SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the quarterly period ended May 28, 1994
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OR
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___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from______________________ to _____________________
Commission file number 1-6403
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0802678
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 152, Forest City, Iowa 50436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 582-3535
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____.
There were 25,238,988 shares of $.50 par value common stock outstanding on July
7, 1994.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO REPORT ON FORM 10-Q
Page Number
PART I. FINANCIAL INFORMATION:
(Interim period information unaudited)
Consolidated Balance Sheets 1 & 2
Unaudited Consolidated Statements of Operations 3
Unaudited Consolidated Condensed Statements of Cash Flows 4
Unaudited Condensed Notes to Consolidated Financial Statements 5 - 7
Management's Discussion and Analysis of Financial Condition and Results
of Operations 8 - 10
PART II. OTHER INFORMATION 11 & 12
PART I FINANCIAL INFORMATION
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
ASSETS May 28, August 28,
1994 1993
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 10,130 $ 11,238
Marketable securities 3,747 2,309
Receivables, less allowance for doubtful
accounts ($2,186 and $2,798, respectively) 29,665 29,239
Dealer financing receivables less allowance
for doubtful accounts ($305 and $290, respectively) 7,803 6,742
Inventories 46,658 40,610
Prepaid expenses 5,703 3,636
Deferred income taxes 511 511
Total current assets 104,217 94,285
PROPERTY AND EQUIPMENT, at cost
Land 1,528 2,153
Buildings 40,790 38,373
Machinery and equipment 74,050 72,505
Transportation equipment 5,968 5,609
122,336 118,640
Less accumulated depreciation 83,839 81,012
Total property and equipment, net 38,497 37,628
LONG-TERM NOTES RECEIVABLE, less allowances
($1,771 and $1,362, respectively) 4,591 4,203
INVESTMENT IN LIFE INSURANCE 14,825 11,853
NET DEFERRED INCOME TAXES 711 829
OTHER ASSETS 5,526 6,429
TOTAL ASSETS $168,367 $155,227
See Unaudited Condensed Notes to Consolidated Financial Statements
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
May 28, August 28,
1994 1993
(Unaudited)
CURRENT ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,259 $ 1,719
Notes payable 2,130 - - -
Accounts payable, trade 20,011 19,462
Accrued expenses:
Insurance 4,222 6,445
Vacation liability 3,502 2,864
Promotional 3,407 4,636
Other 7,602 10,399
Liability on product warranties 3,394 4,091
Total current liabilities 46,527 49,616
LT DEBT AND CAPITAL LEASE OBLIGATIONS 2,943 3,183
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 42,335 18,766
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 2,074 1,969
STOCKHOLDERS' EQUITY
Capital stock, common, par value $.50; authorized
60,000,000 shares 12,911 12,908
Additional paid-in capital 24,337 24,811
Reinvested earnings 44,183 52,245
81,431 89,964
Less treasury stock, at cost 6,943 8,271
Total stockholders' equity 74,488 81,693
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $168,367 $155,227
See Unaudited Condensed Notes to Consolidated Financial Statements
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands except per share data
Thirteen Weeks Ended Thirty-Nine Weeks Ended
May 28, May 29, May 28, May 29,
1994 1993 1994 1993
Revenues:
Manufactured products $125,208 $110,733 $319,049 $262,552
Services 4,458 5,182 14,174 14,241
Total net revenues 129,666 115,915 333,223 276,793
Costs and Expenses:
Cost of manufactured products 105,983 96,523 273,789 229,114
Cost of services 2,554 4,113 8,177 11,268
Selling and delivery 6,898 5,608 19,144 15,791
General and administrative 5,929 5,230 18,708 16,060
Other expense (income) 189 (5) 359 184
Minority interest in net income
(loss)
of consol. subsidiary 20 (116) 105 (408)
Total costs and expenses 121,573 111,353 320,282 272,009
Operating income 8,093 4,562 12,941 4,784
Financial (expense) income (758) 17 (583) 232
Income from operations
before income taxes* 7,335 4,579 12,358 5,016
Provision (credit) for income taxes - - - - - - - - - (1,087)
Income from operations* 7,335 4,579 12,358 6,103
Cumulative effect of change
in accounting principle - - - - - - (20,420) - - -
Net income (loss) $ 7,335 $ 4,579 $ (8,062) $ 6,103
Income (loss) per common share:
Income from operations* $ .29 $ .18 $.49 $.24
Cumulative effect of change
in accounting principle - - - - - - (.81) - - -
Net income (loss) $ .29 $ .18 $(.32) $.24
Weighted average number of
shares of common stock
outstanding 25,209 25,042 25,170 25,034
* Before Cumulative Effect of Change in Accounting Principle.
