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 ~~May 29,~~November 27, 2021


			or

☐			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 ☒

As of ~~June 18,~~December 13, 2021, there were ~~33,599,487~~33,344,672 shares of common stock, par value $0.50 per share, outstanding.

Winnebago Industries, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended ~~May 29,~~November 27, 2021

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Winnebago Industries, Inc.

Consolidated Statements of Income ~~(Loss)~~ and Comprehensive Income ~~(Loss)~~

(Unaudited)

Three Months Ended Nine Months Ended
(in thousands, except per share data) May 29,
2021 May 30,
2020 May 29,
2021 May 30,
2020
Net revenues $ 960,737 $ 402,458 $ 2,593,754 $ 1,617,726
Cost of goods sold 791,125 370,434 2,130,556 1,427,307
Gross profit 169,612 32,024 463,198 190,419
Selling, general, and administrative expenses 63,586 33,271 165,001 126,540
Amortization 3,590 6,926 10,771 18,514
Total operating expenses 67,176 40,197 175,772 145,054
Operating income (loss) 102,436 (8,173) 287,426 45,365
Interest expense 10,229 8,440 30,222 23,140
Non-operating income (93) (74) (310) (460)
Income (loss) before income taxes 92,300 (16,539) 257,514 22,685
Provision (benefit) for income taxes 21,005 (4,186) 59,728 3,702
Net income (loss) $ 71,295 $ (12,353) $ 197,786 $ 18,983
Earnings (loss) per common share
Basic $ 2.12 $ (0.37) $ 5.89 $ 0.57
Diluted $ 2.05 $ (0.37) $ 5.83 $ 0.57
Weighted average common shares outstanding
Basic 33,552 33,625 33,565 33,102
Diluted 34,772 33,625 33,943 33,289
Net income (loss) $ 71,295 $ (12,353) $ 197,786 $ 18,983
Other comprehensive income (loss), net of tax:
Amortization of net actuarial loss (net of tax of $3, $3, $9 and $9) 9 8 26 24
Interest rate swap activity (net of tax of $0, $141, $0 and $163) 0 (432) 0 (500)
Other comprehensive income (loss) 9 (424) 26 (476)
Comprehensive income (loss) $ 71,304 $ (12,777) $ 197,812 $ 18,507


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

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

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

Net income	$	99,630	$	57,423
Other comprehensive income:
Amortization of net actuarial loss (net of tax of $3 and $3)	9		9
Comprehensive income	$	99,639	$	57,432

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

Table of Contents

Winnebago Industries, Inc.

Consolidated Balance Sheets


(in thousands, except per share data)	(in thousands, except per share data)	May 29, 2021		August 29, 2020		(in thousands, except per share data)	November 27, 2021		August 28, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	405,841	$	292,575	Cash and cash equivalents	$	211,384	$	434,563
Receivables, less allowance for doubtful accounts ($287 and $353, respectively)		228,199		220,798
Receivables, less allowance for doubtful accounts ($275 and $307, respectively)						Receivables, less allowance for doubtful accounts ($275 and $307, respectively)	263,677		253,808
Inventories, net	Inventories, net	333,018		182,941		Inventories, net	432,825		341,473
Prepaid expenses and other assets		21,559		17,296
Prepaid expenses and other current assets						Prepaid expenses and other current assets	21,701		29,069
Total current assets	Total current assets	988,617		713,610		Total current assets	929,587		1,058,913
Property, plant, and equipment, net	Property, plant, and equipment, net	177,578		174,945		Property, plant, and equipment, net	224,129		191,427
Goodwill	Goodwill	348,058		348,058		Goodwill	484,176		348,058
Other intangible assets, net	Other intangible assets, net	393,997		404,768		Other intangible assets, net	493,635		390,407
Investment in life insurance	Investment in life insurance	28,381		27,838		Investment in life insurance	29,027		28,821
Operating lease assets	Operating lease assets	27,318		29,463		Operating lease assets	27,747		28,379
Other long-term assets	Other long-term assets	15,821		15,018		Other long-term assets	18,060		16,562
Total assets	Total assets	$	1,979,770	$	1,713,700	Total assets	$	2,206,361	$	2,062,567

Liabilities and Shareholders' Equity
Liabilities and Stockholders' Equity						Liabilities and Stockholders' Equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	173,008	$	132,490	Accounts payable	$	166,848	$	180,030
Income taxes payable	Income taxes payable	0		8,840		Income taxes payable	29,223		8,043
Accrued expenses
Accrued expenses:						Accrued expenses:
Accrued compensation	Accrued compensation	59,412		36,533		Accrued compensation	48,909		67,541
Product warranties	Product warranties	82,062		64,031		Product warranties	102,424		91,222
Self-insurance	Self-insurance	18,237		17,437		Self-insurance	20,952		19,296
Promotional	Promotional	9,851		12,543		Promotional	9,965		10,040
Accrued interest		7,821		4,652
Accrued dividends		4,273		180
Other		20,946		23,684
Accrued interest and dividends						Accrued interest and dividends	8,014		10,720
Other current liabilities						Other current liabilities	40,768		20,384
Total current liabilities	Total current liabilities	375,610		300,390		Total current liabilities	427,103		407,276
Long-term debt, net	Long-term debt, net	524,450		512,630		Long-term debt, net	532,739		528,559
Deferred income taxes	Deferred income taxes	14,852		15,608		Deferred income taxes	13,247		13,429
Unrecognized tax benefits	Unrecognized tax benefits	6,538		6,511		Unrecognized tax benefits	6,667		6,483
Operating lease liabilities		25,391		27,048
Long-term operating lease liabilities						Long-term operating lease liabilities	26,368		26,745
Deferred compensation benefits, net of current portion	Deferred compensation benefits, net of current portion	9,920		11,130		Deferred compensation benefits, net of current portion	9,775		9,550
Other long-term liabilities	Other long-term liabilities	12,751		12,917		Other long-term liabilities	31,204		13,582
Total liabilities	Total liabilities	969,512		886,234		Total liabilities	1,047,103		1,005,624
Contingent liabilities and commitments (Note 10)		0		0
Shareholders' equity
Preferred stock, par value $0.01: 10,000 shares authorized; NaN shares issued and outstanding		0		0
Contingent liabilities and commitments (Note 11)						Contingent liabilities and commitments (Note 11)	0		0
Shareholders' equity:						Shareholders' equity:
Preferred stock, par value $0.01: 10,000 shares authorized; Zero shares issued and outstanding						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	Common stock, par value $0.50: 120,000 shares authorized; 51,776 shares issued and outstanding	25,888		25,888		Common stock, par value $0.50: 120,000 shares authorized; 51,776 shares issued and outstanding	25,888		25,888
Additional paid-in capital	Additional paid-in capital	214,460		203,791		Additional paid-in capital	233,727		218,490
Retained earnings	Retained earnings	1,095,167		913,610		Retained earnings	1,272,697		1,172,996
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(500)		(526)		Accumulated other comprehensive loss	(482)		(491)
Treasury stock, at cost: 18,225 and 18,133 shares, respectively		(324,757)		(315,297)
Treasury stock, at cost: 18,476 and 18,713 shares, respectively						Treasury stock, at cost: 18,476 and 18,713 shares, respectively	(372,572)		(359,940)
Total shareholders' equity	Total shareholders' equity	1,010,258		827,466		Total shareholders' equity	1,159,258		1,056,943
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	1,979,770	$	1,713,700	Total liabilities and shareholders' equity	$	2,206,361	$	2,062,567

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

Table of Contents

Winnebago Industries, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


		Nine Months Ended					Three Months Ended
(in thousands)	(in thousands)	May 29, 2021		May 30, 2020		(in thousands)	November 27, 2021		November 28, 2020
Operating Activities
Operating activities						Operating activities
Net income	Net income	$	197,786	$	18,983	Net income	$	99,630	$	57,423
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						Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation	Depreciation	13,476		11,854		Depreciation	5,306		4,160
Amortization	Amortization	10,771		18,514		Amortization	8,172		3,590
Non-cash interest expense, net	Non-cash interest expense, net	10,372		7,440		Non-cash interest expense, net	3,627		3,351
Amortization of debt issuance costs	Amortization of debt issuance costs	1,852		2,181		Amortization of debt issuance costs	613		606
Last-in, first-out expense		2,321		1,450
Last in, first-out expense						Last in, first-out expense	437		276
Stock-based compensation	Stock-based compensation	11,719		3,332		Stock-based compensation	2,711		2,354
Deferred income taxes	Deferred income taxes	(765)		365		Deferred income taxes	(185)		872
Contingent consideration fair value adjustment						Contingent consideration fair value adjustment	6,370		—
Other, net	Other, net	(4,412)		516		Other, net	2,312		(3,329)
Change in operating assets and liabilities:
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	(7,384)		31,440		Receivables, net	(7,210)		(10,380)
Inventories, net	Inventories, net	(152,398)		91,938		Inventories, net	(70,340)		(80,472)
Prepaid expenses and other assets	Prepaid expenses and other assets	1,010		159		Prepaid expenses and other assets	4,852		583
Accounts payable	Accounts payable	40,817		(13,528)		Accounts payable	(17,704)		(8,371)
Income taxes and unrecognized tax benefits	Income taxes and unrecognized tax benefits	(12,771)		(2,622)		Income taxes and unrecognized tax benefits	24,664		16,556
Accrued expenses and other liabilities	Accrued expenses and other liabilities	35,560		(9,585)		Accrued expenses and other liabilities	(6,706)		10,111
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	147,954		162,437		Net cash provided by (used in) operating activities	56,549		(2,670)

