Winnebago Industries Reports Results for Second Quarter Fiscal 2011

FOREST CITY, IA--March 17, 2011: Winnebago Industries, Inc. , one of the leading United States (U.S.) recreation vehicle manufacturers, today reported results for the Company's second quarter and first six months of Fiscal 2011.

“I am very pleased with our results given the continuing challenges with the U.S. economy and our ability to overcome very tough shipment comparisons with the second quarter last fiscal year”

Revenues for the second quarter of Fiscal 2011 ended February 26, 2011 were $106.6 million, a decrease of 3.6 percent, versus $110.5 million for the second quarter of Fiscal 2010. The Company reported an operating profit of $4.1 million for the quarter, versus an operating loss of $1.9 million for the second quarter of Fiscal 2010. Net income for the second quarter was $3.3 million versus net income of $706,000 for the second quarter of Fiscal 2010. On a diluted per share basis, the Company had net income of $0.11 for the second quarter of Fiscal 2011 versus net income of $0.02 for the second quarter of Fiscal 2010. The net income for the second quarter of Fiscal 2010 reflected the positive impact of $2.2 million in tax benefits associated with various tax planning initiatives and tax settlements.

Most notably, the second quarter of Fiscal 2011 was positively impacted by the results of the annual physical inventory of work-in-process recorded during the quarter, due to lower actual inventory scrap and production loss than recent historical experience, which had the effect of increasing gross profit and inventories by $3.5 million. The quarter was also favorably impacted by higher average selling prices due to mix and less promotional incentives as compared to the second quarter of Fiscal 2010.

Revenues for the first six months of Fiscal 2011 were $230.3 million, an increase of 20.2 percent, compared to $191.5 million for the first six months of Fiscal 2010. The Company reported an operating profit of $9.0 million for the first six months of Fiscal 2011, compared to an operating loss of $7.8 million for the same period of Fiscal 2010. The net income for the first six months of Fiscal 2011 was $7.1 million, or $0.24 per diluted share, versus a net loss of $638,000, or $.02 per diluted share, for the first six months of the last fiscal year.

"I am very pleased with our results given the continuing challenges with the U.S. economy and our ability to overcome very tough shipment comparisons with the second quarter last fiscal year," said Winnebago Industries' Chairman and CEO Bob Olson. "During the second quarter last year, we had significantly ramped up our production to meet our dealers' increased demands for product as they grew their inventories from the lows experienced during the depths of the recession. Increased show traffic and retail sales within the past few months are indicative of an improved economy and consumer confidence level within the U.S. We are very pleased to see this positive dynamic in the marketplace as we enter the important spring market. We remain cautious, however, in light of the volatility of fuel prices due primarily to the violence and turmoil in the Middle East, as well as increasing commodity costs."

According to Winnebago Industries' President Randy Potts, the integration of SunnyBrook RV into Winnebago Industries' operations is progressing according to schedule. "SunnyBrook RV is now operating as Winnebago Industries Towables and is a separate subsidiary of the Company," said Potts. "We have been adding staff strategically within Winnebago Industries Towables to strengthen the SunnyBrook brand, while creating a separate and unique Winnebago brand. We plan to introduce new Winnebago towable products this summer and will soon begin to market these products to our Winnebago brand dealers. On the motorized side, we are seeing continued strength in our Class A gas and diesel products in the marketplace. We have also experienced a great deal of interest in our newly redesigned Class B ERA and will begin shipping them within the next few weeks."

Winnebago Industries' dealer inventory increased 7.8 percent compared to the end of the second quarter of Fiscal 2010, with 2,179 of the Company's Class A, B and C motor homes on dealers' lots at the end of the second quarter of Fiscal 2011. While Winnebago Industries' sales order backlog was 957 Class A, B and C motor homes at the end of the second quarter of Fiscal 2011, a decrease of 17.4 percent compared to the end of the second quarter of Fiscal 2010, the backlog was up 37.1 percent sequentially over the 698 units reported for the first quarter of Fiscal 2011.

Conference Call

Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, March 17, 2011. 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 Winnebego Investor. The event will be archived and available for replay for the next 90 days.