8-K
WINNEBAGO INDUSTRIES INC (WGO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported) June 24, 2020
| Winnebago Industries, Inc. | |||||
|---|---|---|---|---|---|
| (Exact Name of Registrant as Specified in its Charter) | |||||
| Iowa | 001-06403 | 42-0802678 | |||
| --- | --- | --- | --- | --- | --- |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||
| P.O. Box 152 | Forest City | Iowa | 50436 | ||
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code 641-585-3535
______________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.50 par value per share | WGO | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On June 24, 2020, Winnebago Industries, Inc. issued a press release to report financial results for the third quarter of Fiscal 2020 ended May 30, 2020. A copy of the press release is attached as Exhibit 99.1 and is incorporated by reference herein.
Exhibit 99.1 includes non-GAAP financial measures related to our operations. Certain of these non-GAAP measures may be discussed in our earnings conference call for the second quarter of Fiscal 2020. In addition, Exhibit 99.1 includes reconciliations of these GAAP to non-GAAP measures as well as an explanation of why these non-GAAP measures provide useful information to investors and how management uses these non-GAAP measures. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from our results should be carefully evaluated.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release of Winnebago Industries, Inc. datedJune 24, 2020 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WINNEBAGO INDUSTRIES, INC. | |||
|---|---|---|---|
| Date: | June 24, 2020 | By: | /s/ Bryan L. Hughes |
| Name: | Bryan L. Hughes | ||
| Title: | Vice President, Chief Financial Officer |
Document
| News Release |
|---|
Contact: Steve Stuber - Investor Relations - 952-828-8461 - srstuber@wgo.net
Media Contact: Sam Jefson - Public Relations Specialist - 641-585-6803 - sjefson@wgo.net
WINNEBAGO INDUSTRIES ANNOUNCES THIRD QUARTER FISCAL 2020 RESULTS
-- March to May Period Impacted by Shutdown and Restart of Operations Due to Global Pandemic --
-- Focus on Employee Health and Safety as Business Activities Recover and Consumers Flock to Outdoors –
-- RV Market Share Growth Continues – Witnessing Positive Retail Momentum in June --
-- YTD Operating Cash Flow Up 96% Over Prior Year –
-- Liquidity Remains Strong with Cash Balances Rising During the Quarter to $152.5 --
FOREST CITY, IOWA, June 24, 2020 - Winnebago Industries, Inc. (NYSE:WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's third quarter Fiscal 2020 ended May 30, 2020. The Company’s results were impacted by the unprecedented series of events related to the COVID-19 pandemic which included the suspension of manufacturing operations as well as disruptions across its dealer network, supply chain and end consumers during most of the quarter. In response, Winnebago Industries took immediate and decisive actions to keep employees safe, control costs and maintain its financial strength and flexibility. The Company’s financial position remains strong primarily due to its variable cost structure, entering the crisis with a very healthy cash balance, and ample additional capacity under its revolving credit facility if needed. Winnebago Industries is continuing to adapt to this challenging period by prioritizing decisions that are in the best interests of both its employees’ health and its long-term business prospects.
Third Quarter Fiscal 2020 Results
Revenues for the Fiscal 2020 third quarter ended May 30, 2020, were $402.5 million, a decrease of 23.9% compared to $528.9 million for the Fiscal 2019 period. Revenues for Newmar, which was acquired in the first quarter of Fiscal 2020, were $88.0 million. Revenues excluding Newmar were $314.5 million, a decrease of 40.5%. Gross profit was $32.0 million compared to $86.6 million for the Fiscal 2019 period. Gross profit margin decreased 840 basis points in the quarter, primarily driven by deleverage due to the significant revenue decline and an unfavorable mix as Towable’s revenue, as a percent of total revenue, was lower compared to the same period a year ago. Operating income was an $8.2 million loss for the quarter, compared to operating income of $49.0 million in the third quarter of last year. Fiscal 2020 third quarter net income was a loss of $12.4 million, compared to net income of $36.2 million in the same period last year. Net loss per diluted share was $(0.37), compared to earnings per diluted share of $1.14 in the same period last year. Consolidated adjusted net loss per diluted share was $(0.26) for the third quarter, excluding costs totaling $3.5 million, or $0.11 per diluted share, after tax, driven by the non-cash portion of interest expense and restructuring charges. Consolidated Adjusted EBITDA was $4.1 million for the quarter, compared to $55.9 million last year, a decrease of 92.7%.
