Winnebago Industries Announces Strong Third Quarter Fiscal 2021 Results
-- Record Quarterly Revenues of
-- RV Market Share Gains Continue, Rising to 12.5% (+40 Basis Points) on a Fiscal Year to Date Basis thru April --
-- Record Reported Diluted EPS of
-- Record Backlogs Reflect Sustained Levels of Strong End Consumer Demand --
Third Quarter Fiscal 2021 Results
Revenues for the Fiscal 2021 third quarter ended
President and Chief Executive Officer
Towable
Revenues for the Towable segment were
Motorhome
In the third quarter of Fiscal 2021, revenues for the Motorhome segment were
Balance Sheet and Cash Flow
As of
Quarterly Cash Dividend
On
Conference Call
About
Design,
Company builds quality motorhomes, travel trailers, fifth-wheel products and boats.
under the symbol WGO. For access to
email list for Company news releases, visit http://investor.wgo.net.
Forward-Looking Statements
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 increases in interest rates, availability of credit, low consumer confidence, availability of labor, significant increase in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, 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, integration of operations relating to mergers and acquisitions activities, business interruptions, any unexpected expenses related to enterprise resource planning ("ERP"), risks related to compliance with debt covenants, 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
Contacts
srstuber@wgo.net
(952) 828-8461
Media:
sjefson@wgo.net
(641) 585-6803
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three Months Ended | ||||||||||||||||
Net revenues | $ | 960,737 | 100.0 | % | $ | 402,458 | 100.0 | % | ||||||||
Cost of goods sold | 791,125 | 82.3 | % | 370,434 | 92.0 | % | ||||||||||
Gross profit | 169,612 | 17.7 | % | 32,024 | 8.0 | % | ||||||||||
Selling, general, and administrative expenses | 63,586 | 6.6 | % | 33,271 | 8.3 | % | ||||||||||
Amortization | 3,590 | 0.4 | % | 6,926 | 1.7 | % | ||||||||||
Total operating expenses | 67,176 | 7.0 | % | 40,197 | 10.0 | % | ||||||||||
Operating income (loss) | 102,436 | 10.7 | % | (8,173 | ) | (2.0 | ) | % | ||||||||
Interest expense | 10,229 | 1.1 | % | 8,440 | 2.1 | % | ||||||||||
Non-operating income | (93 | ) | — | % | (74 | ) | — | % | ||||||||
Income (loss) before income taxes | 92,300 | 9.6 | % | (16,539 | ) | (4.1 | ) | % | ||||||||
Provision (benefit) for income taxes | 21,005 | 2.2 | % | (4,186 | ) | (1.0 | ) | % | ||||||||
Net income (loss) | $ | 71,295 | 7.4 | % | $ | (12,353 | ) | (3.1 | ) | % | ||||||
Earnings (loss) per common share | ||||||||||||||||
Basic | $ | 2.12 | $ | (0.37 | ) | |||||||||||
Diluted | $ | 2.05 | $ | (0.37 | ) | |||||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 33,552 | 33,625 | ||||||||||||||
Diluted | 34,772 | 33,625 | ||||||||||||||
Nine Months Ended | ||||||||||||||||
Net revenues | $ | 2,593,754 | 100.0 | % | $ | 1,617,726 | 100.0 | % | ||||||||
Cost of goods sold | 2,130,556 | 82.1 | % | 1,427,307 | 88.2 | % | ||||||||||
Gross profit | 463,198 | 17.9 | % | 190,419 | 11.8 | % | ||||||||||
Selling, general, and administrative expenses | 165,001 | 6.4 | % | 126,540 | 7.8 | % | ||||||||||
Amortization | 10,771 | 0.4 | % | 18,514 | 1.1 | % | ||||||||||
Total operating expenses | 175,772 | 6.8 | % | 145,054 | 9.0 | % | ||||||||||
