Winnebago Industries Reports First Quarter Results
13 December 2000
Winnebago Industries Reports First Quarter Results
FOREST CITY, Iowa--Dec. 13, 2000--Winnebago Industries, Inc. today reported results for the first quarter of fiscal 2001 which ended November 25, 2000. Revenues were $164.2 million compared to pro forma revenues of $187.1 million for the first quarter of fiscal 2000.Net income for the first quarter of fiscal 2001 before the cumulative effect of an accounting method change described below was $9.6 million, or 45 cents per diluted share, compared to pro forma net income of $12.4 million, or 55 cents per diluted share, reported for the first quarter of fiscal 2000. Net income including the effect of an accounting method change was $8.5 million, or 40 cents per diluted share.
Beginning in the first quarter of fiscal 2001, Winnebago Industries elected to adopt the Securities and Exchange Commission's (SEC) Staff Accounting Bulletin No. 101 ("SAB 101") - Revenue Recognition in Financial Statements, which the SEC staff issued in December 1999. SAB 101 sets forth the SEC's views concerning revenue recognition, the effect of which on the Company is to record revenue upon delivery of products to Winnebago Industries' dealers rather than upon shipment by the Company. This change requires an adjustment to retained earnings in the Company's first quarter 2001 results, which reflects the cumulative effect on the prior year's results due to the application of SAB 101. Pro forma information has been provided for comparison purposes.
"Winnebago Industries' first quarter results for fiscal 2001 were lower than last year due to the impact of the slowing U.S. economy," said Winnebago Industries' Chairman, CEO and President Bruce D. Hertzke. "We believe the reduction in motor home sales was a result of increased interest rates and a decline in consumer confidence levels. To a lesser degree, we believe increased fuel costs and a decline in stock market performance also had an impact. Despite these economic conditions, we have started the new fiscal year with a solid performance. It was off from last fiscal year's record first quarter, but shows our strength and stability."
For the first quarter ended November 25, 2000, Winnebago Industries reported factory shipments of 1,345 Class A and 852 Class C motor homes, compared to 1,754 Class A and 871 Class C motor homes for the first quarter last year. Factory shipments of Class B motor homes for Winnebago Industries were 113 for the first quarter of fiscal 2001 compared to 174 for the first quarter last year.
Market Share Growth
The Company's focus on product development and quality has earned Winnebago Industries continued market share growth. According to Statistical Surveys, Inc., the RV retail registration reporting firm, Winnebago Industries achieved 17.1 percent of the Class A and C retail market nationally calendar year to date through October 2000. This is an increase in market share of 3.6 percent from the 16.5 percent market share achieved by Winnebago Industries for the same period last year. Performing better than the RV market overall, Winnebago Industries incurred a slight 1.1 percent decrease for Class A and C motor home retail sales calendar year to date through October 2000, compared to a decrease of 4.6 percent in retail sales for the entire motor home industry for the same period. Winnebago Industries sales order backlog was 1,420 on November 25, 2000.
Outlook
The Company's expectations for the next couple of quarters remain below prior year levels as a result of higher interest rates and decreased consumer confidence levels. However, as it appears interest rates may have peaked and energy prices appear to have stabilized, we believe the Company may begin to see an improvement in revenues next summer. The long-term outlook for motor home sales, however, continues to appear very favorable. Studies show that the Company's prime target market of people 50 years of age and older will continue to increase by over 4 million a year through the year 2030. "Although current economic conditions are impacting short-term results, the increased market for our motor homes along with Winnebago Industries' continued product innovation, experienced workforce, and strong brand recognition, leads me to believe the Company will experience strong long-term growth over the next 30 years," said Hertzke.
Winnebago Industries, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except per share amounts)
Thirteen Weeks Ended
Nov. 25, 2000 Nov. 27, 1999
Net revenues $164,167 $184,946
Cost of goods sold 141,684 155,797
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Gross profit 22,483 29,149
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Operating expenses:
Selling 6,339 6,489
General and administrative 2,764 4,600
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Total operating expenses 9,103 11,089
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Operating income 13,380 18,060
Financial income 971 653
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Income before tax and cumulative effect
of a change in accounting method 14,351 18,713
Provision for taxes 4,755 6,332
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Income before cumulative effect of a change
in accounting method 9,596 12,381
Cumulative effect on prior years of the
accounting method change (1,050) ---
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Net income $ 8,546 $ 12,381
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Earnings per share-basic:
Income before cumulative effect of a
change in accounting method $ 0.45 $ 0.56
Cumulative effect on prior years of the
accounting method change
(0.05) -
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Net income $ 0.40 $ 0.56
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Number of shares used in per share
calculations-basic 21,101 22,114
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Earnings per share-diluted:
Income before cumulative effect of a
change in accounting method $ 0.45 $ 0.55
Cumulative effect on prior years of the
accounting method change (0.05) -
---------------------------
Net income $ 0.40 $ 0.55
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Number of shares used in per share
calculations-diluted 21,280 22,531
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Fiscal 2000 first quarter financial results restated on a pro forma basis for the adoption of SAB 101 result in net revenue of $187,096,000 and net income of $12,436,000, or 55 cents per diluted share.
Certain prior year information has been reclassified to conform to the current year presentation.
Winnebago Industries, Inc.
Consolidated Condensed Balance Sheets
(In thousands)
Nov. 25, 2000 Aug. 26, 2000
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(Unaudited)
ASSETS
Current assets
Cash $ 62,208 $ 51,443
Receivables 53,538 64,741
Inventories 91,268 85,707
Other 11,839 11,627
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Total current assets 218,853 213,518
Property and equipment, net 46,613 45,455
Deferred income taxes 20,635 20,635
Other assets 29,106 29,078
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Total assets $315,207 $308,686
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 31,494 $ 26,212
Income taxes payable 13,677 10,381
Accrued expenses 31,388 35,242
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Total current liabilities 76,559 71,835
Post retirement health care and
deferred compensation benefits 62,928 61,942
Stockholders' equity 175,720 174,909
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Total liabilities and stockholders'
equity $315,207 $308,686
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