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 Q2 Results

Wed Mar 7, 2018

151925313685764.pngThor Industries, Inc. (NYSE:THO) on Wednesday announced it saw record second-quarter results with income before taxes of $141.1 million, on revenues of $1.97 billion. Gross profit for the second quarter, ended Jan. 31, increased 27.7 percent to $270.3 million, according to the company.

As a result of the strength of revenues and production during the quarter, as well as operating efficiencies and process improvements attained in the past year, primarily by Jayco, gross profit margins increased to 13.7 percent in the second quarter compared to 13.3 percent in the prior-year period, the company states.

“Our second quarter results reflect another period of exceptional growth of both sales and earnings,” says Bob Martin, Thor president and CEO. “In what has historically been our lowest volume quarter, we achieved our third highest sales level of any quarter in the company’s history.

Net income and diluted earnings per share for the second quarter were $79.8 million and $1.51, respectively, according to the company. That compares to net income and diluted earnings per share in the prior-year second quarter of $64.8 million and $1.23, respectively.

Changes to the U.S. tax code—including a reduction of the federal corporate income tax rate to 21 percent (part of the Tax and Jobs Act enacted at the start of the year)—resulted in Thor’s blended tax rate for its fiscal year, which ends July 31, being 26.9 percent, the company states. That lower blended tax rate in the second quarter provided an income tax benefit of $12.5 million when the lower tax rate was applied to first quarter returns, according to Thor. The company says it also “recognized a non-recurring, non-cash income tax charge of $34 million due to the revaluation of its net deferred tax assets as a result of the lower federal tax rate under the Tax Act.”

Other highlights of the Q2 results include:
• Second quarter net sales of $1.97 billion, up 24.1 percent.
• Second quarter income before taxes of $141.1 million, up 43.4 percent.
• Second quarter diluted EPS of $1.51, up 22.8 percent. First half net sales of $4.20 billion, up 27.5 percent.
• First half income before taxes of $328.2 million, up 53.2 percent.

By segment, Thor reports:
• Towable RV sales were $1.37 billion for the second quarter, up 26.9 percent from $1.08 billion in the prior-year period, “driven primarily by continued strong demand for our more affordably-priced travel trailers and fifth wheels.”
• Motorized RV sales were $559.9 million for the second quarter, up 17.9 percent from $475.0 million in the prior-year second quarter. “The increase in motorized RV sales was a result of the ongoing growth in our more moderately-priced gas class A and class C motorhomes, both of which continue to be in high demand by our dealers and end consumers.”

Colleen Zuhl, Thor senior vice president and CFO, says Thor’s balance sheet remains “very strong.” In the first half of fiscal 2018, Thor invested more than $63 million in capital projects and its working capital increased to $118 million.

“We also continued to reduce the outstanding balance under our credit facility, paying down $65 million during the first half of the year to exit with $80 million outstanding as of Jan. 31, 2018, compared to $145 million outstanding at July 31, 2017,” she says.

“Subsequent to the end of the second quarter, Thor made a $46.9 million investment in a newly created joint venture, named TH2. TH2 was formed to own, improve and sell innovative and comprehensive digital platforms throughout the RV marketplace. This investment was funded by cash on hand at the closing, in early March 2018.”

Consolidated backlog was up 33.9 percent to $2.80 billion vs. Q2 2017, driven by continued strong consumer demand for affordably-priced travel trailers and motorhomes,” according to the company.

“Our healthy backlog is confirmation of the overall strength of the RV lifestyle and confirmation that our products are hitting the target of price and design for consumers,” Martin says. “The overall health of the RV industry remains strong and is supported by solid growth of retail shipments, with our dealer inventories at appropriate levels for seasonal consumer demand. Demand continues to be driven by favorable economic conditions and demographic trends that are reflecting the growth of first-time and younger buyers. Dealer optimism remains high based on strong attendance and sales performance at the early spring retail trade shows.

“As we look forward to the remainder of fiscal 2018, we will be facing tougher year-over-year comparatives during the second half of the fiscal year as the significant operating efficiencies and process improvements achieved at Jayco began to materialize in the third quarter of fiscal 2017. We are confident, however, that fiscal 2018 will be another year of meaningful growth,” he says.

A question-and-answer document and PowerPoint presentation on the quarterly results and other topics can be viewed here.