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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' Second Quarter Profit Increases 42 Percent

Tue Mar 7, 2017

145382602566676.pngELKHART, Indiana - Thor Industries, Inc. has announced record second-quarter net income of $64.8 million, or $1.23 per diluted share, on record revenues of $1.59 billion for the second quarter ended Jan. 31.

Gross profit increased 42.3 percent to $211.7 million, though gross profit margins decreased to 13.3 percent in the second quarter compared to 15.3 percent in the prior-year period, due primarily to acquisition-related dilution. Net income increased 45 percent on sales growth of 62.9 percent when compared with the second quarter of last year. This strong growth was a combination of organic growth as well as the inclusion of results from Jayco. Diluted earnings per share for the fiscal 2017 second quarter increased 44.7 percent from the previous year.

"The second quarter marked another period of growth for Thor, as we experienced a positive start to the spring retail show season around the country," Thor President and CEO Bob Martin says. "Growing demand from new consumers broadening our market has continued, with younger families increasingly buying more affordably priced travel trailers and smaller motorhomes. These positive trends give us confidence that Thor and the industry will outpace volumes achieved in 2016, which was the best year of wholesale RV shipments since the 1970s. We remain convinced that these trends will continue to drive industry growth in future periods, as we provide new consumers with positive experiences that prompt them to become lifelong RVers.

"We increased production in the first half of fiscal 2017, which is typically a slower seasonal period, to respond to the high demand. We continue to make progress in expanding our production capacity, including expansion projects announced at Keystone, Jayco and Heartland, which should begin to ramp up over the remainder of fiscal 2017 and into fiscal 2018. The investments we are making in expanding our production facilities will position us well for long-term growth, which is a consistent focus of our strategic plan."

Towable RVs:

Towable RV sales were $1.08 billion for the second quarter, up 55 percent from $698.3 million in the prior-year period. Jayco contributed $294.1 million to towable sales, while the towable growth excluding the acquisition was 12.9 percent, driven primarily by strength in smaller, more affordably priced travel trailers.

Towable RV income before tax was $78 million, up 47 percent from $53.1 million in the second quarter last year. This increase was driven primarily by the increase in sales and modestly improved Selling General and Administrative (SG&A) expense as a percent of revenues, partially offset by increased amortization expense and lower gross margins associated with Jayco.

Towable RV backlog increased $615 million, or 86.8 percent, to $1.32 billion, compared to $708.4 million at the end of the second quarter of fiscal 2016, reflecting the inclusion of Jayco's $414.9 million backlog as well as continued momentum in travel trailers.

Motorized RVs:

Motorized RV sales were $475 million for the second quarter, up 95.6 percent from $242.9 million in the prior-year second 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 have been well received by dealers and consumers. Motorized revenues also benefited from the inclusion of Jayco's motorized revenues of $137.2 million.

Motorized RV income before tax was $28.5 million, up 38.8 percent from $20.5 million last year, driven primarily by the growth in motorized sales and improved SG&A expense as a percent of revenues, partially offset by increased amortization expense and lower gross margins associated with Jayco.

Motorized RV backlog nearly doubled to $766.9 million from $396.8 million a year earlier, reflecting the inclusion of Jayco's $138.1 million motorized backlog as well as strong, continued demand for smaller gas type A and type C motorhomes.

"With the strong operating performance during the quarter, we saw an increase in working capital which was driven by two main components," Thor Senior Vice President and CFO Colleen Zuhl says. "First, inventory levels have increased with most of our production facilities operating near capacity and with the recent capacity expansions made at a number of our subsidiaries. Second, accounts receivable, which turn very quickly, grew with the increase in sales and the timing of sales near the end of the quarter. As expected, we also invested approximately $25 million in capital projects and reduced the balance on our revolving credit facility by $15 million during the second quarter. At Jan. 31, we held $134.7 million of cash and $325 million was outstanding under the debt agreement. For the second half of the fiscal year, we expect to continue investing in additional production capacity to meet the robust demand for our products. Total capital investments for the fiscal year are forecast to be approximately $130 million as we expect to invest approximately $80 million in additional capital projects during the remainder of the fiscal year."

Acquisition Impact:

For the second quarter, Jayco contributed about $431.3 million in sales and $38.1 million in gross profit.

Interest expense and amortization of debt issuance costs for the quarter were about $2.2 million.

Results for the quarter were also affected by the increase in amortization of intangibles. Total amortization for the quarter attributable to the Jayco acquisition amounted to $10 million.

"We remain very optimistic regarding Thor's prospects as we see healthy demand for our products among dealers and consumers, including a growing segment of consumers that are just starting to experience the RV lifestyle," Thor Executive Chairman Peter Orthwein says. "With record attendance at many of the largest consumer RV shows in the early part of calendar 2017, many in our industry are optimistic about the prospects for continued growth. For Thor, our team will continue to focus on the factors that have made us successful over the long term – providing the innovative products and service that dealers and consumers value, while maintaining a long-term, strategic focus on investing for the future."

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.