EX-99.1 2 q3pressrelease.htm PRESS RELEASE 3RD QTR DATED JUNE 17, 2010 WebFilings | EDGAR view
Contact: Sheila Davis - PR/IR Mgr. - 641-585-6803 - sdavis@winnebagoind.com
 
WINNEBAGO INDUSTRIES REPORTS CONTINUED IMPROVEMENT IN
THIRD QUARTER FISCAL 2010
-- First Operating Profit Since Second Quarter FY 2008 --
 
FOREST CITY, IOWA, June 17, 2010- Winnebago Industries, Inc. (NYSE:WGO), the leading United States motor home manufacturer, today reported continued improvement in financial results during the Company's third quarter of fiscal year 2010.
 
Revenues for the third quarter of fiscal 2010 ended May 29, 2010 were $134.8 million, an increase of 165.1 percent, versus $50.8 million for the third quarter of fiscal 2009. The Company reported an operating profit of $3.4 million for the quarter, versus an operating loss of $14.8 million for the third quarter of fiscal 2009. Net income for the third quarter was $6.0 million versus a net loss of $8.6 million for the third quarter of fiscal 2009. On a diluted per share basis, the Company had net income of $.21 for the third quarter of fiscal 2010 versus a net loss of $.29 for the third quarter of fiscal 2009. The third quarter of fiscal 2010 was benefited from increased motor home unit deliveries, particularly in the Class A category. The net income for the third quarter reflected the positive effect of $2.4 million in tax benefits associated with resolution of tax audits and various tax planning initiatives.
 
Revenues for the first nine months of fiscal 2010 were $326.4 million, an increase of 114.6 percent, versus revenues of $152.1 million for the first nine months of fiscal 2009. The Company reported an operating loss of $4.4 million for the first nine months of fiscal 2010, versus an operating loss of $50.3 million for the first nine months of fiscal 2009. Net income for the first nine months of fiscal of 2010 was $5.4 million, or $0.18 per diluted share, versus a loss of $28.5 million, or $.98 per diluted share for the first nine months of fiscal 2009. No tax benefits have yet been recorded on the first nine months of fiscal 2010 pre-tax losses. To the extent that future pre-tax income is generated, these unrecorded tax benefits will offset tax expense until fully utilized.  The $9.5 million of tax benefit recorded in the first nine months of fiscal 2010 primarily relates to tax benefits associated with the carryback of fiscal year 2009 net operating losses permitted by tax law changes and tax benefits associated with various tax planning initiatives and tax settlements.
 
“We are extremely pleased to report our results for the third quarter of fiscal 2010 which show profitability at the operating level for the first time since our second quarter of 2008,” said Winnebago Industries' Chairman, CEO and President Bob Olson. "We are also encouraged by continued sequential improvement in revenues and gross profit. The main driver for this improvement was increased motor home shipments which increased 120.3 percent over the third quarter of fiscal 2009 and 23.2 percent sequentially over the second quarter ended February 27, 2010. The increased volume resulted in greater efficiencies and higher utilization of our manufacturing facilities."
 
Dealer inventory was relatively flat with 2,000 Class A, B and C motor homes as of May 29, 2010, compared to the 2,022 at the end of the second quarter of fiscal 2010; and down 13.9 percent from dealer inventory of 2,324 on May 30, 2009. Olson continued, "Dealer inventory has leveled off, which we believe is appropriate in today's market environment. Dealers and their lending institutions are keeping a close eye on inventories to ensure that supply is consistent with retail demand. We have also seen dramatic improvement within the last year in the age of the product in dealer inventory, with much less older inventory on their lots."
 
Winnebago Industries' sales order backlog was 935 motor homes at May 29, 2010, an increase of 144.8 percent compared to the end of the third quarter of fiscal 2009. "While our sales order backlog increased considerably since the third quarter of fiscal 2009, it has declined 19.3 percent sequentially from the end of the second quarter of fiscal 2010," said Olson. "We are launching our new 2011 products to our dealers this month. As dealers are able to see these exciting new products, we anticipate the sales order backlog will rise accordingly."
 
