23/10/2023

23 October 2023
23 October 2023, Comments Comments Off on Winnebago issues fourth quarter and full rear fiscal 2023 results
Winnebago issues fourth quarter and full rear fiscal 2023 results

Winnebago Industries, Inc. has reported financial results for its fourth quarter and full year Fiscal 2023.

Revenues for the Fiscal 2023 fourth quarter ended August 26, 2023, were $771.0 million, a decrease of 34.6% compared to $1.2 billion for the Fiscal 2022 period, driven by lower unit sales related to current market conditions and dealer efforts to reduce inventories, and higher discounts and allowances compared to prior year, partially offset by carryover price increases. Gross profit was $127.5 million, a decrease of 39.4% compared to $210.4 million for the Fiscal 2022 period. Gross profit margin decreased 130 basis points in the quarter to 16.5%, as a result of volume deleverage and higher discounts and allowances compared to prior year. Operating income was $57.5 million for the quarter, a decrease of 53.4% compared to $123.6 million for the fourth quarter of last year. Fiscal 2023 fourth quarter net income was $43.8 million, a decrease of 47.0% compared to $82.6 million in the prior year quarter. Reported earnings per diluted share was $1.28, compared to reported earnings per diluted share of $2.61 in the same period last year. Adjusted earnings per diluted share was $1.59, a decrease of 47.4% compared to Adjusted earnings per diluted share of $3.02 in the same period last year. Consolidated Adjusted EBITDA was $72.9 million for the quarter, compared to $139.2 million last year, a decrease of 47.6%.

President and Chief Executive Officer Michael Happe commented, “While the consumer market continues to be challenged and our fourth quarter results reflect a stubborn retail environment, we continued to see the benefits of our diversified portfolio on our results for the fiscal year. Our team has remained intently focused on rationalizing inventory levels, optimizing our supply chain, and appropriately managing capacity, output, and cost in a strategic manner. Those efforts, combined with disciplined capital allocation, have enabled us to drive sustained profitability in our consolidated results supported by our diverse portfolio of premium brands, allowing us to continue investing in our growth initiatives and return meaningful value to our shareholders. A significant highlight of Fiscal 2023 was completing the acquisition of Lithionics Battery which has bolstered our onboard battery solutions offering, energized our electrical supply ecosystem, and positioned Winnebago Industries as a leader in electrification. Our continued focus on strategically investing in our business, new products and innovation reflects the confidence we have in our ability to drive growth and expand market share by providing our customers with more diverse and exciting options. As always, I want to thank our 6,250+ Winnebago Industries
employees for their continued hard work and dedication in a challenging and dynamic environment.”

Fiscal 2023 revenues of $3.5 billion decreased 29.6% from $5.0 billion in Fiscal 2022 primarily due to lower unit sales related to retail market conditions and higher discounts and allowances compared to prior year, partially offset by carryover price increases. Gross profit margin of 16.8% decreased 190 basis points year-over-year driven primarily by volume deleverage and higher discounts and allowances compared to prior year.

Operating income was $300.7 million for Fiscal 2023 compared to $583.5 million in Fiscal 2022. Net income was $215.9 million compared to $390.6 million in the prior year. Earnings per diluted share was $6.23 compared to earnings per diluted share of $11.84 in Fiscal 2022. Adjusted earnings per diluted share was $7.67 compared to Adjusted earnings per diluted share of $13.81 in the same period last year. Consolidated Adjusted EBITDA was $354.7 million compared to $648.9 million in Fiscal 2022.

Revenues for the Towable RV segment were $341.4 million for the fourth quarter Fiscal 2023, down 30.9% from the prior year, primarily driven by a decline in unit volume associated with retail market conditions and a cautious dealer network, as well as higher levels of discounts and allowances compared to prior year. Segment Adjusted EBITDA was $42.7 million, down 19.7% from the prior year period. Adjusted EBITDA margin of 12.5% increased 170 basis points from the prior year reflecting cost reduction efforts and favorable warranty experience partially offset by volume deleverage and higher levels of discounting and allowances. Backlog decreased to $208.1 million, down 63.9% from the prior year due to continued softness in retail conditions and a cautious dealer network.

