Winnebago Industries Reports Results for Third Quarter Fiscal 2011
FOREST CITY, Iowa, Jun 16, 2011 (BUSINESS WIRE) --
Winnebago Industries, Inc. (NYSE:WGO), one of the leading United States (U.S.) recreation vehicle manufacturers, today reported results for the Company's third quarter and first nine months of Fiscal 2011.
Consolidated revenues for the third quarter of Fiscal 2011 ended May 28, 2011 were $135.6 million, an increase of 0.6% percent, versus $134.8 million for the third quarter of Fiscal 2010. Included within consolidated revenues were $7.2 million associated with towable products. The Company reported an operating profit of $0.5 million for the quarter, versus an operating profit of $3.4 million for the third quarter of Fiscal 2010. Net income for the third quarter of Fiscal 2011 was $1.2 million versus net income of $6.0 million for the third quarter of Fiscal 2010. On a diluted per share basis, the Company had net income of $0.04 for the third quarter of Fiscal 2011 versus net income of $0.21 for the third quarter of Fiscal 2010. The net income for the third quarter of Fiscal 2010 reflected the positive effect of $.08 per diluted share in tax benefits associated with resolution of tax audits and various tax planning initiatives.
The third quarter of Fiscal 2011 as compared to the third quarter of Fiscal 2010 was negatively impacted by last-in, first-out (LIFO) inventory expense as opposed to LIFO income in the prior year, commodity inflation, an impairment charge on an asset held for sale, as well as increased discounts, repurchase exposure and legal costs. These negative items were partially offset by a tax benefit recorded in the third quarter of Fiscal 2011, primarily due to a favorable adjustment as a result of a lower annual effective tax rate.
Consolidated revenues for the first nine months of Fiscal 2011 were $365.9 million, an increase of 12.1 percent, compared to $326.4 million for the first nine months of Fiscal 2010. Included within consolidated revenues were $9.0 million associated with towable products. The Company reported an operating profit of $9.5 million for the first nine months of Fiscal 2011, compared to an operating loss of $4.4 million for the first nine months of Fiscal 2010. The net income for the first nine months of Fiscal 2011 was $8.3 million, or $0.28 per diluted share, versus a net income of $5.4 million, or $0.18 per diluted share, for the first nine months of Fiscal 2010. A tax benefit of $.33 per diluted share was recorded in the first nine months of Fiscal 2010, which primarily related to tax benefits associated with the carryback of Fiscal 2009 net operating losses permitted by tax law changes and tax benefits associated with various tax planning initiatives and tax settlements.
"The retail market for motor homes softened during our third Fiscal quarter, adding to our disappointment with the level of industry retail sales thus far in Calendar 2011 compared with the prior year," said Winnebago Industries' Chairman and CEO Bob Olson. "While discouraging, it is understandable in the context of new job creation slowing in America, along with reports of falling home prices, declining auto sales, weaker consumer spending, the concern over rising fuel prices and the impact these issues are currently having on the stock market. We remain concerned the current recovery appears to be slowing."
According to Winnebago Industries' President Randy Potts, "We have started to produce our 2012 motor home lineup and we are introducing these new and exciting products to our dealers throughout our fourth quarter. In addition, the Winnebago Industries Towables subsidiary continues to make progress with new and redesigned SunnyBrook brand products to be introduced throughout the summer. We also expect to debut Winnebago brand towable products in the coming months."
Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, June 16, 2011. 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., The Most Recognized Name In Motor Homes(R), is a leading U.S. manufacturer of recreation vehicles, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes, travel trailers and fifth wheel products under the Winnebago, Itasca, ERA and SunnyBrook brand names. Winnebago Industries has received the Quality Circle Award from the Recreation Vehicle Dealers Association every year since the award's inception in 1996. 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 news 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, integration of operations relating to mergers and acquisitions activities 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 Securities and Exchange Commission (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.
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Winnebago Industries, Inc. |
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Unaudited Consolidated Statements of Operations |
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(In thousands, except percent and per share data) |
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Quarter Ended |
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| May 28, 2011 | May 29, 2010 | |||||||||||||
| Net revenues | $ | 135,568 | 100.0 | % | $ | 134,813 | 100.0 | % | ||||||
| Cost of goods sold | 126,865 | 93.6 | % | 125,058 | 92.8 | % | ||||||||
| Gross profit | 8,703 | 6.4 | % | 9,755 | 7.2 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling | 3,608 | 2.7 | % | 3,107 | 2.3 | % | ||||||||
| General and administrative | 3,952 | 2.9 | % | 3,244 | 2.4 | % | ||||||||
| Assets held for sale impairment | 605 | 0.4 | % | -- | -- | % | ||||||||
| Total operating expenses | 8,165 | 6.0 | % | 6,351 | 4.7 | % | ||||||||
| Operating income | 538 | 0.4 | % | 3,404 | 2.5 | % | ||||||||
| Non-operating income | 76 | 0.1 | % | 158 | 0.1 | % | ||||||||
| Income before taxes | 614 | 0.5 | % | 3,562 | 2.6 | % | ||||||||
| Benefit for taxes | (581 | ) | (0.4 | )% | (2,430 | ) | (1.8 | )% | ||||||
| Net income | $ | 1,195 | 0.9 | % | $ | 5,992 | 4.4 | % | ||||||
| Income per common share: | ||||||||||||||
| Basic | $ | 0.04 | $ | 0.21 | ||||||||||
| Diluted | $ | 0.04 | $ | 0.21 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 29,124 | 29,098 | ||||||||||||
| Diluted | 29,152 | 29,107 | ||||||||||||
| Nine Months Ended | ||||||||||||||
| May 28, 2011 | May 29, 2010 | |||||||||||||
| Net revenues | $ | 365,872 | 100.0 | % | $ | 326,359 | 100.0 | % | ||||||
| Cost of goods sold | 334,646 | 91.5 | % | 311,296 | 95.4 | % | ||||||||
| Gross profit | 31,226 | 8.5 | % | 15,063 | 4.6 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling | 10,129 | 2.8 | % | 9,438 | 2.9 | % | ||||||||
| General and administrative | 11,623 | 3.2 | % | 10,056 | 3.1 | % | ||||||||
| Assets held for sale impairment and gain | (39 | ) | -- | % | -- | -- | % | |||||||
| Total operating expenses | 21,713 | 5.9 | % | 19,494 | 6.0 | % | ||||||||
| Operating income (loss) | 9,513 | 2.6 | % | (4,431 | ) | (1.4 | )% | |||||||
| Non-operating income | 550 | 0.2 | % | 289 | 0.1 | % | ||||||||
| Income (loss) before income taxes | 10,063 | 2.8 | % | (4,142 | ) | (1.3 | )% | |||||||
| Provision (benefit) for taxes | 1,767 | 0.5 | % | (9,496 | ) | (2.9 | )% | |||||||
| Net income | $ | 8,296 | 2.3 | % | $ | 5,354 | 1.6 | % | ||||||
| Income per common share: | ||||||||||||||
| Basic | $ | 0.28 | $ | 0.18 | ||||||||||
| Diluted | $ | 0.28 | $ | 0.18 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Weighted average common shares outstanding: | 29,118 | 29,084 | ||||||||||||
| Diluted | 29,135 | 29,097 | ||||||||||||
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Winnebago Industries, Inc. |
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Unaudited Consolidated Balance Sheets |
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(In thousands) |
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May 28, |
August 28, |
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| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 65,230 | $ | 74,691 | |||
| Short-term investments | 250 | -- | |||||
| Receivables, net | 17,408 | 18,798 | |||||
| Inventories | 76,346 | 43,526 | |||||
| Prepaid expenses and other assets | 4,298 | 4,570 | |||||
| Income taxes receivable | 380 | 132 | |||||
| Total current assets | 163,912 | 141,717 | |||||
| Total property and equipment, net | 23,365 | 25,677 | |||||
