Winnebago Industries Reports Results

FOREST CITY, Iowa--Winnebago Industries, Inc. , the leading United States motor home manufacturer, today reported financial results for the Company’s fourth quarter and fiscal year 2006 ended August 26, 2006.

Net income for the fourth quarter was $9.3 million, compared to net income of $15.4 million for the fourth quarter of fiscal 2005. On a diluted per share basis, the Company earned 30 cents a share for the fourth quarter of fiscal 2006, compared to 46 cents per diluted share for the fourth quarter last year. Included as an increase to net income in the fourth quarter was $924,000, or 3 cents per diluted share, due to a liquidation of last-in, first-out (LIFO) inventory values as a result of a significant reduction of inventory levels during 2006. Conversely, product liability expense increased in the fourth quarter of 2006 as a result of increased claims payment experience and the number of claims filed, which resulted in a decrease in net income of $1.2 million, or 4 cents per diluted share. Lastly, included as a reduction to net income in the fourth quarter of fiscal 2006 was $717,000, 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 fourth quarter of last year.

Revenues for the fourth quarter ended August 26, 2006 were $205.4 million, a decrease of 11.3 percent, compared to revenues of $231.5 million for the fourth quarter last year.

Net income for fiscal 2006 was $44.7 million, compared to $65.1 million for fiscal 2005. On a diluted per share basis, the Company earned $1.37 a share, compared to $1.92 a share for fiscal 2005. Included as a reduction to net income for fiscal 2006 was $3.8 million, or 12 cents per diluted share, of stock option expense.

Revenues for fiscal 2006 were $864.4 million, a decrease of 12.9 percent compared to $992.0 million for the previous fiscal year.

“We were encouraged with our financial performance during fiscal 2006, particularly in light of such challenging market conditions,” said Winnebago Industries’ Chairman and CEO Bruce Hertzke. “While negative economic factors, including rising interest rates, record fuel prices and declining consumer confidence created a very difficult market for the motor home industry, we remained solidly profitable.”

“The innovative, fuel-efficient Winnebago View and Itasca Navion Class C diesel motor homes have continued to sell extremely well in the marketplace,” continued Hertzke. “As a result, the View and Navion have helped us achieve a significant increase in our Class C market share, capturing 25.1 percent of the Class C retail market for the first eight months of calendar 2006, compared to 19.3 percent for the same period a year ago, according to Statistical Surveys, Inc., an independent retail reporting service.”

“Fourth quarter and fiscal 2006 results for Winnebago Industries were impacted by a significant shift in mix to lower priced products, primarily Class C motor homes,” said Winnebago Industries’ President Ed Barker. “Contributing to the shift in mix during the fourth quarter was the introduction of the value-priced 2007 Winnebago Access and Itasca Impulse Class C motor homes. We also achieved a record level of operating cash flow of $113.3 million during fiscal 2006 as a result of aggressive management of our inventory and receivable levels.”

During the Company’s fourth quarter ended August 26, 2006, Winnebago Industries repurchased 219,000 shares of common stock for approximately $6.2 million. During fiscal 2006, the Company repurchased 1,977,000 shares of common stock for an aggregate price of $57.8 million. As of August 26, 2006, the Company had $22.2 million remaining on the current share repurchase authorization.

“The recent decline in fuel prices and the pause in interest rate hikes by the Federal Reserve suggests more positive economic conditions going forward,” said Hertzke. “We do not currently, however, see an immediate change in motor home buying patterns, and anticipate continued softness throughout our first and second fiscal quarters.”

In a meeting held yesterday, Winnebago Industries’ Board of Directors declared a quarterly cash dividend of ten cents a share, payable on January 8, 2007 to shareholders of record as of December 8, 2006.

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. 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.