Good morning, and welcome to Camping World Holdings Conference Call to discuss Financial Results for the Third Quarter of Fiscal Year 2022. 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 Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Karin Bell, Chief Financial Officer; Tamara Ward, Chief Operating Officer; Matthew Wagner, Executive Vice President; Lindsey Christen, Executive Vice President and General Counsel; Tom Kirn, Chief Accounting Officer, and Brett Andress, Senior Vice President, Investor Relations. I will now 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 2022 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 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 recently disclosed cybersecurity incidents; the expected impact of inflation and market conditions; our strategic initiatives, acquisitions, SG&A expenses, and capital expenditures; potential stock repurchases, future dividend payments, increases in our borrowings; our liquidity and future compliance with our financial covenants and anticipated future 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-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, 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 2022 third quarter results are made against the 2021 third quarter results unless otherwise noted. I'll now turn the call over to Marcus.

Thanks, Lindsay. Good morning, and thanks for joining us for Camping World's 2022 Third Quarter Earnings Call. On today's call, we're going to lay our financial results, along with providing some insight into the remainder of this year and 2023. As a company, we continue to experience healthy demand, resulting in our company generating revenue for the quarter, just shy of $1.9 billion. During the quarter, we sold over 32,000 RVs, just under the record we set last year, with the big driver being our record used unit sales of 14,460 units, up over 6% compared to the third quarter last year. We have seen recent demand stay comparatively strong for this time of year, with used RV setting the pace. During the third quarter, as a result of growing installed base of RVs and evidenced by our results, we continue to see both stability and growth in our service business, Good Sam segment, and our used business. As you'll hear today, we feel very strongly that, these key areas of our business and further investments to them will help us to intelligently and profitably outperform the market over the next 12 months to 24 months and beyond. One of the key things I want investors on this call to focus on is the success we're having in driving the used side of our business in the face of short-term pressure on the new side. Our goal of achieving used sales of $3 billion annually has substantial momentum. For the quarter, our record used unit sales delivered over $0.5 billion of revenue up over a year ago, putting us at $1.9 billion on a trailing 12-month basis. More importantly, $400 million higher than the trailing 12-month figure from a year ago. As we talked about on our last call, our…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Mike Swartz with Tourist Securities. Please, go ahead.

Hey, good morning, everyone. Hey, Marcus, I just wanted to kind of add on to your comments that you just made of planning for the industry to be, maybe, worse than what some of the numbers you're hearing out there? And I think pretty broadly the consensus view is maybe retail closer to 400,000 units in 2023. And if we go back, I think, the industry was around -- right around that level in 2016. So the question being is, is your 2016 earnings level the right way to think about earnings if we see a 400,000 unit number? I mean, obviously, you've added about 80 doors since that time. So there's some M&A pickup. But just maybe any sense or any parameters you can give us how to think about earnings in that scenario?

Well, our business is materially different than it was in 2016. It's almost double the size and a lot of parts of our business have grown nicely. I think what I'd like to always compare it to as we go into these headwinds is, a lot of people have been talking about what 2019 was like, when the industry was under a lot of pressure, because the manufacturers had overbuilt, margins came screaming down. And, for us, that was really a lot of lessons learned. When I look at the 2019 results, we recognize that there was two big errors in my decision-making in that moment in time. The first was we had launched an initiative in a segment of our business that wasn't our core business. And when we look at shedding that and all the associated expenses that we don't have today that we had back in 2019, our SG&A is about $150 million lower on a comparative basis. I think, additionally, when we deployed our capital in certain categories that weren't turning fast, that weren't giving us the margin profile we wanted and we then exited all those categories and shifted into our current makeup mix, that's about $100 million of gross. And so, if I was pro forming 2019, I'd have about a $250 million adjustment up from where that low watermark was. In addition to that, I think, we also learned that this business is best when it sticks to its absolute core strike zone, selling, servicing, financing and all the associated products related to exclusively RVs. And when we look at any time we go into a headwind period and I've been doing this for 20 years, you have to contract your SG&A, contract your headcount, contract all of your initiatives and get hyper…

Okay. That was extremely helpful. I appreciate that market. And then just maybe -- I think you made the comment on your opening in your opening commentary that demand has held comparatively strong for this time of the year. So maybe just -- maybe in the context of like the cadence of the quarter and what you've seen in October? Any color you can provide there around those specific comments.