| Assets held for sale | 600 | 4,254 | |||||
| Long-term investments | 10,911 | 17,785 | |||||
| Investment in life insurance | 23,249 | 23,250 | |||||
| Goodwill | 1,228 | -- | |||||
| Amortizable intangible assets | 739 | -- | |||||
| Other assets | 17,009 | 14,674 | |||||
| Total assets | $ | 241,013 | $ | 227,357 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 22,563 | $ | 19,725 | |||
| Income taxes payable | 66 | 99 | |||||
| Accrued expenses | 31,844 | 30,548 | |||||
| Total current liabilities | 54,473 | 50,372 | |||||
| Long-term liabilities: | |||||||
| Unrecognized tax benefits | 5,511 | 5,877 | |||||
| Postretirement health care and deferred compensation benefits, net of current portion | 75,937 | 73,581 | |||||
| Total long-term liabilities | 81,448 | 79,458 | |||||
| Stockholders' equity: | 105,092 | 97,527 | |||||
| Total liabilities and stockholders equity | $ | 241,013 | $ | 227,357 | |||
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Winnebago Industries, Inc. |
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Unaudited Consolidated Statements of Cash Flows |
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(In thousands) |
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| Nine Months Ended | ||||||||
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May 28, |
May 29, |
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| Operating activities: | ||||||||
| Net income | $ | 8,296 | $ | 5,354 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 4,193 | 4,850 | ||||||
| LIFO expense (income) | 1,193 | (34 | ) | |||||
| Asset impairment | 605 | -- | ||||||
| Stock-based compensation | 1,001 | 414 | ||||||
| Deferred income taxes including valuation allowance | 874 | -- | ||||||
| Postretirement benefit income and deferred compensation expense | 1,034 | 927 | ||||||
| Provision (reduction) for doubtful accounts | 5 | (65 | ) | |||||
| Increase in cash surrender value of life insurance policies | (617 | ) | (962 | ) | ||||
| (Gain) loss on the sale or disposal of property | (867 | ) | 14 | |||||
| Gain on life insurance | (372 | ) | -- | |||||
| Other | 90 | 58 | ||||||
| Change in assets and liabilities: | ||||||||
| Inventories | (30,091 | ) | 7,750 | |||||
| Receivables and prepaid assets | 2,609 | 843 | ||||||
| Income taxes and unrecognized tax benefits | (747 | ) | 13,736 | |||||
| Accounts payable and accrued expenses | 1,523 | 6,605 | ||||||
| Postretirement and deferred compensation benefits | (2,792 | ) | (2,679 | ) | ||||
| Net cash (used in) provided by operating activities | (14,063 | ) | 36,811 | |||||
| Investing activities: | ||||||||
| Proceeds from the sale of investments at par | 6,450 | 12,900 | ||||||
| Proceeds from life insurance | 659 | -- | ||||||
| Purchases of property and equipment | (1,590 | ) | (1,467 | ) | ||||
| Proceeds from the sale of property | 4,009 | 58 | ||||||
| Cash paid for acquisition, net of cash acquired | (4,694 | ) | -- | |||||
| Other | (410 | ) | 127 | |||||
| Net cash provided by investing activities | 4,424 | 11,618 | ||||||
| Investing activities: | ||||||||
| Payments for purchases of common stock | (89 | ) | (249 | ) | ||||
| Payments on ARS portfolio | -- | (8,490 | ) | |||||
| Proceeds from issuance of stock options | 83 | 280 | ||||||
| Other | 184 | (240 | ) | |||||
| Net cash provided by (used in) financing activities | 178 | (8,699 | ) | |||||
| Net (decrease) increase in cash and cash equivalents | (9,461 | ) | 39,730 | |||||
| Cash and cash equivalents at beginning of period | 74,691 | 36,566 | ||||||
| Cash and cash equivalents at end of period | $ | 65,230 | $ | 76,296 | ||||
| Supplemental cash flow disclosure: | ||||||||
