Winnebago Industries Reports 2006 Revenues and Earnings
FOREST CITY, Iowa--March 16, 2006--Winnebago Industries, Inc., , the leading United States (U.S.) motor home manufacturer, today reported financial results for the Company's second quarter and first six months ended February 25, 2006.Net income for the second quarter was $7.7 million, a decrease of 38.7 percent compared to net income of $12.6 million for the second quarter last year. On a diluted per share basis, the Company earned 23 cents a share for the second quarter of fiscal 2006, compared to net income of 37 cents a share for the second quarter last year. Included as a reduction to net income in the second quarter of fiscal 2006 was $804,000, or 2 cents per diluted share, of stock option expense due to the adoption of Statement of Financial Accounting Standards No. 123R, Share-Based Payment beginning August 28, 2005, which was not effective in the second quarter of last year.
Revenues for the second quarter of fiscal 2006 were $206.4 million, a decrease of 13.8 percent compared to revenues of $239.4 million for the second quarter of fiscal 2005.
Net income for the first six months of fiscal 2006 was $22.3 million, a decrease of 30.7 percent compared to net income of $32.1 million for same period in fiscal 2005. On a diluted per share basis, the Company earned 67 cents a share for the first six months of fiscal 2006, compared to 94 cents a share for the first six months of fiscal 2004. Included as a reduction to net income for the first six months of fiscal 2006 was $2.3 million, or 7 cents per diluted share, of stock option expense.
Revenues for the first six months of fiscal 2006 were $438.7 million, a decrease of 13.2 percent compared to revenue of $505.5 million for the same period in fiscal 2005.
"Revenues and net income for the quarter and first six months were negatively impacted primarily by lower motor home deliveries as a result of decreased industry retail demand," said Winnebago Industries' Chairman and CEO Bruce Hertzke. "We were also impacted by a shift towards lower priced motor home products. This shift in product mix is occurring industry-wide. Based on statistics from the Recreation Vehicle Industry Association for calendar 2005, Class A motor home shipments decreased 12.7 percent while Class C shipments for the industry decreased only 1.7 percent for the same period."
The Company's sales order backlog was 1,581 units at February 25, 2006, compared to the backlog of 2,108 units at February 26, 2005. Hertzke continued, "As evidenced by the composition of the backlog, we continue to see a shift in the mix of products on order by our dealer partners to lower priced motor homes. The introduction of our new Winnebago View and Itasca Navion fuel efficient Class C diesel motor homes was particularly timely and continues to have a positive impact on our Class C backlog."
According to Statistical Surveys, Inc., an independent retail reporting service, Winnebago Industries completed calendar 2005 in the number one position with combined Class A and Class C retail sales market share of 17.9 percent. "Manufacturers' and dealers' inventories were high at the beginning of calendar 2005, leading many manufacturers to promotionally discount their products into the marketplace," said Winnebago Industries' President Ed Barker. "As we've previously stated, our primary goal is profitability, so we did not participate in offering incentives at the same level as our major competitors. Consequently, our market share for the combined Class A and C markets declined from 19.0 percent for calendar 2004, driven primarily by lower Class A market share. However, as calendar 2005 progressed and discounts in the marketplace decreased, we did see recovery in our market share, achieving 19.3 percent of the combined Class A and C market for the fourth quarter of calendar 2005."
Winnebago Industries repurchased 100,000 shares of the Company's common stock for an aggregate consideration of approximately $3.1 million during the second quarter of fiscal 2006. The Company has approximately $21.7 million remaining on the current share repurchase authorization.
About Winnebago Industries
Winnebago Industries, Inc. is the leading U.S. 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 and Itasca 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.
