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 .
Mon Dec 5, 2016
ELKHART, Indiana - Thor Industries, Inc. has announced record first quarter net income of $78.7 million, or $1.49 per diluted share, on record revenues of $1.71 billion for the first quarter ended Oct. 31.
Gross profit increased 55.5 percent to $236.8 million, though gross profit margins decreased modestly to 13.9 percent in the first quarter compared to 14.8 percent in the prior-year period, due primarily to acquisition-related dilution. Net income increased 55.9 percent on sales growth of 65.8 percent when compared with the first quarter of last year. Diluted earnings per share for the fiscal 2017 first quarter increased 55.2 percent from the previous year.
"Fiscal 2017 began like fiscal 2016 ended, with continued robust performance throughout the company," Thor President and CEO Bob Martin says. "The strong revenue and earnings growth reflects the ongoing enthusiastic reception of our product offerings by dealers and consumers alike, as well as our ability to effectively manage our growth and integrate acquisitions successfully. Starting with our Dealer Open House in September, our new products have been incredibly well received, with strong year-over-year sales and backlog growth. With continued dealer optimism and steady economic conditions, we believe 2017 will be one of the strongest years for wholesale shipments for the industry since the 1970s.
"The Jayco integration has gone very smoothly, as illustrated by their meaningful contribution to our revenues and gross profit. We also made good progress on expanding capacity in a disciplined way to meet the strong demand for our products. New facilities or production lines at Dutchmen, Heartland, Highland Ridge, Jayco and Thor Motor Coach ramped up during the first quarter and we are evaluating additional projects to increase capacity where necessary. The need to meet such strong demand is a true testament to our entire team and the great network of dealers, who are important partners in our success."
Towable RV sales were $1.21 billion for the first quarter, up 62.6 percent from $744.7 million in the prior-year period. Jayco contributed $324.3 million to towable sales, while the towable growth excluding the acquisition was a robust 19.1 percent, driven by strength in smaller, more affordably priced travel trailers.
Towable RV income before tax was $94.2 million, up 49 percent from $63.2 million in the first quarter last year. This increase was driven primarily by the increase in sales and modest Selling General and Administrative (SG&A) expense leverage as well as a $2.2 million gain on the sale of a property, partially offset by increased amortization expense and purchase accounting costs associated with Jayco.
Towable RV backlog increased $690.4 million, or 97.2 percent, to $1.4 billion, compared to $710 million at the end of the first quarter of fiscal 2016, reflecting the inclusion of Jayco's $442 million backlog as well as continued momentum in travel trailers.
Motorized RV sales were $461.5 million for the first quarter, up 83.8 percent from $251.1 million in the prior-year first 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 $142.8 million of Jayco's motorized revenues.
Motorized RV income before tax was $28.9 million, up 33.6 percent from $21.7 million last year, driven primarily by the growth in motorized sales and improved SG&A expense leverage, partially offset by increased amortization expense and purchase accounting costs associated with Jayco.
Motorized RV backlog more than doubled to $706.4 million from $341 million a year earlier, reflecting the inclusion of Jayco's $135.5 million motorized backlog as well as strong, continued demand for smaller gas type A and type C motorhomes.
"As a result of the strong operating performance during the quarter, coupled with the timing of sales near the end of the quarter, we saw an increase in working capital – primarily accounts receivable which turn very quickly," Thor Senior Vice President and CFO Colleen Zuhl says. "We also invested over $26 million on capital projects and reduced the balance on our revolving credit facility by $20 million. At Oct. 31, we held $161.7 million of cash and $340 million was outstanding under the debt agreement with $157.8 million of availability under the revolver. As we look to the remainder of the fiscal year, we see continued strong demand for our products resulting in the need for additional production capacity. We intend to be prudent in investing our cash to ensure we have the ability to meet demand while also further reducing our debt."
For the first quarter, Jayco contributed approximately $467.1 million in sales and $44.7 million in gross profit. Gross profit contribution for the quarter was adversely affected by the impact of purchase accounting on the value of inventory.
Interest expense and amortization of debt issuance costs for the quarter were about $2.4 million.
Results for the quarter also were affected by the amortization of intangibles. Backlog amortization, which was amortized over a period of three months and is now complete, amounted to $8.3 million in the first quarter. Total amortization cost for the quarter attributable to the Jayco acquisition, including the backlog amortization, amounted to $12.9 million.
"With what I believe is the best team in the business, we have continued to execute our strategic plan and deliver solid growth while maintaining extremely prudent capital allocation objectives," Thor Executive Chairman Peter Orthwein says. "We will continue to focus on both our short and long-term initiatives to provide Thor the ability to grow in fiscal 2017 and beyond. With a stable or improved economy, including job and income growth, we are optimistic that demand from consumers and dealers will drive another year of impressive growth for the RV industry. Our challenge, as it has been over the past several years, will be to develop new products and produce them in the volumes necessary to meet demand and with the quality our customers expect, while generating solid returns for our shareholders. We are confident that our team, operating approach and financial discipline position us well to achieve this."