| Income taxes paid (refunded) | $ | 1,638 | $ | (23,390 | ) | |||
| Winnebago Industries, Inc. | ||||||||||||||||||
| Unaudited Deliveries | ||||||||||||||||||
| Quarter Ended | Change | |||||||||||||||||
| (In units) |
May 28, |
Product |
May 29, |
Product Mix % |
Units |
% Change |
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| Class A gas | 425 | 33.1 | % | 417 | 30.5 | % | 8 | 1.9 | % | |||||||||
| Class A diesel | 204 | 15.9 | % | 273 | 20.0 | % | (69 | ) | (25.3 | )% | ||||||||
| Total Class A | 629 | 49.0 | % | 690 | 50.5 | % | (61 | ) | (8.8 | )% | ||||||||
| Class B | 1 | 0.1 | % | 76 | 5.6 | % | (75 | ) | (98.7 | )% | ||||||||
| Class C | 653 | 50.9 | % | 600 | 43.9 | % | 53 | 8.8 | % | |||||||||
| Total motor homes | 1,283 | 100.0 | % | 1,366 | 100.0 | % | (83 | ) | (6.1 | )% | ||||||||
| Fifth wheel | 94 | 28.8 | % | |||||||||||||||
| Travel trailer | 232 | 71.2 | % | |||||||||||||||
| Total towables | 326 | 100.0 | % | |||||||||||||||
| Nine Months Ended | Change | |||||||||||||||||
| (In units) |
May 28, |
Product |
May 29, |
Product Mix % |
Units |
% Change |
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| Class A gas | 1,145 | 34.6 | % | 1,030 | 31.5 | % | 115 | 11.2 | % | |||||||||
| Class A diesel | 692 | 20.9 | % | 707 | 21.6 | % | (15 | ) | (2.1 | )% | ||||||||
| Total Class A | 1,837 | 55.5 | % | 1,737 | 53.1 | % | 100 | 5.8 | % | |||||||||
| Class B | 2 | 0.1 | % | 202 | 6.2 | % | (200 | ) | (99.0 | )% | ||||||||
| Class C | 1,468 | 44.4 | % | 1,330 | 40.7 | % | 138 | 10.4 | % | |||||||||
| Total motor homes | 3,307 | 100.0 | % | 3,269 | 100.0 | % | 38 | 1.2 | % | |||||||||
| Fifth wheel | 115 | 28.0 | % | |||||||||||||||
| Travel trailer | 296 | 72.0 | % | |||||||||||||||
| Total towables | 411 | 100.0 | % | |||||||||||||||
| Winnebago Industries, Inc. | |||||||||||||||||||||
| Unaudited Backlog | |||||||||||||||||||||
| As Of | |||||||||||||||||||||
| May 28, 2011 | May 29, 2010 | (Decrease) | |||||||||||||||||||
| Units | % (1) | Units | % (1) | Increase | |||||||||||||||||
| Class A gas | 187 | 29.1 | % | 323 | 34.5 | % | (136 | ) | (42.1 | )% | |||||||||||
| Class A diesel | 113 | 17.6 | % | 234 | 25.0 | % | (121 | ) | (51.7 | )% | |||||||||||
| Total Class A | 300 | 46.7 | % | 557 | 59.6 | % | (257 | ) | (46.1 | )% | |||||||||||
| Class B | 130 | 20.2 | % | 34 | 3.6 | % | 96 | 282.4 | % | ||||||||||||
| Class C | 212 | 33.0 | % | 344 | 36.8 | % | (132 | ) | (38.4 | )% | |||||||||||
| Total motor home backlog (2) | 642 | 100.0 | % | 935 | 100.0 | % | (293 | ) | (31.3 | )% | |||||||||||
| Fifth wheel | 46 | 28.0 | % | ||||||||||||||||||
| Travel trailer | 118 | 72.0 | % | ||||||||||||||||||
| Total towable backlog (2) | 164 | 100.0 | % | ||||||||||||||||||
| Total approximate backlog revenue (in 000's): | |||||||||||||||||||||
| Motor home | $ | 61,924 | $ | 93,214 | $ | (31,290 | ) | (33.6 | )% | ||||||||||||
| Towable | $ | 3,532 | -- | ||||||||||||||||||
| (1) Percentages may not add due to rounding differences. |
| (2) We include in our backlog all accepted purchase orders from dealers to be shipped within the next six months. Orders in backlog can be canceled 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. |
| Winnebago Industries, Inc. | |||||||||||
| Unaudited Dealer Inventory | |||||||||||
| As Of | |||||||||||
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5/28/2011 |
5/29/2010 |
(Decrease) |
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| Motor home | 2,068 | 2,000 | 68 | 3.4 | % | ||||||
| Towable | 1,028 | -- | |||||||||
SOURCE: Winnebago Industries, Inc.
Winnebago Industries, Inc.
Sheila Davis, 641-585-6803
PR/IR Mgr.
sdavis@winnebagoind.com