See Unaudited Condensed Notes to Consolidated Financial Statements.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Dollars in thousands
Increase (decrease) in cash and cash equivalents Thirty-Nine Weeks Ended
May 28, May 29,
1994 1993
Cash flows from operating activities:
Net income (loss) $(8,062) $ 6,103
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Cumulative effect of change in accounting principle 20,420 - - -
Employee stock bonus plan 437 - - -
Depreciation and amortization 5,804 5,820
Realized and unrealized gains (losses) on investments, net 276 (216)
Postretirement benefits other than pensions 3,149 - - -
Minority shareholders' portion of consolidated
subsidiary 105 (408)
Other 99 3,533
Change in assets and liabilities:
Decrease in accounts receivable 271 421
Increase in inventories (5,966) (4,419)
Decrease in accounts payable and accrued expenses (4,262) (2,271)
Increase (decrease) in other categories, net (2,646) 477
Net cash provided by operating activities 9,625 9,040
Cash flows from investing activities:
Investments in marketable securities (8,945) (5,829)
Proceeds from the sale of marketable securities 7,231 6,160
Purchases of property and equipment (6,565) (4,683)
Investments in dealer receivables (26,338) (21,651)
Proceeds from dealer receivables 25,283 13,888
Investment in other assets and notes receivable (4,205) (4,528)
Other 842 352
Net cash used by investing activities (12,697) (16,291)
Cash flows from financing activities and capital transactions:
Net increase in notes payable 2,130 - - -
Payments of long-term debt (1,389) (698)
Proceeds from issuance of long-term debt 858 820
Other 365 117
Net cash provided by financing activities and
capital transactions 1,964 239
Net decrease in cash and cash equivalents (1,108) (7,012)
Cash and cash equivalents - beginning of period 11,238 13,286
Cash and cash equivalents - end of period $10,130 $ 6,274
See Unaudited Condensed Notes to Consolidated Financial Statements.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary to
present fairly the consolidated financial position as of May 28, 1994,
and results of operations and cash flows for the 13 and 39 weeks ended
May 28, 1994 and May 29, 1993.
2. The results of operations for the 39 weeks ended May 28, 1994, are not
necessarily indicative of the results to be expected for the full year.
Service revenues, in the Consolidated Statements of Operations, consist
of revenues generated by Cycle-Sat, Inc. (Cycle-Sat) and Winnebago
Acceptance Corporation (WAC), subsidiaries of the Company. Also during
the 13 and 39 weeks ended May 29, 1993 service revenues included revenues
generated by North Iowa Electronics, Inc. (NIE), a former subsidiary of
the Company which was sold during fiscal 1993.
3. Inventories are valued at the lower of cost or market, with cost being
determined under the last-in, first-out (LIFO) method and market defined
as net realizable value.
Inventories are composed of the following (dollars in thousands):
May 28, August 28,
1994 1993
Finished Goods............. $ 21,033 $ 16,578
Work In Process............ 13,806 11,051
Raw Materials.............. 25,826 26,614
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60,665 54,243
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LIFO Reserve............... 14,007 13,633
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$ 46,658 $ 40,610
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4. The Company entered into a $12,000,000 financing and security agreement
with NationsCredit Corporation (NationsCredit) formerly Chrysler First
Commercial Corporation. Terms of the agreement limit borrowings to the
lesser of $12,000,000 or 75% of eligible inventory (fully manufactured
recreational vehicles ready for delivery to a dealer). Borrowings are
secured by the Company's receivables and inventory. The agreement
provides for a graduated interest rate based upon the NationsCredit
reference rate as defined in the agreement. The line of credit is
available for a term of one year and continues during successive
one-year periods unless either party provides at least 90-days notice
prior to the end of the one-year period to the other party that they
wish to terminate the line of credit. The agreement prohibits any
advances or loans to any subsidiary or affiliate or additional
guarantees of any obligations of any subsidiary or affiliate, in either
case in excess of $5,000,000 or $7,500,000 in the aggregate for all
subsidiaries and affiliates from the date of the agreement. The
agreement also includes certain restrictive covenants including
maintenance of a certain minimum net worth and certain working capital
and debt to equity ratios. As of May 28, 1994, the Company was in
compliance with these covenants. There was no outstanding balance under
the line of credit at May 28, 1994.
Cycle-Sat entered into a $3,000,000 line of credit with Firstar Bank
Cedar Rapids, N.A dated February 24, 1994. Terms of the agreement limit
the amount advanced to the lesser of $3,000,000 or the sum of the base of
75% of Cycle-Sat's eligible accounts receivable and 50% of its inventory.
The agreement provides for a graduated interest rate based on the
tangible net worth of Cycle-Sat and contains a restrictive covenant
related to the maintenance by Cycle-Sat of a minimum tangible net worth
as defined in the agreement. Cycle-Sat is in compliance with this
covenant. Borrowings under the line of credit have been guaranteed by the
Company. The line of credit has a maturity date of January 31, 1995. The
outstanding balance under the line of credit at May 28, 1994 was
$1,880,000 with an interest rate of 8.0% per annum.
5. It is customary practice for companies in the recreation vehicle industry
to enter into repurchase agreements with lending institutions which have
provided wholesale floor plan financing to dealers. The Company's
agreements provide for the repurchase of its products from the financing
institution in the event of repossession upon a dealer's default. The
Company was contingently liable for approximately $130,799,000 and
$101,445,000 under repurchase agreements with the lending institutions as
of May 28, 1994, and August 28, 1993, respectively. Included in these
contingent liabilities are approximately $39,714,000 and $27,758,000,
respectively, of certain dealer receivables subject to recourse
agreements with ITT Commercial Finance Corporation, NationsCredit and
John Deere Credit, Inc.
6. Fiscal year-to-date the Company paid cash for the following (dollars in
thousands):
Thirty-Nine Weeks Ended
May 28, May 29,
1994 1993
Interest $ 870 $396
Income Taxes 2,809 242
7. At May 28, 1994, Postretirement Benefits Other Than Pensions included
Deferred Compensation of $19,919,000 and Postretirement Benefits related
to health care and other benefits of $22,416,000. Effective August 29,
1993, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" related to health care and other benefits. SFAS No. 106
requires the Company to accrue the estimated cost of retiree benefit
payments during the years the employee provides services. The Company
previously expensed the cost of these benefits, which are principally
health care, as claims were incurred. SFAS No. 106 allows recognition of
the cumulative effect of the liability in the year of adoption or the
amortization of the obligation over a period of up to 20 years. The
Company has elected to recognize the cumulative effect of this
obligation on the immediate recognition basis. The cumulative effect as
of August 29, 1993 of adopting SFAS No. 106 was an accrual of
postretirement health care costs of $20,420,000 and a decrease in net
earnings of $20,420,000 ($.81 per share), which has been included in the
Company's consolidated statement of operations for the 39 weeks ended
May 28, 1994.
The effect of adopting SFAS No. 106 on income from operations for the 39
weeks ended May 28, 1994 was a net expense of $1,996,000 ($.08 per
share).