For the full year Fiscal 2023, revenues for the Towable RV segment were $1.4 billion, down 45.5% from Fiscal 2022 driven by a decline in unit volume associated with retail market conditions, a reduction in dealer inventories, and higher levels of discounts and allowances compared to prior year, partially offset by carryover price increases. Segment Adjusted EBITDA for the full year was $172.1 million, down 55.1% year-over-year. Adjusted EBITDA margin of 12.2% decreased 260 basis points for the full year from Fiscal 2022, primarily due to volume deleverage and higher discounts and allowances, partially offset by successful cost reduction initiatives and favorable warranty experience.

Revenues for the Motorhome RV segment were $317.7 million for the fourth quarter, down 42.8% from the prior year, driven by a decline in unit volume associated with retail market conditions and higher levels of discounts and allowances compared to prior year, partially offset by price increases related to higher chassis costs. Segment Adjusted EBITDA was $22.4 million, a decrease of 71.1% from the prior year. Adjusted EBITDA margin of 7.0% decreased 690 basis points from the prior year and 20 basis points sequentially, primarily driven by volume deleverage, higher discounts and allowances, and operational efficiency challenges. Backlog decreased to $688.6 million, down 59.2% from the prior year, driven by
continued softness in retail conditions and a cautious dealer network.

For the full year Fiscal 2023, revenues for the Motorhome RV segment were $1.6 billion, down 18.4% from Fiscal 2022 driven by unit volume declines associated with retail market conditions and higher levels of discounts and allowances compared to prior year, partially offset by price increases related to higher chassis costs. Segment Adjusted EBITDA for the full year was $142.0 million, down 40.3% from Fiscal 2022. Adjusted EBITDA margin of 9.1% was down 340 basis points for the full year over Fiscal 2022, due to volume deleverage, higher discounts and allowances, and operational efficiency challenges.


As of August 26, 2023, the Company had total outstanding debt of $592.4 million ($600.0 million of debt, net of debt issuance costs of $7.6 million) and
working capital of $600.7 million. Cash flow from operations was $294.5 million in Fiscal 2023, a decrease of $106.1 million compared to $400.6 million last year, driven by lower profitability adjusted for non-cash items, partially offset by net favorable changes in operating assets and liabilities.

The Company generated strong free cash flow of $211.3 million in Fiscal 2023, including $122.9 million in the fourth quarter of Fiscal 2023. Quarterly Cash Dividend and Share Repurchases On August 16, 2023, the Company’s Board of Directors approved a quarterly cash dividend of $0.31 per share payable on September 27, 2023, to common stockholders of record at the close of business on September 13, 2023. This represents a 15%, or $0.04 per share, increase from the previous quarter. Additionally, in the fourth quarter Winnebago Industries executed share repurchases of $30 million.

Mr. Happe continued, “Looking ahead, our focus remains steadfast on preserving profitability and reinforcing our RV and Marine market share positions. Concurrently, we are committed to further investing in the long-term vitality of our outdoor recreation enterprise, while driving quality and
innovation across our broad brand portfolio. Continued collaboration with our dealer partners, in support of maintaining the optimal product mix will remain a top priority as well. We are particularly excited about our latest product releases, especially those introductions in our Towable RV segment – the Winnebago brand Access and M-class, along with the Grand Design Reflection 100 and Influence models. These offerings exemplify the type of innovative new features that our discerning customers have grown accustomed to from our premium brands, while also addressing important concerns around affordability. As we enter Fiscal 2024, we expect the continued pressure of current retail market dynamics, coupled with dealer selectiveness to take on additional inventory amidst retail challenges, through the first half of the Fiscal year. However, we anticipate that as inventory levels further normalize and consumer demand stabilizes, dealers will exhibit a growing willingness to rebuild inventories and bring in additional
models as we enter the back half of Fiscal 2024.”