SOURCE: Winnebago Industries, Inc.

Winnebago Industries, Inc.

June 18, 2009 07:00 ET

Winnebago Industries Reports Results for Third Quarter and First Nine Months of Fiscal Year 2009

FOREST CITY, IA--(Marketwire - June 18, 2009) - Winnebago Industries, Inc. (NYSE: WGO) today reported financial results for the Company's third quarter and first nine months of fiscal year 2009 ended May 30, 2009.

Revenues for the quarter were $50.8 million versus revenues of $139.7 million for the third quarter last fiscal year. The Company reported an operating loss of $14.8 million for the quarter versus an operating loss of $6.9 million for the third quarter of fiscal 2008. Net loss for the third quarter was $8.6 million versus net income of $3.0 million for the third quarter of fiscal 2008. On a diluted per share basis, the Company had a net loss of 29 cents a share for the third quarter of fiscal 2009 versus net income of 10 cents per share for the third quarter last fiscal year.

The third quarter was negatively impacted by lower motor home deliveries, low absorption of fixed costs and higher production inefficiencies due to lower production volumes, significant increases of wholesale and retail promotions due to challenging market conditions, and a higher mix of lower priced Class C and B motor home deliveries. There was a positive benefit to cost of goods sold, however, from the liquidation of last-in, first-out (LIFO) inventory values due to a significant reduction of inventory levels. This has the effect of decreasing the net loss by $2.1 million, or seven cents per diluted share.

Revenues for the first 39 weeks of fiscal 2009 were $152.1 million versus $519.1 million for the first 40 weeks of fiscal 2008. Operating loss was $50.3 million for the first 39 weeks of fiscal 2009 versus an operating income of $9.1 million for the first 40 weeks of fiscal 2008. Net loss for the first 39 weeks of fiscal 2009 was $28.5 million versus net income of $15.5 million for the first 40 weeks of fiscal 2008. On a diluted per share basis, the Company had a net loss of 98 cents a share for the first 39 weeks of fiscal 2009 versus net income of 53 cents a share for the first 40 weeks of fiscal 2008.

"We are pleased by our successful efforts to reduce inventory during the quarter," said Winnebago Industries' Chairman, CEO and President Bob Olson. "While market conditions remain very challenging, we were able to generate $14.7 million of cash from operations during our third quarter as a result of aggressive management of our working capital. On a fiscal year to date basis through the third quarter, cash generated from operations has increased over 19 percent compared to last year."

According to Statistical Surveys, the retail reporting service for the RV industry, Winnebago Industries gained market share in the combined Class A and C market with 18.4 percent calendar year to date through April 2009 as compared to 17.3% for the same period last year. Industry-wide, combined Class A and C motor home retail sales have declined approximately 46 percent calendar year to date through April. The Recreation Vehicle Industry Association has reported wholesale motor home shipments industry-wide to have decreased by approximately 78 percent calendar year to date through April.

"While industry motor home shipments as reported were down 76.6 percent during the first two months of our third fiscal quarter, we were pleased that our shipments showed a less significant decline, at 61.9 percent for the quarter," Olson continued. "We have seen modest improvement industry-wide during calendar 2009 in both retail sales and wholesale shipments, unfortunately, the improvement has not been of the magnitude that would imply a full recovery within the near term. As a result, we are continuing to reduce our cost structure as reflected by the recent announcement of the upcoming closure of our fiberglass manufacturing facility in Hampton, Iowa."

"Credit remains the biggest hurdle the industry faces," said Olson. "Floor plan lending institutions continue to emphasize reducing inventories and increasing turn rates for dealerships across the country. Dealer inventory of Winnebago Industries' products has been reduced by nearly 50 percent since a year ago and by approximately 20 percent since the end of our last fiscal quarter. While our sales order backlog is over 60 percent less than last year at this time, we are pleased that it has increased 14 percent since the end of our last fiscal quarter. We continue to believe we are in a strong financial position with sufficient cash, no long-term debt and with the benefit of a respected brand name known for its quality products."

