WINNEBAGO INDUSTRIES INC - FORM 8-K - EX-99.1 - EXHIBIT - December 19, 2013

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News Release
 


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

WINNEBAGO INDUSTRIES REPORTS RESULTS FOR
FIRST QUARTER OF FISCAL 2014
-- First Quarter Revenues Increase of 15% and Net Income Increase of 51% --

FOREST CITY, IOWA, December 19, 2013 - Winnebago Industries, Inc. (NYSE:WGO), a leading United States (U.S.) recreation vehicle manufacturer, today reported financial results for the Company's first quarter of Fiscal 2014.

Revenues for the 13-week first quarter ended November 30, 2013 were $222.7 million, an increase of 15.0%, versus $193.6 million for the 14-week first quarter of Fiscal 2013. The Company reported operating income of $16.0 million for the quarter, an increase of 60.9% versus $9.9 million for the first quarter of Fiscal 2013. Net income for the first quarter of Fiscal 2014 was $11.1 million, an increase of 50.8%, versus $7.4 million for the first quarter of Fiscal 2013. Diluted earnings per share for the first quarter of Fiscal 2014 was $0.40, an increase of 53.8%, versus $0.26 for the first quarter of Fiscal 2013.

Earnings in the 13-week first quarter were positively impacted by increased motorhome volumes as a result of higher dealer and retail consumer demand, as compared to the 14-week first quarter of Fiscal 2013. Also in the quarter, shipping terms were revised to reflect delivery FOB Forest City to conform to standard industry practice which positively impacted shipments. The increased production and delivery volumes, along with firmer pricing and strong demand for new products, as well as lower operating expense, provided more leverage that resulted in higher operating margins, net income and earnings per share as compared to the same quarter last year.

“Our strong first quarter results are a reflection of our dedicated team running the business well,” said Winnebago Industries' Chairman, CEO and President Randy Potts. "Everyone's hard work and creativity contributes to the success of our business. We are keeping our fixed costs low, while continuing to grow our business with new and innovative products. New product entries in both motorized and towable categories displayed at the recent National RV Show in Louisville, KY were very well received, with the Winnebago Trend named as a "2014 Top RV Debut" by RV Business Magazine. We plan to continue to bring new and innovative products to market and believe we have tremendous growth opportunities ahead. In addition to our new products, the backlog reflects a large rental order to be delivered primarily in our third fiscal quarter, which is incremental to our normal rental business."

"We will continue to make investments in working capital," said Winnebago VP, CFO Sarah Nielsen. "Production increased 27% in the first quarter of Fiscal 2014 compared to same period last year and 11% sequentially from the fourth quarter last year based on improved demand. A key component to our investment in working capital is the need for additional inventory to support the higher production rates."

Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, December 19, 2013. 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 Motorhomes®", is a leading U.S. manufacturer of recreation vehicles, which are used primarily in leisure travel and outdoor recreation activities. The Company and its subsidiary build quality motorhomes, travel trailers, fifth wheel products and transit buses under the Winnebago, Itasca, Winnebago Touring Coach, SunnyBrook and Metro brand names. Winnebago Industries has received the Quality Circle Award from the Recreation Vehicle Dealers Association every year since 1996. The Company's common stock is listed on the New York and Chicago Stock Exchanges and traded under the symbol WGO. Options for the Company's common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit, http://www.winnebagoind.com/investor.html.





This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to increases in interest rates, availability of credit, low consumer confidence, significant increase in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions, integration of operations relating to mergers and acquisitions activities and other factors. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
# # #





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

 
Quarter (1) Ended
 
November 30, 2013
 
December 1, 2012
Net revenues
$
222,670

 
100.0
%
 
$
193,554

 
100.0
%
Cost of goods sold
196,708

 
88.3
%
 
172,807

 
89.3
%
Gross profit
25,962

 
11.7
%
 
20,747

 
10.7
%
Operating expenses:
 
 
 
 
 
 
 
Selling
4,333

 
1.9
%
 
4,961

 
2.6
%
General and administrative
5,623

 
2.5
%
 
5,812

 
3.0
%
Loss on sale of asset held for sale
—

 
—
%
 
28

 
—
%
Total operating expenses
9,956

 
4.5
%
 
10,801

 
5.6
%
Operating income
16,006

 
7.2
%
 
9,946

 
5.1
%
Non-operating income
91

 
—
%
 
614

 
0.3
%
Income before income taxes
16,097

 
7.2
%
 
10,560

 
5.5
%
Provision for taxes
4,951

 
2.2
%
 
3,169

 
1.6
%
Net income
$
11,146

 
5.0
%
 
$
7,391

 
3.8
%
Income per common share:
 
 
 
 
 
 
 
Basic
$
0.40

 
 
 
$
0.26

 
 
Diluted
$
0.40

 
 
 
$
0.26

 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
27,851

 
 
 
28,301

 
 
Diluted
27,971

 
 
 
28,361

 
 

Percentages may not add due to rounding differences.

(1) The fiscal quarters ended November 30, 2013 and December 1, 2012 contained 13 weeks and 14 weeks, respectively.







Winnebago Industries, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
November 30,
2013
 
August 31,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
49,737

 
$
64,277

Receivables, net
42,944

 
29,145

Inventories
122,478

 
112,541

Prepaid expenses and other assets
8,356

 
8,277

Income taxes receivable and prepaid
132

 
1,868

Deferred income taxes
8,155

 
7,742

Total current assets
231,802

 
223,850

Total property and equipment, net
21,057

 
20,266

Long-term investments
—

 
2,108

Investment in life insurance
25,299

 
25,051

Deferred income taxes
25,007

 
25,649

Goodwill
1,228

 
1,228

Other assets
10,520

 
10,993

Total assets
$
314,913

 
$
309,145

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
27,316

 
$
28,142

Income taxes payable
2,623

 
—

Accrued expenses
37,070


42,212

Total current liabilities
67,009

 
70,354

Long-term liabilities:
 
 
 
Unrecognized tax benefits
3,830

 
3,988

Postretirement health care and deferred compensation benefits
63,485

 
64,074

Total long-term liabilities
67,315

 
68,062

Stockholders' equity
180,589

 
170,729

Total liabilities and stockholders' equity
$
314,913

 
$
309,145







Winnebago Industries, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
Quarter (1) Ended
 
November 30,
2013
 
December 1,
2012
Operating activities:
 
 
 
Net income
$
11,146

 
$
7,391

Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
Depreciation and amortization
984

 
1,147

LIFO expense
431

 
352

Stock-based compensation
952

 
687

Deferred income taxes including valuation allowance
366

 
(40
)
Postretirement benefit income and deferred compensation expenses
(139
)
 
221

Provision for doubtful accounts
—

 
3

Loss (gain) on disposal of property
8

 
(3
)
Gain on life insurance
—

 
(509
)
Increase in cash surrender value of life insurance policies
(286
)
 
(383
)
Change in assets and liabilities:
 
 
 
Inventories
(10,368
)
 
(19,621
)
Receivables, prepaid and other assets
(13,928
)
 
(4,107
)
Income taxes and unrecognized tax benefits
4,584

 
3,195

Accounts payable and accrued expenses
(4,675
)
 
2,521

Postretirement and deferred compensation benefits
(970
)
 
(1,177
)
Net cash used in operating activities
(11,895
)
 
(10,323
)
 
 
 
 
Investing activities:
 
 
 
Proceeds from the sale of investments, at par
2,350

 
—

Proceeds from life insurance
—

 
974

Purchases of property and equipment
(1,693
)
 
(1,273
)
Proceeds from the sale of property
1

 
566

Payments of COLI borrowings
—

 
(1,371
)
Other
153

 
129

Net cash provided by (used in) investing activities
811

 
(975
)
 
 
 
 
Financing activities:
 
 
 
Payments for purchase of common stock
(5,561
)
 
