UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November ~~28, 2020~~

27, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File Number:

001-06403

WINNEBAGO INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Iowa

42-0802678

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

~~P. O. Box 152~~13200 Pioneer Trail

~~Forest City~~Eden Prairie

~~Iowa~~Minnesota

~~50436~~55347

(Address of principal executive offices)

(Zip Code)

~~641-~~

~~585-3535~~952-829-8600

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 par value per share	WGO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated filer ☐

Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~The number~~As of December 13, 2021, there were 33,344,672 shares of common stock, par value $0.50 per share, ~~outstanding on December 10, 2020 was 33,554,500.~~outstanding.

Winnebago Industries, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended November 27, 2021

Table of Contents

PART I. FINANCIAL ~~INFORMATION.~~INFORMATION

Item 1. ~~Condensed~~ Consolidated Financial ~~Statements.~~Statements

Winnebago Industries, Inc.

~~Condensed~~ Consolidated Statements of Income and Comprehensive Income

(Unaudited)


		Three Months Ended					Three Months Ended
(in thousands, except per share data)	(in thousands, except per share data)	November 28, 2020		November 30, 2019		(in thousands, except per share data)	November 27, 2021		November 28, 2020
Net revenues	Net revenues	$	793,131	$	588,458	Net revenues	$	1,155,740	$	793,131
Cost of goods sold	Cost of goods sold	656,127		509,845		Cost of goods sold	926,328		656,127
Gross profit	Gross profit	137,004		78,613		Gross profit	229,412		137,004
Selling, general, and administrative expenses	Selling, general, and administrative expenses	48,399		51,105		Selling, general, and administrative expenses	74,870		48,399
Amortization of intangible assets		3,590		3,614
Amortization						Amortization	8,172		3,590
Total operating expenses	Total operating expenses	51,989		54,719		Total operating expenses	83,042		51,989
Operating income	Operating income	85,015		23,894		Operating income	146,370		85,015
Interest expense		9,941		6,049
Non-operating loss (income)		94		(116)
Interest expense, net						Interest expense, net	10,242		9,941
Non-operating loss						Non-operating loss	6,357		94
Income before income taxes	Income before income taxes	74,980		17,961		Income before income taxes	129,771		74,980
Provision for income taxes	Provision for income taxes	17,557		3,893		Provision for income taxes	30,141		17,557
Net income	Net income	$	57,423	$	14,068	Net income	$	99,630	$	57,423

Income per common share:
Earnings per common share:						Earnings per common share:
Basic	Basic	$	1.71	$	0.44	Basic	$	2.99	$	1.71
Diluted	Diluted	$	1.70	$	0.44	Diluted	$	2.90	$	1.70

Weighted average common shares outstanding:	Weighted average common shares outstanding:					Weighted average common shares outstanding:
Basic	Basic	33,609		32,067		Basic	33,322		33,609
Diluted	Diluted	33,839		32,267		Diluted	34,378		33,839

Net income	Net income	$	57,423	$	14,068	Net income	$	99,630	$	57,423
Other comprehensive income (loss):
Other comprehensive income:						Other comprehensive income:
Amortization of net actuarial loss (net of tax of $3 and $3)	Amortization of net actuarial loss (net of tax of $3 and $3)	9		8		Amortization of net actuarial loss (net of tax of $3 and $3)	9		9
Interest rate swap activity (net of tax of $0 and $22)		0		(68)
Total other comprehensive income (loss)		9		(60)
Comprehensive income	Comprehensive income	$	57,432	$	14,008	Comprehensive income	$	99,639	$	57,432

~~See~~

The accompanying Notes to ~~Condensed~~ Consolidated Financial ~~Statements.~~Statements are an integral part of these consolidated financial statements.

Table of Contents

Winnebago Industries, Inc.

~~Condensed~~ Consolidated Balance Sheets

~~(Unaudited)~~


(in thousands, except per share data)	November 27, 2021		August 28, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	211,384	$	434,563
Receivables, less allowance for doubtful accounts ($275 and $307, respectively)	263,677		253,808
Inventories, net	432,825		341,473
Prepaid expenses and other current assets	21,701		29,069
Total current assets	929,587		1,058,913
Property, plant, and equipment, net	224,129		191,427
Goodwill	484,176		348,058
Other intangible assets, net	493,635		390,407
Investment in life insurance	29,027		28,821
Operating lease assets	27,747		28,379
Other long-term assets	18,060		16,562
Total assets	$	2,206,361	$	2,062,567

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	166,848	$	180,030
Income taxes payable	29,223		8,043
Accrued expenses:
Accrued compensation	48,909		67,541
Product warranties	102,424		91,222
Self-insurance	20,952		19,296
Promotional	9,965		10,040
Accrued interest and dividends	8,014		10,720
Other current liabilities	40,768		20,384
Total current liabilities	427,103		407,276
Long-term debt, net	532,739		528,559
Deferred income taxes	13,247		13,429
Unrecognized tax benefits	6,667		6,483
Long-term operating lease liabilities	26,368		26,745
Deferred compensation benefits, net of current portion	9,775		9,550
Other long-term liabilities	31,204		13,582
Total liabilities	1,047,103		1,005,624
Contingent liabilities and commitments (Note 11)	0		0
Shareholders' equity:
Preferred stock, par value $0.01: 10,000 shares authorized; Zero shares issued and outstanding	—		—
Common stock, par value $0.50: 120,000 shares authorized; 51,776 shares issued and outstanding	25,888		25,888
Additional paid-in capital	233,727		218,490
Retained earnings	1,272,697		1,172,996
Accumulated other comprehensive loss	(482)		(491)
Treasury stock, at cost: 18,476 and 18,713 shares, respectively	(372,572)		(359,940)
Total shareholders' equity	1,159,258		1,056,943
Total liabilities and shareholders' equity	$	2,206,361	$	2,062,567

(in thousands, except per share data) November 28,
2020 August 29,
2020
Assets
Current assets:
Cash and cash equivalents $ 272,939 $ 292,575
Receivables, less allowance for doubtful accounts ($349 and $353, respectively) 231,182 220,798
Inventories, net 263,137 182,941
Prepaid expenses and other assets 21,162 17,296
Total current assets 788,420 713,610
Property, plant, and equipment, net 171,210 174,945
Other assets:
Goodwill 348,058 348,058
Other intangible assets, net 401,178 404,768
Investment in life insurance 27,904 27,838
Operating lease assets 28,838 29,463
Other assets 15,382 15,018
Total assets $ 1,780,990 $ 1,713,700
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 123,328 $ 132,490
Income taxes payable 25,565 8,840
Accrued expenses:
Accrued compensation 33,620 36,533
Product warranties 70,502 64,031
Self-insurance 18,410 17,437
Promotional 10,817 12,543
Accrued interest 8,184 4,652
Other 22,975 23,864
Total current liabilities 313,401 300,390
Non-current liabilities:
Long-term debt, less current maturities 516,527 512,630
Deferred income taxes 16,483 15,608
Unrecognized tax benefits 6,692 6,511
Operating lease liabilities 26,492 27,048
Deferred compensation benefits, net of current portion 10,884 11,130
Other 18,953 12,917
Total non-current liabilities 596,031 585,844
Contingent liabilities and commitments (Note 11)
Stockholders' equity:
Preferred stock, par value $0.01: Authorized-10,000 shares; Issued-0 0 0
Common stock, par value $0.50: Authorized-60,000 shares; Issued-51,776 shares 25,888 25,888
Additional paid-in capital 204,551 203,791
Retained earnings 966,945 913,610
Accumulated other comprehensive loss (517) (526)
Treasury stock, at cost: 18,275 and 18,133 shares, respectively (325,309) (315,297)
Total stockholders' equity 871,558 827,466
Total liabilities and stockholders' equity $ 1,780,990 $ 1,713,700

~~See~~The accompanying Notes to ~~Condensed~~ Consolidated Financial ~~Statements.~~Statements are an integral part of these consolidated financial statements.

Table of Contents

Winnebago Industries, Inc.

~~Condensed~~ Consolidated Statements of Cash Flows

(Unaudited)


		Three Months Ended					Three Months Ended
(in thousands)	(in thousands)	November 28, 2020		November 30, 2019		(in thousands)	November 27, 2021		November 28, 2020
Operating activities:
Operating activities						Operating activities
Net income	Net income	$	57,423	$	14,068	Net income	$	99,630	$	57,423
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities						Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation	Depreciation	4,160		3,586		Depreciation	5,306		4,160
Amortization of intangible assets		3,590		3,614
Amortization						Amortization	8,172		3,590
Non-cash interest expense, net	Non-cash interest expense, net	3,351		1,023		Non-cash interest expense, net	3,627		3,351
Amortization of debt issuance costs	Amortization of debt issuance costs	606		760		Amortization of debt issuance costs	613		606
Last-in, first-out expense		276		332
Last in, first-out expense						Last in, first-out expense	437		276
Stock-based compensation	Stock-based compensation	2,354		1,583		Stock-based compensation	2,711		2,354
Deferred income taxes	Deferred income taxes	872		731		Deferred income taxes	(185)		872
Contingent consideration fair value adjustment						Contingent consideration fair value adjustment	6,370		—
Other, net	Other, net	(3,329)		65		Other, net	2,312		(3,329)
Change in assets and liabilities:
Receivables		(10,380)		27,906
Inventories		(80,472)		20,082
Change in operating assets and liabilities, net of assets and liabilities acquired						Change in operating assets and liabilities, net of assets and liabilities acquired
Receivables, net						Receivables, net	(7,210)		(10,380)
Inventories, net						Inventories, net	(70,340)		(80,472)
Prepaid expenses and other assets	Prepaid expenses and other assets	583		(84)		Prepaid expenses and other assets	4,852		583
Accounts payable	Accounts payable	(8,371)		(4,214)		Accounts payable	(17,704)		(8,371)
Income taxes and unrecognized tax benefits	Income taxes and unrecognized tax benefits	16,556		3,217		Income taxes and unrecognized tax benefits	24,664		16,556
Accrued expenses and other liabilities	Accrued expenses and other liabilities	10,111		6,364		Accrued expenses and other liabilities	(6,706)		10,111
Net cash (used in) provided by operating activities		(2,670)		79,033
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	56,549		(2,670)

Investing activities:
Purchases of property and equipment		(8,689)		(6,624)
Investing activities						Investing activities
Purchases of property, plant, and equipment						Purchases of property, plant, and equipment	(23,215)		(8,689)
Acquisition of business, net of cash acquired	Acquisition of business, net of cash acquired	0		(264,280)		Acquisition of business, net of cash acquired	(228,159)		—
Proceeds from sale of property and equipment		7,775		0
Proceeds from the sale of property, plant, and equipment						Proceeds from the sale of property, plant, and equipment	—		7,775
Other, net	Other, net	(234)		243		Other, net	(36)		(234)
Net cash used in investing activities	Net cash used in investing activities	(1,148)		(270,661)		Net cash used in investing activities	(251,410)		(1,148)

Financing activities:
Financing activities						Financing activities
Borrowings on long-term debt	Borrowings on long-term debt	798,359		903,292		Borrowings on long-term debt	932,566		798,359
Repayments on long-term debt	Repayments on long-term debt	(798,359)		(603,292)		Repayments on long-term debt	(932,566)		(798,359)
Purchase of convertible bond hedge		0		(70,800)
Proceeds from issuance of warrants		0		42,210
Payments of cash dividends	Payments of cash dividends	(4,046)		(3,469)		Payments of cash dividends	(6,010)		(4,046)
Payments for repurchases of common stock	Payments for repurchases of common stock	(11,606)		(1,663)		Payments for repurchases of common stock	(23,723)		(11,606)
Payments of debt issuance costs		0		(10,707)
Other, net	Other, net	(166)		(46)		Other, net	1,415		(166)
Net cash (used in) provided by financing activities		(15,818)		255,525
Net cash used in financing activities						Net cash used in financing activities	(28,318)		(15,818)

Net (decrease) increase in cash and cash equivalents		(19,636)		63,897
Net decrease in cash and cash equivalents						Net decrease in cash and cash equivalents	(223,179)		(19,636)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	292,575		37,431		Cash and cash equivalents at beginning of period	434,563		292,575
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	272,939	$	101,328	Cash and cash equivalents at end of period	$	211,384	$	272,939

Supplemental Disclosures						Supplemental Disclosures
Income taxes paid (received), net						Income taxes paid (received), net	$	8,716	$	(195)
Interest paid						Interest paid	4,765		2,377

Table of Contents

Supplement cash flow disclosure:
Income taxes received, net $ (195) $ (311)
Interest paid $ 2,377 $ 5,193
Non-cash transactions:
Issuance of Winnebago common stock for acquisition of business $ 0 $ 92,572
Capital expenditures in accounts payable $ 613 $ 2,063



Non-cash investing and financing activities
Issuance of common stock for acquisition of business	$	22,000	$	—
Capital expenditures in accounts payable	1,101		613

~~See~~The accompanying Notes to ~~Condensed~~ Consolidated Financial ~~Statements.~~Statements are an integral part of these consolidated financial statements.

Table of Contents

Winnebago Industries, Inc.

~~Condensed~~ Consolidated Statements of Changes in ~~Stockholders'~~Shareholders' Equity

(Unaudited)

Three Months Ended November 28, 2020
(in thousands,
except per share data) Common Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders' Equity
Number Amount Number Amount
Balances at August 29, 2020 51,776 $ 25,888 $ 203,791 $ 913,610 $ (526) (18,133) $ (315,297) $ 827,466
Stock-based compensation, net of forfeitures — — 2,346 — — 0 8 2,354
Issuance of stock, net — — (1,586) — — 91 1,586 0
Repurchase of common stock — — — — — (233) (11,606) (11,606)
Common stock dividends; $0.12 per share — — — (4,088) — — — (4,088)
Actuarial loss, net of tax — — — — 9 — — 9
Net income — — — 57,423 — — — 57,423
Balances at November 28, 2020 51,776 $ 25,888 $ 204,551 $ 966,945 $ (517) (18,275) $ (325,309) $ 871,558
Three Months Ended November 30, 2019
(in thousands,
except per share data) Common Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders' Equity
Number Amount Number Amount
Balances at August 31, 2019 51,776 $ 25,888 $ 91,185 $ 866,886 $ (491) (20,262) $ (351,256) $ 632,212
Stock-based compensation, net of forfeitures — — 1,574 — — 0 9 1,583
Issuance of restricted stock — — (2,219) — — 128 2,219 0
Issuance of stock for acquisition — — 57,811 — — 2,000 34,761 92,572
Repurchase of common stock — — — — — (43) (1,663) (1,663)
Common stock dividends; $0.11 per share — — — (3,485) — — — (3,485)
Actuarial loss, net of tax — — — — 8 — — 8
Interest rate swap activity, net of tax — — — — (68) — — (68)
Equity component of convertible senior notes and offering costs, net of tax of $20,915 — — 61,555 — — — — 61,555
Convertible note hedge purchase, net of tax of $17,417 — — (53,383) — — — — (53,383)
Warrant transactions — — 42,210 — — — — 42,210
Net income — — — 14,068 — — — 14,068
Balances at November 30, 2019 51,776 $ 25,888 $ 198,733 $ 877,469 $ (551) (18,177) $ (315,930) $ 785,609


	Three Months Ended November 27, 2021
(in thousands, except per share data)	Common Shares			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Shareholders' Equity
	Number	Amount								Number	Amount
Balance at August 28, 2021	51,776	$	25,888	$	218,490	$	1,172,996	$	(491)	(18,713)	$	(359,940)	$	1,056,943
Stock-based compensation	—	—		2,702		—		—		—	9		2,711
Issuance of stock for acquisition	—	—		14,709		—		—		379	7,291		22,000
Issuance of stock, net	—	—		(2,174)		—		—		194	3,791		1,617
Repurchase of common stock	—	—		—		—		—		(336)	(23,723)		(23,723)
Other	—	—		—		71		—		—	—		71
Total comprehensive income	—	—		—		—		9		—	—		9
Net income	—	—		—		99,630		—		—	—		99,630
Balance at November 27, 2021	51,776	$	25,888	$	233,727	$	1,272,697	$	(482)	(18,476)	$	(372,572)	$	1,159,258

	Three Months Ended November 28, 2020
(in thousands, except per share data)	Common Shares			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Shareholders' Equity
	Number	Amount								Number	Amount
Balance at August 29, 2020	51,776	$	25,888	$	203,791	$	913,610	$	(526)	(18,133)	$	(315,297)	$	827,466
Stock-based compensation	—	—		2,346		—		—		—	8		2,354
Issuance of stock, net	—	—		(1,586)		—		—		91	1,586		—
Repurchase of common stock	—	—		—		—		—		(233)	(11,606)		(11,606)
Common stock dividends; $0.12 per share	—	—		—		(4,088)		—		—	—		(4,088)
Total comprehensive income	—	—		—		—		9		—	—		9
Net income	—	—		—		57,423		—		—	—		57,423
Balance at November 28, 2020	51,776	$	25,888	$	204,551	$	966,945	$	(517)	(18,275)	$	(325,309)	$	871,558

~~See~~The accompanying Notes to ~~Condensed~~ Consolidated Financial ~~Statements.~~Statements are an integral part of these consolidated financial statements.

