SOURCE: Winnebago Industries, Inc.

December 18, 2008 07:00 ET

Winnebago Industries Reports Results for the First Quarter of Fiscal Year 2009

FOREST CITY, IA--(Marketwire - December 18, 2008) - Winnebago Industries, Inc. (NYSE: WGO), the nation's top-selling motor home manufacturer, today reported financial results for the Company's first quarter of fiscal year 2009 ended November 29, 2008.

Revenues for the 13-week quarter were $69.4 million, a decrease of 67.7 percent, versus revenues of $215.1 million for the 14-week first quarter last year. The Company reported an operating loss of $16.9 million for the first quarter of fiscal 2009 versus operating income of $13.6 million for the first quarter of fiscal 2008. Net loss for the first quarter was $9.6 million versus net income of $10.0 million for the first quarter of fiscal 2008. On a diluted per share basis, the Company had a net loss of 33 cents for the first quarter of fiscal 2009, versus net income of 34 cents for the first quarter last year.

The first quarter of fiscal 2009 was negatively impacted by the continued decline in motor home delivery volumes, increased incentives at the wholesale and retail levels and a less favorable mix of products sold. In turn, lower motor home volume resulted in inefficiencies due to reduced utilization of manufacturing facilities. However, during the first quarter, the Company benefited from a reduction in inventories of $27.3 million, which contributed to a 61.1 percent increase in cash and cash equivalents to $28.8 million as of November 29, 2008. Additional cash has been provided from the sale at par of $5.4 million of auction rate securities in December following the end of the quarter, now classified as short term investments.

"Current market conditions remain extremely challenging due to the overall decline in the general economy, and a declining housing market and stock market, which continue to erode the American consumer's sense of wealth," said Winnebago Industries' Chairman, CEO and President Bob Olson. "Additionally, the availability and terms of financing at both the wholesale and retail levels are a significant concern. Industry-wide dealer inventories continue to be adjusted downward by lower retail demand. In spite of these difficult challenges, we continue to focus on new product development. At the Annual National RV Trade Show held in Louisville, KY earlier this month, we once again demonstrated our leadership in innovation with the introduction of the exciting new Winnebago Via which was named 'Best of Show' by RVBusiness magazine. The new Via and the Itasca Reyo, which we will be building in the coming year, are the industry's first Class A motor homes built on the Dodge Sprinter chassis. We also introduced several new floorplans as well as two other concept vehicles. The concept vehicles include a Winnebago Adventurer Hybrid, the Company's first hybrid and the first hybrid motor home to feature an Auxiliary Power Generation unit, as well as a new Itasca Sunstar 32K front engine diesel motor home. The new Via, Adventurer Hybrid and Sunstar 32K all feature superior fuel economy. We were also honored to receive the Quality Circle Award for our Winnebago and Itasca brands from the Recreation Vehicle Dealers' Association for the 13th consecutive year at the show."

"While we are pleased with the reception of our new products," said Olson, "we anticipate continued softness in motor home sales, particularly during our seasonally slow second quarter. Statistical Surveys, the retail reporting service for the RV industry, has reported a decline in retail motor home sales of 48.0 percent for the month of October and 39.5 percent calendar year to date through October 2008 as compared to last year. We continue to lead the industry in retail sales of Class A and Class C motor homes combined with our Winnebago and Itasca brands garnering 18.6 percent of the market calendar year to date through October."

Olson continued, "Our Winnebago, Itasca and ERA dealer partners' have a combined total inventory of 3,269 motor homes as of November 29, 2008, a 34.3 percent reduction compared with the high of 4,978 motor homes in inventory at the end of fiscal 2004, and a 25.1 percent reduction as compared to dealer inventory at the end of the first quarter of fiscal 2008. I believe once dealers have reduced their inventory levels to more closely match retail demand, we will experience an increase in deliveries through the replacement of retailed units."

