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WINNEBAGO INDUSTRIES, INC.
P.O. BOX 152
FOREST CITY, IA 50436
FORM 10-K
FISCAL YEAR ENDED AUGUST 28, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
( X ) Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required) for the fiscal year ended
August 28, 1999; or
( ) Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
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
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
- ---------------------------------------- -------------------------------------
Common Stock ($.50 par value) The New York Stock Exchange, Inc.
Chicago Stock Exchange, Inc.
The Pacific Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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 __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Annual Report on Form
10-K or any amendment to this Annual Report on Form 10-K ______.
Aggregate market value of the common stock held by non-affiliates of the
Registrant on November 8, 1999: $225,548,865 (13,566,849 shares at closing price
on New York Stock Exchange of $16.625).
Common stock outstanding on November 8, 1999, 21,827,651 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1. The Winnebago Industries, Inc. Annual Report to Shareholders for the fiscal
year ended August 28, 1999, portions of which are incorporated by reference
into Part II hereof.
2. The Winnebago Industries, Inc. Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held January 11, 2000, portions of which are
incorporated by reference into Part III hereof.
WINNEBAGO INDUSTRIES, INC.
FORM 10-K
Report for the Fiscal Year Ended August 28, 1999
PART I
ITEM 1. Business
GENERAL
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. Motor home sales by the Company represented more than 87
percent of its revenues in each of the past five fiscal years. The Company's
motor homes are sold through dealer organizations primarily under the Winnebago,
Itasca, Rialta and Ultimate brand names.
Other products manufactured by the Company consist principally of extruded
aluminum, commercial vehicles, and a variety of component products for other
manufacturers. Finance revenues consisted of revenues from floor plan unit
financing for a limited number of the Company's dealers.
The Company was incorporated under the laws of the state of Iowa on February 12,
1958, and adopted its present name on February 28, 1961. The Company's executive
offices are located at 605 West Crystal Lake Road in Forest City, Iowa. Unless
the context indicates otherwise, the term "Company" refers to Winnebago
Industries, Inc. and its subsidiaries.
FORWARD LOOKING INFORMATION
Except for the historical information contained herein, certain of the matters
discussed in this Annual Report on Form 10-K are "forward looking statements" as
defined in the Private Securities Litigation Reform Act of 1995, which involve
risks and uncertainties, including, but not limited to availability of chassis,
slower than anticipated sales of new or existing products, a significant
increase in interest rates, a general slow down in the economy, or new product
introductions by competitors and other factors which may be disclosed throughout
this Annual Report on Form 10-K. Any forecasts and projections in this report
are "forward looking statements," and are based on management's current
expectations of the Company's near-term results, based on current information
available pertaining to the Company, including the aforementioned risk factors,
actual results could differ materially.
1
PRINCIPAL PRODUCTS
The Company determined it was appropriate to define its operations into two
business segments for fiscal 1999 (See Note 14, "Business Segment Information"
in the Company's Annual Report to Shareholders for the year ended August 28,
1999). However, during each of the last five fiscal years, at least 91% of the
revenues of the Company were derived from recreational vehicle products.
The following table sets forth the respective contribution to the Company's net
revenues by product class for each of the last five fiscal years (dollars in
thousands):
Fiscal Year Ended (1)
----------------------------------------------------------------------------------------
August 28, August 29, August 30, August 31, August 26,
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- --------------
Motor Homes (Class A and C) .............. $ 610,987 $468,004 $381,191 $432,212 $402,435
91.5% 89.1% 87.0% 89.2% 87.5%
Other Recreation
Vehicle Revenues (2) ................ 15,587 18,014 19,771 17,166 19,513
2.3% 3.5% 4.5% 3.5% 4.2%
Other Manufactured Products
Revenues (3) ........................ 38,081 37,000 35,750 34,020 36,961
5.7% 7.0% 8.2% 7.0% 8.0%
-------------- -------------- -------------- -------------- --------------
Total Manufactured
Products Revenues ............. 664,655 523,018 436,712 483,398 458,909
99.5% 99.6% 99.7% 99.7% 99.7%
Finance Revenues (4) .................... 2,995 2,076 1,420 1,406 1,220
.5% .4% .3% .3% .3%
-------------- -------------- -------------- -------------- --------------
Total Net Revenues ...................... $ 667,650 $525,094 $438,132 $484,804 $460,129
100.0% 100.0% 100.0% 100.0% 100.0%
(1) The fiscal year ended August 31, 1996 contained 53 weeks; all other fiscal
years in the table contained 52 weeks. All years prior to fiscal 1998 are
appropriately restated to exclude the Company's discontinued Cycle-Sat,
Inc. (Cycle-Sat) subsidiary's revenues from satellite courier and tape
duplication services.