Yes. It's really kind of crazy. When I look at the last four months and I include October. August and September were relatively decent. We were starting to feel the margin pressure in the middle of the quarter and we obviously wanted to react. That's partially the reason that in our opinion we outperformed their retail registration data that was out there in the market. I think, we were down six or seven for the quarter on the new side and some data that I've seen may be as high as 25% or 26%. So when you look at SG&A and you look at margin, we spent a little bit more to keep that volume wheel going because of the overall lifetime value of that transaction, and our margins came down a little bit as we discussed. We saw September come and our volume fell irregularly compared to what we had seen. It fell off pretty hard compared to August and September -- excuse me to July and August. Then we got into October and our volume came back. Now I don't want to attribute that to the hurricane or anything like that because we are definitely -- we'll never use weather as a forecaster. What I'll attribute it to is there continue to be pressure in the marketplace and we had to pivot. And oftentimes, when we spend marketing money in a month, there is a slight delayed reaction to yielding that revenue. It's not like the grocery store where we advertise tomatoes today and somebody comes in. There is about a 17-day lag period between us marketing something, getting a lead and that transaction happening. That's probably why we saw relatively flat sales in October, but we experienced a slight bit more margin compression than we had in…

Okay. Super helpful. Thanks Marcus.

Yeah.

Next question comes from Joe Altobello with Ramon James. Please go ahead.

Thanks. Hey guys, good morning. I guess, first question Marcus would love to get your thoughts on the promotional environment. Obviously you haven't seen much in the way of promotion or discounting over the last two or three years. And it seems like the expectation is that we'll get back to 2019 levels in terms of promotions. So I guess first question is, is that your outlook, or could we see even heavier promotional activity versus three years ago?

We're budgeting for something better than what happened in 2019, because there was an excess supply of new inventory in the channel that even evidenced by our current same-store sale unit stocking decline over historical levels. So we don't think we're going to see that level of pressure. But we are going to see pressure compared to what we've seen in the last 12 months. And I think the manufacturers probably because we started to call this out last February, they started to pull back on their production and we don't believe that there's a heavy glut of inventory in the channel today. Now the manufacturers and dealers have to stay disciplined through this next what I'm going to call six to seven months, because there are headwinds that are coming at us at a pretty rapid pace. And I think the only way profitability maintains itself at a level that we wanted to is very tight inventory control both on the buy side and the sell side and a very robust focus on used because of the margin profile there. But we are expecting there to continue to be slight pressure, but I want to be clear we don't expect at this point unless some new information comes out that we're going to see margins look like they did when everybody was on a fire sale in 2019.

Got it. That's very helpful. And just a follow-up on that. Maybe if you could give us an update on some of the progress that you've made on some of your recent initiatives like Peer-to-Peer RV rentals, for example, your service marketplace, et cetera?

Well, I'm pleased that we launched those initiatives over the last couple of years. We've made the decision to almost virtually cut back all spending on any initiatives other than our core business. We just have decided that at this point our investors expect us to lock everything up, reduce SG&A at a very rapid pace, unfortunately reduced head count and we can't in good conscience reduce headcount and continue to spend on ideas. While those ideas are good, they'll be there for another day. Today it's used service, Good Sam business and a lockdown of SG&A.

Got it. Thank you.

Next question comes from Daniel Imbro with Stephens, Inc. Please go ahead.

Hey. Good morning, Marcus. Thanks for taking questions. I want to start on the revenue line. I think last quarter you said, you expected same-store kind of down 15% to 18% in the back half. Obviously you outperformed that on both new and used. I guess what drove that? Was it just a stronger consumer than you expected? Was it better inventory control? And I'm guessing that's not the right level for the back half now. So can you help us frame up like what you would expect same-store decline for the rest of this year given what you've seen? I think you said October was flat.

