Chip stocks fall with Nvidia after data center rev disappointment
LINCOLNSHIRE, IL - Camping World Holdings, Inc. (NYSE:CWH), a retailer of recreational vehicles (RVs) with annual revenue of $6 billion, announced on Tuesday an expansion of its credit facilities and an extension of their maturity. According to InvestingPro analysis, the company’s financial health score is currently rated as WEAK, with a high debt-to-equity ratio of 33.13x. The company entered into a ninth amended and restated credit agreement, which revises its existing floor plan facility.
The amended agreement, secured with Bank of America, N.A. and other lenders, increases the company’s borrowing capacity under the floor plan facility from $1.85 billion to $2.15 billion. Additionally, the letter of credit facility has been raised from $30.0 million to $45.0 million. The maximum amount available under the revolving line of credit remains at $70.0 million. With a current ratio of 1.23, InvestingPro data shows the company maintaining adequate liquidity despite challenging market conditions. Subscribers can access detailed financial health metrics and 12+ additional ProTips for CWH through the comprehensive Pro Research Report.
An accordion feature was also included, offering the option to increase the floor plan facility by $50 million increments, up to a total of $300 million. This feature provides Camping World with the flexibility to adjust its borrowing in response to changes in its inventory financing needs.
Significantly, the maturity date for the Floor Plan Facility has been extended to February 18, 2030, from the previous date of September 30, 2026. However, if certain term loans are not addressed by March 5, 2028, the maturity date will adjust to match that timeline.
The financing can cover up to 100% of the company’s new RV inventory and a varying percentage of used RV inventory. Interest rates for the floor plan notes and letters of credit will range from 1.90% to 2.50% over the floating SOFR, or 0.40% to 1.00% over the base rate, contingent on the company’s consolidated current ratio.
For general corporate purposes, Camping World may borrow, repay, and reborrow under the Revolving Credit Loans. The interest rates for these loans will be either SOFR plus 2.25% or a base rate plus 0.75%, depending on the chosen benchmark.
The credit agreement includes standard events of default, such as payment defaults, covenant breaches, cross-defaults with other indebtedness, and bankruptcy events. Borrowings are guaranteed by FreedomRoads Intermediate Holdco, LLC and certain subsidiaries, with the administrative agent receiving a first priority security interest in the financed RVs and related sales proceeds.
This financial move, detailed in an 8-K filing with the SEC, demonstrates Camping World’s efforts to strengthen its liquidity and financial flexibility to support its operations and growth initiatives. With a market capitalization of $2.23 billion and a beta of 2.52 indicating high stock volatility, investors seeking deeper insights can access the full financial analysis through InvestingPro’s comprehensive research tools and Fair Value assessments.
In other recent news, Camping World Holdings has announced an updated employment agreement with CEO Marcus Lemonis, effective January 1, 2025. The agreement includes a base salary of $1.5 million and a bonus target of 150% of that salary, alongside 600,000 restricted stock units and performance stock units tied to stock price milestones. BofA Securities has initiated coverage on Camping World, assigning a Buy rating with a price target of $30.00, indicating a potential upside of approximately 43%. The firm’s positive outlook is based on Camping World’s performance, which has surpassed industry benchmarks and a resurgence in used sales and margins.
Additionally, Camping World has extended the maturity date of its revolving credit facility to March 3, 2028, as disclosed in a recent SEC filing. This amendment provides the company with increased financial flexibility, involving a $1.4 billion term loan facility and a $65 million revolving credit facility. In industry-related insights, KeyBanc Capital Markets noted optimism in the RV sector despite affordability concerns, highlighting Camping World’s strategy to address these challenges through competitively priced offerings. The company aims to improve its gross profit and administrative expenses as a percentage of gross profit by 6-7% in 2025.
These developments reflect Camping World’s strategic focus on operational efficiencies and market share gains, as noted by BofA Securities. Camping World’s management has expressed a positive retail environment, although they do not expect significant changes in industry retail levels for 2025 compared to the previous year. The company’s strategic offerings and contract manufacturing strategy continue to bolster its market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.