Operating income | 287,426 | 11.1 | % | 45,365 | 2.8 | % | ||||||||||
Interest expense | 30,222 | 1.2 | % | 23,140 | 1.4 | % | ||||||||||
Non-operating income | (310 | ) | — | % | (460 | ) | — | % | ||||||||
Income before income taxes | 257,514 | 9.9 | % | 22,685 | 1.4 | % | ||||||||||
Provision for income taxes | 59,728 | 2.3 | % | 3,702 | 0.2 | % | ||||||||||
Net income | $ | 197,786 | 7.6 | % | $ | 18,983 | 1.2 | % | ||||||||
Earnings per common share | ||||||||||||||||
Basic | $ | 5.89 | $ | 0.57 | ||||||||||||
Diluted | $ | 5.83 | $ | 0.57 | ||||||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 33,565 | 33,102 | ||||||||||||||
Diluted | 33,943 | 33,289 |
Percentages may not add due to rounding differences.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 405,841 | $ | 292,575 | |||
Receivables, net | 228,199 | 220,798 | |||||
Inventories, net | 333,018 | 182,941 | |||||
Prepaid expenses and other assets | 21,559 | 17,296 | |||||
Total current assets | 988,617 | 713,610 | |||||
Property, plant, and equipment, net | 177,578 | 174,945 | |||||
348,058 | 348,058 | ||||||
Other intangible assets, net | 393,997 | 404,768 | |||||
Investment in life insurance | 28,381 | 27,838 | |||||
Operating lease assets | 27,318 | 29,463 | |||||
Other long-term assets | 15,821 | 15,018 | |||||
Total assets | $ | 1,979,770 | $ | 1,713,700 | |||
Liabilities and Shareholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 173,008 | $ | 132,490 | |||
Income taxes payable | — | 8,840 | |||||
Accrued expenses | 202,602 | 159,060 | |||||
Total current liabilities | 375,610 | 300,390 | |||||
Long-term debt, net | 524,450 | 512,630 | |||||
Deferred income taxes | 14,852 | 15,608 | |||||
Unrecognized tax benefits | 6,538 | 6,511 | |||||
Long-term operating lease liabilities | 25,391 | 27,048 | |||||
Deferred compensation benefits, net of current portion | 9,920 | 11,130 | |||||
Other long-term liabilities | 12,751 | 12,917 | |||||
Total liabilities | 969,512 | 886,234 | |||||
Shareholders' equity | 1,010,258 | 827,466 | |||||
Total liabilities and shareholders' equity | $ | 1,979,770 | $ | 1,713,700 |
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended | ||||||||||
(in thousands) | ||||||||||
Operating Activities | ||||||||||
Net income | $ | 197,786 | $ | 18,983 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||
Depreciation | 13,476 | 11,854 | ||||||||
Amortization | 10,771 | 18,514 | ||||||||
Non-cash interest expense, net | 10,372 | 7,440 | ||||||||
Amortization of debt issuance costs | 1,852 | 2,181 | ||||||||
Last in, first-out expense | 2,321 | 1,450 | ||||||||
Stock-based compensation | 11,719 | 3,332 | ||||||||
Deferred income taxes | (765 | ) | 365 | |||||||
Other, net | (4,412 | ) | 516 | |||||||
Change in operating assets and liabilities: | ||||||||||
Receivables, net | (7,384 | ) | 31,440 | |||||||
Inventories, net | (152,398 | ) | 91,938 | |||||||
Prepaid expenses and other assets | 1,010 | 159 | ||||||||
Accounts payable | 40,817 | (13,528 | ) | |||||||
Income taxes and unrecognized tax benefits | (12,771 | ) | (2,622 | ) | ||||||
Accrued expenses and other liabilities | 35,560 | (9,585 | ) | |||||||
Net cash provided by (used in) operating activities | 147,954 | 162,437 | ||||||||
Investing Activities | ||||||||||
Purchases of property, plant and equipment | (23,596 | ) | (28,582 | ) | ||||||
