FOREST CITY, IA -- (MARKET WIRE) -- 06/20/08 -- Winnebago Industries, Inc. (NYSE: WGO)
today reported financial results for the Company's third quarter and first
40 weeks of fiscal year 2008 ended May 31, 2008.
Revenues for the quarter were $139.7 million, a decrease of 39.7 percent,
compared to revenues of $231.7 million for the third quarter last fiscal
year. The Company reported an operating loss of $6.9 million for the
quarter, compared to operating income of $14.7 million for the third
quarter of fiscal 2007. During the third quarter, tax benefits of $8.9
million were recorded that related to favorable settlements of uncertain
tax positions, a reduction of the effective tax rate due to lower
year-to-date pre-tax income, and tax planning initiatives. Net income for
the third quarter was $3.0 million, a decrease of 73.3 percent compared to
net income of $11.3 million for the third quarter of fiscal 2007. On a
diluted per share basis, the Company had net income of 10 cents a share for
the third quarter of fiscal 2008, compared to 35 cents per share for the
third quarter last fiscal year.
The third quarter was negatively impacted by lower motor home deliveries
which resulted in a significant reduction in production and very low
absorption of fixed costs, a decline in the average selling price of the
Company's motor homes due to a higher mix of lower priced Class C motor
home deliveries including increased rental unit sales, and increased
wholesale and retail promotions.
Revenues for the first 40 weeks of fiscal 2008 were $519.1 million, a
decrease of 17.9 percent compared to $632.5 million for the first 39 weeks
of fiscal 2007. Operating income was $9.1 million for the first 40 weeks
of fiscal 2008, compared to $34.2 million for the first 39 weeks of fiscal
2007. Net income for the first 40 weeks of fiscal 2008 was $15.5 million,
a decrease of 42.1 percent compared to $26.7 million for the first 39 weeks
of fiscal 2007. On a diluted per share basis, the Company earned 53 cents
a share for the first 40 weeks of fiscal 2008, compared to 84 cents a share
for the first 39 weeks of fiscal 2007.
"The motor home market has changed significantly in the past year, with
dramatic declines in the past few months," said Winnebago Industries'
Chairman, CEO and President Bob Olson. "Discretionary purchases have
declined in the United States as the country is faced with unstable fuel
prices, consumer confidence at 16-year lows and a tighter credit
environment. Industry-wide, the motor home market has faced double digit
retail sales percentage declines for eight of the last nine consecutive
months. Statistical Surveys, Inc., a retail reporting service for the RV
industry, recently reported a decrease in retail sales of Class A and C
motor homes of 26.1 percent for the first four months of calendar 2008,
with a decline of over 30 percent in both March and April, which are
typically some of the seasonally strongest months. On a wholesale basis,
industry forecasts indicate volumes will decline to levels that haven't
been seen since calendar 1991."
"It is an understatement to say that we were not pleased with our operating
results in the third quarter," said Olson. "As recently announced, in
order to better position ourselves for the declining motor home market, we
will idle our Charles City Manufacturing Facility by August 1, 2008 and
transfer Class C motor home production to the Forest City campus. Also,
additional consolidation opportunities are currently being undertaken to
continue to reduce our overhead cost structure. This will result in an
estimated fourth quarter restructuring charge of $2.5 to $5.5 million,
primarily dependent upon the amount of the potential impairment of the
Charles City Manufacturing Facility."
"Our Dealer Days event was held in May in Las Vegas and we were pleased
with the positive reaction to the introduction of our new 2009 Winnebago,
Itasca and ERA products," said Olson. "The new fuel-efficient ERA Class B
continues to be very well received by both dealers and retail customers.
"Overall, our dealer partners continue to be very cautious with their
inventory levels. While dealer inventory of Winnebago Industries' products
have been reduced by 10.3 percent during the quarter, our dealers continue
to emphasize reducing inventories and increasing turn rates for their
dealerships, which is evident from the dramatic decline in our current
sales order backlog."
