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 .

Winnebago Revenues Up 75.1 Percent in Third Quarter

Wed Jun 21, 2017

148244018890251.jpgFOREST CITY, Iowa - Winnebago Industries, Inc. has reported an increase of 75.1 percent on revenues for the company's third quarter of Fiscal 2017, much of which is attributable to the acquisition of Grand Design Recreational Vehicles, according to a company press release.

Revenues for the Fiscal 2017 third quarter ended May 27 were $476.4 million, an increase of 75.1 percent compared to $272.1 million for the Fiscal 2016 period. Gross profit was $70.8 million, an increase of 134 percent compared to $30.3 million for the Fiscal 2016 period as gross profit margins expanded 380 basis points driven by a favorable product mix, including the addition of Grand Design products within the overall sales mix. Operating income was $34.9 million for the current quarter, an improvement of 69.3 percent compared to $20.6 million in the third quarter of last year. Fiscal 2017 third quarter net income was $19.4 million, or $0.61 per diluted share, an increase of 34.3 percent compared to $14.4 million, or $0.53 per diluted share, in the same period last year. Growth in EPS was impacted by the recognition of $10.2 million of amortization expense during the quarter associated with the Grand Design acquisition. Consolidated adjusted EBITDA was $47.3 million compared to $17.7 million last year, which is an increase of 167.2 percent.

"Our third quarter results continued to reflect the journey we are on here at Winnebago Industries to build a larger, more profitable, full-line RV portfolio," Winnebago President and CEO Michael Happe says. "The performance of our new Grand Design division and the associated integration activities continue to meet and even exceed our expectations, and are certainly accelerating our diversification within the still-growing North American RV industry. We delivered strong improvement in gross margin, driven primarily by the overall shift of revenues to our more profitable Towables Segment. We are gaining market share in both of our Towables businesses, including the Winnebago-branded side, and are aggressively investing in new products and further capacity expansion. In the Motorized segment, we are building the foundation for future growth with significant activity around product-line rationalization, enhanced dealer coverage strategies and focused new product development teams, improving quality and service support processes, and building toward a more nimble and lean manufacturing environment. In addition to solid sales and profitability results, we have also strengthened our balance sheet by reducing debt by $43 million during the quarter. I would like to thank our Winnebago Industries employees for their hard work during the quarter and for their ongoing commitment to provide high-quality products and service to our end customers."

Significant items related to the Grand Design acquisition that are impacting income before income taxes in the third quarter of Fiscal 2017:

* Additional transaction costs related to the acquisition were $0.5 million, or $0.01 per diluted share, net of tax.
* Amortization expenses of $10.2 million were recorded related to the definite-lived intangible assets acquired, or $0.21 per diluted share, net of tax. Starting next quarter (in the fiscal fourth quarter), the company expects amortization expenses will be about $2 million per quarter through Fiscal 2021.
* Interest expense of $5.3 million was recorded related to the debt associated with the acquisition of Grand Design, or $0.11 per diluted share, net of tax.


Revenues for the Motorized segment were $241.7 million, down 2 percent from the previous year. Segment Adjusted EBITDA was $12.6 million, down 22.3 percent from the prior year. Adjusted EBITDA margin decreased 140 basis points, primarily driven by pricing adjustments, product mix and costs associated with transitioning production to the company's Junction City, Oregon facility.


Revenues for the Towable segment were $234.7 million for the quarter, up $209.3 million over the prior year, driven by the addition of $196.9 million in revenue from the Grand Design acquisition. Winnebago also saw continued strong organic growth in Winnebago-branded Towable products in which revenues are up 49 percent compared to last year. Segment Adjusted EBITDA was $34.7 million, up $33.2 million over the prior year. Adjusted EBITDA margin increased 880 basis points, driven by higher volumes and a favorable product mix, including the addition of Grand Design products within this segment.

Balance Sheet and Cash Flow

As of May 27, the company had total outstanding debt of $286.9 million ($297 million of debt, net of debt issuance costs of $10.1 million) and working capital of $120.8 million. The debt-to-equity ratio was 68.9 percent and the current ratio was 1.7 as of the end of the quarter. Cash flow from operations was $62.2 million in the quarter, representing a 53 percent increase from last year.

"As we head into the final quarter of Fiscal 2017, we remain optimistic about the ongoing growth of the RV industry," Happe says. "Solid macroeconomic fundamentals, combined with a surge of younger demographics embracing the outdoor lifestyle, as well as expanding use cases for RVs, suggest continued runway for increasing RV shipments and retail. The strong growth in the Towable segment validates our full-line strategy and demonstrates our momentum, and we are pleased to note healthy and increasing backlog in both the Motorized and Towable segments this quarter. As a result, we have approved investments in expanded capacity, including the addition of approximately 40 percent more production space within our Grand Design business. We also recently initiated the selling process with our dealers for a new opening price Class A Gas product series and a new innovative Class B 4x4 product series, which we anticipate will have a positive impact on trends in our Motorized business."

Conference Call

Winnebago Industries, Inc. conducted a conference call to discuss third quarter Fiscal 2017 results at 9 a.m. CST on Wednesday morning. The event will be archived and available for replay for the next 90 days.