The Company provides certain health care and other benefits for certain
retired employees who have fulfilled eligibility requirements of age 55
with 15 years of service. In fiscal year 1993 and 1992, the Company
recognized on a "pay-as-you-go" basis expense of $501,000 and $364,000
respectively, for postretirement health care benefits. The Company's
postretirement health care plan is not funded. The status of the plan is
as follows:
Accumulated postretirement benefit obligation at August 29, 1993:
Retirees $ 2,745,000
Fully eligible active plan participants 3,099,000
Other active plan participants 14,576,000
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$ 20,420,000
============
Net postretirement benefit cost for the 13 and 39 weeks ended May 28,
1994 consisted of the following components:
Thirteen Thirty-Nine
Weeks Weeks
Service cost - benefits earned during the period $ 443,000 $ 1,218,000
Interest cost on accumulated postretirement
benefit obligation 360,000 989,000
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$ 803,000 $ 2,207,000
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The assumed pre-65 and post-65 health care cost trend rates used in
measuring the accumulated postretirement benefit obligation as of August
29, 1993 was 10.84% and 10.35%, respectively for 1993, decreasing each
successive year until it reaches 5.5% in 2014 and 2019, respectively,
after which it remains constant. A one-percentage-point increase in the
assumed health care cost trend rate for each year would increase the
accumulated postretirement benefit obligation as of August 29, 1993 and
net postretirement health care cost by approximately 27%. The assumed
discount rate used in determining the accumulated postretirement benefit
obligation was 6.5%.
8. At May 28, 1994, the Company had net operating loss carryforwards for
financial reporting purposes of approximately $44,000,000 which will, if
unused, expire at various times in fiscal years 2006 through 2008. The
Company has not recognized the tax benefits of net operating loss
carryforwards due to the uncertainty of future realization.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended May 28, 1994 Compared to Thirteen Weeks Ended May 29, 1993
Net revenues of manufactured products for the 13 weeks ended May 28, 1994
increased $14,475,000 or 13.1 percent from the 13 week period ended May 29,
1993. Motor home shipments increased by 46 units or 1.8 percent during the 13
weeks ended May 28, 1994 when compared to the third quarter of fiscal 1993. The
growth in the Company's revenues is attributed to an increase in volume of
higher-priced Class A models. The Company's outlook for the remainder of fiscal
1994 remains optimistic.
Service revenues for the 13 weeks ended May 28, 1994 decreased $724,000 or 14.0
percent from the 13 weeks ended May 29, 1993. The decrease was caused by the
absence of revenues of NIE (an electronic component assembly business), which
was sold during August 1993. However, Cycle-Sat did record increased revenues
($495,000 or 13.1 percent) from established customers and new customers when
comparing the 13 weeks ended May 28, 1994 to the comparable period of fiscal
1993.
Cost of manufactured products, as a percent of manufactured product revenues,
was 84.6 percent for the 13 weeks ended May 28, 1994 compared to 87.2 percent
for the 13 weeks ended May 29, 1993. This decrease can be attributed primarily
to a shift in shipments to a more favorable product mix and to an increase in
motor home production volume.
Cost of services, as a percent of service revenues, decreased to 57.3 percent
from 79.4 percent when comparing the 13 weeks ended May 28, 1994 to the 13 weeks
ended May 29, 1993. This decrease when comparing the two periods can be
attributed primarily to the increase in Cycle-Sat revenues and to a reduction in
lease expense at Cycle-Sat due to renegotiations of the satellite lease
agreement.
Selling and delivery expenses increased by $1,290,000 to 5.3 percent of net
revenues from 4.8 percent of net revenues when comparing the 13 weeks ended May
28, 1994 to the comparable period of fiscal 1993. The increase can be attributed
primarily to increases in advertising expenses.
General and administrative expenses increased by $699,000 to 4.6 percent of net
revenues from 4.5 percent of net revenues when comparing the 13 weeks ended May
28, 1994 to the comparable period of fiscal 1993. The increase in dollars is
primarily due to an increase in the Company's product liability insurance
reserves.
The Company had other expense of $189,000 during the 13 weeks ended May 28, 1994
compared to other income of $5,000 during the 13 weeks ended May 29, 1993. The
primary reasons for the change when comparing the two periods was the increase
in the current period in the Company's provision for losses on the resale of
motor homes repurchased by the Company under its repurchase agreements with
financial institutions and by the recording of lease income received by WAC
during the period ended May 29, 1993.