Winnebago Industries will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, June 18, 2009. 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)


                                              Quarter Ended
                                    May 30, 2009          May 31, 2008
                                --------------------  --------------------
                                                 %                     %
Net revenues                    $  50,848      100.0  $ 139,736      100.0
Cost of goods sold                 59,133      116.3    137,112       98.1
                                ---------  ---------  ---------  ---------
  Gross (deficit) profit           (8,285)     (16.3)     2,624        1.9
                                ---------  ---------  ---------  ---------
Operating expenses
  Selling                           3,083        6.1      5,085        3.6
  General and administrative        3,414        6.7      4,442        3.2
                                ---------  ---------  ---------  ---------
  Total operating expenses          6,497       12.8      9,527        6.8
                                ---------  ---------  ---------  ---------
Operating loss                    (14,782)     (29.1)    (6,903)      (4.9)
Financial income                      209        0.4      1,053        0.7
                                ---------  ---------  ---------  ---------
Loss before income taxes          (14,573)     (28.7)    (5,850)      (4.2)
Benefit for taxes                  (6,020)     (11.9)    (8,850)      (6.3)
                                ---------  ---------  ---------  ---------
Net (loss) income               $  (8,553)     (16.8) $   3,000        2.1
                                =========  =========  =========  =========
(Loss) income per common share:
  Basic                         $   (0.29)            $    0.10
  Diluted                       $   (0.29)            $    0.10
Weighted average common shares
 outstanding
  Basic                            29,045                29,013
  Diluted                          29,056                29,048


                                   39 Weeks Ended        40 weeks Ended
                                    May 30, 2009          May 31, 2008
                                --------------------  --------------------
                                                 %                     %
Net revenues                    $ 152,054      100.0  $ 519,081      100.0
Cost of goods sold                181,025      119.1    478,648       92.2
                                ---------  ---------  ---------  ---------
  Gross (deficit) profit          (28,971)     (19.1)    40,433        7.8
                                ---------  ---------  ---------  ---------
Operating expenses
  Selling                           9,564        6.3     14,948        2.9
  General and administrative       11,748        7.7     16,350        3.1
                                ---------  ---------  ---------  ---------
  Total operating expenses         21,312       14.0     31,298        6.0
                                ---------  ---------  ---------  ---------
Operating (loss) income           (50,283)     (33.1)     9,135        1.8
Financial income                    1,366        0.9      3,529        0.6
                                ---------  ---------  ---------  ---------
(Loss) income before income
 taxes                            (48,917)     (32.2)    12,664        2.4
Benefit for taxes                 (20,387)     (13.4)    (2,815)      (0.6)
                                ---------  ---------  ---------  ---------
Net (loss) income               $ (28,530)     (18.8) $  15,479        3.0
                                =========  =========  =========  =========
(Loss) income per common share:
  Basic                         $   (0.98)            $    0.53
  Diluted                       $   (0.98)            $    0.53
Weighted average common shares
 outstanding
  Basic                            29,036                29,116
  Diluted                          29,046                29,183



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


                                                May 30, 2009  Aug. 30, 2008
                                                ------------- -------------
ASSETS
Current assets:
  Cash and cash equivalents                     $      41,308 $      17,851
  Short-term investments                                  400         3,100
  Receivables, net                                      7,890         9,426
  Inventories                                          53,230       110,596
  Income taxes receivable                              19,127         6,618
  Prepaid and other                                    12,407        15,290
                                                ------------- -------------
    Total current assets                              134,362       162,881

  Property and equipment, net                          34,077        40,097
  Long-term investments, less impairments              33,120        37,538
  Deferred income taxes                                28,660        26,862
  Investment in life insurance                         22,476        22,123
  Other assets                                         13,156        15,954
  Assets held for sale                                  2,276         - - -
                                                ------------- -------------
    Total assets                                $     268,127 $     305,455
                                                ============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                              $       9,806 $      15,631
  Short-term ARS borrowings                             9,100         - - -
  Income taxes payable                                     91            76
  Accrued expenses                                     30,442        38,626
                                                ------------- -------------
    Total current liabilities                          49,439        54,333

Long-term liabilities:
  Unrecognized tax benefits                             9,031         9,469
  Postretirement health care and deferred
   compensation benefits, net of current
   portion                                             64,767        67,729
                                                ------------- -------------
    Total long-term liabilities                        73,798        77,198

