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Winnebago Industries Announces 3rd Quarter Results

Winnebago Industries, Incorporated today reported financial results for the Company’s third quarter of Fiscal 2021.

Third Quarter Fiscal 2021 Results
Revenues for the Fiscal 2021 third quarter ended May 29, 2021, were $960.7 million, an increase of 138.7% compared to $402.5 million for the Fiscal 2020 period, and a sequential increase of 14.4% over the Fiscal 2021 second quarter. Gross profit was $169.6 million, an increase of 429.6% compared to $32.0 million for the Fiscal 2020 period, and an increase of 8.3% on a sequential basis, driven primarily by increased revenues as a result of the pandemic-driven shutdown of operations for a six week period in the third quarter of Fiscal 2020. Gross profit margin increased 970 basis points year-over-year, driven primarily by operating leverage, pricing, including lower discounts and allowances, and favorable segment mix. Operating income was $102.4 million for the quarter compared to a loss of $(8.2) million in the third fiscal quarter of last year and increased 2.5% sequentially. Fiscal 2021 third quarter net income was $71.3 million compared to a net loss of $(12.4) million in the prior year fiscal quarter, and net income of $69.1 million in the Fiscal 2021 second quarter. Reported earnings per diluted share was $2.05, compared to a net loss per diluted share of $(0.37) in the same period last year, and earnings per diluted share of $2.04 in the Fiscal 2021 second quarter. Consolidated adjusted earnings per diluted share was $2.16 for the Fiscal 2021 third quarter compared to adjusted loss per diluted share of $(0.26) in the same period last year, and adjusted earnings per diluted share of $2.12 for the Fiscal 2021 second quarter. Consolidated Adjusted EBITDA was $109.8 million for the quarter, compared to $4.1 million in the third quarter of Fiscal 2020 and $108.0 million in the Fiscal 2021 second quarter.

President and Chief Executive Officer Michael Happe commented, “Winnebago Industries’ record fiscal third quarter results continued our sequential growth trajectory, which is a testament to the sustained strength of consumer engagement in the outdoor lifestyle as well as the tremendous appeal of our premium brands. Throughout the quarter, we capitalized on the prime spring selling season to gain share and drive higher consumer engagement, further cultivating our pipeline of lifelong customers. I’m also proud of the Winnebago Industries team who has been able to maintain our commitment to manufacturing excellence amid incredible demand and drive operational leverage that is producing continued, strong profitability. We are very pleased with our results and will maintain our focus on executing our proven strategy to build a differentiated, premier outdoor company and drive long-term value for end customers, dealers, employees and shareholders.”

Towable
Revenues for the Towable segment were $555.7 million for the third quarter of Fiscal 2021, up 194.2% over the prior year period and 26.5% sequentially, driven by heightened consumer demand for our Grand Design and Winnebago branded products. Segment Adjusted EBITDA was $80.1 million, up 387.1% over the prior year period and 28.5% over the Fiscal 2021 second quarter. Adjusted EBITDA margin of 14.4% increased 570 basis points year-over-year and 20 basis points sequentially, primarily due to robust operating leverage and lower levels of discounting. Backlog increased to $1,522.1 million, reflecting an increase of 264.9% over the prior year period, and 26.1% over the Fiscal 2021 second quarter, due to continued strong consumer demand combined with extremely low levels of dealer inventory.

Motorhome
In the third quarter of Fiscal 2021, revenues for the Motorhome segment were $385.3 million, up 89.2% from the prior year period, driven by continued strong consumer demand for both Winnebago and Newmar branded motorhomes. Segment Adjusted EBITDA was $37.5 million compared to a loss of $(10.8) million in the same period last year and $51.0 million in the prior quarter. Adjusted EBITDA margin increased 1,500 basis points over the prior year to 9.7%, driven by operating leverage and low levels of discounting. Backlog increased to $2,180.1 million, an increase of 323.3% over the prior year period, and 20.0% over the prior quarter, as dealers continue to experience significant reductions in inventories due to extremely high levels of consumer demand.

Balance Sheet and Cash Flow
As of May 29, 2021, the Company had total net outstanding debt of $524.5 million ($600.0 million of debt, net of convertible note discount of $63.9 million and net of debt issuance costs of $11.6 million) and working capital of $613.0 million. Cash flow from operations was $148.0 million in the first nine months of Fiscal 2021, a decrease of $14.5 million from the same period in Fiscal 2020 due to strong improvement in income during the current year-to-date period that was more than offset by year-over-year changes in working capital required to support increased production and rapid sales growth.

Quarterly Cash Dividend
On May 19, 2021, the Company’s Board of Directors approved a quarterly cash dividend of $0.12 per share payable on June 30, 2021, to common stockholders of record at the close of business on June 16, 2021.

Mr. Happe continued, “As we enter the final quarter of Fiscal 2021, we are pleased with the strength of our business and the unique appeal of our leading brands. We remain focused on working with our suppliers to sustain strong levels of production and with our dealer network to replenish their inventories in the face of record backlog. We are also continuing to invest in our business to ensure we are best positioned to meet the persistent, elevated demand we anticipate in quarters to come, driven by the secular and ongoing growth in outdoor lifestyle products and a positive change in consumer preferences for leisure and family activities. I am also incredibly proud of Winnebago Industries’ unwavering commitment to stewardship of the environment and the communities in which we live and operate. During the quarter, we announced our participation in the United Nations Global Compact – a corporate sustainability initiative designed to advance universal principles on human rights, labor, environment and anti-corruption – and initiated a partnership with Habitat for Humanity, a global housing nonprofit, to support its community-based neighborhood revitalization efforts. These organizations’ missions are clearly aligned with Winnebago Industries’ values and enable more communities to safely and equitably enjoy the outdoors where they live, work and play.”

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