WINNEBAGO INDUSTRIES INC - FORM 8-K - EX-99.1 - FIRST QUARTER 2011 RELEASE - December 16, 2010

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8-K - 8K 1ST QUARTER FY 2011 - WINNEBAGO INDUSTRIES INCa8kq12011earnings.htm
 

Contact: Sheila Davis - PR/IR Mgr. - 641-585-6803 - sdavis@winnebagoind.com
 
WINNEBAGO INDUSTRIES REPORTS RESULTS FOR
FIRST QUARTER FISCAL 2011
-- Net Income of $3.8 Million --
 
 
FOREST CITY, IOWA, December 16, 2010 - Winnebago Industries, Inc. (NYSE:WGO), one of the leading United States (U.S.) motor home manufacturers, today reported continued improvement in financial results during the Company's first quarter of Fiscal year 2011.
 
Revenues for the first quarter of Fiscal 2011 ended November 27, 2010 were $123.7 million, an increase of 52.7 percent, versus $81.0 million for the first quarter of Fiscal 2010. The Company reported an operating profit of $4.9 million for the quarter, versus an operating loss of $6.0 million for the first quarter of Fiscal 2010. Net income for the first quarter was $3.8 million versus a net loss of $1.3 million for the first quarter of Fiscal 2010. On a diluted per share basis, the Company had net income of $0.13 for the first quarter of Fiscal 2011 versus a net loss of $0.05 for the first quarter of Fiscal 2010. The net loss for the first quarter of Fiscal 2010 reflected the positive impact of $4.9 million in tax benefits associated with additional Fiscal 2009 net operating loss carryback due to tax law changes in Fiscal 2010; however, no tax benefits were recorded on first quarter Fiscal 2010 pre-tax losses which were not immediately subject to refund. During the first quarter of Fiscal 2011, an idled assembly facility in Charles City, Iowa (CCMF) classified as held for sale, was sold to CGS Tires US, Inc. The sale was finalized on November 1, 2010 and generated $3.7 million in net proceeds and a gain of $644,000.
 
The first quarter was positively impacted by increased motor home deliveries, increased average selling price due to a shift to more higher-priced Class A products, more fixed cost absorption and improved labor efficiencies as a result of higher production levels, as well as the sale of CCMF.
 
“Increased motor home deliveries continued to drive the improvement in our first quarter Fiscal 2011 results,” said Winnebago Industries' Chairman, CEO and President Bob Olson. "We are pleased to see increases in our delivery volumes, as well as strength in our Class A products in the marketplace, with gains in both Class A gas and diesel market share. As we enter the slower winter months, however, we remain cautious until we see continued retail growth."
 
"We experienced a very positive response from dealers on our new 2011 products shown at the recent National RV Trade Show in Louisville, KY which took place November 30 through December 2, 2010," continued Olson. "Our dealers were particularly excited about the new Class A diesel Winnebago Tour and Itasca Ellipse products for 2011, which were totally redesigned with a new exterior design and four floorplans unique to the Recreation Vehicle (RV) industry. We also displayed several new floorplans in our Class A gas and Class C product lines, in addition to the premier viewing of our new 2012 ERA Class B motor home, with better user-functionality, enhanced features, more storage capacity and more value."
 
Winnebago Industries' dealer inventory increased 31.8 percent with 2,066 Class A, B and C motor homes on dealers' lots at the end of the first quarter of Fiscal 2011, compared to the end of the first quarter of Fiscal 2010. Conversely, Winnebago Industries' sales order backlog was 698 Class A, B and C motor homes at the end of the first quarter of Fiscal 2011, a decrease of 54.1 percent compared to the end of the first quarter of Fiscal 2010.
 
"Our higher sales order backlog last year at this time was indicative of the fact dealer inventory had bottomed out and our dealers were finally ready to re-stock their shelves with new product," said Olson. "We responded to that increased demand by ramping up our production a year ago and dealer inventory has remained at a consistent level and in line with retail demand since February 2010."
 
Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, December 16, 2010. 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 motor homes which are 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. Winnebago Industries has received the Quality Circle Award from the Recreation Vehicle Dealers Association every year since the award's inception in 1996. The Company's common stock is listed on the New York and Chicago Stock Exchanges and traded under the symbol WGO. Options for the Company's common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit, http://www.winnebagoind.com/investor.html.
 