Yes. We believe that our proprietary database along with the way we market along with our pricing strategy, a lead-based pricing strategy, is what drove some of our results. In addition to that, we spent about $5 million to $6 million, probably more than anticipated on generating activity for that revenue to be generated. And when we look at the overall long-term health of our business, more transactions and more unique customers in our database, gives us greater lifetime value of our customers. And the best acquisition point for lifetime value of a customer, a Good Sam member, is the sale of a new or used RV. It feeds our service business, our parts business and our Good Sam business and we made the decision internally as we went through the quarter to continue to invest in the flywheel. And we understand that our SG&A was higher than anticipated, we acknowledge that we needed to make some cuts and those started in the third quarter but what we don't want to do is stop the momentum of our flywheel. Now, as we go into the fourth quarter and the first quarter, we're going to be pulling that back pretty heavily. But we will not do that at the expense of breaking our flywheel, because we know that the long-term value created in those transactions yields us income in 2023, 2024 and beyond. As we prepare for the fourth quarter and we prepare for the first quarter, I'm going to stick to my narrative of down 15% to 18%. And I know that I've said that three quarters in a row and we've outperformed it. But I'd rather show up and have people be pleased with our outperformance then pleased with our -- been disappointed with our over-optimism in the face of a macro environment that everybody can see. So I'm going to stick to down 15% to 18%. I'm going to tell you that I believe that our new and used margins in the fourth quarter are going to experience a normal seasonal fourth quarter compression. And our SG&A just, so we can get it out on the table, historically, was always materially higher than the second and third quarter, because it's our shoulder season. What we don't want to do is have people think two things. One that the fourth quarter that we experienced in 2020 and 2021 is normal. I remember for many years, we never made money in the fourth quarter. And we started to make money in the fourth quarter, because we started to control our costs and generate some revenue. So, we are very focused on that. But to project revenue deep into 2023, I think would be dangerous at this point for all of us.

No. That's really helpful. Helpful color, Marcus. As I think back on the investment, you kind of listed the four buckets of used service and parts Good Sam. But the fourth one was M&A. It feels like you guys have historically leaned into that during downturns. I'm curious are you seeing more sellers come to the table, where are on multiples on the M&A side? Just as we look at the public stock multiple and how you weigh the decision between buybacks or M&A, I would love to hear any updated thoughts you have on the M&A channel.

We're always conflicted when we look at the low valuations that are being assigned to our company when we know the intrinsic value of our company is higher. So we're always conflicted. But our primary objective in this company has been and will continue to be from 2016 when we went public for the foreseeable future is that we are an opportunistic acquirer of RV dealerships, because it is the baseline, it is the foundation of everything else in our company. We have started to see a pickup in people wanting to talk about selling their business and I can tell you with absolute conviction that those multiples have come down. Those expectations have come down. What we are doing in our company today is building cash as evidenced by all the working capital that we talked to you about and getting ready to be opportunistic, getting ready to be opportunistic. We have not -- we do not at this point in time as we sit here today have anything materially signed that we're prepared to disclose. But I can tell you that when we went public, we told the marketplace one thing, we like a downturn for two reasons. We get better at managing our business, we tighten up our SG&A, we improve our processes and our efficiencies and we buy a ton of revenue at a very low to no multiple. And when that hockey stick turns and it always does, we end up experiencing revenue and earnings that we essentially paid nothing for. We buy inventory, we buy real estate and in some cases, we pay a little scratch of goodwill, but nothing like we pay in the good times. And we are the best at buying those types of businesses, because our processes and our systems go into what we would call distressed or troubled businesses and we yield an unbelievable return on capital.

Makes a lot of sense. Thanks so much for the color Marcus, and best of luck.

Thank you.

The next question comes from Craig Kennison with Baird. Please go ahead.

Hey good morning. Thanks for taking my question. Marcus, you talked about the used business being a scale business and I certainly appreciate that, and then you talked about one node in that process being the reconditioning process. I'm just curious, if you could just comment on the scale you have in that particular function and maybe what it cost to recondition the average unit?