Investing Activities
Purchases of property, plant and equipment		(23,596)		(28,582)
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		(260,965)		Acquisition of business, net of cash acquired	(228,159)		—
Proceeds from sale of property, plant and equipment		12,450		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	(224)		141		Other, net	(36)		(234)
Net cash provided by (used in) investing activities		(11,370)		(289,406)
Net cash used in investing activities						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	2,629,932		1,795,209		Borrowings on long-term debt	932,566		798,359
Repayments on long-term debt	Repayments on long-term debt	(2,629,932)		(1,501,709)		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	(12,136)		(10,881)		Payments of cash dividends	(6,010)		(4,046)
Payments for repurchases of common stock	Payments for repurchases of common stock	(12,109)		(1,789)		Payments for repurchases of common stock	(23,723)		(11,606)
Payments of debt issuance costs		(224)		(10,761)
Other, net	Other, net	1,151		539		Other, net	1,415		(166)
Net cash provided by (used in) financing activities		(23,318)		242,018
Net cash used in financing activities						Net cash used in financing activities	(28,318)		(15,818)

Net increase in cash and cash equivalents		113,266		115,049
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	$	405,841	$	152,480	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

Supplemental Disclosures
Income taxes paid, net $ 71,090 $ 6,240
Interest paid 14,618 14,961
Non-cash investing and financing activities
Issuance of common stock for acquisition of business $ 0 $ 92,572
Capital expenditures in accounts payable 121 255
Dividends declared not yet paid 4,273 126



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

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

Table of Contents

Winnebago Industries, Inc.

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

Three Months Ended May 29, 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 February 27, 2021 51,776 $ 25,888 $ 209,727 $ 1,032,020 $ (509) (18,225) $ (324,762) $ 942,364
Stock-based compensation — — 4,733 — — 0 5 4,738
Common stock dividends paid; $0.12 per share — — — (4,062) — — — (4,062)
Common stock dividends accrued; $0.12 per share — — — (4,086) — — — (4,086)
Actuarial loss, net of tax — — — — 9 — — 9
Net income — — — 71,295 — — — 71,295
Balance at May 29, 2021 51,776 $ 25,888 $ 214,460 $ 1,095,167 $ (500) (18,225) $ (324,757) $ 1,010,258
Three Months Ended May 30, 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 February 29, 2020 51,776 $ 25,888 $ 200,751 $ 890,994 $ (543) (18,153) $ (315,566) $ 801,524
Stock-based compensation — — (315) — — 0 7 (308)
Issuance of stock, net — — 20 — — 8 133 153
Repurchase of common stock — — — — — (1) (52) (52)
Common stock dividends paid; $0.11 per share — — — (3,730) — — — (3,730)
Actuarial loss, net of tax — — — — 8 — — 8
Interest rate swap activity, net of tax — — — — (432) — — (432)
Net loss — — — (12,353) — — — (12,353)
Balance at May 30, 2020 51,776 $ 25,888 $ 200,456 $ 874,911 $ (967) (18,146) $ (315,478) $ 784,810
Nine Months Ended May 29, 2021
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 — — 11,701 — — 1 18 11,719
Issuance of stock — — (1,032) — — 149 2,631 1,599
Repurchase of common stock — — — — — (242) (12,109) (12,109)
Common stock dividends paid; $0.36 per share — — — (12,136) — — — (12,136)
Common stock dividends accrued; $0.12 per share — — — (4,093) — — — (4,093)
Actuarial loss, net of tax — — — — 26 — — 26
Net income — — — 197,786 — — — 197,786
Balance at May 29, 2021 51,776 $ 25,888 $ 214,460 $ 1,095,167 $ (500) (18,225) $ (324,757) $ 1,010,258

~~Table of Contents~~

Nine Months Ended May 30, 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 31, 2019 51,776 $ 25,888 $ 91,185 $ 866,886 $ (491) (20,262) $ (351,256) $ 632,212
Stock-based compensation — — 3,309 — — 1 23 3,332
Issuance of stock, net — — (2,011) — — 160 2,782 771
Issuance of stock for acquisition — — 57,811 — — 2,000 34,761 92,572
Repurchase of common stock — — — — — (45) (1,788) (1,788)
Common stock dividends paid; $0.33 per share — — — (10,958) — — — (10,958)
Actuarial loss, net of tax — — — — 24 — — 24
Interest rate swap activity, net of tax — — — — (500) — — (500)
Equity component of convertible senior notes and offering costs, net of tax of $20,840 — — 61,335 — — — — 61,335
Convertible note hedge purchase, net of tax of $17,417 — — (53,383) — — — — (53,383)
Warrant transactions — — 42,210 — — — — 42,210
Net income — — — 18,983 — — — 18,983
Balance at May 30, 2020 51,776 $ 25,888 $ 200,456 $ 874,911 $ (967) (18,146) $ (315,478) $ 784,810


	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

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

Table of Contents

Winnebago Industries, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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

Note 1. Basis of Presentation

The consolidated financial statements include 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," ~~"Winnebago",~~"Winnebago," "we," "our," and ~~"the Company"~~"us" in this Quarterly Report on Form 10-Q, unless the context otherwise requires, refers to Winnebago Industries, Inc. and its wholly owned subsidiaries.

The interim unaudited consolidated financial statements included herein are prepared pursuant to the rules and regulations of the 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, and reflects all adjustments that are, in management’s opinion, necessary for a fair presentation of such financial statements. The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). GAAP requires us to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations.

The consolidated financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited 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~~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.~~

~~Fiscal Period~~

~~The Company has a 5-4-4 quarterly accounting cycle with the fiscal~~ year ending ~~on the last Saturday in August. Fiscal 2021 ending on~~ August ~~28, 2021 will consist of 52 weeks. Fiscal 2020 ended on August 29, 2020 consisted of 52 weeks.~~

~~Cash and Cash Equivalents~~

Cash and cash equivalents represent cash, demand deposits and highly liquid investments with original maturities of three months or less that are not legally restricted. Cash equivalents are recorded at cost, which approximates fair value. Accounts at each banking institution are insured by the Federal Deposit Insurance Corporation up to $250,000, while the remaining balances are uninsured.27, 2022.

Subsequent Events

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

On December 15, 2021, our Board of Directors declared a quarterly cash dividend of $0.18 per share payable on January 26, 2022 to common shareholders of record at the close of business on January 12, 2022.

CARES Act

The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was signed into law on March 27, 2020 to help alleviate the impact of the COVID-19 pandemic in the U.S. ~~The Company is~~We are taking advantage of the employer payroll tax 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 employer payroll tax liability as of ~~May 29,~~November 27, 2021 was ~~$16,223~~$12.4 million and will be payable in equal installments in December 2021 and December 2022. ~~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 ~~(Loss)~~ and Comprehensive Income ~~(Loss)~~ was approximately ~~$3,999.~~$4.0 million. The entire amount is expected to be received ~~by the end of~~during calendar year ~~2021.~~2022. As of ~~May 29,~~November 27, 2021, ~~$3,202~~$3.2 million remains outstanding within other current assets 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:Simplifying the Accounting for Income Taxes, ~~which changes~~was adopted in the accounting for credit losses on instruments measured at amortized costs, such as accounts receivables and deposits by adding an impairment model that is based on expected losses rather than incurred losses. An entity will recognize as an allowance its estimatefirst quarter of ~~expected credit losses, which is believed to result in more timely recognition of such losses as the~~Fiscal 2022. The new standard eliminates ~~the probable initial recognition threshold. The Company~~certain exceptions to Topic 740's general principles, improves consistent application and simplifies its application. We adopted the new ~~standard using~~guidance in the ~~modified retrospective approach, which involves recognizing the cumulative effect~~first quarter of ~~initial adoption of Topic 326 as an adjustment to its opening retained earnings as of August 30, 2020. As a result, the Company did~~Fiscal 2022, and there was not adjust comparative period financial information for periods before the effective date. No incremental allowance for credit losses has been recognized during the nine months ended May 29, 2021 as a result of the adoption. The adoption of this standard did not have a material impact ~~on the Company’s~~

~~Table of Contents~~

to our financial condition, results of operations or disclosures.

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) which reduces the number of models used to account for convertible instruments, amends diluted 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. Certain disclosure requirements were also added to increase transparency and decision-usefulness regarding a convertible instrument's terms and features. Additionally, the if-converted method for including convertible instruments must be used in diluted EPS as opposed to the treasury stock method. The new guidance is effective for annual reporting periods beginning after December 15, 2021, which is ~~the Company's~~our Fiscal 2023. Early adoption is permitted using either a modified retrospective or full retrospective approach. ~~The Company expects~~We expect to adopt the new guidance in the first

Table of Contents

quarter of Fiscal 2023 and ~~has~~have not yet evaluated the impact the adoption of this guidance will have on ~~its~~our financial condition, results of operations or disclosures; however, the new guidance is expected to change ~~the Company's~~our diluted EPS 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, 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 this 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. This guidance is not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The guidance can be applied immediately through December 31, 2022. ~~The Company~~We will adopt this standard when LIBOR is discontinued and ~~does~~do not expect a material impact to ~~its~~our financial condition, results of operations or disclosures based on the current debt portfolio and capital structure.

Note 2. Business Combinations

~~In December 2019,~~

On August 31, 2021, we purchased 100% of the ~~FASB~~equity interests of Barletta Boat Company, LLC and Three Limes, LLC (collectively, "Barletta"), a manufacturer of high-quality, premium pontoon boats that are sold through a network of independent authorized 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 ~~ASU 2019-12,~~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 preliminary fair values assigned to the Barletta net assets acquired as of the date of acquisition:


(in thousands)	August 31, 2021
Cash	$	11,903
Other current assets	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	$	286,252

Goodwill from the Barletta acquisition is recognized in our newly created Marine segment. We expect that the full amount of goodwill will be deductible for tax purposes.