According to Statistical Surveys, Inc., the retail reporting service for the RV industry, Winnebago Industries continues to lead the industry in retail sales of Class A and Class C motor homes combined with 19.5 percent for the first four months of calendar 2010, compared to 18.4 percent for the same period of calendar 2009.
 
Olson continued, "Dr. Richard Curtin, the economist for the Recreation Vehicle Industry Association, recently increased his forecast for the motor home market, estimating 22,600 Class A, B and C motor homes will be shipped to dealers in calendar 2010, a 71 percent increase over 2009. We remain cautious, however, until we see prolonged improvement in retail sales. We continue to believe that retail sales will be the key driver to sustain our recovery and for continued growth going forward."
 
 
 
Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, June 17, 2010. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company's website at http://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days.
 
About Winnebago Industries
Winnebago Industries, Inc. is the leading U.S. manufacturer of motor homes which are self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes under the Winnebago, Itasca and ERA brand names with state-of-the-art computer-aided design and manufacturing systems on automotive-styled assembly lines. The Company's common stock is listed on the New York and Chicago Stock Exchanges and traded under the symbol WGO. Options for the Company's common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit, http://www.winnebagoind.com/investor.html.
 
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to interest rates and availability of credit, low consumer confidence, significant increase in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a further or continued slowdown in the economy, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions, and other factors. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the SEC over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
# # #
 
 
Winnebago Industries, Inc.
Unaudited Statements of Income
(In thousands, except percent and per share data)
 
 
Quarter Ended
 
May 29, 2010
 
May 30, 2009
 
 
 
 
 
 
 
 
Net revenues
$
134,813
 
 
100.0
%
 
$
50,848
 
 
100.0
%
Cost of goods sold
125,058
 
 
92.8
%
 
59,133
 
 
116.3
%
Gross profit (deficit)
9,755
 
 
7.2
%
 
(8,285
)
 
(16.3
)%
Operating expenses:
 
 
 
 
 
 
 
Selling
3,107
 
 
2.3
%
 
3,083
 
 
6.1
%
General and administrative
3,244
 
 
2.4
%
 
3,414
 
 
6.7
%
Total operating expenses
6,351
 
 
4.7
%
 
6,497
 
 
12.8
%
Operating income (loss)
3,404
 
 
2.5
%
 
(14,782
)
 
(29.1
)%
Financial income
158
 
 
0.1
%
 
209
 
 
0.4
%
Income (loss) before income taxes
3,562
 
 
2.6
%
 
(14,573
)
 
(28.7
)%
Benefit for taxes
(2,430
)
 
(1.8
)%
 
(6,020
)
 
(11.9
)%
Net income (loss)
$
5,992
 
 
4.4
%
 
$
(8,553
)
 
(16.8
)%
Income (loss) per common share:
 
 
 
 
 
 
 
Basic
$
0.21
 
 
 
 
$
(0.29
)
 
 
Diluted
$
0.21
 
 
 
 
$
(0.29
)
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,098
 
 
 
 
29,045
 
 
 
Diluted
29,107
 
 
 
 
29,056
 
 
 
 
 
 
Nine Months Ended
 
May 29, 2010
 
May 30, 2009
 
 
 
 
 
 
 
 
Net revenues
$
326,359
 
 
100.0
%
 
$
152,054
 
 
100.0
%
Cost of goods sold
311,296
 
 
95.4
%
 
181,025
 
 
119.1
%
Gross profit (deficit)
15,063
 
 
4.6
%
 
(28,971
)
 
(19.1
)%
Operating expenses:
 
 
 
 
 
 
 
Selling
9,438
 
 
2.9
%
 
9,564
 
 
6.3
%
General and administrative
10,056
 
 
3.1
%
 
11,748
 
 
7.7
%
Total operating expenses
19,494
 
 
6.0
%
 
21,312
 
 
14.0
%
Operating loss
(4,431
)
 