Winnebago Industries will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, December 18, 2008. 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://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days.

About Winnebago Industries

Winnebago Industries, Inc. is the nation's top-selling manufacturer of motor homes which are self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes under the Winnebago, Itasca and ERA brand names with state-of-the-art computer-aided design and manufacturing systems on automotive-styled assembly lines. The Company's common stock is listed on the New York and Chicago Stock Exchanges and traded under the symbol WGO. Options for the Company's common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit, http://www.winnebagoind.com/investor.html.

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 interest rates and availability of credit, low consumer confidence, availability and price of fuel, a further slowdown in the economy, 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, 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.

                        Winnebago Industries, Inc.
                Unaudited Consolidated Statements of Income
            (In thousands, except percent and per share data)


                                      Thirteen Weeks      Fourteen Weeks
                                          Ended               Ended
                                    November 29, 2008    December 1, 2007
                                    ------------------  -------------------
                                                  %                   %
Net revenues                        $ 69,398     100.0  $ 215,142     100.0
Cost of goods sold                    78,292     112.8    189,502      88.1
                                    --------  --------  --------- ---------
   Gross (deficit) profit             (8,894)    (12.8)    25,640      11.9
                                    --------  --------  --------- ---------
Operating expenses
   Selling                             3,665       5.3      5,605       2.6
   General and administrative          4,331       6.2      6,451       3.0
                                    --------  --------  --------- ---------
   Total operating expenses            7,996      11.5     12,056       5.6
                                    --------  --------  --------- ---------
Operating (loss) income              (16,890)    (24.3)    13,584       6.3
Financial income                         524       0.7      1,240       0.6
                                    --------  --------  --------- ---------
(Loss) income before income taxes    (16,366)    (23.6)    14,824       6.9
(Credit) provision for taxes          (6,770)     (9.8)     4,862       2.3
                                    --------  --------  --------- ---------
Net (loss) income                   $ (9,596)    (13.8) $   9,962       4.6
                                    ========  ========  ========= =========
(Loss) income per common share:
   Basic                            $  (0.33)           $    0.34
   Diluted                          $  (0.33)           $    0.34
Weighted average common shares
 outstanding
   Basic                              29,027               29,352
   Diluted                            29,039               29,440






                        Winnebago Industries, Inc.
              Unaudited Consolidated Condensed Balance Sheets
                              (In thousands)


                                                        Nov. 29,  Aug. 30,
                                                          2008      2008
                                                        --------- ---------
ASSETS
Current assets:
   Cash and cash equivalents                            $  28,765 $  17,851
   Short-term investments                                   5,400     3,100
   Receivables, net                                         4,648     9,426
   Inventories                                             83,294   110,596
   Income taxes receivable                                 11,232     6,618
   Prepaid and other                                       13,632    15,290
                                                        --------- ---------
      Total current assets                                146,971   162,881

Property and equipment, net                                38,633    40,097
Long-term investments, less impairments                    32,750    37,538
Deferred income taxes                                      29,033    26,862
Investment in life insurance                               22,280    22,123
Other assets                                               12,848    15,954
                                                        --------- ---------
      Total assets                                      $ 282,515 $ 305,455
                                                        ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                     $  10,997 $  15,631
   Income taxes payable                                        20        76
   Accrued expenses                                        34,039    38,626
                                                        --------- ---------
      Total current liabilities                            45,056    54,333
                                                        --------- ---------

 Long-term liabilities:
   Unrecognized long-term tax benefit                       9,282     9,469
   Postretirement health care and deferred compensation
    benefits, net of current portion                       64,193    67,729
                                                        --------- ---------
      Total long-term liabilities                          73,475    77,198

Stockholders' equity                                      163,984   173,924
                                                        --------- ---------
      Total liabilities and stockholders' equity        $ 282,515 $ 305,455
                                                        ========= =========






                        Winnebago Industries, Inc.
               Unaudited Condensed Statements of Cash Flows
                              (In thousands)