The intangible assets acquired 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 a straight line basis over ~~Income Taxes (Topic 740):~~10 months and ~~Simplifying~~12 years, respectively.

Table of Contents

Total transaction costs related to the ~~Accounting for Income Taxes,~~ Barletta acquisition were $3.1 million, of which eliminates certain exceptions to Topic 740's general principles, improves consistent application and simplifies its application. The standard is effective for annual reporting periods beginning after December 15, 2020, which is the Company's Fiscal 2022, including interim periods within those annual reporting periods. The Company expects to adopt the new guidance in$2.4 million were expensed during the first quarter of Fiscal 2022 and ~~does not expect a material impact to its financial condition,~~$0.7 million were expensed during the fourth quarter of Fiscal 2021. Transaction costs are included in selling, general and administrative expenses in the accompanying Consolidated Statements of Income and Comprehensive Income.

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

Note 2.3. 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. Financial performance is evaluated based on each operating segment's Adjusted 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 are: Towable (an aggregation of the Grand Design towables and the Winnebago towables operating segments) ~~and~~; Motorhome (an aggregation of the Winnebago motorhomes and Newmar motorhomes operating 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 certain corporate administration expenses related to the oversight of the 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.

~~The Company's~~Our Chief Executive Officer (the Chief Operating Decision Maker ("CODM")) regularly reviews consolidated financial results in their entirety and operating segment financial information through Adjusted EBITDA and has ultimate responsibility for enterprise decisions. ~~The Company's~~Our CODM is responsible for allocating resources and assessing performance of the consolidated enterprise, reportable segments and operating segments. Management of each operating segment has responsibility for operating decisions, allocating resources and assessing performance within their respective operating segment. ~~Both~~The accounting policies of all reportable segments ~~and all operating segments follow~~are the same ~~accounting policies~~as those described in Note 1 to the Consolidated Financial Statements included in Item 8 of Part II of ~~the Company's~~our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020.~~28, 2021.

~~Table of Contents~~

~~The Company monitors~~We monitor and ~~evaluates~~evaluate operating performance of ~~its~~our reportable segments based on Adjusted EBITDA. ~~The Company believes~~We believe disclosing Adjusted EBITDA is useful to securities analysts, investors and other interested parties when evaluating companies in ~~the industry.~~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 ~~(loss).~~or loss.

Financial information by reportable segment is as follows:

Table of Contents


		Three Months Ended				Nine Months Ended					Three Months Ended
(in thousands)	(in thousands)	May 29, 2021		May 30, 2020		May 29, 2021		May 30, 2020		(in thousands)	November 27, 2021		November 28, 2020
Net Revenues	Net Revenues									Net Revenues
Towable	Towable	$	555,749	$	188,898	$	1,449,934	$	813,611	Towable	$	651,024	$	454,901
Motorhome	Motorhome	385,257		203,590		1,090,221		755,023		Motorhome	421,479		322,389
Marine										Marine	79,318		11,894
Corporate / All Other	Corporate / All Other	19,731		9,970		53,599		49,092		Corporate / All Other	3,919		3,947
Consolidated	Consolidated	$	960,737	$	402,458	$	2,593,754	$	1,617,726	Consolidated	$	1,155,740	$	793,131

Adjusted EBITDA	Adjusted EBITDA									Adjusted EBITDA
Towable	Towable	$	80,130	$	16,451	$	205,639	$	86,982	Towable	$	112,077	$	63,143
Motorhome	Motorhome	37,467		(10,789)		118,779		13,488		Motorhome	50,153		30,343
Marine										Marine	10,570		854
Corporate / All Other	Corporate / All Other	(7,823)		(1,588)		(17,386)		(8,919)		Corporate / All Other	(5,568)		(5,047)
Consolidated	Consolidated	$	109,774	$	4,074	$	307,032	$	91,551	Consolidated	$	167,232	$	89,293

Capital Expenditures	Capital Expenditures									Capital Expenditures
Towable	Towable	$	4,639	$	2,296	$	11,490	$	11,962	Towable	$	11,158	$	4,137
Motorhome	Motorhome	2,976		5,768		10,247		13,348		Motorhome	7,751		4,003
Marine										Marine	628		549
Corporate / All Other	Corporate / All Other	1,061		1,492		1,859		3,272		Corporate / All Other	3,678		—
Consolidated	Consolidated	$	8,676	$	9,556	$	23,596	$	28,582	Consolidated	$	23,215	$	8,689


(in thousands)	November 27, 2021		August 28, 2021
Assets
Towable	$	823,838	$	790,257
Motorhome	762,742		728,060
Marine	395,533		102,901
Corporate / All Other	224,248		441,349
Consolidated	$	2,206,361	$	2,062,567

(in thousands) May 29,
2021 August 29,
2020
Assets
Towable $ 745,249 $ 718,253
Motorhome 721,603 600,304
Corporate / All Other 512,918 395,143
Consolidated $ 1,979,770 $ 1,713,700

Table of Contents

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


		Three Months Ended				Nine Months Ended					Three Months Ended
(in thousands)	(in thousands)	May 29, 2021		May 30, 2020		May 29, 2021		May 30, 2020		(in thousands)	November 27, 2021		November 28, 2020
Net income (loss)		$	71,295	$	(12,353)	$	197,786	$	18,983
Interest expense		10,229		8,440		30,222		23,140
Provision (benefit) for income taxes		21,005		(4,186)		59,728		3,702
Net income										Net income	$	99,630	$	57,423
Interest expense, net										Interest expense, net	10,242		9,941
Provision for income taxes										Provision for income taxes	30,141		17,557
Depreciation	Depreciation	4,917		4,134		13,476		11,854		Depreciation	5,306		4,160
Amortization	Amortization	3,590		6,926		10,771		18,514		Amortization	8,172		3,590
EBITDA	EBITDA	111,036		2,961		311,983		76,193		EBITDA	153,491		92,671
Acquisition-related fair-value inventory step-up		0		0		0		4,810
Acquisition-related costs	Acquisition-related costs	0		(189)		0		9,761		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	19		1,376		112		1,247		Restructuring expenses	—		93
Gain on sale of property, plant and equipment		(1,188)		0		(4,753)		0
Non-operating income		(93)		(74)		(310)		(460)
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	$	109,774	$	4,074	$	307,032	$	91,551	Adjusted EBITDA	$	167,232	$	89,293

Note 3.4. Investments and Fair Value Measurements

In determining the fair value of financial assets and liabilities, ~~the Company utilizes~~we utilize market data or other assumptions that ~~it believes~~we believe market participants would use in pricing the asset or liability in the principal or most advantageous market and ~~adjusts~~adjust for non-performance and/or other risks associated with ~~the Company~~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

Financial assets and liabilities measured at fair value on a recurring basis are as follows:


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

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

Fair Value at Fair Value Hierarchy
(in thousands) May 29,
2021 Level 1 Level 2 Level 3
Assets that fund deferred compensation
Domestic equity funds $ 917 $ 917 $ 0 $ 0
International equity funds 39 39 0 0
Fixed income funds 46 46 0 0
Total assets at fair value $ 1,002 $ 1,002 $ 0 $ 0

~~Table of Contents~~


		Fair Value at		Fair Value Hierarchy							Fair Value at		Fair Value Hierarchy
(in thousands)	(in thousands)	August 29, 2020		Level 1		Level 2		Level 3		(in thousands)	August 28, 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	$	626	$	626	$	0	$	0	Domestic equity funds	$	940	$	940	$	—	$	—
International equity funds	International equity funds	34		34		0		0		International equity funds	41		41		—		—
Fixed income funds	Fixed income funds	50		50		0		0		Fixed income funds	46		46		—		—
Total assets at fair value	Total assets at fair value	$	710	$	710	$	0	$	0	Total assets at fair value	$	1,027	$	1,027	$	—	$	—

Assets that 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. Refer to Note 1110 of the Notes to the Consolidated Financial Statements included in Item 8 of Part II of ~~the Company's~~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 expenses and other assets on the Consolidated Balance Sheets. The remaining assets are classified as non-current and are included in 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 Measured at Fair Value on a Nonrecurring Basis

Certain financial instruments are measured at fair value on a nonrecurring basis. 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~~we will evaluate the non-financial asset for impairment. If an impairment has occurred, the asset is will be written down to its current estimated fair value. ~~NaN~~No impairments were recorded for non-financial assets in the three ~~or nine~~months ended ~~May 29,~~November 27, 2021 or ~~May 30,~~November 28, 2020.

Assets and Liabilities Not Measured at Fair Value

Certain financial instruments 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. 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 89 for ~~information about~~ the fair value of ~~the Company's~~our long-term debt.

Table of Contents

Note 4.5. Inventories

Inventories consist of the following:

(in thousands) May 29,
2021 August 29,
2020
Finished goods $ 19,638 $ 17,141
Work-in-process 182,316 86,651
Raw materials 169,218 114,982
Total 371,172 218,774
Less: Last-in, first-out ("LIFO") reserve 38,154 35,833
Inventories, net $ 333,018 $ 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) May 29,
2021 August 29,
2020
LIFO basis $ 147,836 $ 88,675
First-in, first-out basis 223,336 130,099
Total $ 371,172 $ 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, before reduction for the LIFO reserve, approximates replacement cost at the respective dates.

1314

Table of Contents

Note 5.6. 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)	May 29, 2021		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	147,679		144,565		Buildings and building improvements	163,731		147,629
Machinery and equipment	Machinery and equipment	120,557		117,370		Machinery and equipment	126,093		121,911
Software	Software	33,644		28,456		Software	36,099		36,815
Transportation	Transportation	4,974		4,913		Transportation	5,972		5,335
Construction in progress	Construction in progress	22,158		20,778		Construction in progress	46,144		31,137
Property, plant, and equipment, gross	Property, plant, and equipment, gross	338,123		327,183		Property, plant, and equipment, gross	388,736		351,938
Less: Accumulated depreciation	Less: Accumulated depreciation	160,545		152,238		Less: Accumulated depreciation	164,607		160,511
Property, plant, and equipment, net	Property, plant, and equipment, net	$	177,578	$	174,945	Property, plant, and equipment, net	$	224,129	$	191,427

Depreciation expense was ~~$4,917~~$5.3 million and ~~$4,134~~$4.2 million for the three months ended ~~May 29,~~November 27, 2021 and ~~May 30, 2020, respectively, and $13,476 and $11,854 for the nine months ended May 29, 2021 and May 30,~~November 28, 2020, respectively.

Note 6.7. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segment, with no accumulated impairment losses, for the ~~nine~~three months ended ~~May 29,~~November 27, 2021 and ~~May 30,~~November 28, 2020 are as follows:

(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 73,127 0 73,127
Balances at May 30, 2020 $ 244,684 $ 73,127 $ 30,247 $ 348,058
Balances at August 29, 2020 and May 29, 2021(2)
$ 244,684 $ 73,127 $ 30,247 $ 348,058


(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) There was no activity in the three months ended November 28, 2020.

(2) The change in ~~Motorhome~~marine activity is related to the acquisition of ~~Newmar Corporation, Dutch Real Estate Corp., New-Way Transport and New-Serv (collectively "Newmar")~~Barletta that occurred on ~~November 8, 2019.~~August 31, 2021. See Note 2 to the Consolidated Financial Statements included in Item 81 of Part III of ~~the Company's Annual Report~~this quarterly report on Form ~~10-K for the fiscal year ended August 29, 2020 for additional acquisition information.~~

~~(2)~~ ~~There was 0 activity in the nine months ended May 29, 2021.~~10-Q.

1415

Table of Contents

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

May 29, 2021
($ in thousands) Weighted Average Life-Years Gross Carrying Amount Accumulated Amortization Net Carrying Value
Trade names Indefinite $ 275,250 $ — $ 275,250
Dealer networks 12.1 159,581 $ 42,360 117,221
Backlog 0.5 28,327 28,327 0
Non-compete agreements 4.3 6,647 5,121 1,526
Other intangible assets $ 469,805 $ 75,808 $ 393,997
August 29, 2020
($ in thousands) Weighted Average Life-Years Cost Accumulated Amortization Net Carrying Value
Trade names Indefinite $ 275,250 $ — $ 275,250
Dealer networks 12.2 159,581 32,487 127,094
Backlog 0.5 28,327 28,327 0
Non-compete agreements 4.1 6,647 4,223 2,424
Other intangible assets $ 469,805 $ 65,037 $ 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 ~~May 29,~~November 27, 2021 was approximately 913 years.

Estimated future amortization expense related to finite-lived intangible assets is as follows:


(in thousands)	Amount
Remainder of Fiscal ~~2021~~2022	$	~~3,590~~
~~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	~~13,165~~14,865
Fiscal 2027	14,865
Thereafter	~~48,104~~45,139
Total amortization expense remaining	$	~~118,747~~141,385

Note 7.8. 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.

1516

Table of Contents

Changes in the product warranty liability are as follows:

Three Months Ended Nine Months Ended
(in thousands) May 29,
2021 May 30,
2020 May 29,
2021 May 30,
2020
Balance at beginning of period $ 76,040 $ 60,211 $ 64,031 $ 44,436
Business acquisition(1)
0 0 0 15,147
Provision 23,056 13,227 64,986 44,274
Claims paid (17,034) (12,773) (46,955) (43,192)
Balance at end of period $ 82,062 $ 60,665 $ 82,062 $ 60,665


	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 ~~Newmar~~Barletta on ~~November 8, 2019.~~August 31, 2021. See Note 2 to the Consolidated Financial Statements in Item 81 of Part III of ~~the Company's Annual Report~~this quarterly report on Form ~~10-K for the fiscal year ended August 29, 2020~~10-Q for additional acquisition information.

Note 8.9. Long-Term Debt

Long-term debt consists of the following:

(in thousands) May 29,
2021 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 (63,922) (74,294)
Debt issuance costs, net (11,628) (13,076)
Long-term debt, net $ 524,450 $ 512,630


(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 ~~$300,000~~$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, 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 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 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.

Debt issuance costs incurred and 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 ~~$7,493~~$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 $249,750, which was repaid with the proceeds from the Senior Secured Notes, and debt issuance costs of $4,650 were written off upon repayment. In addition, the interest rate swaps with a liability position of $600 used to hedge the Term Loan interest rates were settled early in July 2020 in conjunction with the Term Loan repayment.

Under the ABL, ~~the Company has~~we have a ~~$192,500~~$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 ~~$19,250. The Company~~

~~Table of Contents~~

~~pays~~$19.3 million. 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 ~~$300,000~~$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 ~~$290,223.~~$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 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. The Company’s ability to cash settle may be limited depending on the stock price at the time of conversion.

~~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 shareholders 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 $28,590 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.

~~Table~~Refer to Note 9 of ~~Contents~~

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 the Convertible Notes and 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 ~~$214,979~~$215.0 million and ~~$85,021,~~$85.0 million, respectively. The initial ~~$214,979~~$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 ~~$85,021~~$85.0 million ($~~64,106~~64.1 million net of tax) equity component represents the difference between the fair value of the initial ~~$214,979~~$215.0 million in debt and the ~~$300,000~~$300.0 million of gross proceeds. The related initial debt discount of ~~$85,021~~$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 ~~$9,777~~$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 ~~$7,006~~$7.0 million of debt issuance costs to the liability component, which were capitalized as deferred financing costs within 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 ~~$2,771~~$2.8 million of transaction costs allocated to the equity component were recorded as a reduction of the equity component.

Fair Value and Future Maturities

As of ~~May 29,~~November 27, 2021 and August ~~29, 2020,~~28, 2021, the fair value of long-term debt, gross, was ~~$729,954~~$727.4 million and ~~$674,709,~~$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	0—
Fiscal 2027	—
Thereafter	300,000
Total Senior Secured Notes and Convertible Notes	$	600,000

Table of Contents

Note 9.10. Employee and Retiree Benefits

Deferred compensation liabilities are as follows:

(in thousands) May 29,
2021 August 29,
2020
Non-qualified deferred compensation $ 10,157 $ 11,460
Supplemental executive retirement plan 1,601 1,838
Executive deferred compensation plan 1,004 710
Deferred compensation benefits 12,762 14,008
Less current portion(1)
2,842 2,878
Deferred compensation benefits, net of current portion $ 9,920 $ 11,130


(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

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

Note ~~10.~~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, ~~the Company~~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

~~Table of Contents~~

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 ~~$739,966~~$1,051.3 million and ~~$798,906~~$727.7 million at ~~May 29,~~November 27, 2021 and August ~~29, 2020,~~28, 2021, respectively.

Repurchased sales are not recorded as a revenue transaction, rather the net difference between the original repurchase price and the resale price 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-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 expenses: other on the Consolidated Balance Sheets. ~~The Company's~~Our repurchase accrual was ~~$989~~$1.0 million and ~~$980~~$0.9 million at ~~May 29,~~November 27, 2021 and August ~~29, 2020,~~28, 2021, respectively. Repurchase risk is affected by the credit worthiness of ~~the Company's~~our dealer network. ~~The Company does~~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.

There was no material activity related to repurchase agreements during the ~~nine~~three months ended ~~May 29,~~November 27, 2021 and ~~May 30, 2020.~~August 28, 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, 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 ~~the Company's~~our view of these matters may change in the future.

Table of Contents

Note ~~11.~~12. Revenue

All operating revenue is generated from contracts with customers. ~~The Company's~~Our primary revenue source is generated through the sale of manufactured non-motorized towable units, 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 Nine Months Ended
(in thousands) May 29,
2021 May 30,
2020 May 29,
2021 May 30,
2020
Net Revenues
Towable
Fifth Wheel $ 284,432 $ 107,364 $ 751,822 $ 459,301
Travel Trailer 264,450 77,974 680,088 342,331
Other(1)
6,867 3,560 18,024 11,979
Total Towable 555,749 188,898 1,449,934 813,611
Motorhome
Class A 172,437 92,280 464,347 337,629
Class B 135,705 65,000 382,162 232,349
Class C 67,386 39,268 215,935 161,801
Other(1)
9,729 7,042 27,777 23,244
Total Motorhome 385,257 203,590 1,090,221 755,023
Corporate / All Other
Other(2)
19,731 9,970 53,599 49,092
Total Corporate / All Other 19,731 9,970 53,599 49,092
Consolidated Net Revenues $ 960,737 $ 402,458 $ 2,593,754 $ 1,617,726


	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

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

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

~~Table of Contents~~

~~The Company does~~We do not have material contract assets or liabilities. 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

No single dealer organization accounted for more than 10% of net revenue for the three ~~or nine~~ months ended ~~May 29,~~November 27, 2021 or ~~May 30,~~November 28, 2020.