President and Chief Executive Officer Michael Happe commented, “Our third fiscal quarter was a uniquely challenging time for Winnebago Industries, as it spanned the most intense portion of the unexpected COVID-19 pandemic in the U.S. While the pandemic has significantly changed how we conduct business on a day-to-day basis, I couldn’t be prouder of how our teams have worked collaboratively to respond to this tremendous test. We would like to especially recognize and thank the first responders, health care professionals, and public health officials across the country and specifically in the communities in which we have a physical presence. As we ramp up operations across our portfolio, I have been inspired by the efforts our team members have put forth to ensure our manufacturing, warehouse, service, office, and remote environments are as safe as possible. Despite the COVID-19 disruption and ongoing related obstacles, we have not lost our focus on quality, innovation and customer service. We have grown market share, strengthened dealer and supplier relationships, and maintained key investments in initiatives critical to our future. Our portfolio of premium outdoor brands continues to perform well and be desired
by channel partners and end consumers alike. Winnebago Industries’ North American RV retail market share was 11.7% on a trailing three-month basis through April, 2020, up 1.7 share points (up 1.2 share points on an organic basis) over the same period last year. I want to thank all of our Winnebago Industries employees for their commitment and cooperation as we continue the process of returning to work in a thoughtful and safe manner. We are especially grateful for the support of our dealer network as they also guided their teams through these truly unique times with great passion and fortitude, always serving our collective end consumers during a time of extraordinary challenges.”
Towable
Revenues for the Towable segment were $188.9 million for the third quarter, down 45.5% from the prior year, primarily driven by the suspension of manufacturing and the disruption to consumer buying patterns due to COVID-19. The overall strength of the Towable product portfolio and increased consumer demand in the month of May, as stay-at-home orders were eased, has contributed to accelerated momentum, especially in the Company’s Grand Design RV business. Winnebago Industries’ unit share of the North American towable market on a trailing three-month basis through April 2020, excluding folding and truck campers, was 10.7%, an increase of 2.0 share points over the same 2019 period. Segment Adjusted EBITDA was $16.5 million, down 71.2% from the prior year. Adjusted EBITDA margin of 8.7% decreased 780 basis points, primarily due to deleverage
related to the significant revenue decline. Backlog increased 86.7%, in units, over the prior year, reflecting a strong rebound in dealer demand in May as April was the period most impacted by COVID-19.
Motorhome
In the third quarter, revenues for the Motorhome segment increased 27.1% to $203.6 million, driven by the year over year impact of Newmar, which was acquired in November 2019, partially offset by the suspension of manufacturing and the disruption to consumer buying patterns due to COVID-19. Underlying demand for the Class B product line-up, including the Revel, Travato, Boldt, and Solis models, remains strong despite the impact from the pandemic. Winnebago Industries’ unit share of the North American Class B segment, on a trailing three-month basis through April 2020, was 45.4%, an increase of 5.2 share points over the same 2019 period. Excluding Newmar, segment revenues decreased 27.9% from the prior year period. Segment Adjusted EBITDA was $(10.8) million, down $11.2 million from the prior year primarily due to the revenue decline and cost impact driven by COVID-19, partially offset by favorable mix and the addition of Newmar. Adjusted EBITDA margin of (5.3%) decreased 550 basis points primarily due to deleverage related to the significant revenue decline, partially offset by favorable mix driven by strong Class B demand and the contribution from Newmar. Backlog increased 99.2%, in units, over the prior year, due to the addition of Newmar and a strong rebound in dealer demand in May as April was the period most impacted by COVID-19.