Winnebago Industries will conduct a conference call in conjunction with
this release at 9 a.m. Central Time today, Friday, June 20, 2008. 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. is a leading U.S. manufacturer of motor homes,
self-contained recreation vehicles used primarily in leisure travel and
outdoor recreation activities. The Company builds quality motor homes
under the Winnebago, Itasca and ERA brand names with state-of-the-art
computer-aided design and manufacturing systems on automotive-styled
assembly lines. 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 the effect of global
tensions, declines in consumer confidence, the availability and price of
fuel, a significant increase in interest rates, a slowdown in the economy,
availability of chassis or other key component parts, sales order
cancellations, slower than anticipated sales of new or existing products,
new products introduced by competitors 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.
Winnebago Industries, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except percent and per share data)
Quarter Ended
May 31, 2008 May 26, 2007
-------------------- ---------------------
% %
Net revenues $ 139,736 100.0 $ 231,692 100.0
Cost of goods sold 137,112 98.1 205,436 88.7
--------- --------- ---------- ---------
Gross profit 2,624 1.9 26,256 11.3
--------- --------- ---------- ---------
Operating expenses
Selling 5,085 3.6 5,511 2.4
General and administrative 4,442 3.2 6,086 2.6
--------- --------- ---------- ---------
Total operating expenses 9,527 6.8 11,597 5.0
--------- --------- ---------- ---------
Operating (loss) income (6,903) (4.9) 14,659 6.3
Financial income 1,053 0.7 1,799 0.8
--------- --------- ---------- ---------
(Loss) income before income
taxes (5,850) (4.2) 16,458 7.1
(Credit) provision for taxes (8,850) (6.3) 5,205 2.2
--------- --------- ---------- ---------
Net income $ 3,000 2.1 $ 11,253 4.9
========= ========= ========== =========
Income per common share:
Basic $ 0.10 $ 0.36
Diluted $ 0.10 $ 0.35
Weighted average common shares
outstanding
Basic 29,013 31,524
Diluted 29,048 31,761
40 Weeks Ended 39 weeks Ended
May 31, 2008 May 26, 2007
-------------------- ---------------------
% %
Net revenues $ 519,081 100.0 $ 632,471 100.0
Cost of goods sold 478,648 92.2 565,866 89.5
--------- --------- ---------- ---------
Gross profit 40,433 7.8 66,605 10.5
--------- --------- ---------- ---------
Operating expenses
Selling 14,948 2.9 14,553 2.3
General and administrative 16,350 3.1 17,893 2.8
--------- --------- ---------- ---------
Total operating expenses 31,298 6.0 32,446 5.1
--------- --------- ---------- ---------
Operating income 9,135 1.8 34,159 5.4
Financial income 3,529 0.6 4,964 0.8
--------- --------- ---------- ---------
Income before income taxes 12,664 2.4 39,123 6.2
(Credit) provision for taxes (2,815) (0.6) 12,402 2.0
--------- --------- ---------- ---------
Net income $ 15,479 3.0 $ 26,721 4.2
========= ========= ========== =========
Income per common share:
Basic $ 0.53 $ 0.85
Diluted $ 0.53 $ 0.84
Weighted average common shares
outstanding
Basic 29,116 31,411
Diluted 29,183 31,697
Winnebago Industries, Inc.
Unaudited Consolidated Condensed Balance Sheets
(In thousands)
May 31, 2008 Aug. 25, 2007
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 46,200 $ 6,889
Short-term investments --- 102,650
Receivables, net 10,132 30,285
Inventories 110,960 101,208
Prepaid and other 3,257 3,981
Deferred income taxes 11,967 12,687
-------------- --------------
Total current assets 182,516 257,700
Long-term investments 40,148 ---
Property and equipment, net 46,472 51,389
Deferred income taxes 24,970 19,856
Investment in life insurance 20,094 20,015
Other assets 17,395 17,550
-------------- --------------
Total assets $ 331,595 $ 366,510
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,092 $ 35,286
Income taxes payable 1,939 4,252
Accrued expenses 42,986 49,299
-------------- --------------
Total current liabilities 65,017 88,837
Long-term liabilities:
Unrecognized tax benefits 8,803 ---
Postretirement health care and deferred
compensation benefits, net of current
portion 69,750 69,319
-------------- --------------
Total long-term liabilities 78,553 69,319
Stockholders' equity 188,025 208,354
-------------- --------------
Total liabilities and stockholders'
equity $ 331,595 $ 366,510
============== ==============
Winnebago Industries, Inc.