Table of Contents

Winnebago Industries, Inc.

Notes to ~~Condensed~~ Consolidated Financial Statements

(Unaudited)

(All amounts are in thousands, except share and per share data, unless otherwise designated)

Note 1:1. Basis of Presentation

~~Unless~~The consolidated financial statements include the ~~context otherwise requires, the~~accounts of Winnebago Industries, Inc. and its wholly owned subsidiaries. Significant intercompany account balances and transactions have been eliminated.

The use of the terms "Winnebago Industries," ~~"Company," "WGO,~~"Winnebago," "we," ~~"us,~~"our," and ~~"our"~~"us" in ~~these Notes to Condensed Consolidated Financial Statements~~this Quarterly Report on Form 10-Q, unless the context otherwise requires, refers to Winnebago Industries, Inc. and its ~~wholly-owned~~wholly owned subsidiaries.

InThe interim unaudited consolidated financial statements included herein are prepared pursuant to the ~~opinion~~rules and regulations of ~~management,~~ the ~~accompanying Condensed~~United States (“U.S.”) Securities and Exchange Commission (“SEC”). The information furnished in these consolidated financial statements includes normal recurring adjustments, unless noted otherwise in the Notes to Consolidated Financial Statements, ~~contain~~and reflects all adjustments that are, in management’s opinion, necessary for a fair presentation ~~as prescribed by accounting principles generally accepted~~of such financial statements. The consolidated financial statements are prepared in ~~the United States~~accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). ~~All adjustments were comprised of normal recurring adjustments, except as noted~~GAAP requires us to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in ~~these Notes~~financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to ~~Condensed Consolidated Financial Statements.~~SEC rules and regulations.

~~Interim results are not necessarily indicative of the results to be expected for the full year.~~ The ~~interim Condensed Consolidated Financial Statements~~consolidated financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited ~~Consolidated Financial Statements~~consolidated financial statements and notes thereto included in ~~the Company's~~our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~

~~Fiscal Period~~

~~The Company follows a 52-/53-week~~28, 2021 filed with the SEC. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year ending ~~the last Saturday in August. Fiscal 2021 and Fiscal 2020 are both a 52-week year.~~

~~Cash and cash equivalents~~

Cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted. Accounts at each banking institution are insured by the Federal Deposit Insurance Corporation up to $250,000, while the remaining balances are uninsured.August 27, 2022.

Subsequent Events

In preparing the accompanying unaudited ~~Condensed Consolidated Financial Statements, the Company~~consolidated financial statements, we have evaluated subsequent events for potential recognition and disclosure through the date of this ~~filing. There were~~filing noting no material subsequent events except for the item noted ~~below.~~below:

~~Dividend~~

On December ~~16, 2020, the Company's~~15, 2021, our Board of Directors declared a quarterly cash dividend of ~~$0.12~~$0.18 per share payable on January ~~27, 2021~~26, 2022 to common ~~stockholders~~shareholders of record at the close of business on January ~~13, 2021.~~12, 2022.

~~Amendment to Articles of Incorporation~~CARES Act

On October 14, 2020, the Board adopted, subject to shareholder approval, an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock, par value $0.50 per share, by 60 million shares to a total of 120 million shares. This amendment was approved by the Company’s shareholders at the 2020 Annual Meeting of Shareholders on December 15, 2020. The amendment, along with an amended and restated Articles of Incorporation, were made effective upon filing with the Secretary of State of the State of Iowa on December 16, 2020.

~~Coronavirus (COVID-19) pandemic~~

The Company is closely monitoring the impact of the novel coronavirus, or COVID-19, on all aspects of its business. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020 and the President of the United States declared the COVID-19 outbreak a national emergency on March 13, 2020. The Coronavirus Aid, Relief, and Economic Security ~~(CARES)~~("CARES") Act was signed into law on March 27, ~~2020. The Company is~~2020 to help alleviate the impact of the COVID-19 pandemic in the U.S. We are taking advantage of the employer payroll tax ~~(FICA)~~ deferral offered by the CARES Act, which allows ~~the Company~~us to defer the payment of employer payroll taxes for the period from March 27, 2020 to December 31, 2020. The deferred ~~FICA~~employer payroll tax liability as of November ~~28, 2020~~27, 2021 was ~~$1.2~~$12.4 million and will be payable in equal installments atin December 2021 and December 2022. ~~Additionally, the Company~~We also took advantage of a tax credit granted to companies under the CARES Act who continued to pay their employees when operations were fully or partially suspended. The refundable tax credit available through the end of the third quarter of Fiscal 2020 reflected in cost of goods sold on the Consolidated Statements of Income and Comprehensive Income was approximately $4.0 million. The entire amount is expected to be received during calendar year 2022. As of November 27, 2021, $3.2 million remains outstanding within other current assets ~~is approximately $4.0 million and will be received in Fiscal 2021.~~on the Consolidated Balance Sheets.

Recently Adopted Accounting Pronouncements

~~The Company adopted~~ Accounting Standards ~~Codification~~Update ("~~ASC"~~ASU") Topic ~~326,~~740, ~~Financial Instruments—Credit Losses~~Income Taxes: ~~(“Topic 326”)~~Simplifying the Accounting for Income Taxes, ~~effective August 30, 2020.~~was adopted in the first quarter of Fiscal 2022. The new ~~impairment model (known as~~standard eliminates certain exceptions to Topic 740's general principles, improves consistent application and simplifies its application. We adopted the ~~current expected credit loss ("CECL") model) is based on expected losses rather than incurred losses. Topic 326 is applicable~~new guidance in the first quarter of Fiscal 2022, and there was not a material impact to our financial assets measured at amortized cost, such as accounts receivable and deposits. It requires historical loss data to be adjusted to reflect changes in asset-specific considerations, current conditions and reasonable and supportable forecastscondition, results of ~~future economic conditions. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The Company adopted Topic 326 using the modified~~operations or disclosures.

~~Table of Contents~~

retrospective transition approach, which involves recognizing the cumulative effect of initial adoption of Topic 326 as an adjustment to its opening retained earnings as of August 30, 2020. Therefore, comparative information prior to the adoption date has not been adjusted. As a result of adoption of Topic 326, the Company did not recognize an incremental allowance for credit losses on its accounts receivable for the period ended November 28, 2020. The adoption of this standard did not materially impact the Company's Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)~~. ASU 2020-06~~ which reduces the number of models used to account for convertible instruments, amends diluted ~~EPS~~earnings per share ("EPS") calculations for convertible instruments, and amends the requirements for a contract (or embedded derivative) that is potentially settled in an entity's own shares to be classified in equity. ~~The amendments add certain~~Certain disclosure requirements were also added to increase transparency and decision-usefulness ~~about~~regarding a convertible instrument's terms and features. ~~Under the amendment, the Company must use~~Additionally, the if-converted method for including convertible instruments must be used in diluted EPS as opposed to the treasury stock method. ~~ASU 2020-06~~The new guidance is effective for annual reporting periods beginning after December 15, 2021, ~~(the Company's~~which is our Fiscal ~~2023).~~2023. Early adoption is ~~allowed under the standard with~~permitted using either a modified retrospective or full retrospective ~~method. The Company expects~~approach. We expect to adopt the new guidance in the first

Table of Contents

quarter of Fiscal ~~2023. While it~~2023 and have not yet evaluated the impact the adoption of this guidance will have on our financial condition, results of operations or disclosures; however, the new guidance is expected to change ~~the Company's~~our diluted EPS ~~reporting, the extent to which the standard will have a material impact on the Company's consolidated financial statements is uncertain at this time.~~reporting.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting~~. ASU 2020-04~~, which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by ~~the amendments in~~ this ~~update~~guidance apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. ~~These amendments are~~This guidance is not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ~~ASU No. 2020-04 is effective as of March 12, 2020~~The guidance can be applied immediately through December 31, ~~2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company~~2022. We will adopt this standard when LIBOR is discontinued and ~~does~~do not expect a material impact to ~~its consolidated~~our financial ~~statements.~~

~~In December 2019,~~condition, results of operations or disclosures based on the ~~FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740):Simplifying the Accounting for Income Taxes~~. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740. The standard is effective for annual reporting periods beginning after December 15, 2020 (the Company's Fiscal 2022), including interim periods within those annual reporting periods. The Company expects to adopt the new guidance in the first quarter of Fiscal 2022,current debt portfolio and ~~does not expect a material impact to its consolidated financial statements.~~capital structure.

Note 2:2. Business Combinations

~~Newmar Corporation~~

On ~~November 8, 2019, pursuant to the terms~~August 31, 2021, we purchased 100% of the ~~Stock Purchase Agreement dated September 15, 2019 (the "Purchase Agreement"~~equity interests of Barletta Boat Company, LLC and Three Limes, LLC (collectively, "Barletta"), ~~Winnebago completed the acquisition of 100% of Newmar Corporation, Dutch Real Estate Corp., New-Way Transport, and New-Serv (collectively “Newmar”). Newmar is~~ a ~~leading~~ manufacturer of ~~Class A and Super C motorized recreation vehicles~~high-quality, premium pontoon boats that are sold through ~~an established~~a network of independent authorized ~~dealers throughout North America.~~dealers.

The acquisition of Barletta resulted in a newly created Marine reportable segment that includes Barletta and Chris-Craft operating segments.

We acquired Barletta for a purchase price of $286.3 million, including cash payments of $240.1 million, $25.0 million in common stock issued to the sellers (subject to a discount noted below), and contingent consideration from earnout provisions. The common stock fair value included in the purchase price reflects a 12% discount, due to the lack of marketability as these are unregistered shares that have a one-year lockup restriction, which reduced the value of the common stock to $22.0 million. The contingent consideration includes both a potential stock payout as well as a potential cash payment based on achievement of certain financial performance metrics over the next few years. The maximum payout under the earnout is $50.0 million in cash and $15.0 million in stock if all metrics are achieved. The fair value of the earnout at August 31, 2021 was $24.2 million. The fair value of the earnout as of November 27, 2021 was $30.6 million, of which $13.8 million is included in other current liabilities and $16.8 million is included in other long-term liabilities on the Consolidated Balance Sheets.

The total purchase price was allocated to the acquired net tangible and intangible assets of Barletta, based on their preliminary fair values at the date of the acquisition. We expect to finalize the allocation of the purchase price when our valuation of the acquired intangible assets, goodwill, and tax accounts is complete.

The following table summarizes the ~~total consideration paid for Newmar~~preliminary fair values assigned to the Barletta net assets acquired as ~~stipulated in~~of the ~~Purchase Agreement:~~date of acquisition:


(in thousands)	~~November 8, 2019~~August 31, 2021
Cash	$	~~264,433~~11,903
~~Winnebago Industries shares: 2,000,000 at $46.29~~Other current assets	~~92,572~~24,564
Property, plant, and equipment	17,250
Goodwill	136,118
Other intangible assets	111,400
Total assets acquired	301,235
Accounts payable	7,181
Product warranties	4,656
Other current liabilities	3,146
Total liabilities assumed	14,983
Total purchase price	$	~~357,005~~286,252

~~The cash portion~~Goodwill from the Barletta acquisition is recognized in our newly created Marine segment. We expect that the full amount of ~~the purchase price of the acquisition and certain transaction expenses were funded through the private placement of convertible senior notes (as further described in Note 9,~~ ~~Long-Term Debt) and cash on hand. The stock consideration was discounted by 7.0% due to lack of marketability because of the one year lock-up restrictions.~~goodwill will be deductible for tax purposes.

The ~~total purchase price was allocated to the net tangible and~~ intangible assets ~~of Newmar~~ acquired ~~based~~include a trade name, dealer network, and backlog. The trade name has an indefinite life, while the backlog and dealer network will be amortized on ~~their fair values at the date of the acquisition. The Company believes that the information provides~~ a ~~reasonable~~straight line basis ~~for estimating the fair values. During the third quarter of Fiscal 2020, the Company finalized the valuation~~over 10 months and ~~completed the purchase price allocation, which included purchase price adjustments of $3.3 million.~~12 years, respectively.

Table of Contents

~~The following table summarizes the fair values assigned to the Newmar net assets acquired and the determination of net assets:~~


~~(in thousands)~~	~~November 8, 2019~~
~~Cash~~	$	~~3,469~~
~~Accounts receivable~~	~~37,147~~
~~Inventories~~	~~82,621~~
~~Prepaid expenses and other assets~~	~~9,830~~
~~Property, plant, and equipment~~	~~31,143~~
~~Goodwill~~	~~73,127~~
~~Other intangible assets~~	~~172,100~~
~~Total assets acquired~~	~~409,437~~
~~Accounts payable~~	~~14,023~~
~~Accrued compensation~~	~~4,306~~
~~Product warranties~~	~~15,147~~
~~Promotional~~	~~6,351~~
~~Other~~	~~11,637~~
~~Deferred tax liabilities~~	~~968~~
~~Total liabilities assumed~~	~~52,432~~
~~Total purchase price~~	$	~~357,005~~

The goodwill, recognized in the Company's Motorhome segment, is primarily attributable to the value of the workforce, reputation of founders, customer and dealer growth opportunities, and expected synergies. Key areas of cost synergies include increased purchasing power for raw materials and supply chain consolidation. The full amount of goodwill is deductible for tax purposes.

~~The following table summarizes the other intangible assets acquired:~~

($ in thousands) November 8, 2019 Useful Life-Years
Trade name $ 98,000 Indefinite
Dealer network 64,000 12.0
Backlog 8,800 0.5
Non-compete agreements 1,300 5.0

The fair value of the trade name and dealer network were estimated using an income approach. Under the income approach, an intangible asset's fair value is equal to the present value of the future economic benefits to be derived from ownership of the asset. The fair value of the trade name was estimated using an income approach, specifically the relief from royalty method. The relief from royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenues. The fair value of the dealer network was estimated using an income approach, specifically the cost to recreate/cost saving method. This method uses the replacement of the asset as an indicator of the fair value of the asset. The useful life of the intangibles was determined considering the expected cash flows used to measure the fair value of the intangible assets adjusted for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets. On the acquisition date, amortizable intangible assets had a weighted-average useful life of approximately 10.5 years.

The results of Newmar's operations have been included in the Company's Condensed Consolidated Financial Statements from the close of the acquisition within the Motorhome segment. The following table provides net revenues and operating income from the Newmar operating segment included in the Company's consolidated results following the November 8, 2019 closing date:

Three Months Ended
(in thousands) November 28, 2020 November 30, 2019
Net revenues $ 118,779 $ 35,663
Operating income (loss) 4,084 (1,283)

~~Table of Contents~~

The following information represents the Company's actual results of operations for the three months ended November 28, 2020, and proforma information for the three months ended November 30, 2019 as if the Fiscal 2020 acquisition of Newmar had occurred at the beginning of Fiscal 2020:

Three Months Ended
(in thousands, except per share data) November 28, 2020 November 30, 2019
Net revenues $ 793,131 $ 741,717
Net income 57,423 17,197
Income per share - basic $ 1.71 $ 0.51
Income per share - diluted $ 1.70 $ 0.50

The Company's actual results of operations for the three months ended November 28, 2020 did not include any significant non-recurring adjustments related to the close of the transaction. The unaudited pro forma data for the three months ended November 30, 2019 above includes the following significant non-recurring adjustments made to account for certain costs which would have changed if the acquisition of Newmar had occurred at the beginning of Fiscal 2020:


	~~Three Months Ended~~
~~(in thousands)~~	~~November 30, 2019~~
~~Amortization of intangibles (1 year or less useful life)(1)~~	$	~~2,251~~
~~Amortization of intangibles(2)~~	~~(1,057)~~
~~Expenses related to business combination (transaction costs)~~	~~9,950~~
~~Interest to reflect new debt structure(3)~~	~~(3,367)~~
~~Taxes related to the adjustments to the pro forma data and to the income of Newmar(4)~~	~~(832)~~

~~(1) Includes amortization adjustments for our backlog intangible asset and our fair-value inventory adjustment.~~

~~(2) Includes amortization adjustments for our dealer network and non-compete intangible assets.~~

~~(3) Includes adjustments for cash and non-cash interest expense as well as deferred financing costs. Refer to Note 9,~~ ~~Long-Term Debt,~~ ~~for additional information on the Company's new debt structure as a result of the acquisition.~~

~~(4) Calculated using our U.S. federal statutory rate of 21.0%.~~

The unaudited pro forma information for the three months ended November 30, 2019 is not necessarily indicative of the results that the Company would have achieved had the transaction actually taken place at the beginning of Fiscal 2020, and the unaudited pro forma information for the three months ended November 30, 2019 does not purport to be indicative of future financial operating results. The unaudited pro forma condensed consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition.