Acquisition of business, net of cash acquired | — | (260,965 | ) | |||||||
Proceeds from sale of property, plant and equipment | 12,450 | — | ||||||||
Other, net | (224 | ) | 141 | |||||||
Net cash provided by (used in) investing activities | (11,370 | ) | — | (289,406 | ) | |||||
Financing Activities | ||||||||||
Borrowings on long-term debt | 2,629,932 | 1,795,209 | ||||||||
Repayments on long-term debt | (2,629,932 | ) | (1,501,709 | ) | ||||||
Purchase of convertible bond hedge | — | (70,800 | ) | |||||||
Proceeds from issuance of warrants | — | 42,210 | ||||||||
Payments of cash dividends | (12,136 | ) | (10,881 | ) | ||||||
Payments for repurchases of common stock | (12,109 | ) | (1,789 | ) | ||||||
Payments of debt issuance costs | (224 | ) | (10,761 | ) | ||||||
Other, net | 1,151 | 539 | ||||||||
Net cash provided by (used in) financing activities | (23,318 | ) | 242,018 | |||||||
Net increase in cash and cash equivalents | 113,266 | 115,049 | ||||||||
Cash and cash equivalents at beginning of period | 292,575 | 37,431 | ||||||||
Cash and cash equivalents at end of period | $ | 405,841 | $ | 152,480 | ||||||
Supplement Disclosure: | ||||||||||
Income taxes paid, net | $ | 71,090 | $ | 6,240 | ||||||
Interest paid | 14,618 | 14,961 | ||||||||
Non-cash investing and financing activities: | ||||||||||
Issuance of |
$ | — | $ | 92,572 | ||||||
Capital expenditures in accounts payable | 121 | 255 | ||||||||
Dividends declared not yet paid | 4,273 | 126 |
Supplemental Information by Reportable Segment (Unaudited) - Towable
(in thousands, except unit data)
Three Months Ended | ||||||||||||||||||||||
% of Revenues | % of Revenues | $ Change | % Change | |||||||||||||||||||
Net revenues | $ | 555,749 | $ | 188,898 | $ | 366,851 | 194.2 | % | ||||||||||||||
Adjusted EBITDA | 80,130 | 14.4 | % | 16,451 | 8.7 | % | 63,679 | 387.1 | % | |||||||||||||
Three Months Ended | ||||||||||||||||||||||
Unit deliveries | Product Mix(1) | Product Mix(1) | Unit Change | % Change | ||||||||||||||||||
Travel trailer | 11,089 | 66.4 | % | 3,537 | 60.3 | % | 7,552 | 213.5 | % | |||||||||||||
Fifth wheel | 5,620 | 33.6 | % | 2,324 | 39.7 | % | 3,296 | 141.8 | % | |||||||||||||
Total towables | 16,709 | 100.0 | % | 5,861 | 100.0 | % | 10,848 | 185.1 | % | |||||||||||||
Nine Months Ended | ||||||||||||||||||||||
% of Revenues | % of Revenues | $ Change | % Change | |||||||||||||||||||
Net revenues | $ | 1,449,934 | $ | 813,611 | $ | 636,323 | 78.2 | % | ||||||||||||||
Adjusted EBITDA | 205,639 | 14.2 | % | 86,982 | 10.7 | % | 118,657 | 136.4 | % | |||||||||||||
Nine Months Ended | ||||||||||||||||||||||
Unit deliveries | Product Mix(1) | Product Mix(1) | Unit Change | % Change | ||||||||||||||||||
Travel trailer | 29,125 | 65.6 | % | 15,319 | 60.8 | % | 13,806 | 90.1 | % | |||||||||||||
Fifth wheel | 15,306 | 34.4 | % | 9,874 | 39.2 | % | 5,432 | 55.0 | % | |||||||||||||
Total towables | 44,431 | 100.0 | % | 25,193 | 100.0 | % | 19,238 | 76.4 | % | |||||||||||||
(in thousands, except units) | Change | % Change | ||||||||||||||||||||
Backlog(2) | ||||||||||||||||||||||
Units | 46,646 | 13,235 | 33,411 | 252.4 | % | |||||||||||||||||
Dollars | $ | 1,522,069 | $ | 417,176 | $ | 1,104,893 | 264.9 | % | ||||||||||||||
Dealer Inventory | ||||||||||||||||||||||
Units | 11,647 | 15,562 | (3,915 | ) | (25.2 | ) | % |
(1) Percentages may not add due to rounding differences.
