Winnebago Industries Reports Third Quarter Results and Record Nine Months Revenue
FOREST CITY, Iowa--June 13, 2003--Winnebago Industries, Inc. , today reported net income from continuing operations of $9.0 million for the third quarter ended May 31, 2003 versus $17.7 million for the third quarter of fiscal 2002. On a diluted per share basis, the Company earned 48 cents from continuing operations for the third quarter of fiscal 2003 versus 88 cents for the third quarter last year. Net income from Winnebago Acceptance Corporation operations, which were discontinued during the quarter was $.3 million, or two cents per diluted share, for the third quarter ended May 31, 2003 versus $.4 million, or two cents per diluted share for the third quarter of fiscal 2002.Revenues from continuing operations for the third quarter of fiscal 2003 were $200.2 million versus $245.9 million for the same quarter last year.
Net income from continuing operations for the first 39 weeks of fiscal 2003 was $36.8 million, versus $36.9 million for the first 40 weeks of fiscal 2002. On a diluted per share basis, the Company earned $1.94 from continuing operations for the first 39 weeks of fiscal 2003 versus $1.78 for the first 40 weeks of fiscal 2002. Net income from discontinued operations for the first 39 weeks of fiscal 2003 was $1.2 million, or six cents per diluted share, versus $1.3 million, or six cents per diluted share for the first 40 weeks of fiscal 2002.
Revenues from continuing operations for the first 39 weeks of fiscal 2003 were a record $619.5 million versus $605.1 million for the first 40 weeks of fiscal 2002.
"Revenues and earnings for the third quarter were impacted primarily by lower sales volume. Due to the lower volume, we reduced production schedules to better align Company and dealer inventory levels with retail demand expectations, decreasing plant efficiencies," said Winnebago Industries' Chairman, CEO and President Bruce Hertzke. "Also contributing, but to a lesser degree, were incentive programs needed to move out final 2003 inventory and start-up expenses for our new Charles City Motor Home Manufacturing Facility."
"The comparison with last year's third quarter reflects the operation of the Company's factories on four-day work weeks for the first six weeks of the quarter versus running on an overtime basis during the third quarter last year," said Hertzke. "Also our fiscal year to date through the end of the third quarter was a traditional 39-week period this year versus a 40-week period in fiscal 2002."
Hertzke continued, "Shipments for the Company's motor homes slowed during the third quarter as a result of dealers choosing to trim inventory levels due to low consumer confidence levels, uncertainty about the war in Iraq and the coming model year changeover. The third quarter was also impacted by competitive programs within the motor home industry."
"I am extremely proud that Winnebago Industries remained solidly profitable during the quarter in spite of decreased volume, increased competitive pressures and start-up expenses from our new Charles City Motor Home Manufacturing Facility," said Hertzke. "Winnebago Industries continues to have a solid balance sheet, an extremely positive cash flow, no debt, and a great name and reputation for product quality and customer service. We will continue to manage our business to achieve high profitability levels within the RV industry."
Winnebago Industries is the top selling motor home manufacturer with 18.4 percent of the combined Class A and C market calendar year to date through April.
For the third quarter ended May 31, 2003, Winnebago Industries reported factory shipments of 2,601 units, comprised of 1,465 Class A and 1,136 Class C motor homes compared to 3,355 units, comprised of 1,965 Class A and 1,390 Class C motor homes, for the third quarter last year. Class A motor home shipments included 397 diesel units compared to 489 diesel units in the third quarter last year.
Winnebago Industries' motor home sales order backlog at the end of the third quarter on May 31, 2003 was 1,419 units, comprised of 941 Class A and 478 Class C motor homes, versus 2,689 units, comprised of 1,721 Class A and 968 Class C motor homes, on order at the end of the third quarter last year.
Dealer inventory levels of the Company's products were 4,561 on May 31, 2003, compared to 4,271 units at that time last year.
In March, the Company's Board of Directors announced the Company's eighth stock repurchase program, authorizing the purchase of outstanding shares of Winnebago Industries' common stock for an aggregate price of up to $20 million. During the third quarter ended May 31, 2003, Winnebago Industries repurchased 345,899 shares for an aggregate price of approximately $9.7 million. Currently, outstanding shares are approximately 18,142,000.
Winnebago Industries will host a live webcast to review third quarter results today, June 13, 2003, at 10 a.m. EST. The webcast will be available on the Company's website at www.winnebagoind.com or at www.shareholder.com/winnebago/medialist.cfm. It will be archived and available for 90 days.
About Winnebago Industries
Winnebago Industries, Inc. is the leading manufacturer of motor homes, self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes under the Winnebago, Itasca, Rialta and Ultimate 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, Chicago and Pacific 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, to add your name to an automatic email list for Company news releases or for information on a dollar-based stock investment service for the Company's stock, visit, www.winnebagoind.com/investor_relations.htm.