Total transaction costs related to the ~~Newmar~~Barletta acquisition were ~~$10.4~~$3.1 million, of which ~~$9.8~~$2.4 million were expensed during the first quarter of Fiscal ~~2020~~2022 and ~~$0.6~~$0.7 million were expensed during the fourth quarter of Fiscal ~~2019. There were no transaction costs incurred during the first three months of Fiscal~~ 2021. Transaction costs are included in ~~Selling,~~selling, general and administrative expenses in the accompanying ~~Condensed~~ Consolidated Statements of Income and Comprehensive Income.

Pro forma results of operations for this acquisition have not been presented as they were immaterial to the reported results.

Note 3:3. Business Segments

~~The Company has 6~~We have 7 operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine, 6) Barletta marine and 6)7) Winnebago specialty vehicles. ~~The Company evaluates~~Financial performance is evaluated based on each operating segment's Adjusted ~~EBITDA,~~Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined below, which excludes certain corporate administration expenses and non-operating income and expense.

The ~~Company's 2~~acquisition of Barletta resulted in a newly created Marine reportable segment effective for the first quarter of Fiscal 2022. The segment consists of Barletta and our existing Chris-Craft operating segment. Prior year amounts for Chris-Craft have been reclassified from Corporate / All Other category to the Marine segment.

Our 3 reportable segments ~~include: 1)~~are: Towable ~~(comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an~~(an aggregation of the Grand Design towables and the Winnebago towables operating ~~segments and 2)~~segments); Motorhome ~~(comprised of products that include a motorized chassis as well as other related manufactured products and services), which is an~~(an aggregation of the Winnebago motorhomes and Newmar motorhomes operating ~~segments.~~segments); and Marine (an aggregation of the Chris Craft marine and Barletta marine operating segments). Towable is comprised of non-motorized products that are generally towed by another vehicle, along with other related manufactured products and services. Motorhome is comprised of products that include a motorized chassis, along with other related manufactured products and services. Marine is comprised of products that include boats, along with other manufactured products and services.

The Corporate / All Other category includes the ~~Chris-Craft marine and~~ Winnebago specialty vehicles operating ~~segments~~segment as well as ~~expenses related to~~ certain corporate administration expenses ~~for~~related to the oversight of the ~~enterprise. These expenses include items~~enterprise, such as corporate leadership and administration costs.

Identifiable assets of the reportable segments exclude general corporate assets, which principally consist of cash and cash equivalents and certain deferred tax balances. The general corporate assets are included in the Corporate / All Other category.

~~Table of Contents~~

~~The Company's chief operating decision maker ("CODM") is its~~Our Chief Executive ~~Officer. The Company's CODM relies on internal management reporting that analyzes~~Officer (the Chief Operating Decision Maker ("CODM")) regularly reviews consolidated financial results ~~to the net earnings level~~in their entirety and operating ~~segment's~~segment financial information through Adjusted ~~EBITDA. The Company's CODM~~EBITDA and has ultimate responsibility for enterprise decisions. ~~The Company's~~Our CODM ~~determines, in particular, resource allocation~~is responsible for allocating resources and ~~monitors the~~assessing performance of the consolidated enterprise, ~~the Towable~~reportable segments and operating segments. Management of each operating segment ~~and the Motorhome segment. The operating segments' management have~~has responsibility for operating decisions, allocating resources and assessing performance within their respective ~~segments.~~operating segment. The accounting policies of ~~both~~all reportable segments are the same ~~and are~~as those described in Note 1 ~~Summary of Significant Accounting Policies, of~~to the ~~Notes to~~ Consolidated Financial Statements included in ~~the Company's~~Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021.

~~The Company evaluates the~~We monitor and evaluate operating performance of ~~its~~our reportable segments based on Adjusted EBITDA. We believe disclosing Adjusted EBITDA is useful to securities analysts, investors and other interested parties when evaluating companies in our industries. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other pretax adjustments made in order to present comparable results ~~from~~ period toover period. Examples of items excluded from Adjusted EBITDA include acquisition-related ~~fair-value inventory step-up, acquisition-related~~ costs, litigation reserves, restructuring expenses, gain or loss on sale of property, plant and equipment, contingent consideration fair value adjustment, and non-operating ~~income. The following table shows~~income or loss.

Financial information by reportable ~~segment:~~segment is as follows:

Table of Contents


	Three Months Ended
(in thousands)	November 27, 2021		November 28, 2020
Net Revenues
Towable	$	651,024	$	454,901
Motorhome	421,479		322,389
Marine	79,318		11,894
Corporate / All Other	3,919		3,947
Consolidated	$	1,155,740	$	793,131

Adjusted EBITDA
Towable	$	112,077	$	63,143
Motorhome	50,153		30,343
Marine	10,570		854
Corporate / All Other	(5,568)		(5,047)
Consolidated	$	167,232	$	89,293

Capital Expenditures
Towable	$	11,158	$	4,137
Motorhome	7,751		4,003
Marine	628		549
Corporate / All Other	3,678		—
Consolidated	$	23,215	$	8,689


		Three Months Ended
(in thousands)	(in thousands)	November 28, 2020		November 30, 2019		(in thousands)	November 27, 2021		August 28, 2021
Net Revenues
Assets						Assets
Towable	Towable	$	454,901	$	341,250	Towable	$	823,838	$	790,257
Motorhome	Motorhome	322,389		225,891		Motorhome	762,742		728,060
Marine						Marine	395,533		102,901
Corporate / All Other	Corporate / All Other	15,841		21,317		Corporate / All Other	224,248		441,349
Consolidated	Consolidated	$	793,131	$	588,458	Consolidated	$	2,206,361	$	2,062,567

Adjusted EBITDA
Towable		$	63,143	$	35,785
Motorhome		30,343		9,331
Corporate / All Other		(4,193)		(3,068)
Consolidated		$	89,293	$	42,048

Capital Expenditures
Towable		$	4,137	$	4,026
Motorhome		4,003		2,240
Corporate / All Other		549		358
Consolidated		$	8,689	$	6,624

(in thousands) November 28,
2020 August 29,
2020
Total Assets
Towable $ 732,419 $ 718,253
Motorhome 671,761 600,304
Corporate / All Other 376,810 395,143
Consolidated $ 1,780,990 $ 1,713,700

1211

Table of Contents

Reconciliation of net income to consolidated Adjusted ~~EBITDA:~~EBITDA is as follows:


		Three Months Ended					Three Months Ended
(in thousands)	(in thousands)	November 28, 2020		November 30, 2019		(in thousands)	November 27, 2021		November 28, 2020
Net income	Net income	$	57,423	$	14,068	Net income	$	99,630	$	57,423
Interest expense		9,941		6,049
Interest expense, net						Interest expense, net	10,242		9,941
Provision for income taxes	Provision for income taxes	17,557		3,893		Provision for income taxes	30,141		17,557
Depreciation	Depreciation	4,160		3,586		Depreciation	5,306		4,160
Amortization of intangible assets		3,590		3,614
Amortization						Amortization	8,172		3,590
EBITDA	EBITDA	92,671		31,210		EBITDA	153,491		92,671
Acquisition-related fair-value inventory step-up		0		1,176
Acquisition-related costs	Acquisition-related costs	0		9,950		Acquisition-related costs	3,384		—
Litigation reserves						Litigation reserves	4,000		—
Gain on sale of property, plant and equipment						Gain on sale of property, plant and equipment	—		(3,565)
Restructuring expenses	Restructuring expenses	93		(172)		Restructuring expenses	—		93
Gain on sale of property and equipment		(3,565)		0
Non-operating loss (income)		94		(116)
Contingent consideration fair value adjustment						Contingent consideration fair value adjustment	6,370		—
Non-operating (income) loss						Non-operating (income) loss	(13)		94
Adjusted EBITDA	Adjusted EBITDA	$	89,293	$	42,048	Adjusted EBITDA	$	167,232	$	89,293

Note 4:4. Investments and Fair Value Measurements

In determining the fair value of financial assets and liabilities, we utilize market data or other assumptions that we believe market participants would use in pricing the asset or liability in the principal or most advantageous market and adjust for non-performance and/or other risks associated with us as well as counterparties, as appropriate. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level 1 — Unadjusted quoted prices which are available in active markets for identical assets or liabilities accessible at the measurement date.

Level 2 — Inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 — Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Table of Contents

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

~~The Company accounts for fair value measurements in accordance with ASC 820,~~ ~~Fair Value Measurements and Disclosures~~, which defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows:

~~Level 1~~ ~~- Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.~~

~~Level 2~~ ~~- Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:~~

•~~Quoted prices for similar assets or liabilities in active markets;~~

•~~Quoted prices for identical or similar assets in nonactive markets;~~

•~~Inputs other than quoted prices that are observable for the asset or liability; and~~

•~~Inputs that are derived principally from or corroborated by other observable market data.~~

~~Level 3~~ - Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

~~Table of Contents~~

~~The following tables set forth by level within the fair value hierarchy the Company's financial~~Financial assets and liabilities ~~that were accounted for~~measured at fair value on a recurring basis ~~at November 28, 2020 and August 29, 2020 according to the valuation techniques the Company used to determine their fair values:~~are as follows:


		Fair Value at		Fair Value Hierarchy							Fair Value at		Fair Value Hierarchy
(in thousands)	(in thousands)	November 28, 2020		Level 1		Level 2		Level 3		(in thousands)	November 27, 2021		Level 1		Level 2		Level 3
Assets that fund deferred compensation:
Assets that fund deferred compensation										Assets that fund deferred compensation
Domestic equity funds	Domestic equity funds	$	783	$	783	$	0	$	0	Domestic equity funds	$	1,347	$	1,347	$	—	$	—
International equity funds	International equity funds	35		35		0		0		International equity funds	76		76		—		—
Fixed income funds	Fixed income funds	49		49		0		0		Fixed income funds	195		195		—		—
Total assets at fair value	Total assets at fair value	$	867	$	867	$	0	$	0	Total assets at fair value	$	1,618	$	1,618	$	—	$	—

Contingent consideration										Contingent consideration
Earnout liability										Earnout liability	$	30,560	$	—	$	—	$	30,560
Total liabilities at fair value										Total liabilities at fair value	$	30,560	$	—	$	—	$	30,560


	Fair Value at		Fair Value Hierarchy
(in thousands)	August 28, 2021		Level 1		Level 2		Level 3
Assets that fund deferred compensation
Domestic equity funds	$	940	$	940	$	—	$	—
International equity funds	41		41		—		—
Fixed income funds	46		46		—		—
Total assets at fair value	$	1,027	$	1,027	$	—	$	—

Fair Value at Fair Value Hierarchy
(in thousands) August 29,
2020 Level 1 Level 2 Level 3
Assets that fund deferred compensation:
Domestic equity funds $ 626 $ 626 $ 0 $ 0
International equity funds 34 34 0 0
Fixed income funds 50 50 0 0
Total assets at fair value $ 710 $ 710 $ 0 $ 0

~~The following methods and assumptions were used to estimate the fair value of each class of financial instrument:~~

Assets that ~~fund deferred compensation~~Fund Deferred Compensation

~~The Company's~~Our assets that fund deferred compensation are marketable equity securities measured at fair value using quoted market prices and primarily consist of equity-based mutual funds. These securities, used to fund the Executive Share Option Plan and the Executive Deferred Compensation Plan, are classified as Level 1 as they are traded in an active market for which closing stock prices are readily available. ~~These securities fund the Executive Share Option Plan and the Executive Deferred Compensation Plan.~~ Refer to Note ~~11,~~ ~~Employee and Retiree Benefits~~,10 of the Notes to the Consolidated Financial Statements included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020~~28, 2021 for additional information regarding these plans.

The proportion of the assets that will fund options which expire within a year are included in ~~Prepaid~~prepaid expenses and other assets inon the ~~accompanying Condensed~~ Consolidated Balance Sheets. The remaining assets are classified as non-current and are included in ~~Other assets.~~other assets on the Consolidated Balance Sheets.

Contingent Consideration

Contingent consideration represents the earnout liability related to the Barletta acquisition and is valued using a probability-weighted scenario analysis of projected EBITDA and gross profit results and discounted at a risk-free rate. The contingent consideration is classified as Level 3. Actual EBITDA and gross profit results may differ significantly from those used in the estimate above, which may affect future payments. Changes in future payments will be reflected in future operating results as they occur.

Assets and Liabilities ~~that are measured~~Measured at Fair Value on a Nonrecurring Basis

~~The Company's non-financial assets, which include goodwill, intangible assets, and property, plant and equipment,~~Certain financial instruments are ~~not required to be~~ measured at fair value on a ~~recurring~~nonrecurring basis. ~~However, if~~These assets primarily include goodwill, intangible assets, property, plant and equipment, and right-of-use lease assets. These assets were originally recognized at amounts equal to the fair value determined at date of acquisition or purchase. If certain triggering events occur, or if an annual impairment test is required, ~~the Company must~~we will evaluate the non-financial asset for impairment. If an impairment has occurred, the asset ~~is required~~will be written down to ~~be recorded at the~~its current estimated fair value. ~~NaN~~No impairments were recorded for non-financial assets in the ~~first quarter of Fiscal~~three months ended November 27, 2021 or ~~the first quarter of Fiscal~~November 28, 2020.

Assets and Liabilities Not Measured at Fair Value ~~of Financial Instruments~~

~~The Company's~~Certain financial instruments ~~other than those presented in the disclosures above,~~are not measured at fair value but are recorded at carrying amounts approximating fair value based on their short-term nature. These financial instruments include cash and cash equivalents, receivables, accounts payable, other payables, and long-term debt. ~~The fair values of cash, receivables, accounts payable, and other payables approximated carrying values because of the short-term nature of these instruments.~~ If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. The fair value of our long-term debt was determined using current quoted prices in active markets for our publicly traded debt obligations, which is classified as Level 1 in the fair value hierarchy. See Note 9 ~~Long-Term Debt~~, for ~~information about~~ the fair value of our long-term debt.

1413

Table of Contents

Note 5:5. Inventories

Inventories consist of the following:

(in thousands) November 28,
2020 August 29,
2020
Finished goods $ 9,295 $ 17,141
Work-in-process 137,280 86,651
Raw materials 152,671 114,982
Total 299,246 218,774
Less last-in, first-out ("LIFO") reserve 36,109 35,833
Inventories, net $ 263,137 $ 182,941


(in thousands)	November 27, 2021		August 28, 2021
Finished goods	$	12,267	$	12,243
Work-in-process	188,380		184,611
Raw materials	271,579		183,583
Total	472,226		380,437
Less: Excess of FIFO over LIFO cost	39,401		38,964
Inventories, net	$	432,825	$	341,473

Inventory valuation methods consist of the following:

(in thousands) November 28,
2020 August 29,
2020
LIFO basis $ 124,002 $ 88,675
First-in, first-out basis 175,244 130,099
Total $ 299,246 $ 218,774


(in thousands)	November 27, 2021		August 28, 2021
LIFO basis	$	176,772	$	139,544
First-in, first-out basis	295,454		240,893
Total	$	472,226	$	380,437

The above inventory value, ~~of inventories,~~ before reduction for the LIFO reserve, approximates replacement cost at the respective dates.