(2) Backlog includes all accepted orders from dealers to be shipped generally within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
Supplemental Information by Reportable Segment (Unaudited) - Motorhome
(in thousands, except unit data)
Three Months Ended | ||||||||||||||||||||||||
% of Revenues | % of Revenues | $ Change | % Change | |||||||||||||||||||||
Net revenues | $ | 385,257 | $ | 203,590 | $ | 181,667 | 89.2 | % | ||||||||||||||||
Adjusted EBITDA | 37,467 | 9.7 | % | (10,789 | ) | (5.3 | ) | % | 48,256 | 447.3 | % | |||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Unit deliveries | Product Mix(1) | Product Mix(1) | Unit Change | % Change | ||||||||||||||||||||
Class A | 745 | 27.3 | % | 428 | 27.4 | % | 317 | 74.1 | % | |||||||||||||||
Class B | 1,384 | 50.8 | % | 694 | 44.4 | % | 690 | 99.4 | % | |||||||||||||||
Class C | 598 | 21.9 | % | 440 | 28.2 | % | 158 | 35.9 | % | |||||||||||||||
Total motorhomes | 2,727 | 100.0 | % | 1,562 | 100.0 | % | 1,165 | 74.6 | % | |||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||
% of Revenues | % of Revenues | $ Change | % Change | |||||||||||||||||||||
Net revenues | $ | 1,090,221 | $ | 755,023 | $ | 335,198 | 44.4 | % | ||||||||||||||||
Adjusted EBITDA | 118,779 | 10.9 | % | 13,488 | 1.8 | % | 105,291 | 780.6 | % | |||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||
Unit deliveries | Product Mix(1) | Product Mix(1) | Unit Change | % Change | ||||||||||||||||||||
Class A | 2,047 | 25.8 | % | 1,803 | 31.0 | % | 244 | 13.5 | % | |||||||||||||||
Class B | 3,901 | 49.1 | % | 2,287 | 39.3 | % | 1,614 | 70.6 | % | |||||||||||||||
Class C | 1,994 | 25.1 | % | 1,734 | 29.7 | % | 260 | 15.0 | % | |||||||||||||||
Total motorhomes | 7,942 | 100.0 | % | 5,824 | 100.0 | % | 2,118 | 36.4 | % | |||||||||||||||
(in thousands, except units) | Change | % Change | ||||||||||||||||||||||
Backlog(2) | ||||||||||||||||||||||||
Units | 18,145 | 4,131 | 14,014 | 339.2 | % | |||||||||||||||||||
Dollars | $ | 2,180,149 | $ | 515,035 | $ | 1,665,114 | 323.3 | % | ||||||||||||||||
Dealer Inventory | ||||||||||||||||||||||||
Units | 2,429 | 5,013 | (2,584 | ) | (51.5 | ) | % |
(1) Percentages may not add due to rounding differences.