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to new product introductions by competitors, low consumer confidence, a further or continued slowdown in the economy, interest rates and availability of credit, inadequate liquidity or capital resources, significant increase in repurchase obligations, availability and price of fuel, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, the effect of global tensions, 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 Statements of Operations
(In thousands, except percent and per share data)
 
 
Quarter Ended
 
November 27, 2010
 
November 28, 2009
Net revenues
$
123,711
 
 
100.0
 %
 
$
81,017
 
 
100.0
 %
Cost of goods sold
112,512
 
 
90.9
 %
 
80,493
 
 
99.4
 %
Gross profit
11,199
 
 
9.1
 %
 
524
 
 
0.6
 %
Operating expenses:
 
 
 
 
 
 
 
Selling
3,267
 
 
2.6
 %
 
3,229
 
 
4.0
 %
General and administrative
3,651
 
 
3.0
 %
 
3,272
 
 
4.0
 %
Gain on sale of asset held for sale
(644
)
 
(0.5
)%
 
—
 
 
—
 %
Total operating expenses
6,274
 
 
5.1
 %
 
6,501
 
 
8.0
 %
Operating income (loss)
4,925
 
 
4.0
 %
 
(5,977
)
 
(7.4
)%
Other non-operating income (expense)
152
 
 
0.1
 %
 
(233
)
 
(0.3
)%
Income (loss) before income taxes
5,077
 
 
4.1
 %
 
(6,210
)
 
(7.7
)%
Provison (benefit) for taxes
1,291
 
 
1.0
 %
 
(4,866
)
 
(6.0
)%
Net income (loss)
$
3,786
 
 
3.1
 %
 
$
(1,344
)
 
(1.7
)%
Income (loss) per common share:
 
 
 
 
 
 
 
Basic
$
0.13
 
 
 
 
$
(0.05
)
 
 
Diluted
$
0.13
 
 
 
 
$
(0.05
)
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,112
 
 
 
 
29,073
 
 
 
Diluted
29,115
 
 
 
 
29,086
 
 
 
 
Winnebago Industries, Inc.
Unaudited Balance Sheets
(In thousands)
 
 
November 27,
2010
 
August 28,
2010
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
81,165
 
 
$
74,691
 
Short-term investments
5,250
 
 
—
 
Receivables, net
16,508
 
 
18,798
 
Inventories
45,173
 
 
43,526
 
Prepaid expenses and other assets
4,597
 
 
4,570
 
Income taxes receivable
132
 
 
132
 
Total current assets
152,825
 
 
141,717
 
Property, plant, and equipment, net
24,949
 
 
25,677
 
Assets held for sale
1,201
 
 
4,254
 
Long-term investments
11,146
 
 
17,785
 
Investment in life insurance
23,500
 
 
23,250
 
Other assets
15,850
 
 
14,674
 
Total assets
$
229,471
 
 
$
227,357
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
17,035
 
 
$
19,725
 
Income taxes payable
1,301
 
 
99
 
Accrued expenses
29,949
 
 
30,548
 
Total current liabilities
48,285
 
 
50,372
 
Long-term liabilities:
 
 
 
Unrecognized tax benefits
5,761
 
 
5,877
 
Postretirement health care and deferred compensation benefits, net of current portion
74,905
 
 
73,581
 
Total long-term liabilities
80,666
 
 
79,458
 
Stockholders' equity
100,520
 
 
97,527
 
Total liabilities and stockholders' equity
$
229,471
 
 
$
227,357
 
 
Winnebago Industries, Inc.
Unaudited Statements of Cash Flows
(In thousands)
 
 
 
Three Months Ended
 
November 27,
2010
 
November 28,
2009
Operating activities:
 
 
 
Net income (loss)
$
3,786
 
 
$
(1,344
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation
1,430
 
 
1,684
 
Stock-based compensation
80
 
 
164
 
Deferred income taxes including valuation allowance
291
 
 
—
 
Postretirement benefit income and deferred compensation expenses
345
 
 
323
 
Provision (reduction) for doubtful accounts
17
 
 
(52
)
Increase in cash surrender value of life insurance policies
(324
)
 