Note ~~12.~~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 units, and other equity compensation to key employees and to non-employee directors. The 2019 Plan replaces 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 awarded and issued under the 2019 Plan is ~~4,100~~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, 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 ~~$4,738~~$2.7 million and ~~$(308)~~$2.4 million during the three months ended ~~May 29,~~November 27, 2021 and ~~May 30, 2020, respectively, and $11,719 and $3,332 during the nine months ended May 29, 2021 and May 30,~~November 28, 2020, respectively. Compensation expense is recognized over the requisite service or performance period of the award.

Note ~~13. Restructuring~~

In Fiscal 2020, the Company's Class A diesel production included in the Motorhome reportable segment 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 $7,731 with a resulting gain of $3,565. In May 2021, the rest of the property in Junction City, OR was sold for net proceeds of $4,692 with a resulting gain of $1,188. The gain on both sales is included within selling, general, and administrative expenses on the Consolidated Statements of Income (Loss) for Fiscal 2021. Total restructuring expenses related to the relocation for the nine months ended May 29, 2021 were immaterial to the Consolidated Financial Statements. The Company does not expect additional restructuring charges during the remainder of Fiscal 2021.

~~Note~~ 14. Income Taxes

~~The Company's~~Our effective tax rate was ~~22.8%~~23.2% and ~~25.3%~~23.4% for the three months ended ~~May 29,~~November 27, 2021 and ~~May 30, 2020, respectively, and 23.2% and 16.3% for the nine months ended May 29, 2021 and May 30,~~November 28, 2020, respectively. The decrease in tax rate for the three months ended ~~May 29,~~November 27, 2021 compared to the three months ended ~~May 30,~~November 28, 2020 was ~~primarily due to a favorable tax adjustment in the third quarter of Fiscal 2020~~ primarily driven by a change in projected annual performance over a pretax loss resulting in a higher calculated effective tax rate. The increase in tax rate for the nine months ended May 29, 2021 compared to the nine months ended May 30, 2020 was driven primarily by the impact of a net favorable benefit in the current year related to stock compensation, partially offset by an increase to the rate due to consistent tax credits year-over-year ~~over an~~and increased ~~year to date pretax~~ 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 ~~May 29,~~November 27, 2021, ~~the Company's~~our Federal returns from Fiscal ~~2017~~2018 to present are subject to review by the Internal Revenue Service. With limited 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.

~~Table of Contents~~

Note 15. Earnings Per Share

Basic and diluted earnings per share are calculated as follows:

Three Months Ended Nine Months Ended
(in thousands, except per share data) May 29,
2021 May 30,
2020 May 29,
2021 May 30,
2020
Net income (loss) $ 71,295 $ (12,353) $ 197,786 $ 18,983
Weighted average common shares outstanding 33,552 33,625 33,565 33,102
Dilutive impact of stock compensation awards 384 0 302 187
Dilutive impact of convertible notes 836 0 76 0
Weighted average diluted common shares outstanding 34,772 33,625 33,943 33,289
Anti-dilutive securities excluded from weighted average diluted common shares outstanding 1 123 46 104
Basic earnings (loss) per common share $ 2.12 $ (0.37) $ 5.89 $ 0.57
Diluted earnings (loss) per common share $ 2.05 $ (0.37) $ 5.83 $ 0.57


	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

Under the treasury stock 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
May 29, 2021 May 30, 2020
(in thousands) Defined Benefit Pension Items Total Defined Benefit Pension Items Interest Rate Swap Total
Balance at beginning of period $ (509) $ (509) $ (543) $ 0 $ (543)
Other comprehensive income (loss) ("OCI") before reclassifications 0 0 0 (432) (432)
Amounts reclassified from AOCI 9 9 8 0 8
Net current-period OCI 9 9 8 (432) (424)
Balance at end of period $ (500) $ (500) $ (535) $ (432) $ (967)
Nine Months Ended
May 29, 2021 May 30, 2020
(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)
OCI before reclassifications 0 0 0 (500) (500)
Amounts reclassified from AOCI 26 26 24 0 24
Net current-period OCI 26 26 24 (500) (476)
Balance at end of period $ (500) $ (500) $ (535) $ (432) $ (967)


	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)

~~Table of Contents~~

Reclassifications out of AOCI, net of tax, were:

Three Months Ended Nine Months Ended
(in thousands) Location on Consolidated Statements
of Income and Comprehensive Income May 29,
2021 May 30,
2020 May 29,
2021 May 30,
2020
Amortization of net actuarial loss SG&A $ 9 $ 8 $ 26 $ 24

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

2221

Table of Contents

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

The terms "Winnebago," "we," "us," and "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 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 ~~dollar~~ 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 of recreation vehicles ("RV"s) and marine products with a diversified portfolio used primarily in leisure travel and outdoor 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.

Acquisition of Barletta

On August 31, 2021, we completed our acquisition of all the 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 sellers (subject to a 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 Item 1 of Part I in this Quarterly Report on Form 10-Q.

The 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.

COVID-19 Pandemic

We continue to monitor 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. 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 outdoors, during the COVID-19 pandemic. ~~While our~~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. 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 Item 1A 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 ~~GAAP,~~generally accepted 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 and the Results of Operations - Nine Months Ended May 29, 2021 Compared to the Nine Months Ended May 30, 2020 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 of Directors to enable our Board of 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 and outstanding notes, as further described in Note 89 to the Consolidated Financial Statements included in Item 1 of Part I 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 the industry.

Industry Trends

~~Table~~The RV and marine industries continue to experience supply shortages and shipping delays of ~~Contents~~

~~Reportable Segments~~

Weraw material components. While we continue to manage through these supply disruptions, they have ~~six operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine~~impacted our ability to increase production to meet existing demand in the current fiscal year. If these shortages and ~~6) Winnebago specialty vehicles. Financial performance is evaluated based~~delays worsen, we could experience a negative impact on ~~each operating segment's Adjusted EBITDA, as defined above, which excludes certain corporate administration expenses~~our sales and ~~non-operating income and expense.~~earnings in the future.

Our two reportable segments are Towable (an aggregation of the Winnebago towables and Grand Design towables operating segments) and Motorhome (an aggregation of the Winnebago motorhomes and Newmar motorhomes 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.

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

~~Industry Trends~~

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

•~~Wholesale unit shipments - RV product delivered to the dealers, which is reported monthly by the Recreation Vehicle Industry Association ("RVIA").~~

•~~Retail unit registrations - Consumer purchases of RVs from dealers, which is reported monthly by Stat Surveys.~~

We track RV industry conditions using these key statistics to monitor trends and evaluate and understand our performance relative to the overall industry. The following is an analysis of changes in these key statistics for the rolling 12 months through April as of 2021 and 2020:

US and Canada Industry
Wholesale Unit Shipments per RVIA Retail Unit Registrations per Stat Surveys
Rolling 12 Months through April Rolling 12 Months through April
2021 2020 Unit Change % Change 2021 2020 Unit Change % Change
Towable(1)
462,704 324,262 138,442 42.7 % 520,369 373,427 146,942 39.3 %
Motorhome(2)
49,293 40,152 9,141 22.8 % 58,743 47,183 11,560 24.5 %
Combined 511,997 364,414 147,583 40.5 % 579,112 420,610 158,502 37.7 %

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

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

Wholesale unit shipments have experienced growth (after the initial industry-wide shutdown of RV manufacturing for a six-week period beginning the last week of March 2020) due to high levels of end consumer demand and extremely low levels of dealer inventories, most notably in the towables segment, as consumers considered RVs a safe travel option during the COVID-19 pandemic. The rolling twelve months retail information for 2021 and 2020 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 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 throughout 2021 and likely into 2022 before normalizing.

Calendar Year
Wholesale Unit Shipment Forecast per RVIA(1)
2021
Forecast 2020
Actual Unit Change % Change
Aggressive 586,300 430,400 155,900 36.2 %
Most likely 576,100 430,400 145,700 33.9 %
Conservative 565,800 430,400 135,400 31.5 %

~~(1)~~ ~~Prepared by ITR Economics for RVIA and reported in the Roadsigns RV Summer 2021 Industry Forecast Issue.~~

~~Table of Contents~~

~~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. This data is subject to adjustment and is continuously updated.

Rolling 12 Months through April Calendar Year
US and Canada 2021
2020(1)
2020
2019(1)
2018
Travel trailer and fifth wheels 10.7 % 9.8 % 10.4 % 9.2 % 7.8 %
Motorhome A, B, C 20.0 % 20.3 % 20.8 % 16.1 % 15.5 %
Total market share 11.6 % 11.0 % 11.5 % 10.0 % 8.7 %

~~(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 due to the identification of 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 the new ERP's useful life.