Matt, take that Craig.

Good morning Craig. Great question. When we think about the scale that Marcus alluding to in his open commentary, it's more in reference to our ability to actually source use better than any other entity out there. And I say that in so much as part of my apprehension over the years of getting involved more in use is the uncertainty associated with that supply chain. I'd like to think based upon all of our proprietary technology, the experience that we've amassed over the years of how our consumers behave in the trade-in cycles and our ability to actually drive down that cost associated with the lead to procure a used unit. I can tell you right now, we're averaging about 2,000 leads per day to buy used units. So if you extrapolate that out, that's in excess of 700,000 used units that we could potentially buy on an annualized basis. And I could tell you, no one else out there has the access the amount of capital information that we do to be able to procure these assets at a severely reduced value compared to all of our competitors out there. When you asked about recondition that's another great question. So I can tell you that's been one top of mind as we're trying to figure out in terms of our capacity between our external work versus our internal work. And what's the best methodology for us to optimize every single transaction, every single reconditioning effort while at the same time ensuring that we could put our brand behind these used assets that we're selling to these consumers. On average we're going to range anywhere from 5% to 10% on reconditioning for those assets that we want to actually recondition. I say that because, we also acknowledge there are certain model years, certain age of units where frankly, it's just not worth reconditioning. So in our minds, we're continuing to get better and better in terms of parsing out the different ways that we approach use. We're continuing to learn every day I'm really confident in the long-term outlook of what we should be able to accomplish here over the next year.

Thanks. And as a follow-up, is there a sweet spot for you in the used market, whether it's the age of the unit the model the brand, or are you able to be successful at a pretty broad range of used product?

Honestly, that's where we've been able to fine-tune our methodology to such an extent where we're able to optimize that gross margin return on investment, because we know exactly which model years are going to yield the most lucrative return for us as an enterprise. So I'll give you the generalized range, but we know within there, there are certain segments certain floor plans certain brands, but generally see about 2016 to 2020 model years is that general range where we oftentimes target, understanding that that consumer will have even a higher likelihood of remaining within the lifestyle to thereafter. So hopefully it turns into a trade or frankly we could purchase it at a significant opportunity, an arbitrage where other competitors simply just don't see that. And we could see that opportunity.

Craig to mass credit, the secret sauce and the valuator tool that Matt built has multiple layers inside of it. And it's kind of an evolving process. And so when you go in at the 2014 owner, you're going to go through a different experience than you would as a 2017 owner. And the values that are ascribed to specific units do vary. And part of the reason why Matt doesn't just want to disclose all of it is, because it is part of our secret sauce. But it's all the way down to values fluctuating up or down based on model year, based on floor plan, based on make, based on model and more importantly, based on our own experience with selling all these units over a decade. And so as we've seen this growth in our used inventory and we'll continue to see growth in our used inventory, it isn't some haphazard walking around thing. And I want to address something that you've also asked me in the past, around the values of used. The valuator is a daily dynamic formula. And what that means is, every single day those values are coming up and down, like they would for the commodities market for corn, or for oil, or for whatever it may be it's based on demand, it's based on time of year. And so when we buy something today, we may have paid materially less than we did yesterday. As aside to that, when you look at our current inventory position which everybody should be thinking about, it's important for people to know that we have the strictest adherence to an aging policy. And so if there is a change in values in the marketplace we turn our inventory so quickly that we rarely get caught flat-footed. That does not mean that we don't make mistakes. That does not mean there aren't cases where we put too much reconditioning into it, and when we get to the fourth quarter, that's usually when we kind of flush the toilet on a few things. We have for years. But I want investors to be very comfortable, that there is an acute science to managing their capital that's deployed into used inventory very strictly and how we buy things. It's not just buy as much as you can for as much as you want to pay for it. It doesn't function that way.

That’s helpful. Thank you.

Next question comes from John Healy with Northcoast Research. Please go ahead.