(1.4
)%
 
(50,283
)
 
(33.1
)%
Financial income
289
 
 
0.1
%
 
1,366
 
 
0.9
%
Loss before income taxes
(4,142
)
 
(1.3
)%
 
(48,917
)
 
(32.2
)%
Benefit for taxes
(9,496
)
 
(2.9
)%
 
(20,387
)
 
(13.4
)%
Net income (loss)
$
5,354
 
 
1.6
%
 
$
(28,530
)
 
(18.8
)%
Income (loss) per common share:
 
 
 
 
 
 
 
Basic
$
0.18
 
 
 
 
$
(0.98
)
 
 
Diluted
$
0.18
 
 
 
 
$
(0.98
)
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,084
 
 
 
 
29,036
 
 
 
Diluted
29,097
 
 
 
 
29,046
 
 
 
 
 
Winnebago Industries, Inc.
Unaudited Balance Sheets
(In thousands)
 
 
May 29,
2010
 
August 29,
2009
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
76,296
 
 
$
36,566
 
Short-term investments
1,150
 
 
13,500
 
Receivables, net
10,105
 
 
11,717
 
Inventories
39,134
 
 
46,850
 
Prepaid expenses and other assets
3,898
 
 
3,425
 
Income taxes receivable
1,148
 
 
17,356
 
Total current assets
131,731
 
 
129,414
 
Property, plant, and equipment, net
24,536
 
 
28,040
 
Assets held for sale
6,515
 
 
6,515
 
Long-term investments
19,272
 
 
19,794
 
Investment in life insurance
23,038
 
 
22,451
 
Other assets
15,218
 
 
14,252
 
Total assets
$
220,310
 
 
$
220,466
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
15,334
 
 
$
10,370
 
Short-term ARS borrowings
610
 
 
9,100
 
Income taxes payable
80
 
 
299
 
Accrued expenses
31,788
 
 
30,185
 
Total current liabilities
47,812
 
 
49,954
 
Long-term liabilities:
 
 
 
Unrecognized tax benefits
6,090
 
 
9,012
 
Postretirement health care and deferred compensation benefits, net of current portion
70,071
 
 
69,169
 
Total long-term liabilities
76,161
 
 
78,181
 
Stockholders' equity
96,337
 
 
92,331
 
Total liabilities and stockholders' equity
$
220,310
 
 
$
220,466
 
 
 
Winnebago Industries, Inc.
Unaudited Statements of Cash Flows
(In thousands)
 
 
 
Nine Months Ended
 
May 29,
2010
 
May 30,
2009
Operating activities:
 
 
 
Net income (loss)
$
5,354
 
 
$
(28,530
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation
4,850
 
 
6,015
 
Stock-based compensation
414
 
 
760
 
Postretirement benefit income and deferred compensation expenses
927
 
 
1,030
 
(Reduction) provision for doubtful accounts
(65
)
 
58
 
Deferred income taxes
—
 
 
(463
)
Increase in cash surrender value of life insurance policies
(962
)
 
(865
)
Loss on disposal of property
14
 
 
70
 
Other
58
 
 
176
 
Change in assets and liabilities:
 
 
 
Inventories
7,716
 
 
57,366
 
Receivables and prepaid assets
843
 
 
2,164
 
Income taxes receivable and unrecognized tax benefits
13,736
 
 
(11,929
)
Accounts payable and accrued expenses
6,605
 
 
(11,034
)
Postretirement and deferred compensation benefits
(2,679
)
 
(2,344
)
Net cash provided by operating activities
36,811
 
 
12,474
 
 
 
 
 
Investing activities:
 
 
 
Proceeds from the sale of investments at par
12,900
 
 
8,500
 
Purchases of property and equipment
(1,467
)
 