Stockholders' equity                                  144,890       173,924
                                                ------------- -------------
    Total liabilities and stockholders' equity  $     268,127 $     305,455
                                                ============= =============



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


                                            39 Weeks Ended  40 Weeks Ended
                                             May 30, 2009    May 31, 2008
                                            --------------  --------------
Operating activities:
  Net (loss) income                         $      (28,530) $       15,479
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
    Depreciation                                     6,015           7,583
    Stock-based compensation                           760           3,617
    Postretirement benefit income and
     deferred compensation expense                   1,030           1,065
    Deferred income taxes                             (463)          4,070
    Increase in cash surrender value of
     life insurance policies                          (865)           (596)
    Other                                              304              43
  Change in assets and liabilities:
    Inventories                                     57,366          (9,752)
    Receivables and prepaid assets                   2,164          20,812
    Income taxes payable and unrecognized tax
     benefits                                      (11,929)         (8,871)
    Accounts payable and accrued expenses          (11,034)        (21,868)
    Postretirement and deferred compensation
     benefits                                       (2,344)         (1,123)
                                            --------------  --------------
Net cash provided by operating activities           12,474          10,459
                                            --------------  --------------

Investing activities:
  Purchases of investments                           - - -        (228,069)
  Proceeds from the sale or maturity of
   investments                                       8,500         288,119
  Purchases of property and equipment               (2,522)         (3,025)
  Other                                               (442)           (619)
                                            --------------  --------------
Net cash provided by investing activities            5,536          56,406
                                            --------------  --------------

Financing activities:
  Payments for purchase of common stock               (164)        (17,767)
  Payments of cash dividends                        (3,489)        (10,509)
  Borrowings on ARS portfolio                        9,100           - - -
  Proceeds from issuance of treasury stock           - - -             722
                                            --------------  --------------
Net cash provided by (used in) financing
 activities                                          5,447         (27,554)
                                            --------------  --------------

Net increase in cash and cash equivalents           23,457          39,311

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

Cash and cash equivalents at end of period  $       41,308  $       46,200
                                            ==============  ==============



                        Winnebago Industries, Inc.
                      Unaudited Motor Home Deliveries


                              Quarter Ended                Change
                        May 30, 2009 May 31, 2008    Units          %
                        ------------ ------------ -----------  -----------
Motor home unit
 deliveries
  Class A Gas                    114          457        (343)       (75.1)
  Class A Diesel                  62          151         (89)       (58.9)
                        ------------ ------------ -----------  -----------
    Total Class A                176          608        (432)       (71.1)
  Class B                         56           47           9         19.1
  Class C                        388          972        (584)       (60.1)
                        ------------ ------------ -----------  -----------
    Total deliveries             620        1,627      (1,007)       (61.9)
                        ============ ============ ===========  ===========



                          39 Weeks     40 Weeks
                            Ended        Ended             Change
                        May 30, 2009 May 31, 2008    Units          %
                        ------------ ------------ -----------  -----------
Motor home unit
 deliveries
  Class A Gas                    356        1,844      (1,488)       (80.7)
  Class A Diesel                 225          801        (576)       (71.9)
                        ------------ ------------ -----------  -----------
    Total Class A                581        2,645      (2,064)       (78.0)
  Class B                         99           48          51        106.3
  Class C                        911        2,786      (1,875)       (67.3)
                        ------------ ------------ -----------  -----------
    Total deliveries           1,591        5,479      (3,888)       (71.0)
                        ============ ============ ===========  ===========



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


                                      As of                  Change
                            May 30, 2009 May 31, 2008   Units        %
                            ------------ ------------ ---------  ---------
Sales order backlog
  Class A Gas                        104          280      (176)     (62.9)
  Class A Diesel                      72          136       (64)     (47.1)
                            ------------ ------------ ---------  ---------
    Total Class A                    176          416      (240)     (57.7)
  Class B                              2          216      (214)     (99.1)
  Class C                            204          515      (311)     (60.4)
                            ------------ ------------ ---------  ---------
    Total backlog*                   382        1,147      (765)     (66.7)
                            ============ ============ =========  =========

Total approximate revenue
 dollars (in thousands)     $     33,556 $     93,927 $ (60,371)     (64.3)

Dealer inventory                   2,324        4,341    (2,017)     (46.5)


* 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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