RVIA Economic Impact Study

The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.

Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .

Thor Industries Announces Record Net Income for Fourth Quarter

Tue Sep 27, 2016

145382602566676.pngELKHART, Indiana - Thor Industries, Inc. has announced a record net income from continuing operations of $82.8 million, or $1.57 per diluted share, on record revenues of $1.29 billion for the fourth quarter ended July 31.

Gross profit margins increased to 17.3 percent in the fourth quarter compared to 16.2 percent in the prior-year period, due primarily to improved volumes and favorable changes in product mix, according to a press release. Net income from continuing operations increased 20.1 percent on sales growth of 22.2 percent when compared with the fourth quarter of last year. Diluted earnings per share from continuing operations for the fiscal 2016 fourth quarter increased 19.8 percent from the previous year.

"The fourth quarter was the culmination of the strongest year in Thor's history, with solid revenue and earnings growth generated by the tremendous efforts of our entire team augmented by strong industry conditions," Thor President and CEO Bob Martin says. "During the fourth quarter, we saw continued year-over-year industry growth in most product categories and were able to capitalize on opportunities to expand our production capacity and output to meet the growing demand for affordably priced travel trailers and motorhomes. Our products continue to hit the mark in terms of the expectations of our dealers and consumers."

Martin also says that the acquisition of Jayco, which took place at the end of June, has been part of the reason for the record fourth quarter.

"Since the Jayco acquisition closed on June 30, the integration of Jayco into Thor has been very smooth for our employees, dealers and consumers," Martin says. "During the Jayco annual dealer meeting last month, I had the opportunity to talk directly with many of Jayco's dealers and I heard positive feedback on the acquisition and the dealers' vision of the future of Jayco as part of Thor. The success of Jayco is an integral part of our future growth plans and is a critical action item within our strategic plan. In addition to the positive impacts from the Jayco acquisition, I see many positive signs for Thor and the RV industry, with opportunities for growth among a variety of consumer demographics, which should result in an expansion of our overall market. Just last week, we had a phenomenal Dealer Open House, with record attendance, dealer optimism and a very positive reception to our new 2017 model year products, with innovative features and floorplans to appeal to consumers in a variety of age and income demographics."

Towable RVs:

Towable RV sales were $961.1 million for the fourth quarter, up 19.8 percent from $802.2 million in the prior-year period, driven primarily by increasing sales of lower-priced travel trailers and the inclusion of one month of Jayco revenues.

Towable RV income before tax was $108.7 million, up 26.8 percent from $85.7 million in the fourth quarter last year. This increase was driven primarily by the increase in sales and improved material costs.

Towable RV backlog increased $431.1 million, or 141.8 percent, to $735.1 million, compared to $304 million at the end of fiscal 2015, reflecting the inclusion of Jayco's $223.4 million backlog as well as continued momentum in the sale of towable products.

Motorized RVs:

Motorized RV sales were $292.7 million for the fourth quarter, up 35.3 percent from $216.4 million in the prior-year fourth quarter. The increase in motorized RV sales was a result of continued strong growth in the more moderately priced gas type A and type C motorhomes, which are targeting new consumers entering the market, combined with the inclusion of one month of Jayco's motorized revenues.

Motorized RV income before tax was $22.2 million, up 11.6 percent from $19.9 million last year, driven primarily by the growth in motorized sales, partially offset by some start-up costs for the new production facility in Bristol, Indiana.

Motorized RV backlog increased $191.8 million, or 71 percent, to $461.8 million from $270 million a year earlier, reflecting the inclusion of Jayco's $122.5 million motorized backlog as well as strong, continued demand for smaller gas type A and type C motorhomes.

"With the growth to record sales and net income in fiscal 2016, we generated record cash from operating activities which we utilized in support of our strategic plan," Thor Senior Vice President and CFO Colleen Zuhl says. "In addition to the Jayco acquisition, we invested nearly $40 million in land and production building additions and improvements during fiscal 2016 to meet our capacity needs. This included facility additions and enhancements for Keystone, Heartland, Airstream, Thor Motor Coach, KZ, Dutchmen and Postle Aluminum. To ensure we continue to have adequate capacity to meet demand, we currently intend to invest $95 million in capital expenditures in fiscal 2017, with a significant part of that investment expected to be utilized for plant expansions. Our priorities for the use of future cash generated from operations include continuing to support and grow our core businesses, both organically and through acquisition; maintaining or growing our regular dividends; reducing our indebtedness; and considering strategic share repurchases or special dividends."

Full-Year Highlights:

Sales for fiscal 2016 were a record $4.58 billion, up 14.4 percent from $4.01 billion last year.

Gross profit margins increased to 15.9 percent in fiscal 2016 from 13.9 percent in fiscal 2015, due primarily to improved volumes, favorable changes in product mix and improvements in material costs compared to the prior year.

Net income from continuing operations for fiscal 2016 was a record $258 million, up 27.7 percent from $202 million in fiscal 2015.

Diluted earnings per share from continuing operations for fiscal 2016 was a record $4.91, up 29.6 percent from $3.79 last year.

Consolidated RV backlog on July 31 was $1.2 billion, up 108.5 percent from $574 million on July 31, 2015.

Total dealer inventory increased 39.6 percent to approximately 94,500 units on July 31 from approximately 67,700 units on July 31, 2015. The inclusion of Jayco accounted for nearly all of the dealer inventory increase (approximately 25,300 of the 26,800 unit increase came from Jayco).

Thor's total cash balances as of July 31, 2016 were $209.9 million while the outstanding balance on the revolving credit line stood at $360 million.

Acquisition Impact:

For the fourth quarter and full year, Jayco contributed approximately $76.9 million in sales of towable RVs and $27.6 million in sales of motorized RVs for the one month of results included in the quarter and fiscal year.

Interest expense and amortization of debt issuance costs for the quarter and year was approximately $0.9 million.

Results for the quarter and year also were affected by the amortization of intangibles related to backlog, which is amortized over three months. This impact amounted to one-third of the $12.4 million value of the asset in the fourth quarter, with the remainder to be amortized in the first quarter of fiscal 2017.

The future impact of purchase accounting, including the amortization of intangibles for backlogs, dealer network and trademarks related to the Jayco acquisition, will have a more significant effect on future consolidated financial results as compared to the fourth quarter of fiscal 2016.


Continued strength in the RV market and an ongoing shift toward more moderately priced towable and motorized products, as well as a full year of revenues from Jayco, is expected to result in double-digit revenue growth in fiscal 2017.

The inclusion of lower gross-margin product sales from Jayco is expected to result in a dilution of gross margins in the coming year, though Jayco should contribute meaningful accretion to earnings per share for the full year.

"This has been an outstanding year for Thor, as we celebrated a number of monumental achievements, including completing the acquisition of Jayco, the successful integrations of Jayco, Cruiser/DRV and Postle Aluminum, and posting record sales and earnings for the quarter and year," Thor Executive Chairman Peter Orthwein says. "With the strength of our retail customers, our dealer base, our product development teams, our employees and operating management team, along with favorable trends within the economy and the industry, we see ample reasons for optimism in the year ahead. With strong fundamentals in our industry, we will continue to invest in our organic growth while assessing additional acquisition opportunities to ensure the long-term success of Thor."

Investor Questions and Answers:

Thor has announced that it has provided a detailed list of investor questions and answers relating to quarterly results and other topics that are posted on the Investor Relations section of its website at www.thorindustries.com.