(2) Primarily recreation vehicle related parts, EuroVan Campers, and recreation
vehicle service revenue.
(3) Primarily sales of extruded aluminum, commercialvehicles and component
products for other manufacturers.
(4) Winnebago Acceptance Corporation (WAC) revenues from dealer financing.
Unit sales of the Company's principal recreation vehicles for the last five
fiscal years were as follows:
Fiscal Year Ended (1)
-------------------------------------------------------------------------------------
August 28, August 29, August 30, August 31, August 26,
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- --------------
Unit Sales:
Class A ............................... 6,054 5,381 4,834 5,893 5,993
Class C ............................... 4,222 3,390 2,724 2,857 2,853
------------- ------------- ------------- ------------- --------------
Total Motor Homes ................. 10,276 8,771 7,558 8,750 8,846
Class B Conversions (EuroVan Camper).... 600 978 1,205 857 1,014
(1) The fiscal year ended August 31, 1996 contained 53 weeks; all other fiscal
years in the table contained 52 weeks.
2
The primary use of recreation vehicles for leisure travel and outdoor recreation
has historically led to a peak retail selling season concentrated in the spring
and summer months. The Company's sales of recreation vehicles are generally
influenced by this pattern in retail sales, but can also be affected by the
level of dealer inventory.
The Company's products are generally manufactured against orders from the
Company's dealers and from time to time to build inventory to satisfy the peak
selling season. As of August 28, 1999, the Company's backlog of orders for Class
A and Class C motor homes was approximately 2,700 units compared to
approximately 1,700 units at August 29, 1998. The Company includes in its
backlog all accepted purchase orders from dealers shippable within the next six
months. Orders in backlog can be canceled at the option of the purchaser at any
time without penalty and, therefore, backlog may not necessarily be a measure of
future sales.
Presently, the Company meets its working capital requirements, capital equipment
requirements and cash requirements of subsidiaries with funds generated
internally. Since March 26, 1992, the Company has had a financing and security
agreement with Bank of America Specialty Group (formerly Nations Bank Specialty
Lending Unit) (See Note 6, "Notes Payable" in the Company's Annual Report to
Shareholders for the year ended August 28, 1999).
RECREATION VEHICLES
MOTOR HOMES - A motor home is a self-propelled mobile dwelling used primarily as
a temporary dwelling during vacation and camping trips.
Recreation Vehicle Industry Association (RVIA) classifies motor homes into three
types (Class A, Class B and Class C). The Company currently manufactures Class A
and Class C motor homes and converts Class B motor homes.
Class A models are conventional motor homes constructed directly on medium-duty
truck chassis which include the engine and drivetrain components. The living
area and driver's compartment are designed and produced by the recreation
vehicle manufacturer.
Class B models are panel-type trucks to which sleeping, kitchen and toilet
facilities are added. These models also have a top extension added to them for
more head room.
Class C models are mini motor homes built on van-type chassis onto which the
manufacturer constructs a living area with access to the driver's compartment.
Certain models of the Company's Class C units include van-type driver's
compartments built by the Company.
The Company currently manufactures and sells Class A and Class C motor homes
primarily under the Winnebago, Itasca, Rialta and Ultimate brand names. These
motor homes generally provide living accommodations for four to seven persons
and include kitchen, dining, sleeping and bath areas, and in some models, a
lounge. Optional equipment accessories include, among other items, air
conditioning, electric power plant, stereo system and a wide selection of
interior equipment. The Company converts Class B motor homes under the EuroVan
Camper brand name, which are distributed through the Volkswagen dealer
organization.
The Company offers, with the purchase of any new Winnebago, Itasca, or Ultimate
motor home, a comprehensive 12-month/15,000-mile warranty, a 3-year/36,000-mile
warranty on sidewalls, floors and slide-out room assemblies, and a 10-year
fiberglass roof warranty. The Rialta has a 2-year/24,000-mile warranty. The
EuroVan Camper has a 2-year/ 24,000-mile warranty on the conversion portion of
the unit. Estimated warranty costs are accrued at the time of sale of the
warranted products. Estimates of future warranty costs are based on prior
experience and known current events.