(7,177
)
Proceeds from exercise of stock options
2,080

 
—

Other
25

 
(133
)
Net cash used in financing activities
(3,456
)
 
(7,310
)
 
 
 
 
Net decrease in cash and cash equivalents
(14,540
)
 
(18,608
)
Cash and cash equivalents at beginning of period
64,277

 
62,683

Cash and cash equivalents at end of period
$
49,737

 
$
44,075

 
 
 
 
Supplemental cash flow disclosure:
 
 
 
Income taxes paid, net of refunds
$
—

 
$
13


(1) The fiscal quarters ended November 30, 2013 and December 1, 2012 contained 13 weeks and 14 weeks, respectively.





Winnebago Industries, Inc.
Deliveries
 
Quarter (2) Ended
 
Change
(In units)
November 30,
2013
Product
Mix % (1)
 
December 1,
2012
Product
Mix % (1)
 
Units
%
Class A gas
710

35.4
%
 
620

40.4
%
 
90

14.5
 %
Class A diesel
397

19.8
%
 
345

22.5
%
 
52

15.1
 %
Total Class A
1,107

55.2
%
 
965

62.9
%
 
142

14.7
 %
Class B
102

5.1
%
 
90

5.9
%
 
12

13.3
 %
Class C
796

39.7
%
 
479

31.2
%
 
317

66.2
 %
Total motorhomes
2,005

100.0
%
 
1,534

100.0
%
 
471

30.7
 %
 
 
 
 
 
 
 
 
 
Travel trailer
407

84.1
%
 
408

73.2
%
 
(1
)
(0.2
)%
Fifth wheel
77

15.9
%
 
149

26.8
%
 
(72
)
(48.3
)%
    Total towables
484

100.0
%
 
557

100.0
%
 
(73
)
(13.1
)%
 
 
 
 
 
 
 
 
 
 
(1) Percentages may not add due to rounding differences.
(2) The fiscal quarters ended November 30, 2013 and December 1, 2012 contained 13 weeks and 14 weeks, respectively.
  
Backlog
 
As Of
 
Change
 
November 30, 2013
 
December 1, 2012
 
 
 
 
Units
% (1)
 
Units
% (1)
 
Units
%
Class A gas
1,382

39.1
%
 
884

41.7
%
 
498

56.3
 %
Class A diesel
521

14.7
%
 
389

18.4
%
 
132

33.9
 %
Total Class A
1,903

53.8
%
 
1,273

60.1
%
 
630

49.5
 %
Class B
317

9.0
%
 
111

5.2
%
 
206

185.6
 %
Class C
1,314

37.2
%
 
734

34.7
%
 
580

79.0
 %
Total motorhome backlog(2)
3,534

100.0
%
 
2,118

100.0
%
 
1,416

66.9
 %
 
 
 
 
 
 
 
 
 
Travel trailer
117

77.5
%
 
557

81.1
%
 
(440
)
(79.0
)%
Fifth wheel
34

22.5
%
 
130

18.9
%
 
(96
)
(73.8
)%
    Total towable backlog (2)
151

100.0
%
 
687

100.0
%
 
(536
)
(78.0
)%
 
 
 
 
 
 
 
 
 
Total approximate backlog revenue dollars (in 000's):
 
 
 
 
 
 
Motorhome
$
340,703

 
 
$
226,457

 
 
$
114,246

50.4
 %
Towable
3,401

 
 
14,049

 
 
(10,648
)
(75.8
)%
  
(1)
Percentages may not add due to rounding differences.
(2)
Our backlog includes all accepted orders from dealers to be shipped within the next six months. Orders in backlog can be canceled or postponed at the option of the purchaser and, therefore, backlog may not necessarily be an accurate measure of future sales.
Dealer Inventory
 
Units As Of
 
Change
 
November 30,
2013
 
December 1,
2012
 
Units
%
Motorhomes
3,135

 
2,045

 
1,090

53.3
%
Towables
1,591

 
1,555

 
36

2.3
%



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