Table of Contents

Note 6:6. Property, Plant, and Equipment

Property, plant, and equipment is stated at cost, net of accumulated depreciation, and consists of the following:


(in thousands)	(in thousands)	November 28, 2020		August 29, 2020		(in thousands)	November 27, 2021		August 28, 2021
Land	Land	$	9,111	$	11,101	Land	$	10,697	$	9,111
Buildings and building improvements	Buildings and building improvements	144,701		144,565		Buildings and building improvements	163,731		147,629
Machinery and equipment	Machinery and equipment	118,317		117,370		Machinery and equipment	126,093		121,911
Software	Software	28,359		28,456		Software	36,099		36,815
Transportation	Transportation	4,840		4,913		Transportation	5,972		5,335
Construction in progress	Construction in progress	17,907		20,778		Construction in progress	46,144		31,137
Property, plant, and equipment, gross	Property, plant, and equipment, gross	323,235		327,183		Property, plant, and equipment, gross	388,736		351,938
Less accumulated depreciation		152,025		152,238
Less: Accumulated depreciation						Less: Accumulated depreciation	164,607		160,511
Property, plant, and equipment, net	Property, plant, and equipment, net	$	171,210	$	174,945	Property, plant, and equipment, net	$	224,129	$	191,427

Depreciation expense was $5.3 million and $4.2 million ~~and $3.6 million during~~for the ~~first quarters of Fiscal~~three months ended November 27, 2021 and November 28, 2020, respectively.

Note 7:7. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segment, ~~were as follows for the first three months of Fiscal 2021 and 2020, of which there were~~with no accumulated impairment ~~losses:~~

(in thousands) Towable Motorhome Corporate / All Other Total
Balances at August 31, 2019 $ 244,684 $ 0 $ 30,247 $ 274,931
Acquisition of Newmar(1)
0 72,909 0 72,909
Balances at November 30, 2019 $ 244,684 $ 72,909 $ 30,247 $ 347,840
Balances at August 29, 2020 and November 28, 2020(2)
$ 244,684 $ 73,127 $ 30,247 $ 348,058
losses, for the three months ended November 27, 2021 and November 28, 2020 are as follows:


(in thousands)	Towable		Motorhome		Marine		Total
Balances at August 29, 2020 and November 28, 2020(1)	$	244,684	$	73,127	$	30,247	$	348,058

Balances at August 28, 2021	$	244,684	$	73,127	$	30,247	$	348,058
Acquisition of Barletta(2)	—		—		136,118		136,118
Balances at November 27, 2021	$	244,684	$	73,127	$	166,365	$	484,176

(1) ~~The change in Motorhome activity is related to the acquisition of Newmar. Refer to Note 2,~~ ~~Business Combinations,~~ ~~for additional information.~~

~~(2)~~ There was no activity in the three months ~~beginning August 29, 2020 and ending~~ended November 28, 2020.

(2) The change in marine activity is related to the acquisition of Barletta that occurred on August 31, 2021. See Note 2 to the Consolidated Financial Statements included in Item 1 of Part I of this quarterly report on Form 10-Q.

Table of Contents

Other intangible assets, net of accumulated amortization, consist of the following:

November 28, 2020 August 29, 2020
($ in thousands) Weighted Average Life-Years Cost Accumulated Amortization Weighted Average Life-Years Cost Accumulated Amortization
Trade names Indefinite $ 275,250 Indefinite $ 275,250
Dealer networks 12.1 159,581 $ 35,778 12.2 159,581 $ 32,487
Backlog 0.5 28,327 28,327 0.5 28,327 28,327
Non-compete agreements 4.3 6,647 4,522 4.1 6,647 4,223
Other intangible assets, gross 469,805 68,627 469,805 65,037
Less accumulated amortization 68,627 65,037
Other intangible assets, net $ 401,178 $ 404,768


	November 27, 2021
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	352,250	$	—	$	352,250
Dealer networks	179,981		$	49,367	130,614
Backlog	42,327		32,527		9,800
Non-compete agreements	6,647		5,676		971
Other intangible assets	$	581,205	$	87,570	$	493,635

	August 28, 2021
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	275,250	$	—	$	275,250
Dealer networks	159,581		45,652		113,929
Backlog	28,327		28,327		—
Non-compete agreements	6,647		5,419		1,228
Other intangible assets	$	469,805	$	79,398	$	390,407

The weighted average remaining amortization period for intangible assets as of November ~~28, 2020~~27, 2021 was approximately 1013 years.

~~Remaining estimated aggregate annual~~Estimated future amortization expense ~~by fiscal year~~related to finite-lived intangible assets is as follows:


(in thousands)	Amount
Remainder of Fiscal ~~2021~~2022	$	~~10,771~~
~~Fiscal 2022~~	~~13,719~~21,247
Fiscal 2023	~~13,526~~15,226
Fiscal 2024	~~13,424~~15,124
Fiscal 2025	~~13,219~~14,919
Fiscal 2026	14,865
Fiscal 2027	14,865
Thereafter	~~61,269~~45,139
Total amortization expense remaining	$	~~125,928~~141,385

Note 8:8. Product Warranties

~~The Company provides~~We provide certain service and warranty on ~~its~~our products. From time to time, ~~the Company~~we also voluntarily ~~incurs~~incur costs for certain warranty-type expenses occurring after the normal warranty period expires to help protect the reputation of ~~the Company's~~our products and maintain the goodwill of ~~the Company's~~our customers. Estimated costs related to product warranty are accrued at the time of sale and are based upon historical warranty and service claims experience. Adjustments are made to accruals as claim data and cost experience becomes available.

In addition to the costs associated with the contractual warranty coverage provided on products, ~~the Company~~we also occasionally ~~incurs~~incur costs as a result of additional service actions not covered by warranties, including product recalls and customer satisfaction actions. Although ~~the Company estimates~~we estimate and ~~reserves~~reserve for the cost of these service actions when probable and estimable, there can be no assurance that expense levels will remain at current levels or such reserves will continue to be adequate.

~~Changes in the Company's product warranty liability are as follows:~~

Three Months Ended
(in thousands) November 28,
2020 November 30,
2019
Balance at beginning of period $ 64,031 $ 44,436
Business acquisition(1)
0 15,147
Provision 21,703 15,318
Claims paid (15,232) (13,794)
Balance at end of period $ 70,502 $ 61,107

~~(1) Refer to Note 2,~~ ~~Business Combinations, for additional information.~~

Table of Contents

Changes in the product warranty liability are as follows:


	Three Months Ended
(in thousands)	November 27, 2021		November 28, 2020
Balance at beginning of period	$	91,222	$	64,031
Business acquisition(1)	4,656		—
Provision	26,059		21,703
Claims paid	(19,513)		(15,232)
Balance at end of period	$	102,424	$	70,502

(1) Relates to the acquisition of Barletta on August 31, 2021. See Note 9:2 to the Consolidated Financial Statements in Item 1 of Part I of this quarterly report on Form 10-Q for additional acquisition information.

Note 9. Long-Term Debt

~~The components~~Long-term debt consists of ~~long-term debt are as follows:~~

(in thousands) November 28,
2020 August 29,
2020
ABL Credit Facility $ 0 $ 0
Senior Secured Notes 300,000 300,000
Convertible Notes 300,000 300,000
Long-term debt, gross 600,000 600,000
Convertible Notes unamortized interest discount (70,943) (74,294)
Debt issuance costs, net (12,530) (13,076)
Long-term debt, net $ 516,527 $ 512,630
the following:


(in thousands)	November 27, 2021		August 28, 2021
ABL Credit Facility	$	—	$	—
Senior Secured Notes	300,000		300,000
Convertible Notes	300,000		300,000
Long-term debt, gross	600,000		600,000
Convertible Notes unamortized interest discount	(56,739)		(60,366)
Debt issuance costs, net	(10,522)		(11,075)
Long-term debt, net	$	532,739	$	528,559

Credit Agreements

On July 8, 2020, ~~the Company~~we closed ~~its~~our private offering (the “Senior Secured Notes Offering”) of ~~$300~~$300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the “Senior Secured Notes”). The Senior Secured Notes were issued in accordance with an Indenture dated as of July 8, 2020 (the “Indenture”). The Senior Secured Notes will mature on July 15, 2028 unless earlier redeemed or repurchased. Interest on the Senior Secured Notes accrues starting July 8, 2020 and is payable semi-annually in arrears on January 15 and July 15 of each year, ~~beginning~~which began on January 15, 2021. The Senior Secured Notes and the related guarantees are secured by (i) a first-priority lien on substantially all of the Company’s and the subsidiary guarantor parties' existing and future assets (other than certain collateral under the Company’s ABL facility) and (ii) a second-priority lien on the Company’s present and future accounts and receivables, inventory and other related assets and proceeds that secure the ABL facility on a first-priority basis.

~~The Indenture limits certain abilities of the Company~~Debt issuance costs incurred and its subsidiaries (subject to certain exceptions and qualifications) to incur additional debt and provide additional guarantees; make restricted payments; create or permit certain liens; make certain asset sales; use the proceeds from the sale of assets and subsidiary stock; create or permit restrictions on the ability of the Company’s restricted subsidiaries to pay dividends or make other inter-company distributions; engage in certain transactions with affiliates; designate subsidiaries as unrestricted subsidiaries; and consolidate, merge or transfer all or substantially all of the Company’s assets and the assets of its restricted subsidiaries.

~~The Company amortizes debt issuance costs~~capitalized are amortized on a straight-line basis over the term of the associated debt agreement. If early principal payments are made on the Senior Secured Notes, a proportional amount of the unamortized debt issuance costs is expensed. As part of the Senior Secured Notes Offering, ~~the Company~~we capitalized ~~$7.3~~$7.5 million in debt issuance costs that will be amortized over the eight-year term of the agreement.

On November 8, 2016, ~~the Company~~we entered into an asset-based revolving credit agreement ("ABL") and a loan agreement ("Term Loan") with JPMorgan Chase Bank, N.A. ("JPMorgan Chase"), as administrative agent and certain lenders from time to time party thereto. The remaining principal balance of the Term Loan as of July 8, 2020 was $249.8 million, which was repaid with the proceeds from the Senior Secured Notes, and debt issuance costs of $4.7 million were written off upon repayment. In addition, the interest rate swaps with a liability position of $0.6 million hedging the Term Loan interest rates were settled early in July 2020.

Under the ABL, ~~the Company has~~we have a $192.5 million credit facility that matures on October 22, 2024 (subject to certain factors which may accelerate the maturity date) on a revolving basis, subject to availability under a borrowing base consisting of eligible accounts receivable and eligible inventory. The ABL is available for issuance of letters of credit to a specified limit of $19.3 million. ~~The Company pays~~We pay a commitment fee of 0.25% on the average daily amount of the facility available, but unused. ~~The Company~~We can elect to base the interest rate on various rates plus specific spreads depending on the amount of borrowings outstanding. If drawn, ~~the Company~~we would pay interest on ABL borrowings at a floating rate based upon ~~LIBOR plus~~ a spread of between 1.25% and 1.75%, plus LIBOR, depending on the usage of the facility during the most recent quarter. Based on current usage, ~~the Company~~we would pay LIBOR plus 1.25%.

Refer to Note 9 of the Notes to the Consolidated Financial Statements included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended August 28, 2021 for additional information regarding these credit agreements.

Convertible Notes

On November 1, 2019, ~~the Company~~we issued $300.0 million in aggregate principal amount of 1.5% unsecured convertible senior notes due 2025 (“Convertible Notes”). The net proceeds from the issuance of the Convertible Notes, after deducting the initial purchasers' transaction fees and offering expense payable by ~~the Company,~~us, were approximately $290.2 million. The Convertible Notes bear interest at the annual rate of 1.5%, payable on April 1 and October 1 of each year, beginning on April 1, 2020, and will mature on April 1, 2025, unless earlier converted or repurchased by ~~the Company.~~us.

Table of Contents

The Convertible Notes will be convertible into cash, shares of ~~the Company's~~our common stock or a combination thereof, at the election of ~~the Company,~~us, at an initial conversion rate of 15.6906 shares of common stock per ~~$1,000~~$1 thousand principal amount of

~~Table of Contents~~

Convertible Notes, which is equivalent to an initial conversion price of approximately $63.73 per share, as adjusted pursuant to the terms of the indenture governing the Convertible Notes. The Convertible Notes may be converted at any time on or after October 1, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date.

The conversion rate of the Convertible Notes may be adjusted in certain circumstances, including in connection with a conversion of the Convertible Notes made following certain fundamental changes and under other circumstances set forth in the indenture. It is the Company's current intent to settle all conversions of the Convertible Notes through settlement of cash.

~~Prior to the close of business on the business day immediately preceding October 1, 2024, the Convertible Notes will be convertible only under the following circumstances:~~

(1) during any fiscal quarter commencing after December 31, 2019 if the closing sale price of the common stock is more than 130% of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2) during the 5 consecutive business day period after any 5 consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate for the Convertible Notes on each such trading day; or

~~(3) upon the occurrence of certain specified corporate events set forth in the indenture.~~

~~The Company may not redeem the Convertible Notes at its option prior to the maturity date, and no sinking fund is provided for the Convertible Notes.~~

On October 29, 2019 and October 30, 2019, in connection with the offering of the Convertible Notes, ~~the Company~~we entered into privately negotiated convertible note hedge transactions (collectively, the “Hedge Transactions”) that cover, subject to customary anti-dilution adjustments, the number of shares of ~~the Company's~~our common stock that initially underlie the Convertible Notes, and are expected generally to reduce the potential dilution and/or offset any cash payments the Company is required to make in excess of the principal amount due, as the case may be, upon conversion of the Convertible Notes in the event that the market price of the Company's common stock is greater than the strike price of the Hedge Transactions, which was initially $63.73 per share (subject to adjustment under the terms of the Hedge Transactions), corresponding to the initial conversion price of the Convertible Notes.

On October 29, 2019 and October 30, 2019, ~~the Company~~we also entered into privately negotiated warrant transactions (collectively, the “Warrant Transactions” and, together with the Hedge Transactions, the “Call Spread Transactions”), whereby ~~the Company~~we sold warrants at a higher strike price relating to the same number of shares of ~~the Company's~~our common stock that initially underlie the Convertible Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $96.20 per share (subject to adjustment under the terms of the Warrant Transactions), which is 100% above the last reported sale price of the Company's common stock on October 29, 2019. The Warrant Transactions could have a dilutive effect to the Company's stockholders to the extent that the market price per share of the Company's common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.

~~The Company used $28.6 million of the net proceeds from the issuance of the Convertible Notes to pay the cost of the Call Spread Transactions.~~

The Hedge Transactions and the Warrant Transactions are separate transactions, in each case, and are not part of the terms of the Convertible Notes and will not affect any holder’s rights under the Convertible Notes. Holders of the Convertible Notes will not have any rights with respect to the Call Spread Transactions.

Accounting Treatment of the Convertible Notes and Related Hedge Transactions and Warrant Transactions

The Call Spread Transactions were classified as equity. ~~The Company~~We bifurcated the proceeds from the offering of the Convertible Notes between liability and equity components. On the date of issuance, the liability and equity components were calculated to be approximately $215.0 million and $85.0 million, respectively. The initial $215.0 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature assuming a hypothetical interest rate of 8%. The initial $85.0 million ($64.1 million net of tax) equity component represents the difference between the fair value of the initial $215.0 million in debt and the $300.0 million of gross proceeds. The related initial debt discount of $85.0 million is being amortized over the life of the Convertible Notes as non-cash interest expense using the effective interest method.

In connection with the above-noted transactions, ~~the Company~~we incurred approximately $9.8 million of offering-related costs. These offering fees were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt and equity issuance costs, respectively. ~~The Company~~We allocated $7.0 million of debt issuance costs to the liability component, which were capitalized as deferred financing costs within ~~Long-term debt.~~long-term debt on the Consolidated Balance Sheets. These costs are being amortized as interest expense over the term of the debt using the effective interest method. The remaining $2.8 million of transaction costs allocated to the equity component were recorded as a reduction of the equity component.

~~Table of Contents~~

Fair Value and Future Maturities

As of November 27, 2021 and August 28, ~~2020,~~2021, the fair value of long-term debt, gross, was ~~$655.0 million. As of August 29, 2020, the fair value of long-term debt, gross, was $674.7 million.~~$727.4 million and $726.6 million, respectively.