The Company's Class A and Class C motor homes are sold by dealers in the retail
market at prices ranging from approximately $45,000 to more than $250,000,
depending on size and model, plus optional equipment and delivery charges.
The Company currently manufactures Class A and Class C motor homes ranging in
length from 26 to 40 feet and 22 to 31 feet, respectively. Class B motor homes
converted by the Company (EuroVan Camper) are 17 feet in length.
3
NON-RECREATION VEHICLE ACTIVITIES
OEM, COMMERCIAL VEHICLES, AND OTHER PRODUCTS
OEM - Original equipment manufacturer sales of component parts such as aluminum
extrusions, metal stamping, rotational moldings, vacuum formed plastics,
fiberglass components, panel lamination, electro-deposition painting of steel
and sewn or upholstered items to outside manufacturers.
Commercial Vehicles - Commercial vehicles sales are custom shells primarily
designed for the buyer's special needs and requirements.
Other Products - Sales of molded plastic docks for marine applications.
WINNEBAGO ACCEPTANCE CORPORATION (WAC) - WAC engages in floor plan and rental
unit financing for a limited number of the Company's dealers.
DISCONTINUED ACTIVITIES -
On November 19, 1996, the Company sold all of the assets of its Cycle-Sat
subsidiary, a distributor of satellite courier and tape duplication services, to
Vyvx, Inc., a subsidiary of The Williams Companies, Inc., Tulsa, Oklahoma. See
Note 2, "Discontinued Operations - Sale of Cycle-Sat Subsidiary" in the
Company's Annual Report to Shareholders for
the year ended August 28, 1999.
4
PRODUCTION
The Company's Forest City facilities have been designed to provide vertically
integrated production line manufacturing. The Company also operates a fiberglass
manufacturing facility in Hampton, Iowa, a sewing operation in Lorimor, Iowa and
chassis modification and cabinet door manufacturing facilities in Charles City,
Iowa. The Company manufactures the majority of the components utilized in its
motor homes, with the exception of the chassis, engines, auxiliary power units
and appliances.
Most of the raw materials and components utilized by the Company are obtainable
from numerous sources. The Company believes that substitutes for raw materials
and components, with the exception of chassis, would be obtainable with no
material impact on the Company's operations. Certain components, however, are
produced by only a small group of quality suppliers who have the capacity to
supply large quantities on a national basis. This is especially true in the case
of motor home chassis, where Ford Motor Company and Freightliner Custom Chassis
Corporation are the Company's dominant suppliers. Decisions by such suppliers to
decrease chassis production or utilize chassis production internally or
shortages, production delays or work stoppages by the employees of such
suppliers could have a material adverse effect on the Company's ability to
produce, and ultimately the results from operations. The Company purchases Class
A and C chassis from Ford Motor Company, Class A chassis from Freightliner
Custom Chassis Corporation, Workhorse Custom Chassis LLC and Spartan Motors,
Inc., Class C chassis from Chevrolet Motor Division and Volkswagen of America,
Inc. Class B chassis from Volkswagen of America, Inc. are utilized in the
Company's EuroVan Camper. Only three vendors accounted for as much as five
percent of the Company's raw material purchases in fiscal 1999, Ford Motor
Company, Freightliner Custom Chassis Corporation, and Volkswagen of America,
Inc. (approximately 36 percent, in the aggregate). Ford Motor Company has been
the Company's primary supplier of chassis for the past two fiscal years. Ford
has advised the industry that for the fourth quarter of calendar 1999 and the
first quarter of calendar 2000, it will reduce the number of chassis available
to motor home manufacturers. The Company believes it will be able to acquire
chassis from other suppliers to offset such reductions.
Motor home bodies are made from various materials and structural components
which are typically laminated into rigid, lightweight panels. Body designs are
developed with computer design and analysis, and subjected to a variety of tests
and evaluations to meet Company standards and requirements.
The Company manufactures picture windows, lavatories, and all of the doors,
cabinets, shower pans, waste holding tanks, wheel wells and sun visors used in
its recreation vehicles. In addition, the Company produces most of the bucket
seats, upholstery items, lounge and dinette seats, seat covers, decorator
pillows, curtains and drapes.
The Company produces substantially all of the raw, liquid-painted and
powder-coated aluminum extrusions used for interior and exterior trim in its
recreation vehicles. The Company also sells aluminum extrusions to over 90
customers.
