Winnebago Industries Reports 59% Net Income Increase for the Fourth Quarter of Fiscal Year 2007

FOREST CITY, Iowa--Winnebago Industries, Inc. , a leading United States motor home manufacturer, today reported financial results for the Company’s fourth quarter and fiscal year ended August 25, 2007.

Revenues for the fourth quarter ended August 25, 2007 were $237.7 million, an increase of 15.7 percent, compared to revenues of $205.4 million for the fourth quarter last year. Net income for the fourth quarter was $14.8 million, compared to net income of $9.3 million for the fourth quarter of fiscal 2006, an increase of 59.3 percent. On a diluted per share basis, the Company earned 49 cents a share for the fourth quarter of fiscal 2007, compared to 30 cents per diluted share for the fourth quarter last year.

The revenue increase for the quarter was primarily due to an increase in Class A motor home unit deliveries, which were nearly 48 percent higher when compared to the same quarter last year. The mix of deliveries in the fourth quarter of 2006 was more heavily weighted to Class C product due to the introduction of the value-priced Winnebago Access and Itasca Impulse. Conversely, the new products introduced during fiscal 2007 have been primarily focused in the Class A product category and generally carry a higher average selling price.

Gross profit margin in the fourth quarter was positively impacted by the stronger mix of Class A motor homes, and to a lesser extent, an increase in volume. In addition to the positive impact on net income from the increase in gross profit margin, net income also improved in the quarter due to reduced operating expenses. Selling expenses in the fourth quarter decreased over the prior year due to timing of the Company’s annual dealer event that was held in the third quarter of fiscal 2007 as opposed to being held in the fourth quarter in prior fiscal years.

Revenues for fiscal year 2007 were $870.2 million, an increase of 0.7 percent compared to $864.4 million for the previous year. Net income for fiscal 2007 was $41.6 million, compared to $44.7 million for 2006. On a diluted per share basis, the Company earned $1.32 a share, compared to $1.37 a share for 2006.

“We were pleased with the results of our fourth quarter and fiscal 2007 in spite of a difficult market,” said Winnebago Industries’ Chairman and CEO Bruce Hertzke. “We experienced a shift to a higher mix of Class A products sold within the fourth quarter which resulted in both higher revenues and margins. As part of our continued long-term strategy of returning profits to our shareholders, we also made significant repurchases of our common stock during the quarter.”

During the Company’s fourth quarter ended August 25, 2007, Winnebago Industries repurchased 1,532,000 shares of common stock for an aggregate cost of approximately $44.1 million. In total, 2,160,000 shares, or 6.9 percent of outstanding shares as of August 26, 2006, were repurchased during fiscal 2007 for an aggregate cost of approximately $64.7 million. As of August 25, 2007, the Company had $17.5 million remaining on the current share repurchase authorization.

“I’m very proud of what our employees have been able to accomplish in the fourth quarter and fiscal 2007,” said Winnebago Industries’ President Bob Olson. “We anticipate softness in motor home sales, however, as we move into our seasonally slower quarters, particularly in light of very low consumer confidence levels nationwide.”

“Retail motor home sales levels continue to lag behind last year,” said Olson. “According to the most recent report from Statistical Surveys, Inc., a retail reporting service for the RV industry, retail sales of Class A and Class C motor homes combined for the month of August 2007 were down 11 percent and for the calendar year to date through August have declined 4.9 percent compared to the same periods last year. While we believe the Federal Reserve’s recent decision to reduce interest rates is a positive step toward improving market conditions for motor homes, it may take some time for this to translate into sustained growth of the retail motor home market. In the meantime, we believe dealers will continue to keep their motor home inventories low or further reduce them as they go into the slower fall and winter seasons.”

In a meeting held yesterday, Winnebago Industries’ Board of Directors declared a quarterly cash dividend of 12 cents a share, payable on January 7, 2008 to shareholders of record as of December 7, 2007.

Winnebago Industries will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, October 11, 2007. 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 a leading U.S. 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 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 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, 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, http://www.winnebagoind.com/investor.html.

Winnebago Industries, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except percent and per share data)
	�					�
		Quarter Ended
		Aug. 25, 2007					Aug. 26, 2006
				�	%				�	%
Net revenues		$	237,681		100.0		$	205,411		100.0
Cost of goods sold			205,089		86.3			180,070		87.7
Gross profit			32,592		13.7			25,341		12.3
Operating expenses
Selling			5,312		2.2			5,905		2.8
General and administrative			6,553		2.8			6,691		3.3
Total operating expenses			11,865		5.0			12,596		6.1
Operating income			20,727		8.7			12,745		6.2
Financial income			1,559		0.7			1,443		0.7
Income before income taxes			22,286		9.4			14,188		6.9
Provision for taxes			7,443		3.1			4,871		2.4
Net income		$	14,843		6.3		$	9,317		4.5
Income per common share:
Basic		$	0.49				$	0.30
Diluted		$	0.49				$	0.30
Weighted average common shares outstanding
Basic			30,417					31,126
Diluted			30,576					31,407
�
										�
										�
		Fiscal Year Ended
		Aug. 25, 2007					Aug. 26, 2006
					%					%
Net revenues		$	870,152		100.0		$	864,403		100.0
Cost of goods sold			770,955		88.6			759,502		87.9
Gross profit			99,197		11.4			104,901		12.1
Operating expenses
Selling			19,865		2.3			19,619		2.2
General and administrative			24,446		2.8			22,184		2.6
Total operating expenses			44,311		5.1			41,803		4.8
Operating income			54,886		6.3			63,098		7.3
Financial income			6,523		0.8			5,097		0.6
Income before income taxes			61,409		7.1			68,195		7.9
Provision for taxes			19,845		2.3			23,451		2.7
Net income		$	41,564		4.8		$	44,744		5.2
Income per common share:
Basic		$	1.33				$	1.39
Diluted		$	1.32				$	1.37
Weighted average common shares outstanding
Basic			31,162					32,265
Diluted			31,415					32,550