Despite challenges posed by the COVID-19 pandemic, the operational integration of Newmar into the Winnebago Industries portfolio is proceeding as planned. The Company remains focused on maximizing targeted synergies and expanding Newmar’s market share in the high-end motorhome segment.
Balance Sheet and Cash Flow
As of May 30, 2020, the Company had total outstanding debt of $465.0 million ($553.5 million of debt, net of convertible note discount of $77.6 million, net of debt issuance costs of $10.9 million) and working capital of $299.8 million. Cash flow from operations was $162.4 million for the first nine months of Fiscal 2020, an increase of $79.6 million from the same period in Fiscal 2019.
Quarterly Cash Dividend
On May 19, 2020, the Company’s board of directors approved a quarterly cash dividend of $0.11 per share payable on July 1, 2020, to common stockholders of record at the close of business on June 17, 2020.
Mr. Happe continued, “As we look ahead to the final quarter of Fiscal 2020, we are optimistic about the slope of our Company’s and industry’s recovery path due to the strong demand rebound we witnessed in May and the positive trends we are seeing continue this summer. Retail and wholesale demand for outdoor recreation products are both recovering and headed in a strong upward direction as the COVID-19 pandemic has impacted travelers’ views toward how they desire to spend their leisure time experiencing nature and the outdoors. As states navigate the reopening of their communities, people are increasingly looking toward RVing and boating as ways to socially distance in a safe and memorable way. As indicated by our robust backlogs as compared to last year and our second fiscal quarter of 2020, Winnebago Industries’ RV, Marine, and Specialty Vehicles brands and businesses remain poised for strong growth and are solidly positioned to offer great value to our end consumers. Going forward, we are committed to prudently managing our business in a disciplined fashion to preserve liquidity and ensure that Winnebago Industries maintains the financial flexibility to continue to outpace the market and navigate the future.”
Conference Call
Winnebago Industries, Inc. will discuss third quarter Fiscal 2020 earnings results during a conference call scheduled for 9:00 a.m. Central Time today. 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://investor.wgo.net. The event will be archived and available for replay for the next 90 days.
About Winnebago Industries
Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Newmar, and Chris-Craft brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motorhomes, travel trailers, fifth wheel products and boats. Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida. The Company's common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.
Forward Looking Statements
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, availability of labor, 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, business interruptions, any unexpected expenses related to enterprise resource planning, impacts of public health crises, such as COVID-19, risks related to compliance with debt covenants and leverage ratios, cyber-attacks, 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.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
| Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| May 30, 2020 | May 25, 2019 | |||||||
| Net revenues | $ | 402,458 | 100.0 | % | $ | 528,940 | 100.0 | % |
| Cost of goods sold | 370,434 | 92.0 | % | 442,356 | 83.6 | % | ||
| Gross profit | 32,024 | 8.0 | % | 86,584 | 16.4 | % | ||
| Selling, general, and administrative expenses | 33,271 | 8.3 | % | 35,332 | 6.7 | % | ||
| Amortization of intangible assets | 6,926 | 1.7 | % | 2,278 | 0.4 | % | ||
| Total operating expenses | 40,197 | 10.0 | % | 37,610 | 7.1 | % | ||
| Operating (loss) income | (8,173) | (2.0) | % | 48,974 | 9.3 | % | ||
| Interest expense | 8,440 | 2.1 | % | 4,446 | 0.8 | % | ||
| Non-operating income | (74) | — | % | (360) | (0.1) | % | ||
| (Loss) income before income taxes | (16,539) | (4.1) | % | 44,888 | 8.5 | % | ||
| (Benefit) provision for income taxes | (4,186) | (1.0) | % | 8,717 | 1.6 | % | ||
| Net (loss) income | $ | (12,353) | (3.1) | % | $ | 36,171 | 6.8 | % |
| Income (loss) per common share: | ||||||||
| Basic | $ | (0.37) | $ | 1.15 | ||||
| Diluted | $ | (0.37) | $ | 1.14 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 33,625 | 31,493 | ||||||
| Diluted | 33,625 | 31,644 | ||||||
| Nine Months Ended | ||||||||
| May 30, 2020 | May 25, 2019 | |||||||
| Net revenues | $ | 1,617,726 | 100.0 | % | $ | 1,455,278 | 100.0 | % |
| Cost of goods sold | 1,427,307 | 88.2 | % | 1,231,269 | 84.6 | % | ||
| Gross profit | 190,419 | 11.8 | % | 224,009 | 15.4 | % | ||
| Selling, general, and administrative expenses | 126,540 | 7.8 | % | 106,303 | 7.3 | % | ||
| Amortization of intangible assets | 18,514 | 1.1 | % | 7,204 | 0.5 | % | ||
| Total operating expenses | 145,054 | 9.0 | % | 113,507 | 7.8 | % | ||
| Operating income | 45,365 | 2.8 | % | 110,502 | 7.6 | % | ||
| Interest expense | 23,140 | 1.4 | % | 13,293 | 0.9 | % | ||
| Non-operating income | (460) | — | % | (1,330) | (0.1) | % | ||
| Income before income taxes | 22,685 | 1.4 | % | 98,539 | 6.8 | % | ||
| Provision for taxes | 3,702 | 0.2 | % | 18,609 | 1.3 | % | ||
| Net income | $ | 18,983 | 1.2 | % | $ | 79,930 | 5.5 | % |
| Income per common share: | ||||||||
| Basic | $ | 0.57 | $ | 2.53 | ||||
| Diluted | $ | 0.57 | $ | 2.52 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 33,102 | 31,546 | ||||||
| Diluted | 33,289 | 31,722 |
Percentages may not add due to rounding differences.
Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
| May 30, 2020 | August 31, 2019 | |||
|---|---|---|---|---|
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 152,480 | $ | 37,431 |
| Receivables, net | 163,590 | 158,049 | ||
| Inventories, net | 190,359 | 201,126 | ||
| Prepaid expenses and other assets | 21,566 | 14,051 | ||
| Total current assets | 527,995 | 410,657 | ||
| Total property, plant, and equipment, net | 175,431 | 127,572 | ||
| Other assets: | ||||
| Goodwill | 348,058 | 274,931 | ||
| Other intangible assets, net | 408,358 | 256,082 | ||
| Investment in life insurance | 27,336 | 26,846 | ||
| Operating lease assets | 29,790 | — | ||
| Other assets | 16,072 | 8,143 | ||
| Total assets | $ | 1,533,040 | $ | 1,104,231 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 81,998 | $ | 81,635 |
| Income taxes payable | — | — | ||
| Accrued expenses | 132,509 | 107,217 | ||
| Current maturities of long-term debt | 13,668 | 8,892 | ||
| Total current liabilities | 228,175 | 197,744 | ||
| Non-current liabilities: | ||||
| Long-term debt, less current maturities | 451,306 | 245,402 | ||
| Deferred income taxes | 16,708 | 12,032 | ||
| Unrecognized tax benefits | 6,269 | 3,591 | ||
| Operating lease liabilities | 27,366 | — | ||