Winnebago Industries, Inc. Unaudited Consolidated Statements of Income (In thousands, except per share amounts) Quarter Ended Six Months Ended February February February February 25, 26, 25, 26, 2006 2005 (a) 2006 2005 (a) ---------- --------- --------- --------- Net revenues $206,425 $239,359 $438,680 $505,492 Cost of goods sold 186,105 210,098 387,196 436,167 ---------- --------- --------- --------- Gross profit 20,320 29,261 51,484 69,325 ---------- --------- --------- --------- Operating expenses Selling 4,505 4,564 9,178 9,118 General and administrative 5,284 5,798 10,333 11,355 ---------- --------- --------- --------- Total operating expenses 9,789 10,362 19,511 20,473 ---------- --------- --------- --------- Operating income 10,531 18,899 31,973 48,852 Financial income 1,314 639 2,236 1,133 ---------- --------- --------- --------- Income before income taxes 11,845 19,538 34,209 49,985 Provision for taxes 4,145 6,967 11,939 17,870 ---------- --------- --------- --------- Net income $7,700 $12,571 $22,270 $32,115 ======================================== Income per common share: Basic $0.23 $0.37 $0.68 $0.95 Diluted $0.23 $0.37 $0.67 $0.94 Weighted average common shares outstanding: Basic 32,806 33,672 32,870 33,647 Diluted 33,147 34,254 33,167 34,224 (a) As restated Winnebago Industries, Inc. Unaudited Consolidated Condensed Balance Sheets (In thousands) February 25, August 27, 2006 2005 ------------ ----------- ASSETS Current assets: Cash and cash equivalents $18,825 $19,484 Short-term investments 144,250 93,100 Receivables, net 29,225 40,910 Inventories 90,888 120,655 Other 13,838 13,943 ------------ ----------- Total current assets 297,026 288,092 Property and equipment, net 60,349 63,853 Deferred income taxes 24,236 24,997 Investment in life insurance 20,437 22,066 Other assets 15,849 13,952 ------------ ----------- Total assets $417,897 $412,960 ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $33,436 $37,229 Income taxes payable 7,523 4,458 Accrued expenses 42,217 48,936 ------------ ----------- Total current liabilities 83,176 90,623 Postretirement health care and deferred compensation benefits, net of current portion 86,541 86,450 Stockholders' equity 248,180 235,887 ------------ ----------- Total liabilities and stockholders' equity $417,897 $412,960 ============ =========== Winnebago Industries, Inc. Unaudited Condensed Statement of Cash Flows (Dollars in thousands) Six Months Ended February 25, February 26, 2006 2005 (a) ------------ ------------ Operating activities: Net income $22,270 $32,115 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 5,328 4,931 Stock-based compensation 2,895 41 Deferred income taxes 1,538 (3) Deferred compensation and postretirement expense 638 630 Excess tax benefit from stock-based compensation (174) --- Other (212) 33 Change in operating assets and liabilities: Receivable and other assets 10,986 18,210 Inventories 29,767 (12,926) Accounts payable and accrued expenses (10,336) (3,436) Income taxes payable 3,257 7,005 Postretirement and deferred compensation benefits (663) (352) ------------ ------------ Net cash provided by operating activities 65,294 46,248 ------------ ------------ Investing activities: Purchases of short-term investments (110,100) (147,473) Proceeds from the sale or maturity of short-term investments 58,950 101,094 Purchases of property and equipment (1,968) (4,178) Other 70 (365) ------------ ------------ Net cash used in investing activities (53,048) (50,922) ------------ ------------ Financing activities: Payments for purchase of common stock (8,284) (1,787) Payment of cash dividends (5,922) (4,712) Proceeds from issuance of treasury stock 1,127 2,835 Excess tax benefit from stock-based compensation 174 --- ------------ ------------ Net cash used in financing activities (12,905) (3,664) ------------ ------------ Net decrease in cash and cash equivalents (659) (8,338) Cash and cash equivalents at beginning of period 19,484 24,445 ------------ ------------ Cash and cash equivalents at end of period $18,825 $16,107 ============ ============ Certain prior period information has been reclassified to conform to the current year presentation. (a) As restated Winnebago Industries, Inc. Unaudited Motor Home Deliveries Quarter Ended Six Months Ended 2/25/2006 2/26/2005 2/25/2006 2/26/2005 ---------- ---------- ---------- ---------- Unit deliveries Class A gas 658 1,117 1,559 2,443 Class A diesel 471 550 893 1,146 Class C 1,139 887 2,310 1,790 ---------- ---------- ---------- ---------- Total deliveries 2,268 2,554 4,762 5,379 Winnebago Industries, Inc. Unaudited Backlog and Dealer Inventory (Units) As of 2/25/2006 2/26/2005 ---------- ---------- Sales order backlog Class A gas 464 683 Class A diesel 245 453 Class C 872 972 ---------- ---------- Total backlog (a) 1,581 2,108 Total approximate revenue dollars (in thousands) $127,800 $181,400 Dealer inventory 5,436 5,601 (a) The Company includes in its backlog all accepted purchase orders from dealers scheduled to be shipped within the next six months. Orders in backlog can be canceled 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.