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Inventories and Floor Plan Payables

12 Months Ended

Dec. 31, 2024

4. Inventories and Floor Plan Payables

Inventories consisted of the following at December 31, 2024 and 2023 (in thousands):


	December 31,		December 31,
	2024		2023
Good Sam services and plans	$	263	$	452
New RVs		1,241,533		1,378,403
Used RVs		413,546		464,833
Products, parts, accessories and other		166,495		199,261
	$	1,821,837	$	2,042,949

Substantially all of the Company’s new RV inventory and certain of its used RV inventory, included in the RV and Outdoor Retail segment, is financed by a floor plan credit agreement with a syndication of banks (“Floor Plan Lenders”). The borrowings under the floor plan credit agreement are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a wholly-owned subsidiary of FreedomRoads, which operates the RV dealerships. The floor plan borrowings are tied to specific vehicles and principal is due upon the sale of the related vehicle or upon reaching certain aging criteria.

As of December 31, 2024 and 2023, FR maintained floor plan financing through the Eighth Amended and Restated Credit Agreement (as amended from time to time, the “Floor Plan Facility”) entered into in September 2021. The Floor Plan Facility at December 31, 2024 allowed FR to borrow (a) up to $1.85 billion under a floor plan facility of which 30% may be used to finance used RV inventory, (b) up to $30.0 million under a letter of credit facility and (c) up to a maximum amount outstanding of $70.0 million under the revolving line of credit.

The Floor Plan Facility also includes an accordion feature allowing FR, at its option, to request to increase the aggregate amount of the floor plan notes payable in $50.0 million increments up to a maximum amount of $300.0 million. The Floor Plan Lenders are not under any obligation to provide commitments in respect of any future increase under the accordion feature.

As of December 31, 2024 and 2023, the applicable interest rate for the floor plan notes payable under the Floor Plan Facility was 6.72% and 7.28%, respectively. As of December 31, 2024, under the Floor Plan Facility, at the Company’s option, the floor plan notes payable, and borrowings for letters of credit, in each case, bear interest at a rate per annum equal to (a) the floating Secured Overnight Financing Rate (“SOFR”), plus a SOFR adjustment of 0.11%, plus the applicable rate of 1.90% to 2.50% determined based on FR’s consolidated current ratio, or, (b) the base rate (as described below) plus the applicable rate of 0.40% to 1.00% determined based on FR’s consolidated current ratio.

The outstanding balance of the revolving line of credit under the Floor Plan Facility was paid off in November 2024 and there was no balance outstanding as of December 31, 2024. As of December 31, 2023, the applicable interest rate for revolving line of credit borrowings under the Floor Plan Facility was 7.63%. As of December 31, 2024, under the Floor Plan Facility, revolving line of credit borrowings bear interest at a rate per annum equal to, at the Company’s option, either: (a) a floating SOFR rate, plus a SOFR adjustment of 0.11%, plus 2.25%, in the case of floating SOFR rate loans, or (b) a base rate determined by reference to the greatest of: (i) the federal funds rate plus 0.50% or (ii) the prime rate published by Bank of America, N.A., plus 0.75%, in the case of base rate loans. Additionally, under the Floor Plan Facility, the revolving line of credit borrowings are subject to a borrowing base calculation, which did not limit the borrowing capacity at December 31, 2024 and 2023.

The Floor Plan Facility includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows the Company to transfer cash to the Floor Plan Lenders as an offset to the payables under the Floor

Plan Facility. These transfers reduce the amount of liability outstanding under the floor plan borrowings that would otherwise accrue interest, while retaining the ability to withdraw amounts from the FLAIR offset account subject to the financial covenants under the Floor Plan Facility. As a result of using the FLAIR offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of operations. As of December 31, 2024 and 2023, FR had $79.5 million and $145.0 million, respectively, in the FLAIR offset account. The maximum FLAIR percentage of outstanding floor plan borrowings is 35% under the Floor Plan Facility. The FLAIR offset account does not reduce the outstanding amount of loans under the Floor Plan Facility for purposes of determining the unencumbered borrowing capacity under the Floor Plan Facility.

Management has determined that the credit agreement governing the Floor Plan Facility includes subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at December 31, 2024 that would trigger a subjective acceleration clause. Additionally, the credit agreement governing the Floor Plan Facility contains certain financial covenants. FR was in compliance with all financial debt covenants at December 31, 2024 and 2023.

In February 2025, FR entered into an amendment to the Floor Plan Facility (the “Floor Plan Amendment”), which (a) increased the commitment for floor plan borrowings by $300.0 million to $2.15 billion, (b) increased the commitment for the letter of credit facility by $15.0 million to $45.0 million, and (c) extended the maturity date from September 30, 2026 to the earlier of, if applicable, (i) February 18, 2030 or (ii) March 5, 2028, if the Company’s Term Loan Facility (as defined and discussed in Note 10 — Long-Term Debt) has not been repaid, refinanced, or defeased and the maturity has not been extended by at least 180 days after February 18, 2030.

The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of December 31, 2024 and December 31, 2023 (in thousands):


	December 31,		December 31,
	2024		2023
Floor Plan Facility:
Notes payable — floor plan:
Total commitment	$	1,850,000	$	1,850,000
Less: borrowings, net of FLAIR offset account		(1,161,713)		(1,371,145)
Less: FLAIR offset account⁽¹⁾		(79,472)		(145,047)
Additional borrowing capacity		608,815		333,808
Less: short-term payable for sold inventory⁽²⁾		(33,152)		(41,577)
Less: purchase commitments⁽³⁾		(9,340)		(27,420)
Unencumbered borrowing capacity	$	566,323	$	264,811

Revolving line of credit	$	70,000	$	70,000
Less: borrowings		-		(20,885)
Additional borrowing capacity	$	70,000	$	49,115

Letters of credit:
Total commitment	$	30,000	$	30,000
Less: outstanding letters of credit		(14,300)		(12,300)
Additional letters of credit capacity	$	15,700	$	17,700

(1)

Flooring line aggregate interest reduction (“FLAIR”) offset account that allows the Company to transfer cash to the Floor Plan Lenders as offset to the payables under the Floor Plan Facility. The FLAIR offset account does not reduce the outstanding amount of loans under the Floor Plan Facility for purposes of determining the unencumbered borrowing capacity under the Floor Plan Facility.

(2)

The short-term payable represents the amount due for sold inventory. A payment for any floor plan units sold is due within three to ten business days of sale. Due to the short term nature of these payables, the Company reclassifies the amounts from notes payable‒floor plan, net to accounts payable in the Consolidated Balance Sheets. Changes in the vehicle floor plan payable are reported as cash flows from financing activities in the Consolidated Statements of Cash Flows.

(3)	Purchase commitments represent vehicles approved for floor plan financing where the inventory has not yet been received by the Company from the supplier and no floor plan borrowing is outstanding.

The following table rolls forward the Company's outstanding supplier finance program obligations confirmed as valid under its Floor Plan Facility for the year ended December 31, 2024 (in thousands):


	Year Ended
	December 31, 2024
Notes payable - floor plan, net, beginning of year	$	1,371,145
Add: FLAIR offset account, beginning of year		145,047
Add: short-term payable for sold inventory, beginning of year		41,577
Confirmed obligations outstanding, beginning of year		1,557,769
Add: new obligations confirmed during the period		2,292,615
Less: confirmed obligations paid during the period		(2,576,047)
Confirmed obligations outstanding, end of period		1,274,337
Less: FLAIR offset account, end of period		(79,472)
Less: short-term payable for sold inventory, end of period		(33,152)
Notes payable - floor plan, net, end of period	$	1,161,713