Industry Links

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 Announces More than 100 Percent Increase in 4Q Gross Profits

Thu Oct 19, 2017

145762292526352.jpgFOREST CITY, Iowa – Winnebago Industries, Inc. has reported a more than 100 percent increase in fourth quarter gross profit as well as significant increases across the board in 2017 Fiscal Year and fourth quarter statements.

Revenues for the Fiscal 2017 fourth quarter ended Aug. 26 were $454.9 million, an increase of 72.8 percent compared to $263.3 million for the Fiscal 2016 period. Gross profit was $73.6 million, an increase of 130.9 percent compared to $31.9 million for the Fiscal 2016 period.

Gross profit margin increased 410 basis points, primarily driven by the favorable mix from the accelerated growth in the more profitable Towable segment. Operating income was $43.5 million for the current quarter, an improvement of 130.2 percent compared to $18.9 million in the fourth quarter of last year. Fiscal 2017 fourth quarter net income was $24.9 million, or $0.79 per diluted share, an increase of 89.6 percent compared to $13.1 million, or $0.49 per diluted share, in the same period last year. Consolidated Adjusted EBITDA was $47.8 million for the quarter, compared to $18.1 million last year, an increase of 163.4 percent.

“We made significant progress in Fiscal 2017 to transform Winnebago Industries into a larger, more profitable outdoor lifestyle company offering a full line of RVs,” Winnebago President and CEO Michael Happe says. “We continue to deliver robust sales growth and gross margin improvements, driven largely by the strong performance of our Grand Design division and the organic growth in our Winnebago-branded Towable division. On the Motorized side, our results reflect our strategic direction of repositioning and simplifying our product line, but also the changing trends of the Motorized buyer to more affordable Class A and Class C motorhomes.

“Our work to streamline and reinvigorate our Motorized product line is an active priority. We are excited about the changes we are making to all of our product offerings, design processes and manufacturing environments across the company. Thanks to the overall balance in our portfolio, we continue to report strong improvements in our financial results and key financial metrics. Our cash flow has been very strong which allowed us to pay down our debt ahead of schedule with total debt reduction of $69 million since the end of the first quarter. I want to thank all our Winnebago Industries employees for their hard work over the year and their continued dedication to providing our customers with an extraordinary experience and strengthening our company overall."

Year over year, Fiscal 2017 revenues of $1.547 billion increased 58.6 percent from $975.2 million in Fiscal 2016. Gross profit improved 280 basis points, primarily due to favorable business mix driven by the addition of Grand Design and the strong growth in the Towable segment overall. Operating income was $125.1 million for Fiscal 2017, an improvement of 90.3 percent compared to $65.7 million in Fiscal 2016. Net income for Fiscal 2017 was $71.3 million, or $2.32 per diluted share, an increase of 38.1 percent compared to the $1.68 per diluted share in last fiscal year. Fiscal 2017 consolidated Adjusted EBITDA was $138.9 million, an increase of 122.9 percent from $62.3 million in Fiscal 2016.

Significant items related to the Grand Design acquisition that are impacting income before income taxes in the fourth quarter of Fiscal 2017 and for the fiscal year:

• Additional transaction costs related to the acquisition were minimal in the fourth quarter. For the full year, transaction costs were $6.6 million, or $0.14 per diluted share, net of tax.
• For the fourth quarter, amortization expenses of $2.1 million were recorded related to the definite-lived intangible assets acquired, or $0.04 per diluted share, net of tax. For the full year, amortization expenses of $24.7 million were recorded, or $0.53 per diluted share, net of tax. The company expects ongoing amortization expenses to be about $2 million per quarter through Fiscal 2021, according to a press release.
• Interest expense of $5.3 million was recorded in the fourth quarter related to the debt associated with the acquisition of Grand Design, or $0.11 per diluted share, net of tax. For the full year, interest expense of $16.8 million was recorded, or $0.36 per diluted share, net of tax.

In the fourth quarter, revenues for the Motorized segment were $226.2 million, down 4.4 percent from the previous year. Segment Adjusted EBITDA was $12.2 million, down 31 percent from the prior year. Adjusted EBITDA margin decreased 210 basis points, primarily driven by pricing adjustments and costs associated with transitioning production to the company's Junction City, Oregon facility.

For the full year Fiscal 2017, revenues for the Motorized segment were $861.9 million, down 2.7 percent from Fiscal 2016. Segment Adjusted EBITDA for the full year was $43.9 million, down 23.4 percent from Fiscal 2016. Adjusted EBITDA margin decreased 140 basis points due to the same factors noted in the fourth quarter.

Revenues for the Towable segment were $228.7 million for the quarter, up $202.1 million over the prior year, driven by the addition of $193.4 million in revenue from the Grand Design acquisition and continued strong organic growth in Winnebago-branded Towable products, which increased 33 percent compared to last year. Segment Adjusted EBITDA was $35.6 million, up $34.8 million over the prior year. Adjusted EBITDA margin increased 1,250 basis points, driven by higher volumes and a favorable product mix, including the addition of Grand Design products within this segment. Margins in the Towable segment were also impacted by a $2.9 million (125 basis points) inventory adjustment in the fourth quarter reflecting an improvement in material usage efficiencies.

For the full year Fiscal 2017, revenues for the Towable segment were $685.2 million, up $595.8 million from Fiscal 2016, driven by the addition of $559.7 million in revenue from the Grand Design acquisition and 40 percent organic growth in Winnebago-branded Towable products. Segment Adjusted EBITDA for Fiscal 2017 was $94.9 million, up $90 million from Fiscal 2016. Adjusted EBITDA margin increased 840 basis points for the full year.

As of Aug. 26, the company had total outstanding debt of $274.6 million ($284 million of debt, net of debt issuance costs of $9.4 million) and working capital of $147 million. The debt-to-equity ratio was 62.2 percent and the current ratio was 1.9 as of the end of the quarter and fiscal year. Cash flow from operations was $29.8 million in the quarter and $97.1 million for the full year, an increase of 42 percent and 84 percent, respectively, from the prior period in Fiscal 2016.

On Oct. 18, the company's Board of Directors authorized a share repurchase program in the amount of $70 million, which is about 5 percent of the company's market capitalization.

"As we head into Fiscal 2018 as a larger, broader and more profitable organization, we will continue our work to build a company that can generate materially more value in the future,” Happe says. “We have very strong brands, and our long-term aspiration is to be the undisputed leader in the market. We are seeing a tremendous amount of interest from dealers and customers in the five new product offerings recently introduced:”

• Type A Diesel Horizon, offering a fresh interior with contemporary styling unlike any other offering at its price point;
• Type A Gas Intent, which strengthens Winnebago's position in the type A value segment;
• Type B Revel, which is an off-road four-by-four that targets a previously unmet market;
• Minnie Plus fifth wheel from the Winnebago-branded Towable division which extends the popular Minnie series into the fifth wheel market with open floor plans, modest weights and a mid-profile design; and finally,
• Reflection fifth wheel, a new half-ton offering from Grand Design that provides maximum towability at a value price point.

As announced last quarter, the company's Board of Directors approved a facilities expansion for Grand Design, and good progress has been made on that project, which is scheduled to increase production midway through Fiscal 2018. In addition, Winnebago has announced that the Board of Directors has recently approved a $12 million facility expansion for the Winnebago-branded Towable division that will add capacity in this fast-growing division. The company intends to continue to invest in its growth opportunities while seeking to generate strong cash flow to further reduce its debt, keep the balance sheet strong and fund profitable growth as it works to become the premier outdoor lifestyle company, according to Happe.