DISTRIBUTION AND FINANCING
The Company markets its recreation vehicles on a wholesale basis to a broadly
diversified dealer organization located throughout the United States and, to a
limited extent, in Canada. Foreign sales, including Canada, were less than three
percent of net revenues in fiscal 1999. As of August 28, 1999 and August 29,
1998, the motor home dealer organization in the United States and Canada
included approximately 340 and 350 dealers, respectively. During fiscal 1999,
eight dealers accounted for approximately 25 percent of motor home unit sales,
and only one dealer accounted for as much as seven percent (7.0%) of motor home
unit sales.
Winnebago Industries Europe GmbH, a wholly owned subsidiary, was sold in August
1997 (See Note 14, "Business Segment Information," in the Company's Annual
Report to Shareholders for the year ended August 28, 1999). All international
sales (except Canada) are now handled by three distributors in Japan and one
distributor in England who market the Company's recreation vehicles.
5
The Company has sales agreements with dealers which are renewed on an annual or
bi-annual basis. Many of the dealers are also engaged in other areas of
business, including the sale of automobiles, and many dealers carry one or more
competitive lines. The Company continues to place high emphasis on the
capability of its dealers to provide complete service for its recreation
vehicles. Dealers are obligated to provide full service for owners of the
Company's recreation vehicles, or in lieu thereof, to secure such service at
their own expense from other authorized firms.
At August 28, 1999, the Company had a staff of 32 people engaged in field sales
and service to the motor home dealer organization.
The Company advertises and promotes its products through national RV magazines
and cable TV networks and on a local basis through trade shows, television,
radio and newspapers, primarily in connection with area dealers.
Substantially all sales of recreation vehicles to dealers are made on cash
terms. Most dealers are financed on a "floor plan" basis under which a bank or
finance company lends the dealer all, or substantially all, of the purchase
price, collateralized by a lien upon, or title to, the merchandise purchased.
Upon request of a lending institution financing a dealer's purchases of the
Company's products, and after completion of a credit investigation of the dealer
involved, the Company will execute a repurchase agreement. These agreements
provide that, in the event of default by the dealer on the dealer's agreement to
pay the lending institution, the Company will repurchase the financed
merchandise. The agreements provide that the Company's liability will not exceed
100 percent of the invoice price and provide for periodic liability reductions
based on the time since the date of the invoice. The Company's contingent
liability on all repurchase agreements was approximately $168,552,000 and
$132,540,000 at August 28, 1999 and August 29, 1998, respectively. Included in
these contingent liabilities are approximately $7,480,000 and $18,623,000,
respectively, of certain dealer receivables subject to recourse (See Note 8,
"Contingent Liabilities and Commitments" in the Company's Annual Report to
Shareholders for the year ended August 28, 1999). The Company's contingent
liability under repurchase agreements varies significantly from time to time,
depending upon seasonal shipments, competition, dealer organization, gasoline
supply and availability of bank financing.
COMPETITION
The recreation vehicle market is highly competitive, both as to price and
quality of the product. The Company believes its principal marketing advantages
are the quality of its products, its dealer organization, its warranty and
service capability and its marketing techniques. The Company also believes that
its prices are competitive with the competitions' units of comparable size and
quality.
The Company is a leading manufacturer of motor homes. For the 12 months ended
August 31, 1999, Recreation Vehicle Industry Association (RVIA) reported factory
shipments of 47,900 Class A motor homes, 3,500 Class B motor homes and 18,500
Class C motor homes. Unit sales of such products by the Company for the last
five fiscal years are shown on page 2 of this report. The Company has numerous
competitors and potential competitors in this industry. The five largest
manufacturers represented approximately 71 percent of the combined Class A and
Class C motor home markets for the 12 months ended August 31, 1999, including
the Company's sales, which represented 16 percent of the market. As the Company
does not manufacture Class B motor homes but only completes a conversion package
on these units, the Class B motor home comparison is not included in this
report. The Company is not a significant factor in the markets for its other
recreation vehicle products and its non-recreation vehicle products and
services.