| Deferred compensation benefits, net of current portion | 11,454 | 12,878 | ||
| Other | 6,952 | 372 | ||
| Total non-current liabilities | 520,055 | 274,275 | ||
| Stockholders' equity | 784,810 | 632,212 | ||
| Total liabilities and stockholders' equity | $ | 1,533,040 | $ | 1,104,231 |
Winnebago Industries, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Nine Months Ended | |||||
|---|---|---|---|---|---|
| (in thousands) | May 30, 2020 | May 25, 2019 | |||
| Operating activities: | |||||
| Net income | $ | 18,983 | $ | 79,930 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation | 11,854 | 9,788 | |||
| Amortization of intangibles | 18,514 | 7,204 | |||
| Non-cash interest expense, net | 7,440 | — | |||
| Amortization of debt issuance costs | 2,181 | 1,186 | |||
| Last in, first-out expense | 1,450 | 1,544 | |||
| Stock-based compensation | 3,332 | 5,735 | |||
| Deferred income taxes | 365 | 362 | |||
| Other, net | 516 | 1,265 | |||
| Change in assets and liabilities: | |||||
| Receivables | 31,440 | (20,961) | |||
| Inventories | 91,938 | 2,701 | |||
| Prepaid expenses and other assets | 159 | (653) | |||
| Accounts payable | (13,528) | 3,954 | |||
| Income taxes and unrecognized tax benefits | (2,622) | (13,898) | |||
| Accrued expenses and other liabilities | (9,585) | 4,692 | |||
| Net cash provided by operating activities | 162,437 | 82,849 | |||
| Investing activities: | |||||
| Purchases of property and equipment | (28,582) | (31,681) | |||
| Acquisition of business, net of cash acquired | (260,965) | (702) | |||
| Proceeds from the sale of property | — | 134 | |||
| Other, net | 141 | 1,752 | |||
| Net cash provided by (used in) investing activities | (289,406) | — | (30,497) | ||
| Financing activities: | |||||
| Borrowings on credit agreement | 1,495,209 | 342,549 | |||
| Repayments of credit agreement | (1,495,209) | (375,438) | |||
| Proceeds from issuance of convertible senior notes | 300,000 | — | |||
| Purchase of convertible note hedge | (70,800) | — | |||
| Proceeds from issuance of warrants | 42,210 | — | |||
| Payments on long-term debt | (6,500) | — | |||
| Payments of offering costs | (10,761) | — | |||
| Payments of cash dividends | (10,881) | (10,201) | |||
| Payments for repurchase of common stock | — | (7,724) | |||
| Other, net | (1,250) | 296 | |||
| Net cash provided by (used in) financing activities | 242,018 | (50,518) | |||
| Net increase in cash and cash equivalents | 115,049 | 1,834 | |||
| Cash and cash equivalents at beginning of year | 37,431 | 2,342 | |||
| Cash and cash equivalents at end of year | $ | 152,480 | $ | 4,176 | |
| Supplement cash flow disclosure: | |||||
| --- | --- | --- | --- | --- | |
| Income taxes paid, net | $ | 6,240 | $ | 33,852 | |
| Interest paid | $ | 14,961 | $ | 10,335 | |
| Non-cash transactions: | |||||
| Issuance of Winnebago common stock for acquisition of business | $ | 92,572 | $ | — | |
| Capital expenditures in accounts payable | $ | 255 | $ | 9 |
Winnebago Industries, Inc.
Supplemental Information by Reportable Segment (Unaudited) - Towable
(in thousands, except unit data)
| Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | May 30, 2020 | % of Revenues | May 25, 2019 | % of Revenues | Change | % Change | |||||
| Net revenues | $ | 188,898 | $ | 346,811 | (45.5) | % | |||||
| Adjusted EBITDA | 16,451 | 8.7 | % | 57,172 | 16.5 | % | (40,721) | (71.2) | % | ||
| Three Months Ended | |||||||||||
