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Q4 2011 Earnings Release


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported)  October 13, 2011
 

 
 
 
Winnebago Industries, Inc.
(Exact Name of Registrant as Specified in its Charter)

Iowa
001-06403
42-0802678
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
 
 
P.O. Box 152, Forest City, Iowa
 
50436
(Address of Principal Executive Offices)
 
(Zip Code)
 
Registrant's telephone number, including area code   641-585-3535
 
______________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report.)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o         Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02 Results of Operations and Financial Condition.
 
Winnebago Industries, Inc. is filing herewith a press release issued on October 13, 2011, as Exhibit 99.1 which is included herein. The press release was issued to report earnings for the fourth quarter and Fiscal 2011 ended August 27, 2011.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits

Exhibit
Number    Description
99.1        Press release of Winnebago Industries, Inc. dated October 13, 2011.





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
WINNEBAGO INDUSTRIES, INC.
 
 
 
(Registrant)
 
 
 
 
 
 
Date:
October 13, 2011
By:
/s/ Randy J. Potts
 
 
 
Name:
Randy J. Potts
 
 
 
Title:
Chief Executive Officer and President
 




EXHIBIT INDEX
 
 
Exhibit
Number
Description
 
 
 
 
99.1

 
 
Press release of Winnebago Industries, Inc. dated October 13, 2011.
 
 



Q4 2011 Earnings


Contact: Sheila Davis - PR/IR Mgr. - 641-585-6803 - sdavis@winnebagoind.com

WINNEBAGO INDUSTRIES REPORTS RESULTS FOR
FOURTH QUARTER AND FISCAL 2011
-- Revenues and Earnings Growth in Fiscal 2011 --


FOREST CITY, IOWA, October 13, 2011 - Winnebago Industries, Inc. (NYSE:WGO), a leading United States (U.S.) recreation vehicle manufacturer, today reported financial results for the Company's fourth quarter and fiscal year 2011.

Revenues for the fourth quarter ended August 27, 2011 were $130.5 million, an increase of 6.0%, versus $123.1 million for the fourth quarter of Fiscal 2010. Included within consolidated revenues was $7.8 million associated with towable products. The Company reported an operating profit of $1.8 million for the quarter, versus $5.0 million for the fourth quarter of Fiscal 2010. Net income for the fourth quarter was $3.5 million versus $4.9 million for the fourth quarter of Fiscal 2010. On a diluted per share basis, the Company had net income of $0.12 for the fourth quarter of Fiscal 2011 versus $0.17 for the fourth quarter of Fiscal 2010.

The fourth quarter of Fiscal 2011 as compared to the fourth quarter of Fiscal 2010 was negatively impacted by last-in, first-out (LIFO) inventory expense as opposed to LIFO income in the prior year period and commodity inflation. These negative items were partially offset by a tax benefit recorded in the fourth quarter of Fiscal 2011, primarily due to the taxable earnings achieved in Fiscal 2011 which increased the likelihood of realizing a portion of gross deferred tax assets in the future.

Revenues for Fiscal 2011 were $496.4 million, an increase of 10.4%, versus revenues of $449.5 million for Fiscal 2010. Included within consolidated revenues was $16.7 million associated with towable products. The Company reported operating income of $11.3 million for Fiscal 2011, versus $0.5 million for Fiscal 2010. Net income for Fiscal 2011 was $11.8 million, or $0.41 per diluted share, versus $10.2 million, or $0.35 per diluted share for Fiscal 2010. Contributing to net income in Fiscal 2010 was $9.5 million of tax benefits recorded primarily related to $5.8 million of tax benefit 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.

“Results for the fourth quarter followed the same pattern as the third, showing the impact from an economy that had slowed in the second half of our fiscal year,” said Winnebago Industries' CEO and President Randy Potts. "While we experienced improved market conditions in the first half of Fiscal 2011, we were disappointed to see the negative effects caused by falling consumer confidence throughout the remainder of the year. The trend of rising average selling prices for our vehicles, however, was positive for us and we were pleased to complete the year with growth in revenues, operating income and net income year over year."

Revenues in Fiscal 2011 included towable products as a result of the acquisition of SunnyBrook Manufacturing. However, the new subsidiary was not yet profitable during the first eight months of ownership. "Fiscal 2011 was a year of investment in the Towables subsidiary," said Potts. "As anticipated, we incurred operational losses in Towables during the year in part related to the integration of systems, expansion of the distribution network, the updating of existing SunnyBrook product and the development of a new Winnebago branded towable product line. We are very excited about the future growth potential this new market holds for us."
 
"During the fourth quarter, we launched 2012 model year products and our dealers have expressed excitement about the new products, particularly the new Winnebago Tour and Itasca Ellipse 42QD floorplan, which was the hit of the recent September 2011 Pennsylvania RV and Camping Show in Hershey, PA," said Potts. "We participated for the first time in a dealer open house event in Elkhart, Indiana during September. This was also the first time we displayed our motorized and towable products together in one display and we were were pleased with the response from our dealers to our new 2012 model year products. It was a great opportunity for them to touch and feel these new products, many of which they were seeing for the first time, particularly the newly introduced Winnebago brand towables."

Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, October 13, 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®, 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 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, 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.
# # #




Winnebago Industries, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except percent and per share data)

 
Quarter Ended
 
August 27, 2011
 
August 28, 2010
Net revenues
$
130,546

 
100.0
 %
 
$
123,125

 
100.0
 %
Cost of goods sold
122,018

 
93.5
 %
 
111,921

 
90.9
 %
Gross profit
8,528

 
6.5
 %
 
11,204

 
9.1
 %
Operating expenses:
 
 
 
 
 
 
 
Selling
4,122

 
3.2
 %
 
3,286

 
2.7
 %
General and administrative
2,640

 
2.0
 %
 
2,967

 
2.4
 %
Total operating expenses
6,762

 
5.2
 %
 
6,253

 
5.1
 %
Operating income
1,766

 
1.4
 %
 
4,951

 
4.0
 %
Non-operating income (expense)
108

 
0.1
 %
 
(67
)
 
(0.1
)%
Income before income taxes
1,874

 
1.4
 %
 
4,884

 
4.0
 %
Benefit for taxes
(1,673
)
 
(1.3
)%
 
(9
)
 
—
 %
Net income
$
3,547

 
2.7
 %
 
$
4,893

 
4.0
 %
Income per common share:
 
 
 
 
 
 
 
Basic
$
0.12

 
 
 
$
0.17

 
 
Diluted
$
0.12

 
 
 
$
0.17

 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,130

 
 
 
29,112

 
 
Diluted
29,199

 
 
 
29,115

 
 


 
Year Ended
 
August 27, 2011
 
August 28, 2010
Net revenues
$
496,418

 
100.0
 %
 
$
449,484

 
100.0
 %
Cost of goods sold
456,664

 
92.0
 %
 
423,217

 
94.2
 %
Gross profit
39,754

 
8.0
 %
 
26,267

 
5.8
 %
Operating expenses:
 
 
 
 
 
 
 
Selling
14,251

 
2.9
 %
 
12,724

 
2.8
 %
General and administrative
14,263

 
2.9
 %
 
13,023

 
2.9
 %
Assets held for sale impairment and gain, (net)
(39
)
 
—
 %
 
—

 
—
 %
Total operating expenses
28,475

 
5.7
 %
 
25,747

 
5.7
 %
Operating income
11,279

 
2.3
 %
 
520

 
0.1
 %
Non-operating income
658

 
0.1
 %
 
222

 
—
 %
Income before income taxes
11,937

 
2.4
 %
 
742

 
0.2
 %
 Provision (benefit) for taxes
94

 
—
 %
 
(9,505
)
 
(2.1
)%
Net income
$
11,843

 
2.4
 %
 
$
10,247

 
2.3
 %
Income per common share:
 
 
 
 
 
 
 
Basic
$
0.41

 
 
 
$
0.35

 
 
Diluted
$
0.41

 
 
 
$
0.35

 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,121

 
 
 
29,091

 
 
Diluted
29,148

 
 
 
29,101

 
 
Percentages may not add due to rounding differences.





Winnebago Industries, Inc.
Unaudited Consolidated Balance Sheets
(In thousands)

 
August 27,
2011
 
August 28,
2010
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
69,307

 
$
74,691

Receivables, net
19,981

 
18,798

Inventories
69,165

 
43,526

Prepaid expenses and other assets
4,227

 
4,570

Income taxes receivable
1,525

 
132

Deferred income taxes
649

 
—

Total current assets
164,854

 
141,717

Total property and equipment, net
22,589

 
25,677

Assets held for sale
600

 
4,254

Long-term investments
10,627

 
17,785

Investment in life insurance
23,669

 
23,250

Goodwill
1,228

 
—

Amortizable intangible assets
720

 
—

Other assets
15,640

 
14,674

Total assets
$
239,927

 
$
227,357

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
21,610

 
$
19,725

Income taxes payable
104

 
99

Accrued expenses
29,604

 
30,548

Total current liabilities
51,318

 
50,372

Long-term liabilities:
 
 
 
Unrecognized tax benefits
5,387

 
5,877

Postretirement health care and deferred compensation benefits, net of current portion
74,492

 
73,581

Total long-term liabilities
79,879

 
79,458

Stockholders' equity
108,730

 
97,527

Total liabilities and stockholders' equity
$
239,927

 
$
227,357





Winnebago Industries, Inc.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 
Year Ended
 
August 27,
2011
August 28,
2010
Operating activities:
 
 
Net income
$
11,843

$
10,247

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
5,492

6,340

LIFO expense (income)
2,075

(783
)
Postretirement benefit income and deferred compensation expenses
1,378

1,275

Stock-based compensation
1,315

546

Asset impairment
605

—

    Provision (reduction) for doubtful accounts
11

(37
)
Deferred income taxes including valuation allowance
517

—

Gain on life insurance
(372
)
—

    Increase in cash surrender value of life insurance policies
(969
)
(1,090
)
    (Gain) loss on disposal of property
(994
)
25

Other
90

111

Change in assets and liabilities:
 