Okay. Just wanted to ask a couple of questions kind of on the financing side. I would just love to get some perspective on what you're seeing there. Obviously, you're outperforming the industry, but would just love to understand the sales process how it's become more elongated and you're seeing on the cost of financing for these consumers as they're coming in to shop for a unit?

Well the process to buy quite frankly with our company is relatively easy. We prequalify many, many people before they even come in. But when they come in our finance process is very, very stringent and has a very tight process to it. But we haven't seen at this point any change in lenders' willingness to lend credit out there. We've seen no headwinds of any kind. I think that's primarily because the RV consumer typically is a better credit profile customer historically then the auto customer. It's an average 700 credit score household income over $100,000. It's a different type of buyer. And when you look at the delinquencies that lenders experienced even back in '08 and '09, it was a small, small fraction of what the auto business went through. So that's number one. I think the second thing is we learned over the last 10 years that having fewer banking partners making credit available to our customers would yield us a better result. And when a bank is going to make an exception or stretch on a particular customer, they do it with us because the overall portfolio that we give them is very rounded out and robust. As opposed to us having a finance office where there's 30 banks, we may have one where there's five or six and a local credit union, that type of process took us a decade to refine and that could be one of the reasons why we're potentially outperforming on the new side because of that tight process on the finance side and our relationships with partners. It's much easier to service our account and if and whenever it happens something goes bad on a loan, we have that built in relationship where they can sell it to us or can sign it to us on the used side and help that customer or bank recover whatever losses they may have experienced.

That's super helpful. Another question I wanted to ask was just any color on what's going on in the State of Florida. I mean obviously a big market for you guys. Are you expecting any sort of kind of government purchases kind of on RVs as we close out the year or any sort of view on how supply was maybe impacted in the market?

Well obviously, we're all terribly devastated by what happened particularly in South Florida. I was -- I visited all of our South Florida stores over the last 10 days and the demand is strong. It's unfortunate that the demand is strong for the reason that it's strong. We expect that demand to continue here in the foreseeable future. And I think the one advantage we have as a company is our ability to mobilize inventory from the entire Southeast US and continue to feed those locations on a regular basis. As it relates to governmental acquisitions of inventory, we're not seeing much FEMA activity. We have heard about some activity inside the state of Florida issued by the state of Florida. But at this point, we are putting bids in through the process but we're focused on the general consumer who's showing up with insurance checks and in some cases, showing up with no home at all and just transacting in a normal process. So, we're not expecting any big bulk sale in the fourth quarter. And obviously, if that happens, we'll let everybody know.

Great. Thank you, so much.

Next question comes from Ryan Brinkman with JP Morgan. Please go ahead.

Hi. Thanks for taking my questions. Wanted to ask about, where you think the industry overall may be in terms of RV inventories on dealer lots? I know, you've been disciplined on new unit stock turn and aging as you ramp, you focus on the used side. But do you have a sense for where your competitors may be with regard to new inventory? And what's the latest in terms of your thinking, regarding the balance of supply and demand for new units and the implication for new RV retail gross margin?

I don't ever like to forecast what other RV dealers are doing. I think, that's a dangerous thing, because we're not forecasters of other people's businesses. But I do believe that other dealers and manufacturers have displayed a level of discipline that to be candid with you I haven't seen in my 20 years of being in this business. It was -- maybe it was because we raised the flag early in February, maybe because everybody realizes that margin protection is a function of inventory discipline. That's what we believe. There are going to be some dealers, that aren't going to be able to compete in this environment. They don't have the digital strategy. They don't have the database and they're not going to be able to enjoy it. And so it's possible, that in certain pockets, in certain markets, dealers may become far more undisciplined about their own pricing strategy. But as the industry continues to consolidate with other large retailers like us, there is a sophistication that exists today, that maybe didn't exist three, four years ago, 10 years ago. And there's a sophistication that exists on the manufacturing side, that I don't believe existed four or five years ago or 10 years ago. I do believe, however, that we're all capitalists in retailers at heart. And when we want to create transactions or generate revenue, we know that the easiest way to do that is to incentivize the customer to do something. And so I expect that promotional activity and margins will fluctuate here over the next four, five, six months, as the headwinds exist. That's just good business to move your inventory. I think what everybody has to recognize, is that, this industry has always had these small little spotty cycles. But the one thing that everybody should remember, that history has taught me, in my whole channel is that, the business always comes back. And so while dramatically reducing SG&A which everybody will do and dramatically reducing inventory levels and dramatically reducing marketing happens, it happens for a short period of time. So, to summarize, I expect there to be some more promotional activity, while the headwinds pick up. I expect there to be more marketing, while the headwinds pick up and that it will normalize very shortly after that.