| Unit deliveries | May 30, 2020 | Product Mix^(1)^ | May 25, 2019 | Product Mix^(1)^ | Unit Change | % Change | |||||
| Travel trailer | 3,537 | 60.3 | % | 6,185 | 59.5 | % | (2,648) | (42.8) | % | ||
| Fifth wheel | 2,324 | 39.7 | % | 4,216 | 40.5 | % | (1,892) | (44.9) | % | ||
| Total towables | 5,861 | 100.0 | % | 10,401 | 100.0 | % | (4,540) | (43.6) | % | ||
| Nine Months Ended | |||||||||||
| (in thousands) | May 30, 2020 | % of Revenues | May 25, 2019 | % of Revenues | Change | % Change | |||||
| Net revenues | $ | 813,611 | $ | 890,335 | (8.6) | % | |||||
| Adjusted EBITDA | 86,982 | 10.7 | % | 121,638 | 13.7 | % | (34,656) | (28.5) | % | ||
| Nine Months Ended | |||||||||||
| Unit deliveries | May 30, 2020 | Product Mix^(1)^ | May 25, 2019 | Product Mix^(1)^ | Unit Change | % Change | |||||
| Travel trailer | 15,319 | 60.8 | % | 16,564 | 60.5 | % | (1,245) | (7.5) | % | ||
| Fifth wheel | 9,874 | 39.2 | % | 10,818 | 39.5 | % | (944) | (8.7) | % | ||
| Total towables | 25,193 | 100.0 | % | 27,382 | 100.0 | % | (2,189) | (8.0) | % | ||
| ($ in thousands) | May 30, 2020 | May 25, 2019 | Change | % Change | |||||||
| Backlog^(2)^ | |||||||||||
| Units | 13,235 | 7,089 | 6,146 | 86.7 | % | ||||||
| Dollars | $ | 417,176 | $ | 237,708 | 75.5 | % | |||||
| Dealer Inventory | |||||||||||
| Units | 15,562 | 18,984 | (3,422) | (18.0) | % |
All values are in US Dollars.
(1) Percentages may not add due to rounding differences.
(2) We include in our backlog all accepted orders from dealers to generally be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.
Winnebago Industries, Inc.
Supplemental Information by Reportable Segment (Unaudited) - Motorhome
(in thousands, except unit data)
| Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | May 30, 2020 | % of Revenues | May 25, 2019 | % of Revenues | Change | % Change | |||||
| Net revenues | $ | 203,590 | $ | 160,239 | 27.1 | % | |||||
| Adjusted EBITDA | (10,789) | (5.3) | % | 381 | 0.2 | % | (11,170) | (2,931.8) | % | ||
| Three Months Ended | |||||||||||
| Unit deliveries | May 30, 2020 | Product Mix^(1)^ | May 25, 2019 | Product Mix^(1)^ | Unit Change | % Change | |||||
| Class A | 428 | 27.4 | % | 378 | 19.3 | % | 50 | 13.2 | % | ||
| Class B | 694 | 44.4 | % | 515 | 26.2 | % | 179 | 34.8 | % | ||
| Class C | 440 | 28.2 | % | 1,069 | 54.5 | % | (629) | (58.8) | % | ||
| Total motorhomes | 1,562 | 100.0 | % | 1,962 | 100.0 | % | (400) | (20.4) | % | ||
| Nine Months Ended^(2)^ | |||||||||||
| (in thousands, except ASP) | May 30, 2020 | % of Revenues | May 25, 2019 | % of Revenues | Change | % Change | |||||
| Net revenues | $ | 755,023 | $ | 506,229 | 49.1 | % | |||||
| Adjusted EBITDA | 13,488 | 1.8 | % | 16,716 | 3.3 | % | (3,228) | (19.3) | % | ||
| Nine Months Ended | |||||||||||
| Unit deliveries | May 30, 2020 | Product Mix^(1)^ | May 25, 2019 | Product Mix^(1)^ | Unit Change | % Change | |||||
| Class A | 1,803 | 31.0 | % | 1,329 | 23.7 | % | 474 | 35.7 | % | ||
| Class B | 2,287 | 39.3 | % | 1,847 | 33.0 | % | 440 | 23.8 | % | ||
| Class C | 1,734 | 29.7 | % | 2,430 | 43.3 | % | (696) | (28.6) | % | ||
| Total motorhomes | 5,824 | 100.0 | % | 5,606 | 100.0 | % | 218 | 3.9 | % | ||
| ($ in thousands) | May 30, 2020 | May 25, 2019 | Change | % Change | |||||||
| Backlog^(3)^ | |||||||||||
| Units | 4,131 | 2,074 | 2,057 | 99.2 | % | ||||||
| Dollars | $ | 515,035 | $ | 182,354 | 182.4 | % | |||||
| Dealer Inventory | |||||||||||
| Units | 5,013 | 4,235 | 778 | 18.4 | % |
All values are in US Dollars.