Unaudited Condensed Statement of Cash Flows
(In thousands)
40 Weeks Ended 39 Weeks Ended
May 31, 2008 May 26, 2007
-------------- --------------
Operating activities:
Net income $ 15,479 $ 26,721
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 7,583 7,942
Stock-based compensation 3,617 4,374
Postretirement benefit income and
deferred compensation expense 1,065 1,154
Deferred income taxes 4,070 (6,165)
Increase in cash surrender value of
life insurance policies (596) (585)
Excess tax benefit from stock-based
compensation (89) (1,926)
Other 132 54
Change in assets and liabilities:
Inventories (9,752) (13,781)
Receivables and prepaid assets 20,812 (1,423)
Income taxes payable (8,871) 1,391
Accounts payable and accrued expenses (21,868) 8,372
Postretirement and deferred
compensation benefits (1,123) (980)
-------------- --------------
Net cash provided by operating activities 10,459 25,148
-------------- --------------
Investing activities:
Purchases of investments (228,069) (238,649)
Proceeds from the sale or maturity of
investments 288,119 223,649
Purchases of property and equipment (3,025) (3,677)
Other (619) 904
-------------- --------------
Net cash provided by (used in) investing
activities 56,406 (17,773)
-------------- --------------
Financing activities:
Payments for purchase of common stock (17,767) (20,548)
Payments of cash dividends (10,509) (9,412)
Proceeds from exercise of stock options 633 7,636
Excess tax benefit from stock-based
compensation 89 1,926
-------------- --------------
Net cash used in financing activities (27,554) (20,398)
-------------- --------------
Net increase (decrease) in cash and cash
equivalents 39,311 (13,023)
Cash and cash equivalents at beginning of
period 6,889 24,934
-------------- --------------
Cash and cash equivalents at end of period $ 46,200 $ 11,911
============== ==============
Winnebago Industries, Inc.
Unaudited Motor Home Deliveries
Quarter Ended Change
May 31, 2008 May 26, 2007 Units %
---------------- ---------------- ----- -----
Motor home unit deliveries
Class A Gas 457 904 (447) (49.5)
Class A Diesel 151 397 (246) (62.0)
---------------- ---------------- ----- -----
Total Class A 608 1,301 (693) (53.3)
Class B 47 --- 47 ---
Class C 972 1,268 (296) (23.3)
---------------- ---------------- ----- -----
Total deliveries 1,627 2,569 (942) (36.7)
================ ================ ===== =====
40 Weeks 39 Weeks
Ended Ended Change
May 31, 2008 May 26, 2007 Units %
------------- ------------- ------- ------
Motor home unit deliveries
Class A Gas 1,844 2,562 (718) (28.0)
Class A Diesel 801 1,168 (367) (31.4)
------------- ------------- ------- ------
Total Class A 2,645 3,730 (1,085) (29.1)
Class B 48 --- 48 ---
Class C 2,786 3,151 (365) (11.6)
------------- ------------- ------- ------
Total deliveries 5,479 6,881 (1,402) (20.4)
============= ============= ======= ======
Winnebago Industries, Inc.
Unaudited Backlog and Dealer Inventory
(Units)
As of Change
May 31, 2008 May 26, 2007 Units %
------------ ------------ ------------- --------
Sales order backlog
Class A Gas 280 907 (627) (69.1)
Class A Diesel 136 409 (273) (66.7)
------------ ------------ ------------- --------
Total Class A 416 1,316 (900) (68.4)
Class B 216 --- 216 ---
Class C 515 1,059 (544) (51.4)
------------ ------------ ------------- --------
Total backlog* 1,147 2,375 (1,228) (51.7)
============ ============ ============= ========
Total approximate
revenue dollars
(in thousands) $ 93,927 $ 207,569 $ (113,642) (54.7)
Dealer inventory 4,341 4,604 (263) (5.7)
* The Company includes in its backlog all accepted orders from dealers to
be shipped within the next six months. Orders in backlog can be
cancelled 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.