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

Nine Months Ended Fiscal Year Cumulative Investment
(in thousands) May 29,
2021 2020 2019 Fiscal 2015-2021
Capitalized $ 3,838 $ 3,891 $ 3,875 $ 30,515 59.2 %
Expensed 2,376 1,788 3,709 21,039 40.8 %
Total $ 6,214 $ 5,679 $ 7,584 $ 51,554 100.0 %

~~Table of Contents~~

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 of Income ~~(Loss)~~ for the three months ended ~~May 29,~~November 27, 2021 compared to the three months ended ~~May 30,~~November 28, 2020:

Three Months Ended
($ in thousands, except per share data) May 29, 2021
% of Revenues(1)
May 30, 2020
% of Revenues(1)
$ Change % Change
Net revenues $ 960,737 100.0 % $ 402,458 100.0 % $ 558,279 138.7 %
Cost of goods sold 791,125 82.3 % 370,434 92.0 % 420,691 113.6 %
Gross profit 169,612 17.7 % 32,024 8.0 % 137,588 429.6 %
Selling, general, and administrative expenses 63,586 6.6 % 33,271 8.3 % 30,315 91.1 %
Amortization 3,590 0.4 % 6,926 1.7 % (3,336) (48.2) %
Total operating expenses 67,176 7.0 % 40,197 10.0 % 26,979 67.1 %
Operating income (loss) 102,436 10.7 % (8,173) (2.0) % 110,609 (1,353.3) %
Interest expense 10,229 1.1 % 8,440 2.1 % 1,789 21.2 %
Non-operating income (93) — % (74) — % 19 25.7 %
Income (loss) before income taxes 92,300 9.6 % (16,539) (4.1) % 108,839 (658.1) %
Provision (benefit) for income taxes 21,005 2.2 % (4,186) (1.0) % 25,191 (601.8) %
Net income (loss) $ 71,295 7.4 % $ (12,353) (3.1) % $ 83,648 (677.1) %
Diluted earnings (loss) per share $ 2.05 $ (0.37) $ 2.42 (654.1) %
Diluted weighted average shares outstanding 34,772 33,625 1,147 3.4 %


	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	%

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

Third quarter Fiscal 2020 results were negatively impacted by the unprecedented series of events related to the COVID-19 pandemic which included the suspension of the Company's manufacturing operations as well as disruptions across its dealer network, supply chain and end consumers during most of the quarter.

Net revenues increased primarily due to unit growth and ~~pricing actions, including lower allowances.~~price increases.

Gross profit as a percentage of revenue increased primarily due to improved operating leverage on higher revenues, ~~pricing actions~~price increases, productivity initiatives, and favorable segment mix, partially offset by higher ~~enterprise-wide variable compensation expense.~~material and component costs.

Operating expenses increased primarily due to ~~an increase in enterprise-wide variable compensation expense and~~ higher selling costs from improved operating performance, ~~partially offset by lower Newmar amortization.~~acquisition-related costs, incremental amortization, and normal operating expenses of Barletta.

~~Interest expense~~Non-operating loss increased ~~primarily~~ due to ~~a higher interest rate on indebtedness as a result~~the contingent consideration fair value adjustment related to the acquisition of ~~refinancing our Term Loan in the fourth quarter of Fiscal 2020.~~Barletta.

Our effective tax rate ~~decreased~~was relatively flat in the first quarter of Fiscal 2022 compared to ~~22.8% for~~ the ~~third~~first quarter of Fiscal 2021 ~~compared~~ primarily due

Table of Contents

to ~~25.3% for~~ the ~~third quarter~~impact of ~~Fiscal 2020 primarily~~a net favorable benefit in the current year related to stock compensation, offset by an increase to the rate due to ~~a favorable~~consistent tax ~~adjustment~~credits year-over-year and increased income in the ~~third quarter of Fiscal 2020 driven by a change in projected annual performance over a pretax loss resulting in a higher calculated effective tax rate.~~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.

~~Table of Contents~~

Non-GAAP Reconciliation

The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the three months ended ~~May 29,~~November 27, 2021 and ~~May 30,~~November 28, 2020:

Three Months Ended
(in thousands) May 29,
2021 May 30,
2020
Net income (loss) $ 71,295 $ (12,353)
Interest expense 10,229 8,440
Provision (benefit) for income taxes 21,005 (4,186)
Depreciation 4,917 4,134
Amortization 3,590 6,926
EBITDA 111,036 2,961
Acquisition-related costs — (189)
Restructuring expenses 19 1,376
Gain on sale of property, plant and equipment (1,188) —
Non-operating income (93) (74)
Adjusted EBITDA $ 109,774 $ 4,074


	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 ~~May 29,~~November 27, 2021 compared to the three months ended ~~May 30,~~November 28, 2020:


		Three Months Ended													Three Months Ended
(in thousands, except ASP)		May 29, 2021		% of Revenues		May 30, 2020		% of Revenues		$ Change		% Change
(in thousands, except ASP and units)														(in thousands, except ASP and units)	November 27, 2021		% of Revenues		November 28, 2020		% of Revenues		$ Change		% Change
Net revenues	Net revenues	$	555,749			$	188,898			$	366,851	194.2	%	Net revenues	$	651,024			$	454,901			$	196,123	43.1	%
Adjusted EBITDA	Adjusted EBITDA	80,130		14.4	%	16,451		8.7	%	63,679		387.1	%	Adjusted EBITDA	112,077		17.2	%	63,143		13.9	%	48,934		77.5	%

Average Selling Price ("ASP")(1)	Average Selling Price ("ASP")(1)	32,958				32,107				851		2.7	%	Average Selling Price ("ASP")(1)	39,237				32,089				7,148		22.3	%

		Three Months Ended													Three Months Ended
Unit deliveries	Unit deliveries	May 29, 2021		Product Mix(2)		May 30, 2020		Product Mix(2)		Unit Change		% Change		Unit deliveries	November 27, 2021		Product Mix(2)		November 28, 2020		Product Mix(2)		Unit Change		% Change
Travel trailer	Travel trailer	11,089		66.4	%	3,537		60.3	%	7,552		213.5	%	Travel trailer	11,143		67.8	%	9,160		64.4	%	1,983		21.6	%
Fifth wheel	Fifth wheel	5,620		33.6	%	2,324		39.7	%	3,296		141.8	%	Fifth wheel	5,288		32.2	%	5,054		35.6	%	234		4.6	%
Total towables	Total towables	16,709		100.0	%	5,861		100.0	%	10,848		185.1	%	Total towables	16,431		100.0	%	14,214		100.0	%	2,217		15.6	%

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

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

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

~~Net revenues increased primarily driven by unit growth.~~

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

~~Table of Contents~~

~~Motorhome~~

~~The following is an analysis of key changes in our Motorhome segment for the three months ended May 29, 2021 compared to the three months ended May 30, 2020:~~

Three Months Ended
(in thousands, except ASP) May 29,
2021 % of Revenues May 30,
2020 % of Revenues $ Change % Change
Net revenues $ 385,257 $ 203,590 $ 181,667 89.2 %
Adjusted EBITDA 37,467 9.7 % (10,789) (5.3) % 48,256 447.3 %
ASP(1)
138,810 131,609 7,201 5.5 %
Three Months Ended
Unit deliveries May 29,
2021
Product Mix(2)
May 30,
2020
Product Mix(2)
Unit Change % Change
Class A 745 27.3 % 428 27.4 % 317 74.1 %
Class B 1,384 50.8 % 694 44.4 % 690 99.4 %
Class C 598 21.9 % 440 28.2 % 158 35.9 %
Total motorhomes 2,727 100.0 % 1,562 100.0 % 1,165 74.6 %

~~(1)~~ ~~ASP excludes off-invoice dealer incentives.~~

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

~~Net revenues increased primarily due to unit growth and increased pricing, including lower allowances, partially offset by unfavorable product mix.~~

Adjusted EBITDA increased primarily due to improved operating leverage on higher revenue and increased pricing, including lower allowances, partially offset by investments in the business and higher variable compensation expense throughout the segment.

~~Table of Contents~~

~~Results of Operations - Nine Months Ended May 29, 2021 Compared to the Nine Months Ended May 30, 2020~~

~~Consolidated Performance Summary~~

~~The following is an analysis of changes in key items included in the Consolidated Statements of Income (Loss) for the nine months ended May 29, 2021 compared to the nine months ended May 30, 2020:~~

Nine Months Ended
($ in thousands, except per share data) May 29, 2021
% of Revenues(1)
May 30, 2020
% of Revenues(1)
$ Change % Change
Net revenues $ 2,593,754 100.0 % $ 1,617,726 100.0 % $ 976,028 60.3 %
Cost of goods sold 2,130,556 82.1 % 1,427,307 88.2 % 703,249 49.3 %
Gross profit 463,198 17.9 % 190,419 11.8 % 272,779 143.3 %
Selling, general, and administrative expenses 165,001 6.4 % 126,540 7.8 % 38,461 30.4 %
Amortization of intangible assets 10,771 0.4 % 18,514 1.1 % (7,743) (41.8) %
Total operating expenses 175,772 6.8 % 145,054 9.0 % 30,718 21.2 %
Operating income 287,426 11.1 % 45,365 2.8 % 242,061 533.6 %
Interest expense 30,222 1.2 % 23,140 1.4 % 7,082 30.6 %
Non-operating income (310) — % (460) — % (150) (32.6) %
Income before income taxes 257,514 9.9 % 22,685 1.4 % 234,829 1,035.2 %
Provision for income taxes 59,728 2.3 % 3,702 0.2 % 56,026 1,513.4 %
Net income $ 197,786 7.6 % $ 18,983 1.2 % $ 178,803 941.9 %
Diluted earnings per share $ 5.83 $ 0.57 $ 5.26 922.8 %
Diluted average shares outstanding 33,943 33,289 654 2.0 %

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

Fiscal 2020 results were negatively impacted by the unprecedented series of events related to the COVID-19 pandemic which included the suspension of the Company's manufacturing operations as well as disruptions across its dealer network, supply chain and end consumers during most of the third quarter.

Net revenues increased primarily due to organic unit growth, the annualized impact from our Newmar acquisition, which took place in the first quarter of Fiscal 2020, and pricing actions, including lower allowances.

~~Gross profit as a percentage of revenue increased primarily due to improved leverage as a result of higher revenues, pricing actions, including lower allowances, and productivity initiatives.~~

Operating expenses increased primarily driven by an increase in enterprise-wide variable compensation, higher selling costs and a full year of Newmar operating costs, partially offset by prior year acquisition-related costs, a gain on sale of certain assets and lower Newmar amortization expense.