Okay, great. Thanks. That's encouraging. And then, what do you think the latest is in terms of the consumer. Of course, interest rates, asset prices, sentiment that may impact new and used units. But what about like gas prices and whatnot for participation in the lifestyle, such as miles driven or trips taken in RVs anecdotally of course, I don't think that data really exists. But how do you think demand at your retail store for like the consumables and sundries and collision and service is likely to track through 2023, et cetera even if we have one of those downside 360 or so new unit forecast that you threw out there?

When we look at the downside 360,000 shipment forecast in our own model, not anybody else's, we still feel very comfortable that people that are already in the lifestyle. And let me clarify for 40 years, for 40 years the installed base of our RVs has always gone up. There are certain years where it goes up more than others. But for 40 years, it has always gone up. And our company, the reason we believe it's special is because it largely focuses on that installed base, which is why our service business is good, which is why our used business is good, which is why our Good Sam business is good. What I believe sometimes happens is, there's a slight pause with new entrants coming into the market, slight pause. That's what creates the drop off from 460,000 to 360,000 and while the $100,000 a lot. It's not a lot across 330 million people. What we have to do as an industry, which I think we've done as a company is to be able to have a cost structure they can move in and out of that, and to accept that, there are going to be trough years, and there are going to be peak years. But when you look at the average of earnings and the average of CAGR growth over a five-year period, the cash flow and the returns on capital are phenomenal. I think that applies for the manufacturers. I know that applies for our business.

Okay. Thanks. And then last question. I heard you say that, you're being more selective with the allocation of capital locking down SG&A to focus on the core business, et cetera. And I'm sorry, if I missed it, but how does that translate to the RV sharing initiative, which is clearly in an investment mode. But I recall you were interested in this business not just for the maybe longer-term profit potential of renting or brokering, the renting of RVs. But also, because of the synergy potential with the core business, including used RV acquisition et cetera. So is investment in RV sharing still a priority?

Investment in anything at this point that doesn't yield us a super margin and a super return like our used our service and our Good Sam business will be paused has been paused. That doesn't mean that, we're abandoning the idea, that doesn't mean that we are not going to revise it at some point. But when I look at the total amount of capital available in our company, we need to get down to brass tax, and that is making sure that we're keeping our employees healthy and safe and stable, because they're the most important asset in our company. We have to look at their benefits, make sure their pay is in line with the market. We have to make sure our inventory is solid that our lenders and our debts are being satisfied. We have to make sure that our dividend is being paid on a regular basis, and we have to make sure that we've stockpiled enough cash to make opportunistic acquisitions. I want to make it more finite than that. If in a given 12-month period, we were going to invest $4 million into any initiative of any kind, RV share, whatever it maybe, I would rather hold those $4 million and wait for a location in the wide space market to open up and buy that land and pick up $15 million of revenue, and $1 million of earnings, when the market turns because the return on capital for that $4 million is better than any $4 million that I could spend.

Okay. Got it. Thanks for all the color.

Next question comes from Brandon Rollé with D.A. Davidson. Please go ahead. Brandon Rollé: Thank you for taking my question. First, just on your mix. This quarter you were 55, 45 new to used. I know you want to get closer to a 50-50 balance. Do you feel like you would reach that balance next year? And is there a chance moving forward maybe it tilts in the favor of used in the future?

