22/06/2023

22 June 2023
22 June 2023, Comments Comments Off on Winnebago Industries third quarter fiscal 2023 results show decline in revenues and profit due to challenging market conditions
Winnebago Industries third quarter fiscal 2023 results show decline in revenues and profit due to challenging market conditions

Winnebago Industries’ financial results for the Company’s Fiscal 2023 third quarter (ended 27/05/23) show revenues of $900.8 million, a decrease of 38.2% compared to $1.5 billion for the Fiscal 2022 period, with a gross profit of $151.4 million, a decrease of 44.5% compared to $273.0 million for the same period in 2022. This is a result of lower unit sales related to RV retail market conditions and higher discounts and allowances compared to prior year, partially offset by carryover price increases.

President and Chief Executive Officer Michael Happe commented: “In the midst of challenging market conditions, our team continues to successfully navigate a dynamic environment with a dual focus on taking care of our customers and operating the business with discipline, resulting in ongoing value for our shareholders. Our diverse portfolio of premium brands across the outdoor recreation industry continues to drive resiliency in our consolidated results, as top-line declines in our RV segments were offset by robust profitability in Towable RVs and continued growth in our Marine businesses. The Barletta brand, in particular, remains a bright spot in our portfolio, delivering strong market share gains in aluminum pontoons.

Overall, we benefited from our highly variable cost structure and managed SG&A spending proactively, delivering double digit adjusted EBITDA margin amid challenging RV market conditions. During the quarter we also announced and closed the strategic vertical technology acquisition of Lithionics Battery, which will accelerate our innovation capabilities in diverse battery solutions, advance our overall electrical supply ecosystem and create opportunities for our RV and marine customers to enjoy fully immersive, off-the-grid outdoor experiences. I want to personally thank all of our Winnebago Industries team members for their hard work and determination during the quarter, and for continuing to reinforce and project our golden threads of quality, innovation, and service.”

Mr. Happe continued, “Looking ahead, we will continue to actively manage production levels across our business to match dealer appetite for our brands, ongoing seasonal retail conditions, and our market share aspirations. We are entering our fourth and final quarter of Fiscal 2023 with a strong balance sheet, having completed multiple inorganic and organic investments in support of future growth strategies and a sequentially improved inventory and working capital position. We are closely tracking and adjusting to market conditions, with a focus on maintaining solid profitability, market competitiveness, and a preferred lot position for our premium brands with our channel partners. Our $20 million of share repurchases in the third quarter and regular quarterly dividend payment of $0.27 (50% higher than prior year) underscores our confidence in the long-term strength and trajectory of our business. We are committed to investing in innovation, product differentiation over the long-term, ongoing operational efficiency
enhancements, disciplined execution and strong cost management as we continue to drive sustainable value creation for all of our stakeholders.”

Revenues for the Towable RV segment were $384.1 million for the third quarter, down 52.3% compared to $805.6 million in the prior year, primarily driven by a decline in unit volume associated with retail market conditions and higher discounts and allowances compared to prior year.

Revenues for the Motorhome RV segment were $374.4 million for the third quarter, down 27.5% from the prior year. This was primarily driven by a decline in unit volume and higher discounts and allowances compared to prior year, partially offset by price increases related to higher chassis costs.

As of May 27, 2023, the Company had total outstanding debt of $591.7 million ($600.0 million of debt, net of debt issuance costs of $8.3 million) and working capital of $574.7 million. Cash flow from operations was $139.6 million in the third quarter of Fiscal 2023.

In the third quarter of Fiscal 2023, Winnebago Industries changed the name of its “Towable” segment to “Towable RV” and its “Motorhome” segment to “Motorhome RV”. These name changes had no impact on the composition of the segments, or previously reported results of operations, financial position, cash
flows or segment results.

Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds motorhomes, travel trailers, fifth-wheel products, outboard and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging vertical integration in key component areas, Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida.