EX-99.3

EX-99.3 5 d225941dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Financial Information

On June 30, 2016 (the “Closing Date”), Thor Industries, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the shareholders of Jayco, Corp. (the “Sellers”), Jayco, Corp. (“Jayco”), and Wilbur L. Bontrager, solely in the capacity as the Seller Representative, pursuant to which the Company acquired all of the issued and outstanding shares of capital stock of Jayco. Jayco is engaged in the business of manufacturing towable and motorized recreational vehicles.

The following selected Unaudited Pro Forma Condensed Combined Financial Information was prepared using the purchase method of accounting, with Thor Industries, Inc. being the acquiring entity, and reflects estimates and assumptions deemed appropriate by Company management to give effect to the acquisition as if it had been completed effective April 30, 2016, with respect to the Unaudited Pro Forma Condensed Combined Balance Sheet, and as of August 1, 2014 (the beginning of the Company’s fiscal 2015), with respect to the Unaudited Pro Forma Condensed Combined Statements of Income and Comprehensive Income.

The historical financial statements have been adjusted to give effect to pro forma events that are directly attributable to the acquisition and the long-term debt incurred by the Company at the time of the acquisition. The adjustments are factually supportable and, with respect to the Unaudited Pro Forma Condensed Combined Statements of Income and Comprehensive Income, are expected to have a continuing impact on the results of the Company after the acquisition. The purchase price allocation reflected in the following Unaudited Pro Forma Combined Condensed Financial Information is preliminary in nature as the final, actual purchase price and certain valuations have not been finalized. Accordingly, the final purchase price allocation may differ materially from the preliminary allocation utilized in the following Unaudited Pro Forma Condensed Combined Financial Information, although these amounts represent management’s current best estimate of fair value. The pro forma adjustments are described in the accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Information.

The Unaudited Pro Forma Condensed Combined Financial Information should be read in conjunction with the:

●

Accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information;

●

Separate historical financial statements of Thor Industries, Inc. included in our Annual Report on Form 10-K as of and for the year ended July 31, 2015 and Form 10-Q as of and for the nine months ended April 30, 2016; and

●

Separate historical financial statements of Jayco included within as Exhibit 99.1 as of and for the year ended December 31, 2015 and Exhibit 99.2 as of and for the period ended April 30, 2016.

The Pro Forma Condensed Combined Financial Information is unaudited, presented for illustrative purposes only and is not necessarily indicative of the financial condition or results of operations that actually would have been realized had the acquisition been completed on the dates indicated above. Additionally, the Unaudited Pro Forma Condensed Combined Financial Information does not purport to project the future financial condition or results of operations of the combined company, and does not include the effects of potential operating synergies or cost savings related to the acquisition. Additionally, management has not completed a full evaluation of Jayco’s accounting and business practices, and any changes identified may impact the future combined operating results.

Thor Industries, Inc. and Subsidiaries & Jayco Corp. and Subsidiary and Affiliate

Unaudited Pro Forma Condensed Combined Balance Sheet

April 30, 2016

(In Thousands)


	THOR INDUSTRIES		JAYCO		PRO FORMA ADJUSTMENTS			PRO FORMA COMBINED
ASSETS
Current Assets
Cash and Cash Equivalents	$	247,297	$	27,324	$	(223,910)	(1)	$	50,711
Investment in Trading Securities		-		7,123		(7,123)	(2)		-
Accounts Receivable, Trade - Net		356,531		101,439		-			457,970
Accounts Receivable, Other		25,502		-		-			25,502
Inventories, Net		275,452		155,725		16,365	(3)		447,542
Prepaid Income Taxes, Expenses and Other		8,988		2,208		-			11,196
Deferred Income Taxes, Net		60,622		-		-			60,622

Total Current Assets		974,392		293,819		(214,668)			1,053,543


Property, Plant and Equipment, Net		255,521		54,419		26,405	(4)		336,345


Other Assets
Goodwill		303,509		853		21,254	(5)		325,616
Amortizable Intangible Assets, Net		151,391		2,054		364,246	(6)		517,691
Cash Value of Life Insurance		-		5,457		(5,457)	(2)		-
Other		13,067		60		7,850	(7)		20,977

Total Other Assets		467,967		8,424		387,893			864,284


Total Assets	$	1,697,880	$	356,662	$	199,630		$	2,254,172


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable	$	197,264	$	69,078	$	-		$	266,342
Accrued Liabilities		244,331		115,514		11,700	(8)		371,545