                                                    Thirteen     Fourteen
                                                  Weeks Ended  Weeks Ended
                                                    Nov. 29,     Dec. 1,
                                                      2008         2007
                                                  -----------  -----------
Operating activities:
   Net (loss) income                              $    (9,596) $     9,962
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                      2,137        2,713
      Stock-based compensation                            288        2,270
      Postretirement benefit income and deferred
       compensation                                       508          377
      Deferred income taxes                            (1,008)         478
      Increase in cash surrender value of life
       insurance policies                                (246)        (170)
      Other                                                19           62
   Change in assets and liabilities:
      Inventories                                      27,302      (18,909)
      Receivables and prepaid assets                    4,704       12,724
      Accounts payable and accrued expenses            (5,951)      (5,879)
      Income taxes (receivable) payable and
       unrecognized tax benefits                       (4,510)       4,303
      Postretirement and deferred compensation
       benefits                                          (781)        (344)
                                                  -----------  -----------
   Net cash provided by operating activities           12,866        7,587
                                                  -----------  -----------

Investing activities:
   Purchases of investments                             - - -     (150,072)
   Proceeds from the sale or maturity of
    investments                                         3,100      163,375
   Purchases of property and equipment                   (689)      (1,505)
   Other                                                 (712)        (431)
                                                  -----------  -----------
Net cash provided by investing activities               1,699       11,367
                                                  -----------  -----------

Financing activities:
   Payments for purchase of common stock                 (162)     (17,519)
   Payments of cash dividends                          (3,489)      (3,546)
   Proceeds from issuance of treasury stock             - - -           58
                                                  -----------  -----------
Net cash used in financing activities                  (3,651)     (21,007)
                                                  -----------  -----------

Net increase (decrease) in cash and cash
 equivalents                                           10,914       (2,053)

Cash and cash equivalents at beginning of period       17,851        6,889
                                                  -----------  -----------

Cash and cash equivalents at end of period        $    28,765  $     4,836
                                                  ===========  ===========







                        Winnebago Industries, Inc.
                      Unaudited Motor Home Deliveries


                          Thirteen     Fourteen
                        Weeks Ended   Weeks Ended
                          Nov. 29,      Dec. 1,            Change
                            2008         2007        Units          %
                        ------------ ------------ -----------  -----------
Class A Gas                      165          836        (671)       (80.3)
Class A Diesel                   118          363        (245)       (67.5)
                        ------------ ------------ -----------  -----------
   Total Class A                 283        1,199        (916)       (76.4)
Class B                           35        - - -          35        - - -
Class C                          338          956        (618)       (64.6)
                        ------------ ------------ -----------  -----------
   Total deliveries              656        2,155      (1,499)       (69.6)
                        ============ ============ ===========  ===========




                        Winnebago Industries, Inc.
            Unaudited Sales Order Backlog and Dealer Inventory
                                  (Units)


                                    As of
                             Nov. 29,     Dec. 1,    Increase/       %
                               2008        2007      Decrease     Change
                            ----------- ----------- ----------  ----------
Class A Gas                          84         449       (365)      (81.3)
Class A Diesel                       35         299       (264)      (88.3)
                            ----------- ----------- ----------  ----------
   Total Class A                    119         748       (629)      (84.1)
Class B                               8       - - -          8       - - -
Class C                             211       1,085       (874)      (80.6)
                            ----------- ----------- ----------  ----------
   Total backlog*                   338       1,833     (1,495)      (81.6)
                            =========== =========== ==========  ==========

Total approximate revenue
 dollars (in thousands)     $    27,648 $   161,743 $ (134,095)      (82.9)
Dealer inventory                  3,269       4,364     (1,095)      (25.1)

* The Company includes in its backlog all accepted orders from dealers to be shipped within the next six months. Orders in backlog can be cancelled or postponed at the option of the purchaser at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.

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