
They're thoughtful and the kinds of products that are making their being considerate to the quality of the units and when you look at for Forest River and Winnebago their reputations rely on and making really good products and so as we get through the balance of the year and materials start to come back in world.
Pick up the pace again, but the current infrastructure will need to be built just like we need to build the stores to build that business and we need to invest and so I would imagine that and the boardrooms of those three companies, they're already talking about building, new factories and building new facilities, but they're doing it in a way that is responsible and thoughtful to the quality of the new.
And the innovation so demand clearly is outpacing the manufacturer's ability to supply I don't see that in my opinion, I don't see that slowing down anytime soon.
And the follow up where do you see and what year supply demand equilibrium with all of all the factors you mentioned.
And and two.
I heard through some people who've who've seen things that outdoors and he just did a private round at 1.7 billion and valuation.
And and your thoughts on that versus what good Sam might be worth.
I'm really happy.
For anybody elses business that achieves the valuation that works for them.
You know I've always believed that our business is undervalued.
And the only way to prove that up as to put numbers on the board and let the market tell us if they agree or disagree with that number if the market disagrees with our ability we have the ability to use our share buyback.
And other mechanisms to deal with that.
And so I can't really speak to that in terms of your first question I'm. The eternal optimist, but I also believe that we are of good scientists I think that the RV lifestyle, which has existed since the 50 used by the way is that a new thing it's not like a fad that just happened because of COVID-19 and withhold.
About a year ago is here to stay but in a different way.
And we think with the development of new smaller lighter products and the van life and the vans and.
Hi, Brad and the variety of other products that the $500000, we should be laughing at years from now we should be laughing at at and you know as we talk about it at the management team and we look at buying dealerships are opening new locations are developing new products, we believe that this industry.
And the next decade should be making a million our visa here.
And that's still a scratch as it relates to the penetration of 330 plus million people and.
It sounds like a lot for an industry that was small and many many decades ago, but from our perspective, you know we're going to continue to invest and we believe at this this industry is not only right, but we know that we are the leader we have been the leader and we will always be the leader in the space. The most of we built around our company and our.
The opinion is unbeatable and we think our numbers of the first quarter and our guidance for the year prove that I think if you look at our EBITDA margins that tells you what kind of team. We are our top line tells you that the industry strong our margins and tell you that the supply demand curve is good our performance and the margins both gross and.
EBITDA margins and it tells you the kinds of business, we're running and that's ultimately what matters and so when you look at us against our peers and whether it's another public boat or RV or auto.
Dealer or you look at even the manufacturers just look at our EBITDA margins. That's the story of that people need to focus on and what drives a lot of that is our good Sam business.
The high margin recurring and reoccurring very stable business that focuses on the installed base.
We are not and RV dealer.
People need the stopped thinking that we're just in RV dealer because our margins tell a very different story of our EBITDA margin till the very different story and so hopefully over the next several years as we continue to perform and the March towards the $1 billion of earnings.
Get the value that we believe we deserve until then we'll just keep working.
I think that's the end of our prepared remarks, and our Q&A and we look forward to reporting our second quarter earnings and the coming months. Thank you so much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.