Total Current Liabilities		441,595		184,592		11,700			637,887
Long-Term Liabilities
Long-term Debt		-		-		360,000	(9)		360,000
Unrecognized Tax Benefits		10,363		-		-			10,363
Deferred Income Taxes, Net		19,942		-		-			19,942
Supplemental Executive Retirement Plan Obligation		-		7,214		(7,214)	(2)		-
Other Liabilities		29,789		3,475		(3,475)	(2)		29,789

Total Long-Term Liabilities		60,094		10,689		349,311			420,094
Stockholders’ Equity
Common Stock		6,244		4,921		(4,921)	(2)		6,244
Additional Paid-In Capital		222,494		-		-			222,494
Retained Earnings		1,298,952		156,460		(156,460)	(2)		1,298,952
Less: Treasury Shares		(331,499)		-		-			(331,499)

Total Stockholders’ Equity		1,196,191		161,381		(161,381)			1,196,191


Total Liabilities and Stockholders’ Equity	$	1,697,880	$	356,662	$	199,630		$	2,254,172

Thor Industries, Inc. and Subsidiaries & Jayco Corp. and Subsidiary and Affiliate

Unaudited Pro Forma Condensed Combined Statements of Income and Comprehensive Income

For the Twelve Months Ended July 31, 2015

(In Thousands, Except Share and Per Share Data)


	THOR INDUSTRIES		JAYCO		PRO FORMA ADJUSTMENTS			PRO FORMA COMBINED
Net Sales	$	4,006,819	$	1,321,502	$	-		$	5,328,321

Cost of Products Sold		3,449,274		1,207,972		4,765	(10)		4,662,011


Gross Profit		557,545		113,530		(4,765)			666,310

Selling, General and Administrative Expenses		250,891		59,813		-			310,704

Amortization of Intangible Assets		16,015		138		46,901	(11)		63,054

Other Income, Net		2,436		1,244		(1,244)	(12)		2,436

Interest Expense		180		259		11,211	(13)		11,650


Income From Continuing Operations Before Income Taxes		292,895		54,564		(64,121)			283,338

Income Taxes		90,886		-		(3,584)	(14)		87,302


Net Income From Continuing Operations		202,009		54,564		(60,537)			196,036

Loss From Discontinued Operations, Net of Income Taxes		2,624		-		-			2,624


Net Income and Comprehensive Income	$	199,385	$	54,564	$	(60,537)		$	193,412


Weighted-Average Common Shares Outstanding:
Basic		53,166,206							53,166,206
Diluted		53,275,510							53,275,510

Earnings Per Common Share From Continuing Operations:
Basic	$	3.80						$	3.69
Diluted	$	3.79						$	3.68

Earnings Per Common Share:
Basic	$	3.75						$	3.64
Diluted	$	3.74						$	3.63

Thor Industries, Inc. and Subsidiaries & Jayco Corp. and Subsidiary and Affiliate

Unaudited Pro Forma Condensed Combined Statements of Income and Comprehensive Income

For the Nine Months Ended April 30, 2016

(In Thousands, Except Share and Per Share Data)


	THOR INDUSTRIES		JAYCO		PRO FORMA ADJUSTMENTS			PRO FORMA COMBINED
Net Sales	$	3,289,476	$	1,264,271	$	-		$	4,553,747

Cost of Products Sold		2,786,501		1,134,632		-			3,921,133


Gross Profit		502,975		129,639		-			632,614

Selling, General and Administrative Expenses		216,653		59,947		-			276,600

Amortization of Intangible Assets		17,662		155		26,468	(15)		44,285

Impairment Charges		9,113		-		-			9,113

Other Income, Net		823		143		(143)	(16)		823

Interest Expense		508		152		8,451	(17)		9,111


Income From Continuing Operations Before Income Taxes		259,862		69,528		(35,062)			294,328

Income Taxes		84,686		-		12,925	(18)		97,611


Net Income From Continuing Operations		175,176		69,528		(47,987)			196,717

Loss From Discontinued Operations, Net of Income Taxes		1,429		-		-			1,429


Net Income and Comprehensive Income	$	173,747	$	69,528	$	(47,987)		$	195,288


Weighted-Average Common Shares Outstanding:
Basic		52,453,025							52,453,025
Diluted		52,569,294							52,569,294

Earnings Per Common Share From Continuing Operations:
Basic	$	3.34						$	3.75
Diluted	$	3.33						$	3.74

Earnings Per Common Share:
Basic	$	3.31						$	3.72
Diluted	$	3.31						$	3.71

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

(All dollar amounts presented in thousands)

Note A: Description of Transaction and Basis of Presentation

On June 30, 2016, the Company closed on a Stock Purchase Agreement for the acquisition of all the issued and outstanding capital stock of towable and motorized recreational vehicle manufacturer Jayco, Corp. (“Jayco”) for initial cash consideration of $576,060, subject to adjustment. This acquisition was funded from the Company’s cash on hand and $360,000 from an asset-based revolving credit facility. The total cash consideration to be paid is subject to the final determination of actual net assets as of the June 30, 2016 closing date.