It's most important to me that we maintain our number one ranking as the new RV retailer in America. And I'm going to hold on to that till the day I die. Getting to a 50-50 use goal is a goal. And really what it does is it forces us to focus more on use, but we would never ever want to cannibalize or destroy our new business to achieve another goal. We would want to continue to grow our new business and grow our used business because we believe the addressable market for used is double that of the new market. The size of new RVs shipped out of the marketplace last year was 400-and-some-odd thousand. The number of used transactions and used units at traded hands was $900,000. We have to improve our market share market by market on the used side, but not at the expense of our new business, at the benefit of growing our used business. And so I don't ever want anybody to think that we're trying to get to 50-50 by suppressing one and lifting up the other. If we get to 50-50 it's going to mean that we continue to [indiscernible] on the new side and we've really dialed in the used business not that we've gotten away from the new business. Brandon Rollé: Okay. Great. And then just on affordability it seems like average selling prices for new vehicles continue to trend higher. Obviously, we're in a higher interest rate environment. How do you feel about affordability moving forward? And maybe where pricing goes over the next 12 months?

So part of the reason why we made this very strategic shift into use in the third quarter of last year is when we exited all those non-core RV categories from the outdoor space we took that capital and we started to put it into our used business because we noticed that there was a return. But the reason we did that is because we were starting to feel the pressure that the consumer would feel around the increases on new pricing. And in order to maintain dominance in the marketplace we needed to give and we'll continue to give the consumer an alternative. If you can buy a like asset that's one or two years older in a higher interest rate environment, you can offset that payment increase by selling them a unit at $2,000, $3,000, $5,000, $6,000, $7000 less than the new unit would have been. We believe that the new manufacturers are doing a hell of a job trying to control costs that they're receiving from their own vendors, trying not to pass on incremental expenses to us. But we also see their filings and their margins. And so we're not naive to the fact that their margins actually expanded. As the largest retailer of new RVs in America in an uncontrolled unregulated industry, we will continue to not pay the same as a single point dealer because as the largest customer we expect to get the best deal. We expect to pass those savings on to both our customer and our bottom-line. Brandon Rollé: Great. And just one last question. Given your greater focus on used vehicles how do you feel about your new vehicle inventories right now? And are they where you want to be, or do you feel like you're a little under inventory over inventory? Thanks.

As we mentioned, I think, we're sitting at about 100 and -- was it 182 units per location new on the ground. That's down from about 200, right? So it's down from over 200. To be candid with you, I think, Matt who is the absolute genius architect of what our inventory strategy has been would probably want it to be five or six units less this time of year. And so in the fourth quarter, we have this really tough challenge of preparing for the selling season where inventory is going to go up. But we want to maybe try to widen the gap between what we historically had before the pandemic, of number of new units per location and where we are today. So, are we maybe a couple of 1,000 units over stock today from where we'd love to be? Sure. Are we going to burn them and just take this absolute no margin approach? No. We'll, be smart about what we buy and what we reorder, but we are not over inventoried even by a little. Brandon Rollé: Great. Thank you.

Next question comes from Tristan Thomas-Martin with BMO Capital Markets. Please go ahead.

Good morning, everyone. Just one question. I think you called out you're getting 2,000 used leads a day. Do you have any data behind, are these bars who are buying a new RV or maybe another used or perhaps leaving a lifestyle to do something else?

Almost impossible to always discern exactly what the motivation is for every single customer. But I could tell you in maths, when you look at our ability to source used assets, these are customers that are oftentimes depending upon the season looking to either reenter the lifestyle, as they're heading into next year. So for example, if an asset or a consumer comes to us in August September, we could reasonably conclude that that same customer just doesn't want to incur the cost and expense with storage. And as such, they come to us to actually buy that asset from us and then they be reentering the lifestyle by March, April of next year. There's always going to be some consumers, that just choose to exit the lifestyle hopefully, for a short time because we see a lot of reentrance into the lifestyle, on a consistent basis. So most are going to be attracted oftentimes in their childhood or as their kids continue to age out, and we see the style of RV that they reentered the marketing to being slightly different. A – Marcus Lemonis: I want to just clarify at this point, and drive it home a little more. Not almost 900,000 used RVs change pans in this country last year, and a very small subset of them happened at the dealer level. The reason that we believe that our lead volume is growing and our used volume is growing, as people are liking the values and the fairness and the transparency of our process and not having to have some stranger come to their house, or put it in and classify that or go through all the gyrations. Historically, dealers have tried to "steal" the trade or steal the purchase and we've decided as a Good Sam…

Got it. Thank you. And then if I can kind of sneak in two more. Can you -- what's your used units per location? And then also are you still expecting to -- I think the last quarter you said 12 to 18 new locations next year. Is that still the target, or has that gone down?