Aggregate contractual maturities of debt in future fiscal years are as follows:


(in thousands)	Amount
Remainder of Fiscal ~~2021~~2022	$	0
~~Fiscal 2022~~	0—
Fiscal 2023	0—
Fiscal 2024	0—
Fiscal 2025	300,000
Fiscal 2026	—
Fiscal 2027	—
Thereafter	300,000
Total ~~Term Loan~~Senior Secured Notes and Convertible Notes	$	600,000

Table of Contents

Note ~~10:~~10. Employee and Retiree Benefits

Deferred compensation liabilities are as follows:


(in thousands)	November 27, 2021		August 28, 2021
Non-qualified deferred compensation	$	9,278	$	9,731
Supplemental executive retirement plan	1,614		1,615
Executive deferred compensation plan	1,620		1,029
Total deferred compensation benefits	12,512		12,375
Less current portion(1)	2,737		2,825
Deferred compensation benefits, net of current portion	$	9,775	$	9,550

(in thousands) November 28,
2020 August 29,
2020
Non-qualified deferred compensation $ 11,010 $ 11,460
Supplemental executive retirement plan 1,851 1,838
Executive deferred compensation plan 867 710
Deferred compensation benefits 13,728 14,008
Less current portion(1)
2,844 2,878
Deferred compensation benefits, net of current portion $ 10,884 $ 11,130

(1) Included in ~~Accrued~~accrued compensation on the ~~Condensed~~ Consolidated Balance Sheets.

Note ~~11:~~11. Contingent Liabilities and Commitments

Repurchase Commitments

Generally, manufacturers in the same industries as ~~the Company~~us enter into repurchase agreements with lending institutions which have provided wholesale floorplan financing to dealers. Most dealers are financed on a "floorplan" basis under which a bank or finance company lends the dealer all, or substantially all, of the purchase price, collateralized by a security interest in the units purchased.

~~The Company's~~Our repurchase agreements generally provide that, in the event of default by the dealer on the agreement to pay the lending institution, ~~Winnebago Industries~~we will repurchase the financed merchandise. The terms of these agreements, which generally can last up to 24 months, provide that ~~the Company's~~our liability will be the lesser of remaining principal owed by the dealer to the lending institution, or dealer invoice less periodic reductions based on the time since the date of the original invoice. ~~The Company's~~Our liability cannot exceed 100% of the dealer invoice. In certain instances, ~~the Company~~we also ~~repurchases~~repurchase inventory from dealers due to state law or regulatory requirements that govern voluntary or involuntary relationship terminations. Although laws vary from state to state, some states have laws in place that require manufacturers of recreational vehicles or boats to repurchase current inventory if a dealership exits the business. The total contingent liability on all of our repurchase agreements ~~of the Company~~ was approximately ~~$760.7~~$1,051.3 million and ~~$798.9~~$727.7 million at November ~~28, 2020~~27, 2021 and August ~~29, 2020,~~28, 2021, respectively.

Repurchased sales are not recorded as a revenue transaction, ~~but~~rather the net difference between the original repurchase price and the resale price ~~are~~is recorded against the loss reserve, which is a deduction from gross revenue. ~~The Company's~~Our loss reserve for repurchase commitments contains uncertainties because the calculation requires management to make assumptions and apply judgment regarding a number of factors. ~~The Company's~~Our risk of loss related to these repurchase commitments is significantly reduced by the potential resale value of any products that are subject to repurchase and is spread over numerous dealers and lenders. The aggregate contingent liability related to ~~the Company's~~our repurchase agreements represents all financed dealer inventory at the ~~period~~period-end reporting date subject to a repurchase agreement, net of the greater of periodic reductions per the agreement or dealer principal payments. Based on these repurchase agreements and ~~the Company's~~our historical loss experience, an associated loss reserve is established which is included in ~~Accrued~~accrued expenses: ~~Other~~other on the ~~Condensed~~ Consolidated Balance Sheets. ~~The Company's~~Our repurchase accrual was ~~$0.9~~$1.0 million and ~~$1.0~~$0.9 million at November ~~28, 2020~~27, 2021 and August ~~29, 2020,~~28, 2021, respectively. Repurchase risk is affected by the credit worthiness of ~~the Company's~~our dealer ~~network, and management does~~network. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to establish the loss reserve for repurchase commitments.

~~Table of Contents~~

There was no material activity related to repurchase agreements during the three months ended November 27, 2021 and August 28, ~~2020 and November 30, 2019.~~2021.

Litigation

~~The Company is~~We are involved in various legal proceedings which are considered ordinary and routine litigation incidental to the business, some of which are covered in whole or in part by insurance. While ~~the Company believes~~we believe the ultimate disposition of litigation will not have a material adverse effect on ~~the Company's~~our financial position, results of operations or liquidity, ~~there exists~~ the possibility exists that such litigation may have an impact on ~~the Company's~~our results for a particular reporting period in which litigation effects become probable and reasonably estimable. Though ~~the Company does~~we do not believe there is a reasonable likelihood that there will be a material change related to these matters, litigation is subject to inherent uncertainties and ~~management’s~~our view of these matters may change in the future.

Table of Contents

Note ~~12:~~12. Revenue

~~The Company generates all~~All operating revenue is generated from contracts with customers. ~~The Company's~~Our primary revenue source ~~of revenue~~ is generated through the sale of manufactured ~~motorized~~non-motorized towable units, ~~non-motorized towable~~motorized units and marine units to ~~the Company's~~our independent dealer network ~~(the Company's~~(our customers). The following table disaggregates revenue by reportable segment and product category:


	Three Months Ended
(in thousands)	November 27, 2021		November 28, 2020
Net Revenues
Towable
Fifth Wheel	$	325,762	$	240,448
Travel Trailer	315,414		208,596
Other(1)	9,848		5,857
Total Towable	651,024		454,901
Motorhome
Class A	195,297		134,166
Class B	145,011		109,287
Class C and Other(1)	81,171		78,936
Total Motorhome	421,479		322,389
Marine	79,318		11,894
Corporate / All Other(2)	3,919		3,947
Consolidated Net Revenues	$	1,155,740	$	793,131

Three Months Ended
(in thousands) November 28,
2020 November 30,
2019
Net Revenues
Towable:
Fifth Wheel $ 240,448 $ 195,189
Travel Trailer 208,596 140,463
Other(1)
5,857 5,598
Total Towable 454,901 341,250
Motorhome:
Class A 134,166 65,644
Class B 109,287 85,456
Class C 69,286 66,876
Other(1)
9,650 7,915
Total Motorhome 322,389 225,891
Corporate / All Other:
Other(2)
15,841 21,317
Total Corporate / All Other 15,841 21,317
Consolidated $ 793,131 $ 588,458

(1) Relates to parts, accessories, and services.

(2) Relates to ~~marine,~~ specialty vehicle units, parts, accessories, and services.

~~The Company does~~We do not have material contract assets or liabilities. ~~The Company establishes allowances~~Allowances for uncollectible receivables are established based on historical collection trends, write-off history, consideration of current conditions and expectations for future economic conditions.

Concentration of Risk

~~None of the Company's~~No single dealer ~~organizations~~organization accounted for more than 10% of net revenue for ~~each of~~ the ~~first quarter periods of Fiscal~~three months ended November 27, 2021 ~~and Fiscal~~or November 28, 2020.

Note ~~13:~~13. Stock-Based Compensation

On December 11, 2018, ~~the Company's~~our shareholders approved the Winnebago Industries, Inc. 2019 Omnibus Incentive Plan ("2019 Plan") as detailed in ~~the Company's~~our Proxy Statement for the 2018 Annual Meeting of Shareholders. The 2019 Plan allows ~~the Company~~us to grant or issue non-qualified stock options, incentive stock options, restricted share ~~awards,~~units, and other equity compensation to key employees and to non-employee directors. The 2019 Plan replaces ~~our~~the 2014 Omnibus Equity, Performance Award, and Incentive Compensation Plan (as amended, the "2014 Plan"). The number of shares of ~~the Company's Common Stock~~our common stock that may be

~~Table of Contents~~

~~the subject of awards~~ awarded and issued under the 2019 Plan is 4.1 million shares, plus the shares subject to any awards outstanding under the 2014 Plan and ~~the Company's~~our predecessor plan, the 2004 Incentive Compensation Plan (the “2004 Plan”), on December 11, 2018 that subsequently expire, are forfeited or canceled, or are settled for cash. Until such time, ~~however,~~ awards under the 2014 Plan and the 2004 Plan, respectively, that ~~are~~were outstanding on December 11, 2018 will continue to be subject to the terms of the 2014 Plan or 2004 Plan, as applicable. Shares remaining available for future awards under the 2014 Plan were not carried over into the 2019 Plan.

Stock-based compensation expense was ~~$2.4~~$2.7 million and ~~$1.6~~$2.4 million during the ~~first quarters of Fiscal~~three months ended November 27, 2021 and November 28, 2020, respectively. Compensation expense is recognized over the requisite service or performance period of the award.

Note ~~14: Restructuring~~

In Fiscal 2020, the Company's Class A diesel production was moved from Junction City, OR to Forest City, IA. In November 2020, a portion of the property in Junction City, OR was sold for net proceeds of $7.7 million with a resulting gain of $3.6 million. The gain on this sale is included within selling, general, and administrative expenses for Fiscal 2021. Total restructuring expenses during the first quarter of Fiscal 2021 were $93,000.

~~The Company does not expect additional reorganization charges during the remainder of Fiscal 2021.~~

~~Note 15:~~14. Income Taxes

~~The Company's~~Our effective tax rate ~~increased to~~was 23.2% and 23.4% for the three months ended November 27, 2021 and November 28, 2020, ~~from 21.7%~~respectively. The decrease in tax rate for the three months ended November ~~30, 2019 due primarily~~27, 2021 compared to the three months ended November 28, 2020 was primarily driven by the impact of a ~~more~~net favorable benefit in the ~~prior~~current year related to stock ~~compensation.~~compensation, partially offset by an increase to the rate due to consistent tax credits year-over-year and increased income in the current year.

~~The Company files~~

Table of Contents

We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. As of November ~~28, 2020, the Company's federal~~27, 2021, our Federal returns from Fiscal ~~2017~~2018 to present are subject to review by the Internal Revenue Service. With limited ~~exception,~~exceptions, state returns from Fiscal ~~2016~~2017 to present continue to be subject to review by state taxing jurisdictions. ~~The Company is~~We are currently under review by certain U.S. state tax authorities for Fiscal 2016 through Fiscal 2019. ~~The Company believes it has~~We believe we have adequately reserved for ~~its~~our exposure to potential additional payments for uncertain tax positions in ~~its~~our liability for unrecognized tax benefits.

Note ~~16: Income~~15. Earnings Per Share

~~The following table reflects the calculation of basic~~Basic and diluted ~~income~~earnings per ~~share:~~

Three Months Ended
(in thousands, except per share data) November 28,
2020 November 30,
2019
Numerator
Net income $ 57,423 $ 14,068
Denominator
Weighted average common shares outstanding 33,609 32,067
Dilutive impact of stock compensation awards 230 200
Weighted average common shares outstanding, assuming dilution 33,839 32,267
Anti-dilutive securities excluded from Weighted average common shares outstanding, assuming dilution 140 73
Basic income per common share $ 1.71 $ 0.44
Diluted income per common share $ 1.70 $ 0.44
share are calculated as follows:


	Three Months Ended
(in thousands, except per share data)	November 27, 2021		November 28, 2020
Net income	$	99,630	$	57,423

Weighted average common shares outstanding	33,322		33,609
Dilutive impact of stock compensation awards	543		230
Dilutive impact of convertible notes	513		—
Weighted average common shares outstanding, assuming dilution	34,378		33,839

Anti-dilutive securities excluded from weighted average common shares outstanding, assuming dilution	78		140

Basic earnings per common share	$	2.99	$	1.71
Diluted earnings per common share	$	2.90	$	1.70

~~Anti-dilutive securities were not included in the computation of diluted income per common share because they are considered anti-dilutive under~~Under the treasury stock ~~method.~~method, shares associated with certain anti-dilutive securities have been excluded from the diluted weighted average shares outstanding calculation because the exercise of those options would lead to a net reduction in common shares outstanding or anti-dilution.

Note 16. Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income ("AOCI") by component, net of tax, were:


	Three Months Ended
	November 27, 2021		November 28, 2020
(in thousands)	Defined Benefit Pension Items		Defined Benefit Pension Items
Balance at beginning of period	$	(491)	$	(526)
Amounts reclassified from AOCI	9		9
Net current-period OCI	9		9
Balance at end of period	$	(482)	$	(517)

Reclassifications out of AOCI, net of tax, were:

Three Months Ended

(in thousands)

Location on Consolidated Statements
of Income and Comprehensive Income

November 27,
2021

November 28,
2020

Amortization of net actuarial loss

SG&A

Table of Contents

~~Note 17: Accumulated Other Comprehensive Income (Loss)~~

~~Changes in Accumulated Other Comprehensive Income ("AOCI") by component, net of tax, were:~~

Three Months Ended
November 28, 2020 November 30, 2019
(in thousands) Defined Benefit Pension Items Total Defined Benefit Pension Items Interest Rate Swap Total
Balance at beginning of period $ (526) $ (526) $ (559) $ 68 $ (491)
Other comprehensive income ("OCI") before reclassifications 0 0 0 (80) (80)
Amounts reclassified from AOCI 9 9 8 12 20
Net current-period OCI 9 9 8 (68) (60)
Balance at end of period $ (517) $ (517) $ (551) $ 0 $ (551)

~~Reclassifications out of AOCI, net of tax, were:~~

Three Months Ended
(in thousands) Location on Consolidated Statements
of Income and Comprehensive Income November 28,
2020 November 30,
2019
Amortization of net actuarial loss SG&A $ 9 $ 8
Interest rate contract Interest expense 0 12
Total reclassifications $ 9 $ 20

~~Table of Contents~~

Item 2. Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations

~~Unless the context otherwise requires, the use of the~~The terms "Winnebago," "we," "us," and ~~"our" refers~~"our," unless the context otherwise requires, refer to Winnebago Industries, Inc. and its wholly-owned subsidiaries.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of ~~our~~ management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Unless otherwise noted, transactions and other factors significantly impacting our financial condition, results of operations and liquidity are discussed in order of magnitude.

Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020~~28, 2021 (including the information presented therein under Risk Factors), as well as our reports on Forms 10-Q and 8-K and other publicly available information. All amounts herein are unaudited. All amounts are in thousands, except share and per share data, unless otherwise noted.

Overview

Winnebago Industries, Inc. is one of the leading North American manufacturers ~~with a diversified portfolio~~ of recreation vehicles ("RV"s) and marine products with a diversified portfolio used primarily in leisure travel and outdoor ~~recreation~~recreational activities. We produce our motorhome units in Iowa and Indiana; our towable units in Indiana; and our marine units in Indiana and Florida. We distribute our RV and marine products primarily through independent dealers throughout the U.S. and Canada, who then retail the products to the end consumer. We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer.

~~COVID-19 Pandemic~~Acquisition of Barletta

~~In March 2020,~~On August 31, 2021, we completed our acquisition of all the ~~World Health Organization declared~~equity interests of Barletta for $286.3 million funded with cash payments of $240.1 million, $25.0 million in common stock issued to the ~~COVID-19 outbreak~~sellers (subject to a ~~pandemic. The COVID-19 pandemic has resulted~~12% discount), and contingent consideration from earnout provisions. For further discussion regarding the acquisition, refer to Note 2 to the Notes to Consolidated Financial Statements, included in ~~governments around the world implementing increasingly stringent measures to help control the spread~~Item 1 of ~~the virus, including quarantines and “shelter-in-place” orders, travel restrictions, business curtailments, limits~~Part I in this Quarterly Report on gatherings, and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures designed to counteract the economic impacts of the COVID-19 pandemic.Form 10-Q.

~~Health and safety~~

~~From the earliest signs~~The acquisition of ~~the outbreak, we have taken proactive measures to protect the health and safety of our employees, customers, and suppliers. We have enacted rigorous safety measures~~Barletta resulted in ~~our sites, including employee training and self-monitoring~~a newly created Marine reportable segment effective for symptoms of the COVID-19 virus, the taking of all employee temperatures upon reporting to work, implementing social distancing protocols, implementing working from home arrangements for those employees that do not need to be physically present, suspending travel, extensively and frequently disinfecting our workspaces, and providing or accommodating the wearing of masks to those employees who must be physically present in their workplace. In the event an employee contracts the virus and is tested positive, we have mandated quarantining and have instructed employees not to return to work until such time that they have been cleared to do so, in accordance with recommendations by the Center for Disease Control and Prevention (CDC). We expect to continue to practice these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, and suppliers.