This Unaudited Pro Forma Condensed Combined Financial Information was prepared using the purchase method of accounting, with Thor Industries, Inc. being the acquiring entity, and reflects estimates and assumptions deemed appropriate by Company management to give effect to the acquisition as if it had been completed effective April 30, 2016, with respect to the Unaudited Pro Forma Condensed Combined Balance Sheet, and as of August 1, 2014 (the beginning of the Company’s fiscal 2015), with respect to the Unaudited Pro Forma Condensed Combined Statements of Income and Comprehensive Income.

For the Unaudited Pro Forma Condensed Combined Balance Sheet, the $576,060 purchase price has been allocated based on Jayco’s April 30, 2016 financial information and our preliminary estimate of the fair value of the assets acquired and liabilities assumed. The final purchase price allocation will be based on the fair value of the final assets acquired and liabilities assumed as of the closing date of the acquisition.


Cash	$	27,324
Other current assets		275,797
Property, plant and equipment		80,824
Dealer network		261,100
Trademarks		92,800
Backlog		12,400
Goodwill		22,107
Current liabilities		(196,292)

Total fair value of net assets acquired		576,060
Less cash acquired		(27,324)

Total cash consideration for acquisition, less cash acquired	$	548,736

The dealer network will be amortized on an accelerated basis over 20 years. The trademarks will be amortized on a straight line basis over 20 years. Backlog will be amortized on a straight line basis over 3 months.

The dealer network is amortized on an accelerated basis, and estimated future amortization of the Jayco dealer network in the five years following acquisition is $29,999, $30,857, $28,772, $26,604, and $24,825.

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

(All dollar amounts presented in thousands)

Note B: Pro Forma Adjustments

The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Financial Information are as follows:

Balance Sheet:

(1)

Reflects the initial cash consideration paid to the Sellers upon the closing of the acquisition, net of proceeds from the revolving credit facility, and $7,850 of debt issuance costs incurred in connection with the revolving credit facility.

(2)

Represents historical Jayco accounts eliminated upon acquisition or excluded from the transaction.

(3)

Represents estimated fair value adjustment to inventory recognized as part of purchase accounting, including the elimination of historical LIFO reserve.

(4)

Represents estimated write-up of fixed assets to fair value as part of purchase price accounting.

(5)

Consists of the elimination of historical Jayco goodwill of $853, plus the estimated goodwill assuming the acquisition of Jayco took place on April 30, 2016.

(6)

Consists of the elimination of the historical Jayco intangible assets of $2,054, plus $366,300 of estimated amortizable intangible assets recognized based on the purchase price allocation.

(7)

Represents capitalized debt issuance costs of $7,850.

(8)

Represents estimated fair value adjustments to certain accrued liability accounts.

(9)

Represents proceeds from the asset-based revolving credit facility.

Income Statement for the Twelve Months Ended July 31, 2015:

(10)

Reflects estimated charges of $4,765 associated with the fair value of acquired inventory.

(11)

Reflects estimated amortization charges of $47,039 associated with the fair value of acquired intangible assets less the historical Jayco amortization of $138.

(12)

Reflects elimination of Jayco investment income from trading securities excluded from the transaction.

(13)

Reflects elimination of historical Jayco interest expense of $259, plus estimated interest expense from the revolving credit facility of $9,900 (assuming 2.75% rate and an outstanding debt balance of $360,000) and amortization of capitalized debt issuance costs of $1,570. A variance in the interest rate of 0.125% would impact interest expense by $450 for the period presented.

(14)

Reflects estimated income tax effect on both Jayco’s stated income before taxes, as they had no tax provision as a Subchapter-S entity, and the net impact of the adjustments noted above. An assumed blended income tax rate of 37.5% was utilized.

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

(All dollar amounts presented in thousands)

Income Statement for the Nine Months Ended April 30, 2016:

(15)

Reflects estimated amortization charges of $26,623 associated with the fair value of acquired intangible assets, less $155 of historic Jayco amortization.

(16)

Reflects elimination of Jayco investment income from trading securities excluded from the transaction.

(17)

Reflects elimination of historical Jayco interest expense of $152, plus estimated interest expense from the revolving credit facility of $7,425 (assuming 2.75% rate and an outstanding debt balance of $360,000) and amortization of capitalized debt issuance costs of $1,178. A variance in the interest rate of 0.125% would impact interest expense by $338 for the period presented.

(18)