(2) Backlog includes all accepted orders from dealers to be shipped generally within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
Non-GAAP Reconciliation (Unaudited)
(in thousands, except per share data)
Non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in
The following table reconciles diluted earnings per share to Adjusted diluted earnings per share:
Three Months Ended | Nine Months Ended | ||||||||||||||||||
Diluted earnings (loss) per share | $ | 2.05 | $ | (0.37 | ) | $ | 5.83 | $ | 0.57 | ||||||||||
Acquisition-related costs(1,2) | — | (0.01 | ) | — | 0.29 | ||||||||||||||
Acquisition-related fair-value inventory step-up(2) | — | — | — | 0.14 | |||||||||||||||
Non-cash interest expense(2,3) | 0.10 | 0.10 | 0.31 | 0.22 | |||||||||||||||
Restructuring expenses(2) | — | 0.04 | — | 0.04 | |||||||||||||||
Gain on sale of property, plant and equipment(2) | (0.03 | ) | — | (0.14 | ) | — | |||||||||||||
Impact of convertible share dilution(4) | 0.05 | — | 0.01 | — | |||||||||||||||
Tax impact of adjustments(5) | (0.01 | ) | (0.03 | ) | (0.04 | ) | (0.15 | ) | |||||||||||
Adjusted diluted earnings (loss) per share(6) | $ | 2.16 | $ | (0.26 | ) | $ | 5.97 | $ | 1.12 |
(1) Represents transaction-closing costs.
(2) Represents a pretax adjustment.
(3) Non-cash interest expense associated with the convertible notes issued as part of our acquisition of
(4) Represents the dilution of convertible notes which is economically offset by a call/spread overlay that was put in place upon issuance.
(5) Income tax charge calculated using the statutory tax rate for the
(6) Per share numbers may not foot due to rounding.
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA.
Three Months Ended | Nine Months Ended | ||||||||||||||||||
Net income (loss) | $ | 71,295 | $ | (12,353 | ) | $ | 197,786 | $ | 18,983 | ||||||||||
Interest expense | 10,229 | 8,440 | 30,222 | 23,140 | |||||||||||||||
Provision (benefit) for income taxes | 21,005 | (4,186 | ) | 59,728 | 3,702 | ||||||||||||||
Depreciation | 4,917 | 4,134 | 13,476 | 11,854 | |||||||||||||||
Amortization | 3,590 | 6,926 | 10,771 | 18,514 | |||||||||||||||
EBITDA | 111,036 | 2,961 | 311,983 | 76,193 | |||||||||||||||
Acquisition-related fair-value inventory step-up | — | — | — | 4,810 | |||||||||||||||
Acquisition-related costs | — | (189 | ) | — | 9,761 | ||||||||||||||
Restructuring expenses | 19 | 1,376 | 112 | 1,247 | |||||||||||||||
Gain on sale of property, plant and equipment | (1,188 | ) | — | (4,753 | ) | — | |||||||||||||
Non-operating income | (93 | ) | (74 | ) | (310 | ) | (460 | ) | |||||||||||
Adjusted EBITDA | $ | 109,774 | $ | 4,074 | $ | 307,032 | $ | 91,551 |
Non-GAAP performance measures of Adjusted diluted earnings per share, EBITDA and Adjusted EBITDA have been provided as comparable measures to illustrate the effect of non-recurring transactions occurring during the reported periods and to improve comparability of our results from period to period. Adjusted diluted earnings per share is defined as diluted earnings per share adjusted for after-tax items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision (benefit) for income taxes, depreciation and amortization expense and other pretax adjustments made in order to present comparable results from period to period. Management believes Adjusted diluted earnings per share and Adjusted EBITDA provide meaningful supplemental information about our operating performance because these measures exclude amounts that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted diluted earnings per share include acquisition-related costs, acquisition-related fair-value inventory step-up, non-cash interest expense, restructuring expenses, gain on sale of property, plant and equipment, impact of convertible share dilution and the tax impact of the adjustments. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, gain or loss on the sale of property, plant and equipment and non-operating income.
Management uses these non-GAAP financial measures (a) to evaluate historical and prospective financial performance and trends as well as assess performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our Board of Directors to enable our Board of Directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for the Company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with restricted activities under the terms of our asset-based revolving ("ABL") credit facility and outstanding notes. Management believes these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry.
Source: Winnebago Industries, Inc.