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 reactions to actual or threatened terrorist attacks, the availability and price of fuel, a significant increase in interest rates, a slowdown in the economy, availability of chassis, sales order cancellations, slower than anticipated sales of new or existing products, new products introduced by competitors 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 per share amounts)
Quarter Ended 39 Weeks 40 Weeks
5/31/2003 6/1/2002 5/31/2003 6/1/2002
---------- ------------------------------
Net revenues $200,211 $245,912 $619,516 $605,121
Cost of goods sold 177,065 209,381 534,930 523,068
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Gross profit 23,146 36,531 84,586 82,053
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Operating expenses
Selling 4,652 4,257 13,407 13,567
General and administrative 4,251 5,689 12,287 14,796
---------- --------- ---------- ---------
Total operating expenses 8,903 9,946 25,694 28,363
---------- --------- ---------- ---------
Operating income 14,243 26,585 58,892 53,690
Financial income 306 623 1,001 2,641
---------- --------- ---------- ---------
Pre-tax income 14,549 27,208 59,893 56,331
Provision for taxes 5,554 9,523 23,129 19,402
---------- --------- ---------- ---------
Income from continuing
operations 8,995 17,685 36,764 36,929
Income from discontinued
operations (net of taxes) 334 409 1,152 1,323
Net income $9,329 $18,094 $37,916 $38,252
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Income per share (basic)
From continuing operations $0.49 $0.91 $1.98 $1.82
From discontinued
operations 0.02 0.02 0.06 0.06
---------- --------- ---------- ---------
Net income $0.51 $0.93 $2.04 $1.88
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Number of shares used in per
share calculations - basic 18,257 19,552 18,586 20,337
Income per share (diluted)
From continuing operations $0.48 $0.88 $1.94 $1.78
From discontinued
operations 0.02 0.02 0.06 0.06
---------- --------- ---------- ---------
Net income $0.50 $0.90 $2.00 $1.84
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Number of shares used in per
share calculations-diluted 18,549 19,995 18,925 20,779
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Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
May 31, Aug. 31,
2003 2002
------------ ---------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $92,747 $42,225
Receivables 24,898 28,375
Inventories 115,084 113,654
Other 11,919 11,221
Net assets of discontinued operations 624 38,121
------------ ---------
Total current assets 245,272 233,596
Property and equipment, net 63,879 48,927
Deferred income taxes 23,626 22,438
Investment in life insurance 22,371 23,474
Other assets 11,731 8,642
------------ ---------
Total assets $366,879 $337,077
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $48,132 $44,230
Income taxes payable 827 2,610
Accrued expenses 46,124 41,761
------------ ---------
Total current liabilities 95,083 88,601
Post retirement health care and
deferred compensation benefits 72,835 68,661
Stockholders' equity 198,961 179,815
------------ ---------
Total liabilities and stockholders' equity $366,879 $337,077
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Winnebago Industries Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(Dollars in thousands)
39 Weeks 40 Weeks
5/31/2003 6/1/2002
---------- ---------
Cash flows from operating activities
Net income as shown on the statement of
income $ 37,916 $ 38,252
Income from discontinued operations (1,152) (1,323)
---------- ---------
Income from continuing operations 36,764 36,929
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 6,395 5,906
Tax benefit of stock options 955 3,292
Other 205 165
Change in assets and liabilities
Decrease (increase) in receivable and other
assets 3,994 (1,911)
Increase in inventories (1,430) (16,561)
Increase in deferred income taxes (2,502) (1,537)
Increase in accounts payable and accrued
expenses 8,265 17,355
(Decrease) increase in income taxes payable (1,783) 6,431
Increase in postretirement benefits 3,680 4,075
---------- ---------
Net cash provided by continuing operations 54,543 54,144
Net cash provided by discontinued operations 234 301
---------- ---------
Net cash provided by operating activities 54,777 54,445
---------- ---------
Cash flows provided by (used in) investing
activities
Purchases of property and equipment (21,539) (5,418)
Other (1,414) (2,099)
---------- ---------
Net cash used in continuing operations (22,953) (7,517)
Net cash provided by discontinued operations 38,423 2,529
---------- ---------
Net cash provided by (used in) investing
activities 15,470 (4,988)
---------- ---------
Cash flows used in financing activities and
capital transactions
Payments for purchase of common stock (20,221) (81,778)
Payment of cash dividends (1,887) (2,075)
Proceeds from issuance of common and treasury
stock 2,383 4,317
---------- ---------
Net cash used in financing activities and capital
transactions (19,725) (79,536)
---------- ---------
Net increase (decrease) in cash and cash
equivalents 50,522 (30,079)
Cash and cash equivalents-beginning of period 42,225 102,280
---------- ---------
Cash and cash equivalents-end of period $ 92,747 $ 72,201
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