6
REGULATION, TRADEMARKS AND PATENTS
The Company is subject to a variety of federal, state and local regulations,
including the National Traffic and Motor Vehicle Safety Act, under which the
National Highway Traffic Safety Administration may require manufacturers to
recall recreational vehicles that contain safety-related defects, and numerous
state consumer protection laws and regulations relating to the operation of
motor vehicles, including so-called "Lemon Laws." The Company is subject to
regulations promulgated by the Occupational Safety and Health Administration
(OSHA). The Company's facilities are periodically inspected by federal or state
agencies, such as OSHA, concerned with workplace health and safety. The Company
believes that its products and facilities comply in all material respects with
the applicable vehicle safety, consumer protection, RVIA and OSHA regulations
and standards. Amendments to any of these regulations and the implementation of
new regulations, however, could significantly increase the cost of
manufacturing, purchasing, operating or selling the Company's products and could
have a material adverse effect on the Company's results of operations. The
failure of the Company to comply with present or future regulations could result
in fines being imposed on the Company, potential civil and criminal liability,
suspension of sales or production, or cessation of operations. In addition, a
major product recall could have a material adverse effect on the Company's
results of operations.
The Company's operations are subject to a variety of federal and state
environmental regulations relating to the use, generation, storage, treatment,
emission and disposal of hazardous materials and wastes and noise pollution.
Although the Company believes that it is currently in material compliance with
applicable environmental regulations, the failure of the Company to comply with
present or future regulations could result in fines being imposed on the
Company, potential civil and criminal liability, suspension of production or
operations, alterations to the manufacturing process, or costly cleanup or
capital expenditures.
The Company has several registered trademarks, including Winnebago, Itasca,
Minnie Winnie, Brave, Chieftain, Sunrise, Adventurer, Spirit, Sunflyer,
Suncruiser, Sundancer, Rialta and Minnie.
RESEARCH AND DEVELOPMENT
During fiscal 1999, 1998 and 1997, the Company spent approximately $1,978,000,
$1,128,000 and $1,695,000, respectively, on research and development activities.
These activities involved the equivalent of 32, 16 and 24 full-time employees
during fiscal 1999, 1998 and 1997, respectively.
HUMAN RESOURCES
As of September 1, 1999, 1998 and 1997, the Company employed approximately
3,400, 3,010 and 2,830 persons, respectively. Of these, approximately 2,800,
2,410 and 2,270 persons, respectively, were engaged in manufacturing and
shipping functions. None of the Company's employees are covered under a
collective bargaining agreement.
7
ITEM 2. Properties
The Company's manufacturing, maintenance and service operations are conducted in
multi-building complexes owned by the Company, containing an aggregate of
approximately 1,452,000 square feet in Forest City, Iowa. The Company also owns
698,000 square feet of warehouse facilities located in Forest City. The Company
leases approximately 235,000 square feet of its unoccupied manufacturing
facilities in Forest City to others. The Company also owns a manufacturing
facility (74,000 square feet) in Hampton, Iowa and manufacturing facilities
(53,000 square feet) in Charles City, Iowa. The Company leases a storage
facility (25,000 square feet) in Hampton, Iowa, a manufacturing facility (17,200
square feet) in Lorimor, Iowa, and a manufacturing facility (10,000 square feet)
in Charles City, Iowa. Leases on the above leased facilities expire at various
dates, the earliest of which is December 31, 1999. The Company's facilities in
Forest City are located on approximately 780 acres of land, all owned by the
Company.
Most of the Company's buildings are of steel or steel and concrete construction
and are protected from fire with high-pressure sprinkler systems, dust collector
systems, automatic fire doors and alarm systems. The Company believes that its
facilities and equipment are well maintained, in excellent condition and
suitable for the purposes for which they are intended. The Company believes that
after the recent expansion in Charles City, Iowa and after future expansions are
completed in Hampton, Iowa, Charles City, Iowa and Forest City, Iowa, its
facilities will be sufficient to meet its production requirements for the
foreseeable future. Should the Company require increased production capacity in
the future, the Company believes that additional or alternative space adequate
to serve the Company's foreseeable needs would be available.