(296
)
Gain on sale or disposal of property
(693
)
 
(8
)
Other
29
 
 
19
 
Change in assets and liabilities:
 
 
 
Inventories
(1,647
)
 
(4,229
)
Receivables and prepaid assets
2,246
 
 
(449
)
     Income taxes and unrecognized tax benefits
974
 
 
(4,887
)
Accounts payable and accrued expenses
(3,435
)
 
4,055
 
Postretirement and deferred compensation benefits
(926
)
 
(837
)
Net cash provided by (used in) operating activities
2,173
 
 
(5,857
)
 
 
 
 
Investing activities:
 
 
 
Proceeds from the sale of investments, at par
1,200
 
 
—
 
Purchases of property and equipment
(667
)
 
(509
)
Proceeds from the sale of property
3,769
 
 
44
 
Other
24
 
 
(464
)
Net cash provided by (used in) investing activities
4,326
 
 
(929
)
 
 
 
 
Financing activities:
 
 
 
Payments for purchase of common stock
(89
)
 
(249
)
Proceeds from exercise of stock options
—
 
 
15
 
    Other
64
 
 
(341
)
Net cash used in financing activities
(25
)
 
(575
)
 
 
 
 
Net increase (decrease) in cash and cash equivalents
6,474
 
 
(7,361
)
Cash and cash equivalents at beginning of period
74,691
 
 
36,566
 
Cash and cash equivalents at end of period
$
81,165
 
 
$
29,205
 
 
 
 
 
Supplemental cash flow disclosure:
 
 
 
Income taxes paid
$
25
 
 
$
21
 
 
Winnebago Industries, Inc.
Unaudited Motor Home Deliveries
 
Quarter Ended
 
Change
(In units)
November 27,
2010
Product
Mix %
 
November 28,
2009
Product
Mix %
 
Units
%
Change
Class A gas
389
 
34.9
%
 
235
 
29.6
%
 
154
 
65.5
 %
Class A diesel
270
 
24.2
%
 
180
 
22.7
%
 
90
 
50.0
 %
Total Class A
659
 
59.1
%
 
415
 
52.3
%
 
244
 
58.8
 %
Class B
1
 
0.1
%
 
62
 
7.8
%
 
(61
)
(98.4
)%
Class C
455
 
40.8
%
 
317
 
39.9
%
 
138
 
43.5
 %
Total deliveries
1,115
 
100.0
%
 
794
 
100.0
%
 
321
 
40.4
 %
 
 
 
 
 
 
Winnebago Industries, Inc.
Unaudited Backlog and Dealer Inventory
 
As Of
 
 
 
November 27, 2010
 
November 28, 2009
 
Increase
 
Units
% (1)
 
Units
% (1)
 
(Decrease)
Class A gas
254
 
36.4
%
 
531
 
34.9
%
 
(277
)
(52.2
)%
Class A diesel
201
 
28.8
%
 
381
 
25.0
%
 
(180
)
(47.2
)%
Total Class A
455
 
65.2
%
 
912
 
60.0
%
 
(457
)
(50.1
)%
Class B (2)
—
 
—
%
 
17
 
1.1
%
 
(17
)
(100.0
)%
Class C
243
 
34.8
%
 
592
 
38.9
%
 
(349
)
(59.0
)%
Total backlog
698
 
100.0
%
 
1,521
 
100.0
%
 
(823
)
(54.1
)%
 
 
 
 
 
 
 
 
 
 
 
Total approximate revenue dollars (in thousands) (3)
$
75,454
 
 
 
$
149,501
 
 
 
$
(74,047
)
(49.5
)%
 
 
 
 
 
 
 
 
 
 
 
Dealer inventory (units)
2,066
 
 
 
1,567
 
 
 
499
 
31.8
 %
 
 
 
 
 
 
 
 
 
(1) Percentages may not add due to rounding differences.
(2) Class B backlog is currently not applicable given the fact that the ERA was temporarily discontinued in the 2011 model year. Current plans call for the ERA to be reintroduced in the 2012 model year.
(3) We include in our backlog all accepted purchase orders from dealers to be shipped within the next six months. Orders in backlog can be canceled or postponed at the option of the purchaser at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales
 

 

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