The Company had net financial expense of $758,000 during the third quarter of
fiscal 1994 compared to income of $17,000 during the third quarter of fiscal
1993. The Company recorded interest expense of $322,000 during the third quarter
of fiscal 1994 compared to interest income of $5,000 during the third quarter of
fiscal 1993. Included in the third quarter of fiscal 1994 was an interest
payment of $419,000 to the Internal Revenue Service relating to the resolution
of pending income tax return issues. The Company recorded $360,000 of realized
and unrealized losses compared to $1,000 of gains during the third quarters of
fiscal 1994 and 1993, respectively.
For the 13 weeks ended May 28, 1994, the Company realized net income of
$7,335,000 or $.29 per share which included income of $80,000 from Cycle-Sat
operations. For the 13 weeks ended May 29, 1993, the Company realized net income
of $4,579,000 or $.18 per share which included a loss of $466,000 ($.02 per
share) from Cycle-Sat operations.
Thirty-Nine Weeks Ended May 28, 1994 Compared to Thirty-Nine Weeks Ended May 29,
1993
Net revenues of manufactured products for the 39 weeks ended May 28, 1994
increased $56,497,000 or 21.5 percent from the 39 weeks ended May 29, 1993.
Motor home shipments increased by 664 units or 11.4 percent during the 39 weeks
ended May 28, 1994 when compared to the comparable period of fiscal 1993. This
growth in the Company's revenues is attributed to an overall industry gain in
motor home volume, an increase in the Company's market share and to an increase
in volume in higher-priced Class A models.
Service revenues for the 39 weeks ended May 28, 1994 decreased $67,000 from the
39 weeks ended May 29, 1993. The decrease was caused by the absence of revenues
of NIE. However, Cycle-Sat did record an increase in revenues of $2,758,000 or
25.5 percent as a result of increased business with established customers and
new customers.
Cost of manufactured products, as a percent of manufactured product revenues,
was 85.8 percent for the 39 weeks ended May 28, 1994 compared to 87.3 percent
for the 39 weeks ended May 29, 1993. This decrease can be attributed primarily
to a favorable shift in product mix and to an increase in motor home production.
Cost of services, as a percent of service revenues, decreased to 57.7 percent
from 79.1 percent when comparing the 39 weeks ended May 28, 1994 to the 39 weeks
ended May 29, 1993. This decrease can be attributed primarily to the increase in
Cycle-Sat revenues and to renegotiations of the satellite lease agreement which
reduced lease expense at Cycle-Sat during the 39 weeks ended May 28, 1994.
Selling and delivery expense increased to $19,144,000 from $15,791,000 when
comparing the 39 weeks ended May 28, 1994 to the 39 weeks ended May 29, 1993.
The percent of selling and delivery expense to net revenues was 5.7 percent for
both periods. The increase can be attributed primarily to increases in
advertising expenses and losses associated with recourse agreements with various
financing institutions.
General and administrative expenses increased by $2,648,000 but decreased to 5.6
percent of net revenues from 5.8 percent of net revenues when comparing the 39
weeks ended May 28, 1994 to the comparable period of fiscal 1993. Affecting the
dollar increase when comparing the two periods was a reduction, in fiscal 1993,
in the company's self-insurance reserves. The increase in dollars was also
attributed to the Company's adoption of FASB No. 106, in fiscal 1994, which
requires the Company to accrue the estimated cost of retiree benefits during the
years the employees provide services.
The Company had other expense of $359,000 during the 39 weeks ended May 28, 1994
compared to $184,000 during the 39 weeks ended May 29, 1993. The primary reason
for the increase was the recording of lease income received by WAC during fiscal
1993.
The Company had net financial expense of $583,000 during the 39 weeks ended May
28, 1994 compared to income of $232,000 during the 39 weeks ended May 29, 1993.
The Company recorded $276,000 of realized and unrealized losses compared to
$216,000 of realized and unrealized gains during the fiscal year-to-dates of
1994 and 1993, respectively. The Company recorded interest expense during the 39
weeks ended May 28, 1994 of $257,000 compared to interest income of $102,000
during the comparable period of fiscal 1993.