ITEM 3. Legal Proceedings
The Company is involved in various legal proceedings which are ordinary routine
litigation incident to its business, many of which are covered in whole or in
part by insurance. While it is impossible to estimate with certainty the
ultimate legal and financial liability with respect to this litigation,
management is of the opinion that while the final resolution of any such
litigation may have an impact on the Company's consolidated results for a
particular reporting period, the ultimate disposition of such litigation will
not have any material adverse effect on the Company's financial position,
results of operations or liquidity.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
8
Executive Officers of the Registrant
NAME OFFICE (YEAR FIRST ELECTED AN OFFICER) AGE
- ----------------------------- ----------------------------------------------------------------------------- -------
Bruce D. Hertzke + Chairman of the Board, Chief Executive Officer and President (1989) 48
Edwin F. Barker Vice President, Chief Financial Officer (1980) 52
Raymond M. Beebe Vice President, General Counsel & Secretary (1974) 57
Ronald D. Buckmeier Vice President, Product Development (1997) 52
Robert L. Gossett Vice President, Administration (1998) 48
Brian J. Hrubes Controller (1996) 48
James P. Jaskoviak Vice President, Sales and Marketing (1994) 47
Robert J. Olson Vice President, Manufacturing (1996) 48
Joseph L. Soczek, Jr. Treasurer (1996) 56
+ Director
Officers are elected annually by the Board of Directors. All of the foregoing
officers have been employed by the Company as officers or in other responsible
positions for at least the last five years, except that Robert L. Gossett was a
Vice President of TCB, Inc. prior to joining the Company in 1998. Mr. Gossett
had been with TCB for at least the past five years. TCB, Inc. is a nationwide
distributor and value-added manufacturer of glass, plastic and ceramic consumer
and packaging industry products.
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Reference is made to information concerning the market for the Company's common
stock, cash dividends and related stockholder matters on page 40 of the
Company's Annual Report to Shareholders for the year ended August 28, 1999,
which information is incorporated by reference herein. On October 7, 1999, the
Board of Directors declared a cash dividend of $.10 per common share payable
January 10, 2000 to shareholders of record on December 10, 1999. The Company
paid dividends of $.20 per common share during fiscal years 1999 and 1998.
ITEM 6. Selected Financial Data
Reference is made to the information included under the caption "Selected
Financial Data" on page 1 of the Company's Annual Report to Shareholders for the
year ended August 28, 1999, which information is incorporated by reference
herein.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Reference is made to the information under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on pages 17
through 21 of the Company's Annual Report to Shareholders for the year ended
August 28, 1999, which information is incorporated by reference herein.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
As of August 28, 1999, the Company had an investment portfolio of fixed income
securities, which are classified as cash and cash equivalents of $48.2 million.
These securities, like all fixed income investments, are subject to interest
rate risk and will decline in value if market interest rates increase. However,
the Company has the ability to hold its fixed income investments until maturity
and, therefore, the Company would not expect to recognize an adverse impact in
income or cash flows in such an event.
As of August 28, 1999, the Company had dealer financing receivables in the
amount of $24.6 million. Interest rates charged on these receivables vary based
on the prime rate and are adjusted monthly.
9
ITEM 8. Financial Statements and Supplementary Data
The consolidated financial statements of the Company which appear on pages 22
through 37 and the report of the independent accountants which appears on page
38, and the supplementary data under "Interim Financial Information (Unaudited)"
on page 39 of the Company's Annual Report to Shareholders for the year ended
August 28, 1999, are incorporated by reference herein.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
Reference is made to the table entitled Executive Officers of the Registrant in
Part One of this report and to the information included under the caption
"Election of Directors" in the Company's Proxy Statement for the Annual Meeting
of Shareholders scheduled to be held January 11, 2000, which information is
incorporated by reference herein.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") requires the Company's officers and directors and persons who beneficially
own more than 10 percent of the Company's common stock (collectively "Reporting
Persons") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York Stock Exchange.
Reporting Persons are required by the SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its review of
the copies of such forms received or written representations from certain
Reporting Persons that no Forms 5 were required for those persons, the Company
believes that, during fiscal year 1999, all the Reporting Persons complied with
all applicable filing requirements, except that Mr. John V. Hanson, a Director
of the Company, inadvertently omitted to file a Form 4 reporting the purchase by
his wife of 100 shares of the Company's common stock.
ITEM 11. Executive Compensation
Reference is made to the information included under the caption "Executive
Compensation" in the Company's Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held January 11, 2000, which information is
incorporated by reference herein.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
Reference is made to the share ownership information included under the caption
"Voting Securities and Principal Holders Thereof" in the Company's Proxy
Statement for the Annual Meeting of Shareholders scheduled to be held January
11, 2000, which information is incorporated by reference herein.
ITEM 13. Certain Relationships and Related Transactions
Reference is made to the information included under the caption "Certain
Transactions with Management" in the Company's Proxy Statement for the Annual
Meeting of Shareholders scheduled to be held January 11, 2000, which information
is incorporated by reference herein.
10
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. The consolidated financial statements of the Company are
incorporated by reference in ITEM 8 and an index to financial
statements appears on page 13 of this report.