(1) Percentages may not add due to rounding differences.
(2) May 30, 2020 nine months ended data includes Newmar results from the time of acquisition (11/08/19); 2019 data excludes Newmar for both the three month ended and nine month ended periods
(3) We include in our backlog all accepted orders from dealers to generally be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the dealer at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.
Winnebago Industries, Inc.
Non-GAAP Reconciliation (Unaudited)
(in thousands, except per share data)
Non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”), have been provided as information supplemental and in addition to the financial measures presented in the accompanying news release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the news release. The non-GAAP financial measures presented may differ from similar measures used by other companies.
The following table reconciles Diluted income per share to Adjusted diluted income per share:
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands)^(1)^ | May 30, 2020 | May 25, 2019 | May 30, 2020 | May 25, 2019 | ||||
| Diluted income per share | $ | (0.37) | $ | 1.14 | $ | 0.57 | $ | 2.52 |
| Pretax acquisition-related costs^(2)^ | (0.01) | — | 0.29 | — | ||||
| Pretax acquisition-related fair-value inventory step-up | — | — | 0.14 | — | ||||
| Pretax non-cash interest expense^(3)^ | 0.10 | — | 0.22 | — | ||||
| Restructuring expense | 0.04 | 0.03 | 0.04 | 0.04 | ||||
| Research and development tax credits | — | (0.04) | — | (0.10) | ||||
| Tax impact of adjustments^(4)^ | (0.03) | (0.01) | (0.15) | (0.01) | ||||
| Adjusted diluted income per share | $ | (0.26) | $ | 1.14 | $ | 1.12 | $ | 2.45 |
(1) Per share numbers may not foot due to rounding
(2) Represents transaction-closing costs.
(3) Non-cash interest expense associated with the Convertible Notes issued related to our acquisition of Newmar.
(4) Income tax charge calculated using the statutory tax rate for the U.S. of 21.0% for both periods presented.
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA.
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | May 30, 2020 | May 25, 2019 | May 30, 2020 | May 25, 2019 | ||||
| Net (loss) income | $ | (12,353) | $ | 36,171 | $ | 18,983 | $ | 79,930 |
| Interest expense | 8,440 | 4,446 | 23,140 | 13,293 | ||||
| Provision for income taxes | (4,186) | 8,717 | 3,702 | 18,609 | ||||
| Depreciation | 4,134 | 3,520 | 11,854 | 9,788 | ||||
| Amortization of intangible assets | 6,926 | 2,278 | 18,514 | 7,204 | ||||
| EBITDA | 2,961 | 55,132 | 76,193 | 128,824 | ||||
| Acquisition-related fair-value inventory step-up | — | — | 4,810 | — | ||||
| Acquisition-related costs | (189) | — | 9,761 | — | ||||
| Restructuring expenses | 1,376 | 1,102 | 1,247 | 1,321 | ||||
| Non-operating income | (74) | (360) | (460) | (1,330) | ||||
| Adjusted EBITDA | $ | 4,074 | $ | 55,874 | $ | 91,551 | $ | 128,815 |
We have provided non-GAAP performance measures of Adjusted diluted income per share, EBITDA, and Adjusted EBITDA as comparable measures to illustrate the effect of non-recurring transactions occurring during the reported periods and improve comparability of our results from period to period. Adjusted diluted income per share is defined as income per share adjusted for items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period. We believe Adjusted diluted income per share and Adjusted EBITDA provide meaningful supplemental information about our operating performance because these measures exclude amounts that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted income per share include acquisition-related costs, acquisition-related fair-value inventory step-up, non-cash interest
expense, and the tax impact of the adjustments. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, and non-operating income.
Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for our company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with covenants and restricted activities under the terms of our debt agreements. We believe these non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties to evaluate companies in our industry.
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