~~Interest expense increased primarily due to a higher interest rate on the refinancing of our Term Loan in the fourth quarter of Fiscal 2020.~~

Our effective tax rate increased to 23.2% for the nine months ended May 29, 2021 compared to 16.3% for the nine months ended May 30, 2020 primarily due to consistent year-over-year tax credits on higher current year pretax income.

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

~~Table of Contents~~

~~Non-GAAP Reconciliation~~

~~The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the nine months ended May 29, 2021 and May 30, 2020:~~

Nine Months Ended
(in thousands) May 29, 2021 May 30, 2020
Net income $ 197,786 $ 18,983
Interest expense 30,222 23,140
Provision for income taxes 59,728 3,702
Depreciation 13,476 11,854
Amortization 10,771 18,514
EBITDA 311,983 76,193
Acquisition-related fair-value inventory step-up — 4,810
Acquisition-related costs — 9,761
Restructuring expenses 112 1,247
Gain on sale of property, plant and equipment (4,753) —
Non-operating income (310) (460)
Adjusted EBITDA $ 307,032 $ 91,551

~~Reportable Segment Performance Summary~~

~~Towable~~

~~The following is an analysis of key changes in our Towable segment for thenine months ended May 29, 2021 compared to the nine months ended months ended May 30, 2020, and as of May 29, 2021 compared to May 30, 2020:~~

Nine Months Ended
(in thousands, except ASP) May 29, 2021 % of Revenues May 30, 2020 % of Revenues $ Change % Change
Net revenues $ 1,449,934 $ 813,611 $ 636,323 78.2 %
Adjusted EBITDA 205,639 14.2 % 86,982 10.7 % 118,657 136.4 %
ASP(1)
32,503 32,836 (333) (1.0) %
Nine Months Ended
Unit deliveries May 29, 2021
Product Mix(2)
May 30, 2020
Product Mix(2)
Unit Change % Change
Travel trailer 29,125 65.6 % 15,319 60.8 % 13,806 90.1 %
Fifth wheel 15,306 34.4 % 9,874 39.2 % 5,432 55.0 %
Total towables 44,431 100.0 % 25,193 100.0 % 19,238 76.4 %
(in thousands, except units) May 29, 2021 May 30, 2020 Change % Change
Backlog(3)
Units 46,646 13,235 33,411 252.4 %
Dollars $ 1,522,069 $ 417,176 $ 1,104,893 264.9 %
Dealer Inventory
Units 11,647 15,562 (3,915) (25.2) %

~~(1)~~ ~~ASP excludes off-invoice dealer incentives.~~

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

~~Table of Contents~~

(3) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped ~~generally~~ 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.~~growth and price increases.

Adjusted EBITDA increased primarily due to operating leverage on an increase in unit sales, ~~and improved pricing,~~ partially offset by higher ~~selling expenses and variable compensation throughout the segment due to improved~~ operating ~~performance.~~expenses.

~~Backlog increased primarily due to the continued strong retail demand by consumers~~

Table of ~~RVs. As a result of this high retail demand, dealer inventory levels are lower, creating higher order backlog.~~Contents

Motorhome

The following is an analysis of key changes in our Motorhome segment for the~~nine~~ three months ended ~~May 29,~~November 27, 2021 compared to the ~~nine~~three months ended ~~months ended May 30, 2020, and as of May 29, 2021 compared to May 30,~~November 28, 2020:


		Nine Months Ended													Three Months Ended
(in thousands, except ASP)		May 29, 2021		% of Revenues		May 30, 2020		% of Revenues		$ Change		% Change
(in thousands, except ASP and units)														(in thousands, except ASP and units)	November 27, 2021		% of Revenues		November 28, 2020		% of Revenues		$ Change		% Change
Net revenues	Net revenues	$	1,090,221			$	755,023			$	335,198	44.4	%	Net revenues	$	421,479			$	322,389			$	99,090	30.7	%
Adjusted EBITDA	Adjusted EBITDA	118,779		10.9	%	13,488		1.8	%	105,291		780.6	%	Adjusted EBITDA	50,153		11.9	%	30,343		9.4	%	19,810		65.3	%

ASP(1)	ASP(1)	135,356				129,344				6,012		4.6	%	ASP(1)	$	152,550			$	136,887			15,663		11.4	%

		Nine Months Ended													Three Months Ended
Unit deliveries	Unit deliveries	May 29, 2021		Product Mix(2)		May 30, 2020		Product Mix(2)		Unit Change		% Change		Unit deliveries	November 27, 2021		Product Mix(2)		November 28, 2020		Product Mix(2)		Unit Change		% Change
Class A	Class A	2,047		25.8	%	1,803		31.0	%	244		13.5	%	Class A	744		27.2	%	598		25.7	%	146		24.4	%
Class B	Class B	3,901		49.1	%	2,287		39.3	%	1,614		70.6	%	Class B	1,447		52.9	%	1,098		47.1	%	349		31.8	%
Class C	Class C	1,994		25.1	%	1,734		29.7	%	260		15.0	%	Class C	544		19.9	%	634		27.2	%	(90)		(14.2)	%
Total motorhomes	Total motorhomes	7,942		100.0	%	5,824		100.0	%	2,118		36.4	%	Total motorhomes	2,735		100.0	%	2,330		100.0	%	405		17.4	%

(in thousands, except units)		May 29, 2021				May 30, 2020				Change		% Change
															November 27, 2021				November 28, 2020				Change		% Change
Backlog(3)	Backlog(3)													Backlog(3)
Units	Units	18,145				4,131				14,014		339.2	%	Units	18,826				13,217				5,609		42.4	%
Dollars	Dollars	$	2,180,149			$	515,035			$	1,665,114	323.3	%	Dollars	$	2,412,625			$	1,709,154			$	703,471	41.2	%
Dealer Inventory	Dealer Inventory													Dealer Inventory
Units	Units	2,429				5,013				(2,584)		(51.5)	%	Units	2,468				2,123				345		16.3	%

(1)ASP excludes off-invoice dealer incentives.

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

(3) ~~Backlog~~Our backlog includes all accepted orders from dealers which generally have been requested to be shipped ~~generally~~ 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 ~~organic~~ unit growth ~~our acquisition of Newmar in the first quarter of Fiscal 2020,~~ and ~~increased pricing, including allowances.~~price increases.

Adjusted EBITDA ~~increased~~increased primarily due to ~~improved~~ operating leverage ~~as a result of higher revenue~~on an increase in unit sales and ~~pricing actions, including allowances,~~productivity initiatives, partially offset by higher ~~variable compensation throughout the segment due to improved~~ operating ~~performance.~~

Backlog increased primarily 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.

expenses.

3126

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.

(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 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:

Nine Months Ended
(in thousands) May 29,
2021 May 30,
2020
Total cash provided by (used in):
Operating activities $ 147,954 $ 162,437
Investing activities (11,370) (289,406)
Financing activities (23,318) 242,018
Net increase in cash and cash equivalents $ 113,266 $ 115,049


	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 primarily~~increased due to higher profitability, partially offset by investments in working capital to support current year revenue growth, including ~~higher~~a $70.3 million increase in inventory to support customer demand, a $7.2 million increase in accounts receivable due to timing of ~~accounts receivable~~ invoicing/collections and ~~payments on~~a $17.7 million decrease in accounts payable ~~and higher enterprise-wide variable compensation, partially offset by higher profitability~~due to timing of payments in the ~~nine~~three months ended ~~May 29,~~November 27, 2021.

Investing Activities

Cash used in investing activities ~~decreased~~increased primarily due to our acquisition of ~~Newmar~~Barletta during the first quarter of Fiscal ~~2020 and proceeds received from the sale~~2022.

Table of ~~property in Junction City, OR.~~Contents

Financing Activities

Cash ~~provided by~~used in financing activities ~~switched~~increased primarily due to cash used in Fiscal 2021 primarily driven by financing of the Newmar acquisition in the prior year through the issuance of Convertible Notes and Warrants, partially offset by the purchase of a convertible bond hedge, and 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 Convertible Notes, which were partially used to fund the Newmar acquisition. Refer to Note 8 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details.

On July 8, 2020, we closed on our private offering (the "Senior Secured Notes Offering") of $300,000 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 8 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details.

We maintain a ~~$192,500~~$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 ~~May 29,~~November 27, 2021, we had no borrowings against the ABL Credit Facility.

As of ~~May 29,~~November 27, 2021, we had ~~$405,841~~$211.4 million in cash and cash equivalents and ~~$192,500~~$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 ~~May 29,~~November 27, 2021 and August ~~29, 2020~~28, 2021 was ~~$613,007~~$502.5 million and ~~$413,220,~~$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 14, 2020, our Board of Directors 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 60,000 shares to a total of 120,000 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 17, 2020.

~~On October 18, 2017,~~13, 2021, our Board of Directors authorized a new share repurchase program in the amount of ~~$70,000. There is~~$200.0 million with no time restriction on the ~~authorization.~~authorization, which took effect immediately and replaced the prior program. In the ~~nine~~three months ended ~~May 29,~~November 27, 2021, we repurchased ~~204,000~~281,000 shares of our own common stock at a cost of ~~$10,004~~$19.6 million under this authorization, and ~~38,000~~55,000 shares at a cost of ~~$2,105~~$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 and Senior Secured Notes, we may purchase shares in the future. At ~~May 29,~~November 27, 2021, we have ~~$58,761~~$190.0 million remaining on our Board approved repurchase authorization.

On ~~May 19,~~December 15, 2021, our Board of Directors approved a quarterly cash dividend of ~~$0.12~~$0.18 per share payable on ~~June 30, 2021,~~January 26, 2022, to common stockholders of record at the close of business on ~~June 16, 2021.~~January 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 8 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details on the Convertible Notes and Senior Secured Notes. Additionally, see2021. 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.