(2,522
)
Proceeds from the sale of property
58
 
 
294
 
Other
127
 
 
(736
)
Net cash provided by investing activities
11,618
 
 
5,536
 
 
 
 
 
Financing activities:
 
 
 
Payments for purchase of common stock
(249
)
 
(164
)
Payments of cash dividends
—
 
 
(3,489
)
(Payments) borrowings on ARS portfolio
(8,490
)
 
9,100
 
Proceeds from exercise of stock options
280
 
 
—
 
Other
(240
)
 
—
 
Net cash (used in) provided by financing activities
(8,699
)
 
5,447
 
 
 
 
 
Net increase in cash and cash equivalents
39,730
 
 
23,457
 
Cash and cash equivalents at beginning of period
36,566
 
 
17,851
 
Cash and cash equivalents at end of period
$
76,296
 
 
$
41,308
 
 
 
Winnebago Industries, Inc.
Unaudited Motor Home Deliveries
 
 
Quarter Ended
 
Change
(In units)
May 29,
2010
 
Product
Mix %
 
May 30,
2009
 
Product
Mix %
 
Units
 
%
Change
Class A gas
417
 
 
30.5
%
 
114
 
 
18.4
%
 
303
 
 
265.8
%
Class A diesel
273
 
 
20.0
%
 
62
 
 
10.0
%
 
211
 
 
340.3
%
Total Class A
690
 
 
50.5
%
 
176
 
 
28.4
%
 
514
 
 
292.0
%
Class B
76
 
 
5.6
%
 
56
 
 
9.0
%
 
20
 
 
35.7
%
Class C
600
 
 
43.9
%
 
388
 
 
62.6
%
 
212
 
 
54.6
%
Total deliveries
1,366
 
 
100.0
%
 
620
 
 
100.0
%
 
746
 
 
120.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
Change
(In units)
May 29,
2010
 
Product
Mix %
 
May 30,
2009
 
Product
Mix %
 
Units
 
%
Change
Class A gas
1,030
 
 
31.5
%
 
356
 
 
22.4
%
 
674
 
 
189.3
%
Class A diesel
707
 
 
21.6
%
 
225
 
 
14.1
%
 
482
 
 
214.2
%
Total Class A
1,737
 
 
53.1
%
 
581
 
 
36.5
%
 
1,156
 
 
199.0
%
Class B
202
 
 
6.2
%
 
99
 
 
6.2
%
 
103
 
 
104.0
%
Class C
1,330
 
 
40.7
%
 
911
 
 
57.3
%
 
419
 
 
46.0
%
Total deliveries
3,269
 
 
100.0
%
 
1,591
 
 
100.0
%
 
1,678
 
 
105.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Winnebago Industries, Inc.
Unaudited Backlog and Dealer Inventory
 
 
As Of
 
Change
Sales order backlog (units):
May 29,
2010
 
Product
Mix
 
May 30,
2009
 
Product
Mix
 
Units
%
Class A gas
323
 
 
34.6
%
 
104
 
 
27.2
%
 
219
 
 
210.6
%
Class A diesel
234
 
 
25.0
%
 
72
 
 
18.9
%
 
162
 
 
225.0
%
Total Class A
557
 
 
59.6
%
 
176
 
 
46.1
%
 
381
 
 
216.5
%
Class B
34
 
 
3.6
%
 
2
 
 
0.5
%
 
32
 
 
NMF
Class C
344
 
 
36.8
%
 
204
 
 
53.4
%
 
140
 
 
68.6
%
Total backlog*
935
 
 
100.0
%
 
382
 
 
100.0
%
 
553
 
 
144.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Total approximate revenue dollars ($ in thousands)
$
93,214
 
 
 
 
$
33,556
 
 
 
 
$
59,658
 
 
177.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Dealer inventory (units)
2,000
 
 
 
 
2,324
 
 
 
 
(324
)
 
(13.9
)%
 
*
The Company includes in its backlog all accepted orders from dealers to be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the purchaser at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.