Matt's going to look up the number of used units per location, but I'm sure he'll punctuate it with we still are understocked by location from where we want to be on a used basis. And in terms of opening locations, we are scheduled to open stores. We have some of them built, we are not going to open stores or spend any money of any kind until we have visibility into where we're going. If opportunistic acquisitions pop-up, we are going to do everything we can to contractually lock that transaction up. But we are in cash build mode and opportunistic acquisition mode. If we have stores that are finishing construction today, which we do or some that have finished construction last month, which we do, we are locking that door and we are waiting until we have visibility so that no unnecessary dollar leaves our bank account when it doesn't have to.

Tristan just to follow-up on that inventory level per store, we're sitting at about 160 used units per store on a same-store basis right now -- or excuse me I'm sorry 79 per store on a same-store basis excuse me and that's actually basically flat year-over-year.

It's not enough. We're probably 10 to 15 units short per location and one of the strategies when we decide to get some of those stores open as we will be opening some stand-alone used stores. That we've made the decision on -- there's no additional investment in that. It's just a mix and margin profile modification. We think the return on those stores will be pretty darn good.

Got it. Thanks.

Next question comes from Jim Chartier with Monness, Crespi, Hardt. Please go ahead.

Hi, good morning. Thanks for taking my question. I just want to follow up on the last question. So, you used vehicles, you pulled back on inventory there during second quarter before starting to build back in third quarter and it sounds like you're under where you want to be. So, what if any impact did the pullback in inventory in 2Q impact your used sales in third quarter? And then what's the time line to kind of get to that 10 to 15 more units per dealership that you'd like to have?

I maintain that we actually -- it's going to be difficult to quantify that opportunity cost, but I could definitely confirm that we did give up some opportunity on used sales, especially in the early part of Q3. I think by the latter part of Q3, we started to pick up some momentum in the way of used sales and that started to transition into October. My hope is that as we fast-forward throughout the entirety of next year, we continue to yield more and more results as we continue to be able to acquire more and more use. But over the past 12 months, we basically have just been able to procure just a little bit more used units compared to what we've been able to sell. So we're constantly up against this battle to rebuild these channels and constantly be able to procure more as we're even expanding into more and more stores here too. So we understand that this is really just the beginning of us continuing to aggressively pursue used assets in the name of fulfilling this ultimate goal of taking more market share in the used space.

Great. And then it sounds like you're still pretty confident in the $3 billion used unit revenue or used revenue. What's the time line to get there at this point?

Rather than giving you a time line, which I know everybody wants because I would be giving some sort of guidance. The fact that we are $400 million higher on a TTM today than we were back then gives us confidence that we have substantial momentum in achieving that. If you ask Matt and we weren't on a public call, he'd probably say a couple of years. I think we just got to be realistic that we're in an environment that has some uncertainty in the next five to six months. The used business will still be great, but it's not the momentum. We're looking for a little tailwind to get there. And so I think we'll be able to provide better clarity of that probably six to eight months from now.

Great. Thank you. End of Q&A:

There are no further questions at this time. I would like to turn the floor over back to Marcus Lemonis for closing comments.

Thank you so much for joining us. I just want to reconfirm that our company is committed to making whatever changes it needs to make to our head count to our SG&A overall to deal with whatever headwinds are in front of us. And that in our 20 years of being in this business headwinds happen. They don't last as long as people think they're going to last. And when they come back, when the market comes back, it comes back pretty fast. So we look forward to reporting our next quarter here in February. Have a great holiday.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Have a great day.