2. Consolidated Financial Statement Schedules Winnebago Industries, Inc.
and Subsidiaries
PAGE
Report of Independent Auditors on Supplemental
Financial Schedule 14
II. Valuation and Qualifying Accounts 15
All schedules, other than Schedule II, are omitted because of the
absence of the conditions under which they are required or because the
information required is shown in the consolidated financial statements
or the notes thereto.
(a) 3. Exhibits
See Exhibit Index on page 16.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
UNDERTAKING
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into registrant's Registration Statements on Form S-8 Nos. 2-40316
(which became effective on or about June 10, 1971), 2-82109 (which became
effective on or about March 15, 1983), 33-21757 (which became effective on or
about May 31, 1988), 33-59930 (which became effective on or about March 24,
1993) and 333-31595 (which became effective on or about July 18, 1997).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By /s/ Bruce D. Hertzke
--------------------------------
Chairman of the Board
Date: November 22, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on, November 22, 1999, by the following persons on behalf
of the Registrant and in the capacities indicated.
SIGNATURE CAPACITY
/s/ Bruce D. Hertzke
- ----------------------------
Bruce D. Hertzke Chairman of the Board, Chief Executive
Officer, President and Director
(Principal Executive Officer)
/s/ Edwin F. Barker
- ----------------------------
Edwin F. Barker Vice President, Chief Financial Officer
(Principal Financial Officer)
/s/ Brian J. Hrubes
- ----------------------------
Brian J. Hrubes Controller
(Principal Accounting Officer)
/s/ Gerald E. Boman
- ----------------------------
Gerald E. Boman Director
/s/ Jerry N. Currie
- ----------------------------
Jerry N. Currie Director
/s/ Fred G. Dohrmann
- ----------------------------
Fred G. Dohrmann Director
/s/ John V. Hanson
- ----------------------------
John V. Hanson Director
/s/ Gerald C. Kitch
- ----------------------------
Gerald C. Kitch Director
/s/ Richard C. Scott
- ----------------------------
Richard C. Scott Director
/s/ Frederick M. Zimmerman
- ----------------------------
Frederick M. Zimmerman Director
12
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES *PAGE
Independent Auditors' Report 38
Consolidated Balance Sheets 22 - 23
Consolidated Statements of Income 24
Consolidated Statements of Cash Flows 25
Consolidated Statements of Changes in Stockholders' Equity 26
Notes to Consolidated Financial Statements 27 - 37
* Refers to respective pages in the Company's 1999 Annual
Report to Shareholders, a copy of which is attached
hereto, which pages are incorporated herein by reference.
13
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Winnebago Industries, Inc.
Forest City, Iowa
We have audited the consolidated financial statements of Winnebago Industries,
Inc. and subsidiaries (the Company) as of August 28, 1999 and August 29, 1998
and for each of the three years in the period ended August 28, 1999 and have
issued our report thereon dated October 7, 1999. Such consolidated financial
statements and report are included in your fiscal 1999 Annual Report to
Shareholders and are incorporated herein by reference. Our audits also included
the consolidated financial statement schedule of Winnebago Industries, Inc. and
subsidiaries, as listed in Item 14(a)2. This consolidated financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Minneapolis, Minnesota
October 7, 1999
14
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
==================================================================================================================================
(Dollars in thousands)
----------------------------------------------------------------------------------------
COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN
A B C D E F
- -------------------------------------- ------------- ---------------------------- ------------- ----------- -----------
ADDITIONS
(REDUCTIONS)
BALANCE AT CHARGED TO BALANCE
BEGINNING COST AND BAD DEBTS DEDUCTIONS AT END OF
PERIOD AND DESCRIPTION OF PERIOD EXPENSES RECOVERIES CHARGE-OFFS OTHER PERIOD
- -------------------------------------- ------------- ------------ ------------ ------------- ----------- -----------
Year Ended August 28, 1999:
Allowance for doubtful
accounts receivable $ 1,582 $ (616) $ - - - $ 6 $ - - - $ 960
Allowance for doubtful
dealer receivables 78 (16) 11 - - - - - - 73
Allowance for excess and
obsolete inventory 703 1,339 - - - 1,251 - - - 791
Allowance for doubtful
notes receivable 973 (711) - - - - - - - - - 262
Year Ended August 29, 1998:
Allowance for doubtful
accounts receivable 1,429 367 - - - 214 - - - 1,582
Allowance for doubtful
dealer receivables 155 (6) - - - 71 - - - 78
Allowance for excess and
obsolete inventory 814 1,443 - - - 1,554 - - - 703
Allowance for doubtful
notes receivable 1,465 (492) - - - - - - - - - 973
Year Ended August 30, 1997:
Allowance for doubtful
accounts receivable 702 730 1 4 - - - 1,429
Allowance for doubtful
dealer receivables 197 (160) 118 - - - - - - 155
Allowance for excess and
obsolete inventory 569 1,319 - - - 1,074 - - - 814
Allowance for doubtful
notes receivable 797 668 - - - - - - - - - 1,465
15
EXHIBIT INDEX
3a. Articles of Incorporation previously filed with the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 27, 1988 (Commission
File Number 1-6403), and incorporated by reference herein.