~~Operations~~

~~Our manufacturing operations were not affected by the COVID-19 pandemic during~~ the first quarter of Fiscal ~~2021. Generally, any government mandated measures providing for business shutdowns exclude certain essential businesses~~2022. The segment consists of Barletta and services, including businesses that manufacture and sell products that were considered essential to daily lives or otherwise operate in essential or critical sectors. While governmental measures may be modified or extended, we expect that our ~~manufacturing facilities will remain operational.~~existing Chris-Craft operating segment.

~~Supply~~

~~Our production has experienced certain supply shortages as a result of the~~ COVID-19 ~~pandemic, particularly on our Newmar business. We are actively monitoring the costs and timing of raw materials and other inputs to our supply chain.~~Pandemic

~~Demand~~

The COVID-19 pandemic has significantly increased economic and demand volatility and uncertainty. Our dealer networks were significantly impacted during the initial onset of the COVID-19 pandemic and a majority of our dealers temporarily closed during the third quarter of Fiscal 2020. However, beginning in May of Fiscal 2020 our dealers began to reopen, with dealer reopenings accelerating in June. The majority of our dealers have reopened as of the end of the first quarter of Fiscal 2021. During the third quarter of Fiscal 2020, we experienced reductions in customer demand due to a decrease in consumer spending attributable to the COVID-19 pandemic. However, in the fourth quarter of Fiscal 2020 and continuing into the first quarter of Fiscal 2021, we experienced higher consumer demand due to the perceived safety of RV travel. At November 28, 2020, backlog levels were higher than the first quarter of Fiscal 2020 due to the increase in demand. Despite the increase in demand, consumer buying activity may still decline if there are additional shut downs within our dealer networks. The current COVID-19 pandemic has caused a global economic slowdown, and the possibility of a global recession. In the event of a recession, demand for our products would decline

~~Table of Contents~~

and our business and results of operations would be adversely affected. When a vaccine is introduced, we could also see a decline in sales as consumers start to feel safer with other modes of transportation.

We continue to monitor ~~the rapidly evolving situation and~~ guidance from international and domestic authorities, including federal, state and local public health authorities, regarding the COVID-19 pandemic and may take additional actions based on their requirements and recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our operating plan. ~~As such, given~~Overall, there has been strong retail demand by consumers of RVs as a safe travel option, and of marine products as a safe way to experience the ~~dynamic nature of this situation, we cannot reasonably estimate the impacts of~~outdoors, during the COVID-19 ~~pandemic on~~pandemic. Our production has experienced certain supply shortages, and if supply shortages continue or there are additional disruptions in our supply chain, it could materially or adversely impact our operating results and financial ~~condition, results of operations or cash flows~~condition. Despite certain supply shortages, we continue to actively manage through these temporary supply chain disruptions. Refer to the COVID-19 related risk factors disclosed in ~~the future. In addition, see~~ Item 1A ~~"Risk Factors"~~of Part I in our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021.

Non-GAAP ~~Reconciliation~~Financial Measures

This MD&A includes financial information prepared in accordance with ~~accounting principles~~ generally accepted ~~in the U.S.~~accounting principles ("GAAP"), as well as certain adjusted or non-GAAP financial measures such as EBITDA and Adjusted EBITDA. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other pretax adjustments made in order to present comparable results from period to period.

These non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, have been provided as information supplemental and in addition to the financial measures presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein. The non-GAAP financial measures presented may differ from similar measures used by other companies.

~~Refer to the Results~~Included in "Results of Operations - Current Quarter Compared to the Comparable Prior Year ~~Quarter for~~Quarter" is a ~~detailed~~ reconciliation of ~~items that impacted~~ EBITDA and Adjusted ~~EBITDA.~~EBITDA from net income, the nearest GAAP measure. We have included these non-GAAP performance measures as a comparable measure to illustrate the effect of non-recurring transactions ~~occurring~~that occurred during the reported periods and to improve comparability of our results from period to period. We believe Adjusted EBITDA provides meaningful supplemental information about our operating performance ~~because these measures exclude~~as this measure excludes amounts from net income that we do not consider part of our core

Table of Contents

operating results when assessing our performance. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, litigation reserves, restructuring expenses, gain or loss on sale of property, plant and equipment, contingent consideration fair value adjustment, and non-operating ~~income.~~income or loss.

Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our ~~board~~Board of ~~directors~~Directors to enable our ~~board~~Board of ~~directors~~Directors to have the same measurement basis of operating performance as is used by management in ~~its assessments~~their assessment of performance and in ~~forecasting and budgeting for our company;~~forecasting; (d) to evaluate potential acquisitions; and (e) to ensure compliance with covenants and restricted activities under the terms of our ABL ~~credit facility~~Credit Facility and outstanding notes, as further described in Note 9 ~~Long-Term Debt, of~~to the ~~Notes to Condensed~~ Consolidated Financial Statements included in Item 1 of Part I~~Condensed Consolidated Financial Statements,~~ of this Quarterly Report on Form 10-Q. We believe these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in ~~our~~the industry.

~~Reportable Segments~~

We have six operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine, and 6) Winnebago specialty vehicles. We evaluate performance based on each operating segment's Adjusted EBITDA, as defined below, which excludes certain corporate administration expenses and non-operating income and expense.

Our two reportable segments include: 1) Towable (comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an aggregation of the Winnebago towables and Grand Design towables operating segments and 2) Motorhome (comprised of products that include a motorized chassis as well as other related manufactured products and services), which is an aggregation of the Winnebago motorhomes and Newmar motorhomes operating segments.

The Corporate / All Other category includes the Chris-Craft marine and Winnebago specialty vehicles operating segments as well as expenses related to certain corporate administration expenses for the oversight of the enterprise. These expenses include items such as corporate leadership and administration costs.

Industry Trends

~~Key reported statistics for the North American~~The RV ~~industry are as follows:~~

•~~Wholesale unit shipments: RV product delivered~~and marine industries continue to ~~the dealers, which is reported monthly by the Recreation Vehicle Industry Association ("RVIA")~~

•~~Retail unit registrations: consumer purchases~~experience supply shortages and shipping delays of ~~RVs from dealers, which is reported monthly by Stat Surveys~~

~~Table of Contents~~

~~We track RV Industry conditions using~~raw material components. While we continue to manage through these ~~key statistics~~supply disruptions, they have impacted our ability to ~~monitor trends and evaluate and understand our performance relative~~increase production to ~~the overall industry. The following is an analysis of changes in these key statistics for the rolling 12 months through October as of 2020 and 2019:~~

US and Canada Industry
Wholesale Unit Shipments per RVIA Retail Unit Registrations per Stat Surveys
Rolling 12 Months through October Rolling 12 Months through October
2020 2019 Unit Change % Change 2020 2019 Unit Change % Change
Towable(1)
356,270 352,496 3,774 1.1 % 428,617 396,136 32,481 8.2 %
Motorhome(2)
39,011 47,726 (8,715) (18.3) % 50,987 52,625 (1,638) (3.1) %
Combined 395,281 400,222 (4,941) (1.2) % 479,604 448,761 30,843 6.9 %

~~(1) Towable: Fifth wheel and travel trailer products.~~

~~(2) Motorhome: Class A, B, and C products.~~

The rolling twelve months shipments for 2020 compared to 2019 reflect a contraction in shipments, particularly in motorhome, as dealers rationalized inventory during the period September 2019 through December 2019. Shipments returned to growth starting in January 2020. Due to the onset of the COVID-19 pandemic in March 2020, evidenced by an industry wide shutdown of RV manufacturing in April 2020, shipments declined year over year for the period of March 2020 through May 2020. Shipments have returned to growth from June 2020 through October 2020 due to high levels of end consumermeet existing demand and extremely low levels of dealer inventories. The rolling twelve months retail information for 2020 and 2019 illustrates that retail sales remain at healthy levels relative to the industry's historical retail levels. We believe retail demand is the key driver to continued growth in the ~~industry.~~

~~The most recent RVIA wholesale shipment forecasts for calendar year 2021, as noted~~current fiscal year. If these shortages and delays worsen, we could experience a negative impact on our sales and earnings in the table below, indicate that industry shipments are expected to experience growth in 2021. The retail activity is anticipated to remain at healthy levels, and wholesale shipments are expected to reflect a rebound associated with dealers rebuilding their inventories.

Calendar Year
Wholesale Unit Shipment Forecast per RVIA(1)
2021
Forecast 2020
Actual Unit Change % Change
Aggressive 515,400 423,600 91,800 21.7 %
Most likely 502,900 423,600 79,300 18.7 %
Conservative 490,300 423,600 66,700 15.7 %

~~(1) Prepared by ITR Economics for RVIA and reported in the Roadsigns RV Winter 2020 Industry Forecast Issue.~~

~~Market Share~~

Our retail unit market share, as reported by Stat Surveys based on state records, is illustrated below. Market share is calculated by taking our brands total unit sales divided by the total units sold in the motorized and travel trailer and fifth wheel markets. The data is used to analyze growth and profitability of our products and brands year over year. Note that this data is subject to adjustment and is continuously updated.

Rolling 12 Months through October Calendar Year
US and Canada
2020(1)
2019 2019 2018 2017
Travel trailer and fifth wheels 10.3 % 9.1 % 9.3 % 7.8 % 6.1 %
Motorhome A, B, C 21.1 % 15.3 % 16.1 % 15.5 % 16.3 %
Total market share 11.4 % 9.8 % 10.1 % 8.7 % 7.4 %

~~(1) Includes retail unit market share for Newmar since its acquisition on November 8, 2019.~~

~~Enterprise Resource Planning System~~

In the second quarter of Fiscal 2015, our Board of Directors approved the strategic initiative of implementing an enterprise resource planning ("ERP") system to replace our legacy business applications. The new ERP platform will provide better support for our changing business needs and plans for future growth. Our initial cost estimates have grown for additional needs of the business, such as the opportunity to integrate the ERP system with additional manufacturing systems. The project includes software, external implementation assistance, and increased internal staffing directly related to this initiative. We anticipate that approximately 40% of the cost will be expensed in the period incurred and 60% will be capitalized and depreciated over its useful life.

~~Table of Contents~~

~~The following table illustrates the cumulative project costs:~~

Three Months Ended Fiscal Year Cumulative Investment
(in thousands) November 28,
2020 2020 2019 Fiscal 2015-2020
Capitalized $ 1,272 $ 3,891 $ 3,875 $ 27,949 59.1 %
Expensed 687 1,788 3,709 19,350 40.9 %
Total $ 1,959 $ 5,679 $ 7,584 $ 47,299 100.0 %
future.

Results of Operations - Current Quarter Compared to the Comparable Prior Year Quarter

Consolidated Performance Summary

The following is an analysis of changes in key items included in the ~~consolidated statements~~Consolidated Statements of ~~income and comprehensive income~~Income for the three months ended November ~~28, 2020~~27, 2021 compared to the three months ended November ~~30, 2019:~~28, 2020:


	Three Months Ended
($ in thousands, except per share data)	November 27, 2021		% of Revenues(1)		November 28, 2020		% of Revenues(1)		$ Change		% Change
Net revenues	$	1,155,740	100.0	%	$	793,131	100.0	%	$	362,609	45.7	%
Cost of goods sold	926,328		80.2	%	656,127		82.7	%	270,201		41.2	%
Gross profit	229,412		19.8	%	137,004		17.3	%	92,408		67.4	%
Selling, general, and administrative expenses	74,870		6.5	%	48,399		6.1	%	26,471		54.7	%
Amortization	8,172		0.7	%	3,590		0.5	%	4,582		127.6	%
Total operating expenses	83,042		7.2	%	51,989		6.6	%	31,053		59.7	%
Operating income	146,370		12.7	%	85,015		10.7	%	61,355		72.2	%
Interest expense, net	10,242		0.9	%	9,941		1.3	%	301		3.0	%
Non-operating loss	6,357		0.6	%	94		—	%	(6,263)		6,662.8	%
Income before income taxes	129,771		11.2	%	74,980		9.5	%	54,791		73.1	%
Provision for income taxes	30,141		2.6	%	17,557		2.2	%	12,584		71.7	%
Net income	$	99,630	8.6	%	$	57,423	7.2	%	$	42,207	73.5	%

Diluted earnings per share	$	2.90			$	1.70			$	1.20	70.6	%
Diluted weighted average shares outstanding	34,378				33,839				539		1.6	%

Three Months Ended
(in thousands, except percent and per share data) November 28, 2020
% of Revenues(1)
November 30, 2019
% of Revenues(1)
$ Change % Change
Net revenues $ 793,131 100.0 % $ 588,458 100.0 % $ 204,673 34.8 %
Cost of goods sold 656,127 82.7 % 509,845 86.6 % 146,282 28.7 %
Gross profit 137,004 17.3 % 78,613 13.4 % 58,391 74.3 %
Selling, general, and administrative expenses 48,399 6.1 % 51,105 8.7 % (2,706) (5.3) %
Amortization of intangible assets 3,590 0.5 % 3,614 0.6 % (24) (0.7) %
Total operating expenses 51,989 6.6 % 54,719 9.3 % (2,730) (5.0) %
Operating income 85,015 10.7 % 23,894 4.1 % 61,121 255.8 %
Interest expense 9,941 1.3 % 6,049 1.0 % 3,892 64.3 %
Non-operating loss (income) 94 — % (116) — % (210) (181.0) %
Income before income taxes 74,980 9.5 % 17,961 3.1 % 57,019 317.5 %
Provision for income taxes 17,557 2.2 % 3,893 0.7 % 13,664 351.0 %
Net income $ 57,423 7.2 % $ 14,068 2.4 % $ 43,355 308.2 %
Diluted income per share $ 1.70 $ 0.44 $ 1.26 286.4 %
Diluted average shares outstanding 33,839 32,267 1,572 4.9 %

(1) Percentages may not add due to rounding differences.

Net revenues increased ~~in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020~~ primarily due to ~~organic~~ unit growth ~~pricing actions including lower allowances,~~ and ~~our acquisition of Newmar.~~price increases.

Gross profit as a percentage of revenue increased primarily due to improved operating leverage on higher revenues, price increases, productivity initiatives, and favorable segment mix, partially offset by higher material and component costs.

Operating expenses increased primarily due to higher selling costs from improved operating performance, acquisition-related costs, incremental amortization, and normal operating expenses of Barletta.

Non-operating loss increased due to the contingent consideration fair value adjustment related to the acquisition of Barletta.

Our effective tax rate was relatively flat in the first quarter of Fiscal ~~2021~~2022 compared to the first quarter of Fiscal ~~2020~~2021 primarily due to improved leverage as a result of higher revenues, pricing actions including lower allowances and productivity initiatives partially offset by the dilutive impact of mix related to the Newmar acquisition.

Operating expenses decreased in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020 due to prior year acquisition-related costs, and in the current year a gain recognized on the sale of certain assets, partially offset by incremental Newmar operating costs and an increase in variable compensation.

Interest expense increased in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020 primarily due to the additional interest expense related to the Convertible Notes issued in connection with the acquisition of Newmar.

The effective tax rate increased to 23.4% for the first quarter of Fiscal 2021 compared to 21.7% for the first quarter of Fiscal 2020 due primarily to a favorable benefit in the prior year related to stock compensation.

Net income and diluted income per share increased in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020 primarily due to the profitability impact of higher organic revenues and improved profit margins, partially offset by a higher effective tax rate.

2623

Table of Contents

to the impact of a net favorable benefit in the current year related to stock compensation, offset by an increase to the rate due to consistent tax credits year-over-year and increased income in the current year.

Net income and diluted earnings per share increased primarily due to leverage gained on higher revenues, partially offset by increased operating expenses and higher income tax expense.