 
Inventories
(23,792
)
4,107

Receivables and prepaid assets
101

(8,550
)
     Income taxes and unrecognized tax benefits
(2,127
)
14,692

Accounts payable and accrued expenses
(1,551
)
9,756

Postretirement and deferred compensation benefits
(3,741
)
(3,600
)
Net cash (used in) provided by operating activities
(10,119
)
33,039

 
 
 
Investing activities:
 
 
Proceeds from the sale of investments, at par
7,150

15,850

Proceeds from life insurance
659

—

Purchases of property and equipment
(2,109
)
(1,874
)
Proceeds from the sale of property
4,143

96

Cash paid for acquisition, net of cash acquired
(4,694
)
—

Other
(914
)
262

Net cash provided by investing activities
4,235

14,334

 
 
 
Financing activities:
 
 
Payments for purchase of common stock
(89
)
(250
)
Payments on ARS portfolio
—

(9,100
)
Proceeds from exercise of stock options
83

280

    Other
506

(178
)
Net cash provided by (used in) financing activities
500

(9,248
)
 
 
 
Net (decrease) increase in cash and cash equivalents
(5,384
)
38,125

Cash and cash equivalents at beginning of period
74,691

36,566

Cash and cash equivalents at end of period
$
69,307

$
74,691

 
 
 
Supplemental cash flow disclosure:
 
 
Income taxes paid (refunded)
$
1,703

$
(24,356
)





Winnebago Industries, Inc.
Unaudited Deliveries

 
Quarter Ended
 
Change
(In units)
August 27,
2011
Product
Mix %
 
August 28,
2010
Product
Mix %
 
Units
%
Change
Class A gas
373

34.3
%
 
453

38.9
%
 
(80
)
(17.7
)%
Class A diesel
226

20.8
%
 
262

22.5
%
 
(36
)
(13.7
)%
Total Class A
599

55.1
%
 
715

61.4
%
 
(116
)
(16.2
)%
Class B
101

9.3
%
 
34

2.9
%
 
67

197.1
 %
Class C
388

35.7
%
 
415

35.7
%
 
(27
)
(6.5
)%
Total motor homes
1,088

100.0
%
 
1,164

100.0
%
 
(76
)
(6.5
)%
 
 
 
 
 
 
 
 
 
Travel trailer
279

77.9
%
 
 
 
 
 
 
Fifth wheel
79

22.1
%
 
 
 
 
 
 
    Total towables
358

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
Change
(In units)
August 27,
2011
Product
Mix %
 
August 28,
2010
Product
Mix %
 
Units
%
Change
Class A gas
1,518

34.5
%
 
1,483

33.4
%
 
35

2.4
 %
Class A diesel
918

20.9
%
 
969

21.9
%
 
(51
)
(5.3
)%
Total Class A
2,436

55.4
%
 
2,452

55.3
%
 
(16
)
(0.7
)%
Class B
103

2.3
%
 
236

5.3
%
 
(133
)
(56.4
)%
Class C
1,856

42.2
%
 
1,745

39.4
%
 
111

6.4
 %
Total motor homes
4,395

100.0
%
 
4,433

100.0
%
 
(38
)
(0.9
)%
 
 
 
 
 
 
 
 
 
Travel trailer
575

74.8
%
 
 
 
 
 
 
Fifth wheel
194

25.2
%
 
 
 
 
 
 
Total towables
769

100.0
%
 
 
 
 
 
 
Percentages may not add due to rounding differences.





Winnebago Industries, Inc.
Unaudited Backlog

 
As Of
 
Change
 
August 27, 2011
 
August 28, 2010
 
 
%
 
Units
% (1)

 
Units
% (1)
 
Units
Change
Class A gas
230

33.8
%
 
272

33.2
%
 
(42
)
(15.4
)%
Class A diesel
177

26.0
%
 
218

26.7
%
 
(41
)
(18.8
)%
Total Class A
407

59.8
%
 
490

59.9
%
 
(83
)
(16.9
)%
Class B
71

10.4
%
 
—

—
%
 
71

100.0
 %
Class C
203

29.8
%
 
328

40.1
%
 
(125
)
(38.1
)%
Total motor home backlog(2)
681

100.0
%
 
818

100.0
%
 
(137
)
(16.7
)%
 
 
 
 
 
 
 
 
 
Travel trailer
187

63.8
%
 
 
 
 
 
 
Fifth wheel
106

36.2
%
 
 
 
 
 
 
    Total towable backlog (2)
293

100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total approximate backlog revenue dollars (in 000's):
 
 
 
 
 
 
 
 
Motor home
$
74,704

 
 
$
82,773

 
 
$
(8,069
)
(9.7
)%
Towable
6,669

 
 
—

 
 
 
 
(1) 
Percentages may not add due to rounding differences.
(2) 
Our backlog includes all accepted 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
 
 
 
 
 
 
 
 
Units As Of
 
 
 
August 27,
2011
 
August 28,
2010
 
(Decrease)
Motor homes
1,958

 
2,044

 
(86
)
(4.2)%
Towables
966

 
—