3b. Amended Bylaws of the Registrant previously filed with the Registrant's
quarterly report on Form 10-Q for the quarter ended February 27, 1999
(Commission File Number 1-6403), and incorporated by reference herein.
4a. Restated Inventory Floor Plan Financing Agreement between Winnebago
Industries, Inc. and Bank of America Specialty Group (formerly
NationsBank Specialty Lending Unit) previously filed with the
Registrant's Annual Report on Form 10-K for the fiscal year ended August
27, 1994 (Commission File Number 1-6403), and incorporated by reference
herein and the First Amendment dated October 31, 1995 thereto.
4b. Restated Financing and Security Agreement dated July 6, 1995 between
Winnebago Industries, Inc. and Bank of America Specialty Group (formerly
Nations Bank Specialty Lending Unit) previously filed with the
Registrant's Annual Report on Form 10-K for the fiscal year ended August
26, 1995 (Commission File Number 1-6403), and incorporated by reference
herein.
10a. Winnebago Industries, Inc. Stock Option Plan for Outside Directors
previously filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 29, 1992 (Commission File Number 1-6403), and
incorporated by reference herein.
10b. Amendment to Winnebago Industries, Inc. Deferred Compensation Plan
previously filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 26, 1995 (Commission File Number 1-6403), and
incorporated by reference herein.
10c. Amendment to Winnebago Industries, Inc. Profit Sharing and Deferred
Savings and Investment Plan previously filed with the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 26, 1995 (Commission
File Number 1-6403), and incorporated by reference herein.
10d. Winnebago Industries, Inc. Book Unit Rights Plan previously filed with
the Registrant's Annual Report on Form 10-K for the fiscal year ended
August 29, 1987 (Commission File Number 1-6403), and incorporated by
reference herein.
10e. Winnebago Industries, Inc. 1987 Non-Qualified Stock Option Plan
previously filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 29, 1987 (Commission File Number 1-6403), and
incorporated by reference herein.
10f. Winnebago Industries, Inc. Officers' Incentive Compensation Plan for
fiscal 2000.
10g. Winnebago Industries, Inc. Employee's Stock Bonus Plan and Trust
Agreement previously filed with the Registrant's Annual Report on Form
10-K for the fiscal year ended August 31, 1996 (Commission File Number
1-6403) and incorporated by reference herein.
10h. Winnebago Industries, Inc. Directors' Deferred Compensation Plan
previously filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 30, 1997 (Commission File Number 1-6403) and
incorporated by reference herein.
10i. Winnebago Industries, Inc. 1997 Stock Option Plan previously filed with
the Registrant's Annual Report on Form 10-K for the fiscal year ended
August 30, 1997 (Commission File Number 1-6403) and incorporated by
reference herein.
10j. Amendment to Winnebago Industries, Inc. Executive Share Option Plan
previously filed with the Registrant's quarterly report on Form 10-Q for
the quarter ended May 29, 1999 (Commission File Number 1-6403), and
incorporated by reference herein.
10k. Winnebago Industries, Inc. Officers' Long-Term Incentive Plan, fiscal
three-year period 1999, 2000 and 2001 previously filed with the
Registrant's quarterly report on Form 10-Q for the quarter ended February
27, 1999 (Commission File Number 1-6403), and incorporated by reference
herein.
10l. Winnebago Industries, Inc. Officers' Long-Term Incentive Plan, fiscal
three-year period 2000, 2001 and 2002.
13. Winnebago Industries, Inc. Annual Report to Shareholders for the year
ended August 28, 1999.
21. List of Subsidiaries.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
16