Non-GAAP Reconciliation

The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the three months ended November ~~28, 2020~~27, 2021 and November ~~30, 2019:~~

Three Months Ended
(in thousands) November 28,
2020 November 30,
2019
Net income $ 57,423 $ 14,068
Interest expense 9,941 6,049
Provision for income taxes 17,557 3,893
Depreciation 4,160 3,586
Amortization of intangible assets 3,590 3,614
EBITDA 92,671 31,210
Acquisition-related fair-value inventory step-up — 1,176
Acquisition-related costs — 9,950
Restructuring expenses 93 (172)
Gain on sale of property and equipment (3,565) —
Non-operating loss (income) 94 (116)
Adjusted EBITDA $ 89,293 $ 42,048
28, 2020:


	Three Months Ended
(in thousands)	November 27, 2021		November 28, 2020
Net income	$	99,630	$	57,423
Interest expense, net	10,242		9,941
Provision for income taxes	30,141		17,557
Depreciation	5,306		4,160
Amortization	8,172		3,590
EBITDA	153,491		92,671
Acquisition-related costs	3,384		—
Litigation reserves	4,000		—
Gain on sale of property, plant and equipment	—		(3,565)
Restructuring expenses	—		93
Contingent consideration fair value adjustment	6,370		—
Non-operating (income) loss	(13)		94
Adjusted EBITDA	$	167,232	$	89,293

Table of Contents

Reportable Segment Performance Summary

Towable

The following is an analysis of key changes in our Towable segment for the three months ended November ~~28, 2020~~27, 2021 compared to the three months ended November ~~30, 2019:~~28, 2020:


	Three Months Ended
(in thousands, except ASP and units)	November 27, 2021		% of Revenues		November 28, 2020		% of Revenues		$ Change		% Change
Net revenues	$	651,024			$	454,901			$	196,123	43.1	%
Adjusted EBITDA	112,077		17.2	%	63,143		13.9	%	48,934		77.5	%

Average Selling Price ("ASP")(1)	39,237				32,089				7,148		22.3	%

	Three Months Ended
Unit deliveries	November 27, 2021		Product Mix(2)		November 28, 2020		Product Mix(2)		Unit Change		% Change
Travel trailer	11,143		67.8	%	9,160		64.4	%	1,983		21.6	%
Fifth wheel	5,288		32.2	%	5,054		35.6	%	234		4.6	%
Total towables	16,431		100.0	%	14,214		100.0	%	2,217		15.6	%

	November 27, 2021				November 28, 2020				Change		% Change
Backlog(3)
Units	48,759				29,659				19,100		64.4	%
Dollars	$	1,874,847			$	865,420			$	1,009,427	116.6	%
Dealer Inventory
Units	15,344				12,637				2,707		21.4	%

(1)

Three Months Ended
(in thousands, except ASP) November 28,
2020 % of Revenues November 30,
2019 % of Revenues $ Change % Change
Net revenues $ 454,901 $ 341,250 $ 113,651 33.3 %
Adjusted EBITDA 63,143 13.9 % 35,785 10.5 % 27,358 76.5 %
Average Selling Price ("ASP")(1)
32,089 32,998 (909) (2.8) %
Three Months Ended
Unit deliveries November 28,
2020
Product Mix(2)
November 30,
2019
Product Mix(2)
Unit Change % Change
Travel trailer 9,160 64.4 % 6,336 59.8 % 2,824 44.6 %
Fifth wheel 5,054 35.6 % 4,263 40.2 % 791 18.6 %
Total towables 14,214 100.0 % 10,599 100.0 % 3,615 34.1 %
($ in thousands) November 28, 2020 November 30, 2019 Change % Change
Backlog
Units 29,659 7,174 22,485 313.4 %
Dollars $ 865,420 $ 242,853 $ 622,567 256.4 %
Dealer Inventory
Units 12,637 17,843 (5,206) (29.2) %

~~(1)~~ Average selling price excludes off-invoice dealer incentives.

(2) Percentages may not add due to rounding differences.

(3) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.

Net revenues increased primarily due to unit growth and price increases.

Adjusted EBITDA increased primarily due to operating leverage on an increase in unit sales, partially offset by higher operating expenses.

2725

Table of Contents

Net revenues increased in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020 driven by unit growth. Industry retail unit sales on a trailing three months through October 2020 as reported by SSI in December 2020 grew 27.2% while our Towable segment grew by 36.9% reflecting an increase in our market share.Motorhome

Adjusted EBITDA increased in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020 due to an increase in unit sales, lower allowances and operating leverage driven by our strong sales growth.

We have seen an increase in backlog as of November 28, 2020 compared to November 30, 2019 due to the continued strong retail demand by consumers of RVs as a safe travel option during the COVID-19 pandemic. As a result of this high retail demand, dealer inventory levels are lower, creating higher order backlog.

~~Motorhome~~

The following is an analysis of key changes in our Motorhome segment for the three months ended November ~~28, 2020~~27, 2021 compared to the three months ended November ~~30, 2019:~~28, 2020:


	Three Months Ended
(in thousands, except ASP and units)	November 27, 2021		% of Revenues		November 28, 2020		% of Revenues		$ Change		% Change
Net revenues	$	421,479			$	322,389			$	99,090	30.7	%
Adjusted EBITDA	50,153		11.9	%	30,343		9.4	%	19,810		65.3	%

ASP(1)	$	152,550			$	136,887			15,663		11.4	%

	Three Months Ended
Unit deliveries	November 27, 2021		Product Mix(2)		November 28, 2020		Product Mix(2)		Unit Change		% Change
Class A	744		27.2	%	598		25.7	%	146		24.4	%
Class B	1,447		52.9	%	1,098		47.1	%	349		31.8	%
Class C	544		19.9	%	634		27.2	%	(90)		(14.2)	%
Total motorhomes	2,735		100.0	%	2,330		100.0	%	405		17.4	%

	November 27, 2021				November 28, 2020				Change		% Change
Backlog(3)
Units	18,826				13,217				5,609		42.4	%
Dollars	$	2,412,625			$	1,709,154			$	703,471	41.2	%
Dealer Inventory
Units	2,468				2,123				345		16.3	%

Three Months Ended
(in thousands, except ASP) November 28,
2020 % of Revenues November 30,
2019 % of Revenues $ Change % Change
Net revenues $ 322,389 $ 225,891 $ 96,498 42.7 %
Adjusted EBITDA 30,343 9.4 % 9,331 4.1 % 21,012 225.2 %
ASP(1)
136,887 119,749 17,138 14.3 %
Three Months Ended
Unit deliveries November 28,
2020
Product Mix(2)
November 30,
2019
Product Mix(2)
Unit Change % Change
Class A 598 25.7 % 399 21.2 % 199 49.9 %
Class B 1,098 47.1 % 809 43.0 % 289 35.7 %
Class C 634 27.2 % 674 35.8 % (40) (5.9) %
Total motorhomes 2,330 100.0 % 1,882 100.0 % 448 23.8 %
($ in thousands) November 28, 2020 November 30, 2019 Change % Change
Backlog
Units 13,217 2,631 10,586 402.4 %
Dollars $ 1,709,154 $ 384,201 $ 1,324,953 344.9 %
Dealer Inventory
Units 2,123 5,169 (3,046) (58.9) %

(1) ASP excludes off-invoice dealer incentives.

(2) Percentages may not add due to rounding differences.

Net revenues increased ~~in the first quarter of Fiscal 2021 compared to the first quarter of Fiscal 2020~~ primarily due to ~~our acquisition of Newmar, organic~~ unit growth and ~~increased pricing.~~price increases.

Adjusted EBITDA ~~increased in the first quarter of Fiscal 2021 compared~~increased primarily due to ~~the first quarter of Fiscal 2020 driven by productivity initiatives, pricing actions, higher revenue and associated~~ operating leverage ~~improvements, and our acquisition of Newmar.~~

~~We have seen~~on an increase in ~~the volume~~unit sales and ~~dollar value of backlog as of November 28, 2020 compared to November 30, 2019 due to the continued strong retail demand~~productivity initiatives, partially offset by ~~consumers of RVs as a safe travel option during the COVID-19 pandemic. As a result of this high retail demand, dealer inventory levels are lower, creating~~ higher ~~order backlog.~~operating expenses.

2826

Table of Contents

Marine

The following is an analysis of key changes in our Marine segment for the three months ended November 27, 2021 compared to the three months ended November 28, 2020:


	Three Months Ended
(in thousands, except ASP and units)	November 27, 2021		% of Revenues		November 28, 2020		% of Revenues		$ Change		% Change
Net revenues	$	79,318			$	11,894			$	67,424	566.9	%
Adjusted EBITDA	10,570		13.3	%	854		7.2	%	9,716		1,137.7	%

ASP(1)	$	69,935			$	195,103			(125,168)		(64.2)	%

	Three Months Ended
Unit deliveries	November 27, 2021				November 28, 2020				Unit Change		% Change
Boats	1,135				61				1,074		1,760.7	%

	November 27, 2021				November 28, 2020				Change		% Change
Backlog(3)
Units	3,002				317				2,685		847.0	%
Dollars	$	257,248			$	61,848			$	195,400	315.9	%
Dealer Inventory
Units	1,446				155				1,291		832.9	%

(1) ASP excludes off-invoice dealer incentives.

(2) Percentages may not add due to rounding differences.

Net revenues increased primarily due to the acquisition of Barletta at the beginning of the first quarter of Fiscal 2022.

Adjusted EBITDA increased primarily due to the acquisition of Barletta at the beginning of the first quarter of Fiscal 2022.

Analysis of Financial Condition, Liquidity, and Resources

Cash Flows

The following table summarizes our cash flows from ~~operations for the three months ended November 28, 2020 and November 30, 2019:~~

Three Months Ended
(in thousands) November 28,
2020 November 30,
2019
Total cash provided by (used in):
Operating activities $ (2,670) $ 79,033
Investing activities (1,148) (270,661)
Financing activities (15,818) 255,525
Net (decrease) increase in cash and cash equivalents $ (19,636) $ 63,897
operations:


	Three Months Ended
(in thousands)	November 27, 2021		November 28, 2020
Total cash provided by (used in):
Operating activities	$	56,549	$	(2,670)
Investing activities	(251,410)		(1,148)
Financing activities	(28,318)		(15,818)
Net increase (decrease) in cash and cash equivalents	$	(223,179)	$	(19,636)

Operating Activities

Cash provided by operating activities ~~decreased for~~increased due to higher profitability, partially offset by investments in working capital to support current year revenue growth, including a $70.3 million increase in inventory to support customer demand, a $7.2 million increase in accounts receivable due to timing of invoicing/collections and a $17.7 million decrease in accounts payable due to timing of payments in the three months ended November ~~28, 2020 compared to the three months ended November 30, 2019 primarily due to an increase in our inventory partially offset by higher profitability in the first quarter of Fiscal~~27, 2021.

Investing Activities

Cash used in investing activities ~~decreased for the three months ended November 28, 2020 compared to the three months ended November 30, 2019~~increased primarily due to our acquisition of ~~Newmar~~Barletta during the first quarter of Fiscal ~~2020.~~2022.

Table of Contents

Financing Activities

Cash ~~provided by~~used in financing activities ~~for the three months ended November 28, 2020 compared to cash used for three months ended November 30, 2019 changed~~increased primarily ~~due to the issuance of Convertible Notes issued in the first quarter of Fiscal 2020 to finance our acquisition of Newmar and~~ due to an increase in stock repurchases in the first quarter of Fiscal ~~2021.~~2022.

Debt and Capital

~~During the first quarter of Fiscal 2020, we issued the Convertible Notes, which were used to partially fund the Newmar acquisition. Refer to Note 9,~~ ~~Long-Term Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional details.~~

On July 8, 2020, we closed our private offering (the "Senior Secured Notes Offering") of $300 million in aggregate principal amount of 6.25% senior secured notes due 2028 (the "Senior Secured Notes"). The proceeds from the Senior Secured Notes were used to repay the remaining debt on the term loan and for general corporate purposes. Refer to Note 9, ~~Long-Term Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional details.~~

We maintain a $192.5 million asset-based revolving credit facility ("ABL Credit Facility") with a maturity date of October 22, 2024 subject to certain factors which may accelerate the maturity date. As of November ~~28, 2020,~~27, 2021, we had no borrowings against the ~~ABL.~~ABL Credit Facility.

As of November ~~28, 2020,~~27, 2021, we had ~~$272.9~~$211.4 million in cash and cash equivalents and $192.5 million in unused ABL Credit Facility. Our cash and cash equivalent balances consist of high quality, short-term money market instruments.

We believe cash flow from operations, existing lines of credit, and access to debt and capital markets will be sufficient to meet our current liquidity needs, and we have committed liquidity and cash reserves in excess of our anticipated funding requirements. We evaluate the financial stability of the counterparties for the Convertible Notes, the Senior Secured Notes, and the ABL Credit Facility, and will continue to monitor counterparty risk on an on-going basis.

Other Financial Measures

Working capital at November ~~28, 2020~~27, 2021 and August ~~29, 2020~~28, 2021 was ~~$475.0~~$502.5 million and ~~$413.2~~$651.6 million, respectively. We currently expect cash on hand, funds generated from operations, and the borrowing available under our ABL Credit Facility to be sufficient to cover both short-term and long-term operating requirements.

~~Table of Contents~~

Share Repurchases and Dividends

We repurchase our common stock and pay dividends pursuant to programs approved by our Board of Directors. Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain a debt leverage ratio within our targeted zone, maintain reasonable liquidity, and then return excess cash over time to shareholders through dividends and share repurchases.

On October ~~18, 2017,~~13, 2021, our Board of Directors authorized a new share repurchase program in the amount of ~~$70.0 million. There is~~$200.0 million with no time restriction on the ~~authorization.~~authorization, which took effect immediately and replaced the prior program. In the ~~first quarter of Fiscal~~three months ended November 27, 2021, we repurchased ~~203,950~~281,000 shares of our own common stock at a cost of ~~$10.0~~$19.6 million under this authorization, and ~~29,449~~55,000 shares at a cost of ~~$1.6~~$4.1 million to satisfy tax obligations on employee equity awards vested. We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL ~~credit facility~~Credit Facility and Senior Secured Notes, we may purchase shares in the future. At November ~~28, 2020,~~27, 2021, we have ~~$58.8~~$190.0 million remaining on our ~~board~~Board approved repurchase authorization.

On December ~~16, 2020,~~15, 2021, our Board of Directors approved a quarterly cash dividend of ~~$0.12~~$0.18 per share payable on January ~~27, 2021,~~26, 2022, to common stockholders of record at the close of business on January ~~13, 2021.~~12, 2022.

Contractual Obligations and Commercial Commitments

There has been no material change in our contractual obligations since the end of Fiscal ~~2020. Refer to Note 9,~~ ~~Long-Term Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional details on the Convertible Notes and Senior Secured Notes, and see~~2021. See our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020~~28, 2021 for additional information regarding our contractual obligations and commercial commitments.

~~Significant~~Critical Accounting Policies ~~and Estimates~~

We describe our significant accounting policies in Note 1 ~~Summary of Significant Accounting Policies, of~~to the ~~Notes to~~ Consolidated Financial Statements included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021. We discuss our critical accounting estimates in Item 7 ~~Management's Discussion and Analysis~~ of ~~Financial Condition and Results~~Part II of ~~Operations, in~~ our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021. There have been no ~~significant~~material changes into our significant accounting policies or critical accounting ~~estimates~~policies since the end of Fiscal ~~2020.~~2021.

~~New~~Recently Issued Accounting Pronouncements

For a ~~description~~summary of ~~new~~recently issued applicable accounting pronouncements, see Note 1 ~~Basis of Presentation, of~~to the ~~Notes to Condensed~~ Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Safe Harbor Statement Under the Private Securities Litigation Reform Act

Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), provide a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their companies. With the exception of historical information, the matters discussed in this Quarterly Report on Form 10-Q are forward-looking statements and may be identified by the use of words such as "anticipate," "assume," ~~"believe,~~

Table of Contents

"believe," "estimate," "expect," "guidance," "intend," "outlook," "plan," "project," and other words and terms of similar meaning. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment, and other events. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in such forward-looking statements. Readers should review Item 1A ~~Risk Factors~~,of Part I of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020,~~28, 2021, and Item 1A ~~Risk Factors, in~~of Part II of this Quarterly Report on Form 10-Q, for a description of important factors that could cause our actual results to differ materially from those contemplated by the forward-looking statements made in this Quarterly Report on Form 10-Q. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: competition and new product introductions by competitors, our ability to attract and retain qualified personnel, increases in market compensation rates, business or production disruptions, sales order cancellations, risk related to the terms of our credit agreements and compliance with debt covenants and leverage ratios, stock price volatility and share dilution, disruptions or unanticipated costs from facility expansions, availability of labor, a slowdown in the economy, low consumer confidence, the effect of global tensions, increases in interest rates, availability of credit

•, availability of financing for RV and marine dealers, impairment of goodwill, risk related to cyclicality and seasonality of our business, slower than anticipated sales of new or existing products, integration of operations relating to merger and acquisition activities generally, our acquisition of Newmar, the possibility that the Newmar acquisition may not perform as expected or may not result in earnings growth, difficulties and expenses related to integrating Newmar into our business, increased focus of management attention and resources on the acquisition of Newmar, risks related to the Convertible Notes and Senior Secured Notes, including our ability to satisfy our obligations under the Convertible Notes and Senior Secured Notes, risks related to our recent Convertible Note hedge and warrant transactions, inadequate liquidity or capital resources, inventory and distribution channel management, our ability to innovate, our reliance on large dealer organizations, significant increase in repurchase obligations, availability and price of fuel, availability of chassis and other key component parts, increased material and component costs, exposure to warranty claims, ability to protect our intellectual property, exposure to product liability claims, dependence on

~~Table of Contents~~

~~information systems and web applications, any unexpected expenses related to the implementation of our ERP system, the duration and scope of~~Uncertainty surrounding the COVID-19 pandemic, actions governments, businesses, and individuals take in response to the COVID-19 pandemic, including mandatory business closures and restrictions of onsite commercial interactions; the impact of the pandemic and actions taken in response to the pandemic on regional economies and economic activity; the pace of recovery when the COVID-19 pandemic subsides; and generalpandemic.