Winnebago Industries, Inc.
Unaudited Consolidated Condensed Balance Sheets
(In thousands)
	�			�
			Aug. 25, 2007			Aug. 26, 2006
ASSETS
Current assets:
Cash and cash equivalents		$	6,889		$	24,934
Short-term investments			102,650			129,950
Receivables, net			30,285			20,859
Inventories			101,208			77,081
Prepaid and other			16,668			14,336
Total current assets			257,700			267,160
						�
Property and equipment, net			51,389			56,907
Deferred income taxes			19,856			25,002
Investment in life insurance			20,015			20,814
Other assets			17,550			14,832
Total assets		$	366,510		$	384,715
						�
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	35,286		$	27,923
Income taxes payable			4,252			7,876
Accrued expenses			49,299			44,323
Total current liabilities			88,837			80,122
						�
Postretirement health care and deferred compensation benefits, net of current portion			69,319			86,271
Stockholders’ equity			208,354			218,322
Total liabilities and stockholders’ equity		$	366,510		$	384,715

Winnebago Industries, Inc.
Unaudited Condensed Statements of Cash Flows
(In thousands)
	�		�
		Year Ended
			Aug. 25, 2007			Aug. 26, 2006
Operating activities:
Net income		$	41,564		$	44,744
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			10,495			10,635
Stock-based compensation			4,871			4,894
Postretirement benefit income and deferred compensation expense �			1,539			1,319
Deferred income taxes			(3,232	)		538
Increase in cash surrender value of life insurance policies			(871	)		(976	)
Excess tax benefit from stock-based compensation			(1,587	)		(501	)
Other			230			390
Change in assets and liabilities:
Inventories			(24,127	)		43,574
Receivables and prepaid assets			(8,325	)		18,954
Income taxes payable			(3,243	)		3,955
Accounts payable and accrued expenses			11,686			(13,300	)
Postretirement and deferred compensation benefits			(1,249	)		(971	)
Net cash provided by operating activities			27,751	�		113,255	�
						�
Investing activities:
Purchases of short-term investments			(308,149	)		(214,825	)
Proceeds from the sale or maturity of short-term investments			335,449			177,975
Purchases of property and equipment			(5,245	)		(4,830	)
Other			(285	)		968	�
Net cash provided by (used in) investing activities			21,770	�		(40,712	)
						�
Financing activities:
Payments for purchase of common stock			(64,650	)		(57,802	)
Payments of cash dividends			(12,517	)		(11,670	)
Proceeds from issuance of treasury stock			8,014			1,878
Excess tax benefit from stock-based compensation			1,587	�		501	�
Net cash used in financing activities			(67,566	)		(67,093	)
						�
Net (decrease) increase in cash and cash equivalents			(18,045	)		5,450
						�
Cash and cash equivalents at beginning of period			24,934	�		19,484	�
						�
Cash and cash equivalents at end of period		$	6,889	�	$	24,934	�

Winnebago Industries, Inc.
Unaudited Motor Home Deliveries
	�	�	�	�			�
		Quarter Ended			Change
		Aug. 25, 2007	Aug. 26, 2006		Units			%
Motor home unit deliveries
Class A Gas		977	620		357			57.6
Class A Diesel		324	260		64	�		24.6	�
Total Class A		1,301	880		421			47.8
Class C		1,287	1,635		(348	)		(21.3	)
Total deliveries		2,588	2,515		73	�		2.9	�
								�
								�
		Fiscal Year Ended			Change
		Aug. 25, 2007	Aug. 26, 2006		Units			%
Motor home unit deliveries
Class A Gas		3,539	2,961		578			19.5
Class A Diesel		1,492	1,494		(2	)		(0.1	)
Total Class A		5,031	4,455		576			12.9
Class C		4,438	5,388		(950	)		(17.6	)
Total deliveries		9,469	9,843		(374	)		(3.8	)

Winnebago Industries, Inc.
Unaudited Backlog and Dealer Inventory
(Units)
�
	�	As of					�	Change
		Aug. 25, 2007		�	Aug. 26, 2006			Units			�	%
Sales order backlog
Class A Gas		619			530			89				16.8
Class A Diesel		419			270			149		�		55.2	�
Total Class A		1,038			800			238				29.8
Class C		837			896			(59		)		(6.6	)
Total backlog(a)		1,875			1,696			179		�		10.6	�
												�
Total approximate revenue dollars (in thousands) �		$	179,700		$	142,100		$	37,600			26.5
												�
Dealer inventory		4,471			4,733			(262		)		(5.5	)

(a) 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.