REVENUE AND CONCENTRATIONS

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE AND CONCENTRATIONS

REVENUE AND CONCENTRATIONS

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to customers at the expected amount we are entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the Condensed Consolidated Statements of Operations.

Revenue from the sale of vehicle contracts is recognized at a point in time on delivery, transfer of title and completion of financing arrangements.

Revenue from the sale of parts, accessories, and related service is recognized as services and parts are delivered or as a customer approves elements of the completion of service. Revenue from the sale of parts, accessories, and related service is recognized in Service, body and parts and other revenue in the Condensed Consolidated Statements of Operations.

Charge-Backs

We receive commissions from the sale of insurance and vehicle service contracts to customers. In addition, we arrange financing for customers through various financial institutions and receive commissions. We may be charged back (“charge-backs”) for financing fees, insurance or vehicle service contract commissions in the event of early termination of the contracts by our customers. The revenues from financing fees and commissions are recorded at the time of the sale of the vehicle and an allowance for future charge-backs is established based on historical operating results and the termination provision of the applicable contracts. The estimates for future chargebacks require judgment by management, and as a result, there is an element of risk associated with these revenue streams.

We have an accrual for charge-backs which totaled $8.3 million and $8.2 million at March 31, 2023 and December 31, 2022, respectively, and is included in “Accrued expenses, and other current liabilities” in the accompanying Condensed Consolidated Balance Sheets.

Revenue by State

Revenues by state that generated 10% or more of revenues were as follows (unaudited):

	Three months ended March 31,
	2023		2022
Florida	50	%	52	%
Tennessee	11	%	13	%

These geographic concentrations increase the exposure to adverse developments related to competition, as well as economic, demographic and weather conditions.

Vendor Concentrations

Vendors representing 10% or more of our total RV and replacement parts purchases were as follows:

	Three months ended March 31,
	2023		2022
Thor Industries,Inc.	38.0	%	49.8	%
Winnebago Industries, Inc.	34.0	%	29.1	%
Forest River, Inc.	24.0	%	17.2	%

We are subject to dealer agreements with each manufacturer. The manufacturer is entitled to terminate the dealer agreement if we are in material breach of the agreement’s terms.