For the 39 weeks ended May 28, 1994, the Company realized income from operations
of $12,358,000 or $.49 per share which included income of $420,000 ($.02 per
share) from Cycle-Sat operations. For the 39 weeks ended May 29, 1993, the
Company realized net income of $6,103,000 or $.24 per share which included a
loss of $1,632,000 ($.07 per share) from Cycle-Sat operations.
On August 29, 1993, the Company was required to adopt FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" which
covers health care and other benefits provided to retirees and which requires
accruing such benefits during the years the employee provides services. This
change in accounting principle resulted in a cumulative non-cash charge of
$20,420,000 or $.81 per share. Giving effect to the foregoing change, the net
loss for the 39 weeks ended May 28, 1994 was $8,062,000 or $.32 per share.
LIQUIDITY AND FINANCIAL CONDITION
Presently, the Company meets its working capital and capital equipment
requirements and cash requirements of subsidiaries with funds generated
internally and funds from agreements with financial institutions.
At May 28, 1994, working capital was $57,690,000 an increase of $13,021,000 from
the amount at August 28, 1993. The Company's principal sources and uses of cash
during the 39 weeks ended May 28, 1994 are set forth in the unaudited
consolidated condensed statement of cash flows for that period.
Principal expected demands at May 28, 1994 on the Company's liquid assets for
the remainder of fiscal 1994 include approximately $2,000,000 for capital
expenditures consisting primarily of tooling, equipment replacement and new
equipment.
Based upon available cash, marketable securities and financing resources (See
Note 4), management believes that the Company has adequate sources of funds to
meet its remaining fiscal 1994 cash requirements. However, any significant
adverse events in the market for motor homes or in the economy could have a
significant effect on the Company's future cash requirements.
Part II Other Information
Item 1 Legal Proceedings
On April 23, 1991, the Federal Trade Commission ("FTC") issued to the Company
Civil Investigative Demands to produce documents and answers to written
interrogatories in connection with an investigation of whether the Company
engaged in deceptive practices in selling approximately 7,800 diesel powered
LeSharo and Phasar motor homes and Centauri and utility vans which were produced
between 1983 and 1986. After narrowing the FTC's Civil Investigative Demands
through a motion to quash and subsequent stipulated order, the Company produced
responsive documents at its corporate offices in December, 1991 and January,
1992. The Company had no further contact with the FTC for approximately 26
months when the Company's FTC Counsel in Washington, D.C. received a letter
dated March 22, 1994 from the FTC staff in which it was suggested that the FTC
staff had concluded that the Company had engaged in violations of Section 5 of
the FTC Act in connection with the marketing and sale of certain of the diesel
and gasoline LeSharo and Phasar motor homes and Centauri vans. The FTC staff
letter also suggested a willingness to pursue consent negotiations with the
Company or otherwise that the FTC staff would be preparing a recommendation to
the FTC that it issue a complaint against the Company seeking consumer redress
and other equitable relief. Any recommendation made by the FTC staff would have
to be approved by the Commission itself. If the FTC should decide to issue such
a complaint, the Company believes it would have meritorious defenses to the same
and further believes that the FTC would have several significant hurdles to
overcome including the statute of limitations issues. The Company currently is
holding informal discussions with FTC personnel in an effort to dissuade the
staff from proceeding in this matter. (Contemporaneously, the Company has
contacted Regie Nationale Des Unises Renault, the manufacturer of a majority of
the component parts under investigation by the FTC, relative to the most recent
action taken by the FTC's staff.)
Item 6 Exhibits and Reports on Form 8-K
(a) No exhibits are being filed as a part of this report.
(b) The Company did not file any reports on Form 8-K during the
period covered by this report.
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 thereunto duly authorized.
WINNEBAGO INDUSTRIES, INC.
(Registrant)
Date July 7, 1994
Fred G. Dohrmann
President and Chief Executive Officer
Date July 7, 1994
Ed F. Barker
Vice President, Controller and Chief
Financial Officer