•General economic uncertainty in key markets and a worsening of domestic economic conditions or low levels of economic ~~growth, risk~~growth.

•Availability of financing for RV and marine dealers.

•Ability to innovate and commercialize new products.

•Ability to manage our inventory to meet demand.

•Competition and new product introductions by competitors.

•Risk related to cyclicality and seasonality of our business.

•Significant increase in repurchase obligations.

•Business or production disruptions.

•Inadequate inventory and distribution channel management.

•Ability to retain relationships with our suppliers.

•Increased material and component costs, including availability and price of fuel and other raw materials.

•Ability to integrate mergers and acquisitions.

•Ability to attract and retain qualified personnel and changes in market compensation rates.

•Exposure to warranty claims.

•Ability to protect our information technology systems from data security, ~~governmental~~cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems.

•Ability to retain brand reputation and related exposure to product liability claims.

•Governmental regulation, including for climate ~~change, risk~~change.

•Impairment of goodwill.

•Risks related to ~~anti-takeover provisions applicable~~our Convertible and Senior Secured Notes, including our ability to ~~us, cyber-attacks and other factors.~~ satisfy our obligations under these notes.

We caution that the foregoing list of important factors is not complete. Any forward-looking statements speak only as of the date they are made, and we assume no obligation to update any forward-looking statement that we may make.

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk

The assets we maintain to fund deferred compensation have market risk, but we maintain a corresponding liability for these assets. The market risk is therefore borne by the participants in the deferred compensation program.

Interest rate risk

As of November ~~28, 2020,~~27, 2021, we have no interest rate swaps outstanding and the Term Loan, that had been subject to variable interest rates, was repaid in the fourth quarter of Fiscal 2020 using the proceeds from the Senior Secured Notes. The ABL Credit Facility is our only floating rate debt instrument which remains undrawn as of November ~~28, 2020.~~27, 2021.

Item 4. Controls and ~~Procedures.~~Procedures

Evaluation of Disclosure Controls and Procedures

We maintain "disclosure controls and procedures", as such term is defined under Securities Exchange Act of 1934, as amended ("Exchange Act") Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures and believes that such controls and procedures are effective at the reasonable assurance level.

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, ~~has~~ evaluated the effectiveness of the design and operation of our disclosure controls and procedures ~~required by~~(as defined in Rule 13a-15(e) under the Securities Exchange Act ~~Rule 13a-15(b)~~of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer ~~have~~ concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Changes in Internal Control Over Financial Reporting

We are implementing an ERP system, which is expected to improve the efficiency of certain financial and related transaction processes. The implementation of an ERP system will likely affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness. As future phases of the ERP implementation are completed, internal controls over financial reporting will be tested for effectiveness with respect to the scope of the phase completed. We concluded, as part of our evaluation described in the above paragraphs, that the implementation of ERP in these circumstances has not materially affected our internal control over financial reporting. The implementation is continuing in a phased approach and will continue to be evaluated for effect on our internal control over financial reporting.

There were no ~~other~~ changes in our internal control over financial reporting that occurred during the first quarter of Fiscal ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3129

Table of Contents

PART II. OTHER ~~INFORMATION.~~INFORMATION

Item 1. Legal ~~Proceedings.~~Proceedings

For a description of our legal proceedings, see Note 11 ~~Contingent Liabilities and Commitments, of~~to the ~~Notes to Condensed~~ Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Item 1A. Risk ~~Factors.~~Factors

There have been no material changes from the risk factors previously disclosed in ~~Part I,~~ Item 1A ~~Risk Factors~~,of Part I of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds

Purchases of our common stock during each fiscal month of the first quarter of Fiscal ~~2021 were:~~

Period
Total Number of Shares Purchased(1)
Average Price Paid per Share
Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(2)(3)
08/30/20 - 10/03/20 — $ — — $ 68,761,000
10/04/20 - 10/31/20 170,174 50.30 141,662 61,761,000
11/01/20 - 11/28/20 63,225 48.12 62,288 58,761,000
Total 233,399 $ 49.71 203,950 $ 58,761,000
2022 are as follows:


Period(1)	Total Number of Shares Purchased(2)	Average Price Paid per Share		Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(3)
08/29/21 - 10/02/21	134,981	$	71.12	134,981	$	13,761,000
10/03/21 - 10/30/21	144,977	69.78		89,986	194,000,000
10/31/21 - 11/27/21	55,979	71.46		55,979	190,000,000
Total	335,937	$	70.60	280,946	$	190,000,000

(1)Number of shares in the table are shown in whole numbers.

(2) Shares not purchased as part of a publicly announced program were repurchased from employees who vested in Company shares and elected to pay their payroll tax via the value of shares delivered as opposed to cash.

~~(2) Pursuant~~(3) Prior to October 13, 2021, pursuant to a ~~$70.0~~$70 million share repurchase program authorized by our Board of Directors on October 18, 2017. On and after October 13, 2021, pursuant to a new $200.0 million share repurchase program authorized by our Board of Directors on October 13, 2021. There is no time restriction on the authorization.

~~(3) Adjustment in dollar amount for repurchases remaining from prior quarter reflects a correction in the counting of share repurchases against share authorizations.~~

Our ~~senior secured notes,~~Senior Secured Notes, as defined in Note 9 ~~Long-Term Debt, of~~to the ~~Notes to Condensed~~ Consolidated Financial Statements included in Item 1 ~~Condensed Consolidated Financial Statements~~,of Part I of this Quarterly Report on Form 10-Q, contains occurrence based restrictions that may limit our ability to make distributions or payments with respect to purchases of our common stock without consent of the lenders, except for limited purchases of our common stock from employees, in the event of a significant reduction in our EBITDA or in the event of a significant borrowing on our ABL Credit Facility.

3230

Table of Contents

Item 6. ~~Exhibits.~~Exhibits


~~3a.~~			~~Articles of Incorporation of the Registrant, as amended and restated on December 17, 2020, and incorporated by reference herein.~~
~~3b.~~3c.			Amended By-Laws of the Registrant ~~previously filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated March 16, 2016 (Commission File Number 001-06403) and incorporated by reference herein.~~effective December 1, 2021.
~~3c.~~			~~Articles of Amendment as filed with the Iowa Secretary of State on December 17, 2020, and incorporated by reference herein.~~
4.1			Indenture, dated November 1, 2019, by and between Winnebago Industries, Inc. and U.S. Bank National Association ~~previously filed as~~(incorporated by reference from Exhibit 4.1 ~~with~~to the Registrant’s Current Report on Form 8-K dated October 29, ~~2019.~~2019).

4.2			Form of 1.50% Convertible Senior Note due 2025 (included in Exhibit 4.1).
4.3			Indenture, dated as of July 8, 2020, by and among Winnebago Industries, Inc., the guarantors named therein and U.S. Bank National Association, as trustee, previously filed as Exhibit 4.1 with the Registrant's Current Report on Form 8-K dated July 8, 2020.
4.4			Form of 6.250% Senior Secured Note due 2028 (included in Exhibit 4.3)

31.1			Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2			Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002 (filed herewith).

32.1			Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002 (furnished herewith).

32.2			Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002 (furnished herewith).
~~101~~			~~The following financial statements from our Quarterly Report on Form 10-Q for~~
101.INS			XBRL Instance Document - the ~~first quarter of Fiscal 2021~~instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline Extensible Business Reporting Language ("iXBRL"): (i) the Condensed Consolidated Balance Sheets at November 28, 2020, and August 29, 2020, (ii) the Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended November 28, 2020, and November 30, 2019, (iii) the Condensed Consolidated Statements of Cash Flows for the three months ended November 28, 2020, and November 30, 2019, (iv) the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended November 28, 2020, and November 30, 2019, and (v) the Notes to the Condensed Consolidated Financial Statements.XBRL document (furnished herewith).

101.SCH			Inline XBRL Taxonomy Extension Schema Document (furnished herewith).

101.CAL			Inline XBRL Taxonomy Calculation Linkbase Document (furnished herewith).

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith).

101.LAB			Inline XBRL Taxonomy Label Linkbase Document (furnished herewith).

101.PRE			Inline XBRL Taxonomy Presentation Linkbase Document (furnished herewith).

104			~~The cover page from our Quarterly Report on Form 10-Q for the first quarter of Fiscal 2021 formatted~~Cover Page Interactive Data File (formatted in ~~iXBRL (included as~~Inline XBRL and contained in Exhibit 101) (furnished herewith).

3331

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WINNEBAGO INDUSTRIES, INC.

Date:

December ~~18, 2020~~17, 2021

ByBy:

/s/ Michael J. Happe

Michael J. Happe

Chief Executive Officer, President

(Principal Executive Officer)

Date:

December ~~18, 2020~~17, 2021

ByBy:

/s/ Bryan L. Hughes

Bryan L. Hughes

Chief Financial Officer and Senior Vice President

(Principal Financial and Accounting Officer)

3432


PART I.	FINANCIAL ~~INFORMATION.~~INFORMATION	3
Item 1.	~~Condensed~~ Consolidated Financial ~~Statements.~~Statements	3
	~~Condensed~~ Consolidated Statements of Income and Comprehensive Income	3
	~~Condensed~~ Consolidated Balance Sheets	4
	~~Condensed~~ Consolidated Statements of Cash Flows	5
	~~Condensed~~ Consolidated Statements of Changes in ~~Stockholders'~~Shareholders' Equity	7
	Notes to ~~Condensed~~ Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	2322
Item 3.	Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk	3129
Item 4.	Controls and Procedures.	3129

PART II.	OTHER ~~INFORMATION.~~INFORMATION	3230
Item 1.	Legal Proceedings.	3230
Item 1A.	Risk ~~Factors.~~Factors	3230
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	3230
Item 6.	~~Exhibits.~~Exhibits	3331

SIGNATURES		3432


Supplement cash flow disclosure:
Income taxes received, net	$	(195)	$	(311)
Interest paid	$	2,377	$	5,193

Non-cash transactions:
Issuance of Winnebago common stock for acquisition of business	$	0	$	92,572
Capital expenditures in accounts payable	$	613	$	2,063


($ in thousands)	November 8, 2019		Useful Life-Years
Trade name	$	98,000	Indefinite
Dealer network	64,000		12.0
Backlog	8,800		0.5
Non-compete agreements	1,300		5.0


		November 28, 2020					August 29, 2020
($ in thousands)	Weighted Average Life-Years	Cost		Accumulated Amortization		Weighted Average Life-Years	Cost		Accumulated Amortization
Trade names	Indefinite	$	275,250			Indefinite	$	275,250
Dealer networks	12.1	159,581		$	35,778	12.2	159,581		$	32,487
Backlog	0.5	28,327		28,327		0.5	28,327		28,327
Non-compete agreements	4.3	6,647		4,522		4.1	6,647		4,223
Other intangible assets, gross		469,805		68,627			469,805		65,037
Less accumulated amortization		68,627					65,037
Other intangible assets, net		$	401,178				$	404,768


	US and Canada Industry
	Wholesale Unit Shipments per RVIA					Retail Unit Registrations per Stat Surveys
	Rolling 12 Months through October					Rolling 12 Months through October
	2020	2019	Unit Change	% Change		2020	2019	Unit Change	% Change
Towable(1)	356,270	352,496	3,774	1.1	%	428,617	396,136	32,481	8.2	%
Motorhome(2)	39,011	47,726	(8,715)	(18.3)	%	50,987	52,625	(1,638)	(3.1)	%
Combined	395,281	400,222	(4,941)	(1.2)	%	479,604	448,761	30,843	6.9	%


	Calendar Year
Wholesale Unit Shipment Forecast per RVIA(1)	2021 Forecast	2020 Actual	Unit Change	% Change
Aggressive	515,400	423,600	91,800	21.7	%
Most likely	502,900	423,600	79,300	18.7	%
Conservative	490,300	423,600	66,700	15.7	%


	Rolling 12 Months through October				Calendar Year
US and Canada	2020(1)		2019		2019		2018		2017
Travel trailer and fifth wheels	10.3	%	9.1	%	9.3	%	7.8	%	6.1	%
Motorhome A, B, C	21.1	%	15.3	%	16.1	%	15.5	%	16.3	%
Total market share	11.4	%	9.8	%	10.1	%	8.7	%	7.4	%


	Three Months Ended		Fiscal Year				Cumulative Investment
(in thousands)	November 28, 2020		2020		2019		Fiscal 2015-2020
Capitalized	$	1,272	$	3,891	$	3,875	$	27,949	59.1	%
Expensed	687		1,788		3,709		19,350		40.9	%
Total	$	1,959	$	5,679	$	7,584	$	47,299	100.0	%


	Three Months Ended
(in thousands, except percent and per share data)	November 28, 2020		% of Revenues(1)		November 30, 2019		% of Revenues(1)		$ Change		% Change
Net revenues	$	793,131	100.0	%	$	588,458	100.0	%	$	204,673	34.8	%
Cost of goods sold	656,127		82.7	%	509,845		86.6	%	146,282		28.7	%
Gross profit	137,004		17.3	%	78,613		13.4	%	58,391		74.3	%
Selling, general, and administrative expenses	48,399		6.1	%	51,105		8.7	%	(2,706)		(5.3)	%
Amortization of intangible assets	3,590		0.5	%	3,614		0.6	%	(24)		(0.7)	%
Total operating expenses	51,989		6.6	%	54,719		9.3	%	(2,730)		(5.0)	%
Operating income	85,015		10.7	%	23,894		4.1	%	61,121		255.8	%
Interest expense	9,941		1.3	%	6,049		1.0	%	3,892		64.3	%
Non-operating loss (income)	94		—	%	(116)		—	%	(210)		(181.0)	%
Income before income taxes	74,980		9.5	%	17,961		3.1	%	57,019		317.5	%
Provision for income taxes	17,557		2.2	%	3,893		0.7	%	13,664		351.0	%
Net income	$	57,423	7.2	%	$	14,068	2.4	%	$	43,355	308.2	%

Diluted income per share	$	1.70			$	0.44			$	1.26	286.4	%
Diluted average shares outstanding	33,839				32,267				1,572		4.9	%


	Three Months Ended
(in thousands, except ASP)	November 28, 2020		% of Revenues		November 30, 2019		% of Revenues		$ Change		% Change
Net revenues	$	454,901			$	341,250			$	113,651	33.3	%
Adjusted EBITDA	63,143		13.9	%	35,785		10.5	%	27,358		76.5	%

Average Selling Price ("ASP")(1)	32,089				32,998				(909)		(2.8)	%

	Three Months Ended
Unit deliveries	November 28, 2020		Product Mix(2)		November 30, 2019		Product Mix(2)		Unit Change		% Change
Travel trailer	9,160		64.4	%	6,336		59.8	%	2,824		44.6	%
Fifth wheel	5,054		35.6	%	4,263		40.2	%	791		18.6	%
Total towables	14,214		100.0	%	10,599		100.0	%	3,615		34.1	%

($ in thousands)	November 28, 2020				November 30, 2019				Change		% Change
Backlog
Units	29,659				7,174				22,485		313.4	%
Dollars	$	865,420			$	242,853			$	622,567	256.4	%
Dealer Inventory
Units	12,637				17,843				(5,206)		(29.2)	%


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(2)(3)
08/30/20 - 10/03/20	—	$	—	—	$	68,761,000
10/04/20 - 10/31/20	170,174	50.30		141,662	61,761,000
11/01/20 - 11/28/20	63,225	48.12		62,288	58,761,000
Total	233,399	$	49.71	203,950	$	58,761,000