Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company’s Fiscal 2023 second quarter.
Second Quarter Fiscal 2023 Results
Revenues for the Fiscal 2023 second quarter ended February 25, 2023, were $866.7 million, a decrease of 25.6% compared to $1.2 billion for the Fiscal 2022 period, driven by unit volume decreases versus record year-ago comparisons, partially offset by carryover price increases in all segments. Gross profit was $146.8 million, a decrease of 32.2% compared to $216.6 million for the Fiscal 2022 period, driven by decreased volume, higher material and input costs, deleverage and productivity loss from supply disruptions, partially offset by carryover price increases in all segments. Gross profit margin decreased 170 basis points in the quarter to 16.9%. Operating income was $76.8 million for the quarter, a decrease of 43.9% compared to $136.8 million for the second quarter of last year. Fiscal 2023 second quarter net income was $52.8 million, a decrease of 42.1% compared to $91.2 million in the prior year quarter. Reported earnings per diluted share was $1.52, compared to reported earnings per diluted share of $2.69 in the same period last year. Adjusted earnings per diluted share was $1.88, a decrease of 40.1% compared to adjusted earnings per diluted share of $3.14 in the same period last year. Consolidated Adjusted EBITDA was $88.4 million for the quarter, a decrease of 41.3%,compared to $150.7 million last year.
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries’ second quarter results continue to demonstrate the resilience of our diversified portfolio of premium brands. Another strong quarter of performance in our Marine segment helped to offset a softening in consumer demand for RVs from recent cyclical highs. Furthermore, ongoing efforts to continuously improve efficiency, reinforced by our commitment to disciplined execution and cost management, allowed us to maintain competitive margins across our Towable, Motorhome and Marine segments. These results could not have been achieved without an incredible effort from the Winnebago Industries team, who continues to demonstrate exceptional discipline, while simultaneously advancing industry-leading innovation. The recent launches of the Barletta Aria and Reserve, as well as the new Chris-Craft Calypso 32 are the latest examples of the innovation that is driving our business forward.”
Revenues for the Towable segment were $342.5 million for the second quarter, down 47.0% from the prior year, primarily driven by a decline in unit volume. Segment Adjusted EBITDA was $39.3 million, down 60.9% compared to the prior year period. Adjusted EBITDA margin of 11.5% decreased 410 basis points, primarily from deleverage and higher discounts and allowances compared to the prior year when demand was elevated. Backlog decreased to $278.2 million, 85.1% lower than the prior year period driven by higher dealer inventory levels.
Revenues for the Motorhome segment were $403.8 million for the second quarter, down 3.3% from the prior year. The decline was driven by lower unit volume, partially offset by carryover price increases and favorable product mix. Segment Adjusted EBITDA was $42.5 million, down 7.8% compared to the prior year. Adjusted EBITDA margin of 10.5% decreased 50 basis points compared to the prior year due to deleverage, higher material and input costs, and productivity and supply disruptions, partially offset by carryover price increases. Backlog decreased to $872.7 million, down 60.6% from the prior year, driven by normalizing levels of dealer inventories.
Revenues for the Marine segment were $112.9 million for the second quarter, up 16.1% due to carryover price increases. The growth was led by Barletta, which continues to outperform the Aluminum Pontoon category and gain market share. Segment Adjusted EBITDA was $14.4 million, and Adjusted EBITDA margin was 12.8%, down 50 basis points compared to the prior year, primarily due to higher material and input costs, partially offset by carryover price increases. Backlog for the Marine segment was down 14.1% compared to the prior year period due to continued replenishment of dealer inventories.
Balance Sheet and Cash Flow
As of February 25, 2023, the Company had total outstanding debt of $591.0 million ($600.0 million of debt, net of debt issuance costs of $9.0 million) and working capital of $654.4 million. Cash flow from operations was $16.8 million in the second quarter of Fiscal 2023.
Mr. Happe continued, “Looking ahead, we will continue to actively manage and navigate a dynamic demand environment, with a continued focus on profitability through disciplined production and cost management, leveraging our highly variable cost structure, and by working closely with our dealer partners to balance and optimize inventory levels and product mix. Our strong balance sheet and cash flow generation will continue to facilitate strategic investments in our business and our future, reinforcing our golden threads of quality, innovation and service and ensuring our increasingly diverse and resilient portfolio of premium brands continues to resonate with consumers. Winnebago Industries remains well positioned to further strengthen our enterprise capabilities, capitalize on growth opportunities through the cycle and achieve our long-term value creation goals.”