Critical Accounting Policies

We describe our significant accounting policies in Note 1 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. 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 material changes to our significant accounting policies or critical accounting policies since the end of Fiscal ~~2020.~~2021.

Recently Issued Accounting Pronouncements

~~Information regarding new~~For a summary of recently issued applicable accounting pronouncements, ~~is include in~~see Note 1 to the 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 of Part I of our Annual Report on Form 10-K for the fiscal year ended August ~~29, 2020,~~28, 2021, and Item 1A 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

~~Table of Contents~~•

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 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 information systems and web applications; any unexpected expenses related to the implementation of our ERP system; the duration and scope ofUncertainty 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~~security, 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

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 ~~May 29,~~November 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 ~~May 29,~~November 27, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act 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 concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Changes in Internal Control Over Financial Reporting

~~During the third quarter of Fiscal 2021~~, we implemented an ERP system within specific areas of certain operating segments which is expected to improve the efficiency of certain financial and related transaction processes. We have evaluated and tested the implementation of the ERP system for effect on our internal control over financial reporting. We have concluded, as part of our evaluation described in the above paragraphs, that the implementation of the ERP system in these circumstances has not materially affected our internal control over financial reporting.

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

3429

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 1011 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Item 1A 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

Purchases of our common stock during each fiscal month of the ~~third~~first quarter of Fiscal ~~2021~~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)~~

~~02/28/21 - 04/03/21~~

—

~~58,761,000~~

~~04/04/21 - 05/01/21~~

—

~~58,761,000~~

~~05/02/21 - 05/29/21~~

—

~~58,761,000~~

~~Total~~

—

~~58,761,000~~


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.

(3) ~~Pursuant~~Prior to October 13, 2021, pursuant to a ~~$70,000~~$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.

Our Senior Secured ~~notes,~~Notes, as defined in Note 89 to the Consolidated Financial Statements included in Item 1 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.

3530

Table of Contents

Item 6. Exhibits


~~3a.~~			~~Articles of Incorporation of the Registrant, as amended and restated on December 17, 2020~~ ~~(incorporated by reference~~ ~~from~~ ~~Exhibit 3a to the Registrant's Quarterly Report for the quarter ended November 28, 2020~~).

~~3b.~~3c.			Amended By-Laws of the Registrant ~~(incorporated by~~ ~~reference from~~ ~~Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated March 16, 2016~~)effective December 1, 2021.

4.1			Indenture, dated November 1, 2019, by and between Winnebago Industries, Inc. and U.S. Bank National Association ~~(incorporate~~d(incorporated by re ~~ference~~reference from Exhibit 4.1 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~~ ~~(incorporated by reference from~~ ~~Exhibit 4.1~~ to ~~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 ~~(fi~~l ed(filed herewith).

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

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline 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			Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) (furnished herewith).

3631

Table of Contents

SIGNATURES

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

WINNEBAGO INDUSTRIES, INC.

Date:

~~June 23,~~December 17, 2021

By:

/s/ Michael J. Happe

Michael J. Happe

Chief Executive Officer, President

(Principal Executive Officer)

Date:

~~June 23,~~December 17, 2021

By:

/s/ Bryan L. Hughes

Bryan L. Hughes

Chief Financial Officer and Senior Vice President

(Principal Financial and Accounting Officer)

3732


PART I.	FINANCIAL INFORMATION	3
Item 1.	Consolidated Financial Statements	3
	Consolidated Statements of Income ~~(Loss)~~and Comprehensive Income ~~(Loss)~~	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Changes in S ~~hareholders~~'Shareholders' Equity	7
	Notes to Consolidated Financial Statements	98
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	2322
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3429
Item 4.	Controls and Procedures.	3429

PART II.	OTHER INFORMATION	3530
Item 1.	Legal Proceedings.	3530
Item 1A.	Risk Factors	3530
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	3530
Item 6.	Exhibits	3631

SIGNATURES		3732



Supplemental Disclosures
Income taxes paid, net	$	71,090	$	6,240
Interest paid	14,618		14,961

Non-cash investing and financing activities
Issuance of common stock for acquisition of business	$	0	$	92,572
Capital expenditures in accounts payable	121		255
Dividends declared not yet paid	4,273		126


	Three Months Ended May 29, 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 February 27, 2021	51,776	$	25,888	$	209,727	$	1,032,020	$	(509)	(18,225)	$	(324,762)	$	942,364
Stock-based compensation	—	—		4,733		—		—		0	5		4,738
Common stock dividends paid; $0.12 per share	—	—		—		(4,062)		—		—	—		(4,062)
Common stock dividends accrued; $0.12 per share	—	—		—		(4,086)		—		—	—		(4,086)
Actuarial loss, net of tax	—	—		—		—		9		—	—		9
Net income	—	—		—		71,295		—		—	—		71,295
Balance at May 29, 2021	51,776	$	25,888	$	214,460	$	1,095,167	$	(500)	(18,225)	$	(324,757)	$	1,010,258

	Three Months Ended May 30, 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 February 29, 2020	51,776	$	25,888	$	200,751	$	890,994	$	(543)	(18,153)	$	(315,566)	$	801,524
Stock-based compensation	—	—		(315)		—		—		0	7		(308)
Issuance of stock, net	—	—		20		—		—		8	133		153
Repurchase of common stock	—	—		—		—		—		(1)	(52)		(52)
Common stock dividends paid; $0.11 per share	—	—		—		(3,730)		—		—	—		(3,730)
Actuarial loss, net of tax	—	—		—		—		8		—	—		8
Interest rate swap activity, net of tax	—	—		—		—		(432)		—	—		(432)
Net loss	—	—		—		(12,353)		—		—	—		(12,353)
Balance at May 30, 2020	51,776	$	25,888	$	200,456	$	874,911	$	(967)	(18,146)	$	(315,478)	$	784,810

	Nine Months Ended May 29, 2021
	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	—	—		11,701		—		—		1	18		11,719
Issuance of stock	—	—		(1,032)		—		—		149	2,631		1,599
Repurchase of common stock	—	—		—		—		—		(242)	(12,109)		(12,109)
Common stock dividends paid; $0.36 per share	—	—		—		(12,136)		—		—	—		(12,136)
Common stock dividends accrued; $0.12 per share	—	—		—		(4,093)		—		—	—		(4,093)
Actuarial loss, net of tax	—	—		—		—		26		—	—		26
Net income	—	—		—		197,786		—		—	—		197,786
Balance at May 29, 2021	51,776	$	25,888	$	214,460	$	1,095,167	$	(500)	(18,225)	$	(324,757)	$	1,010,258


	Nine Months Ended May 30, 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 31, 2019	51,776	$	25,888	$	91,185	$	866,886	$	(491)	(20,262)	$	(351,256)	$	632,212
Stock-based compensation	—	—		3,309		—		—		1	23		3,332
Issuance of stock, net	—	—		(2,011)		—		—		160	2,782		771
Issuance of stock for acquisition	—	—		57,811		—		—		2,000	34,761		92,572
Repurchase of common stock	—	—		—		—		—		(45)	(1,788)		(1,788)
Common stock dividends paid; $0.33 per share	—	—		—		(10,958)		—		—	—		(10,958)
Actuarial loss, net of tax	—	—		—		—		24		—	—		24
Interest rate swap activity, net of tax	—	—		—		—		(500)		—	—		(500)
Equity component of convertible senior notes and offering costs, net of tax of $20,840	—	—		61,335		—		—		—	—		61,335
Convertible note hedge purchase, net of tax of $17,417	—	—		(53,383)		—		—		—	—		(53,383)
Warrant transactions	—	—		42,210		—		—		—	—		42,210
Net income	—	—		—		18,983		—		—	—		18,983
Balance at May 30, 2020	51,776	$	25,888	$	200,456	$	874,911	$	(967)	(18,146)	$	(315,478)	$	784,810


	May 29, 2021
($ in thousands)	Weighted Average Life-Years	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	Indefinite	$	275,250	$	—	$	275,250
Dealer networks	12.1	159,581		$	42,360	117,221
Backlog	0.5	28,327		28,327		0
Non-compete agreements	4.3	6,647		5,121		1,526
Other intangible assets		$	469,805	$	75,808	$	393,997

	August 29, 2020
($ in thousands)	Weighted Average Life-Years	Cost		Accumulated Amortization		Net Carrying Value
Trade names	Indefinite	$	275,250	$	—	$	275,250
Dealer networks	12.2	159,581		32,487		127,094
Backlog	0.5	28,327		28,327		0
Non-compete agreements	4.1	6,647		4,223		2,424
Other intangible assets		$	469,805	$	65,037	$	404,768


	US and Canada Industry
	Wholesale Unit Shipments per RVIA					Retail Unit Registrations per Stat Surveys
	Rolling 12 Months through April					Rolling 12 Months through April
	2021	2020	Unit Change	% Change		2021	2020	Unit Change	% Change
Towable(1)	462,704	324,262	138,442	42.7	%	520,369	373,427	146,942	39.3	%
Motorhome(2)	49,293	40,152	9,141	22.8	%	58,743	47,183	11,560	24.5	%
Combined	511,997	364,414	147,583	40.5	%	579,112	420,610	158,502	37.7	%


	Calendar Year
Wholesale Unit Shipment Forecast per RVIA(1)	2021 Forecast	2020 Actual	Unit Change	% Change
Aggressive	586,300	430,400	155,900	36.2	%
Most likely	576,100	430,400	145,700	33.9	%
Conservative	565,800	430,400	135,400	31.5	%


	Rolling 12 Months through April				Calendar Year
US and Canada	2021		2020(1)		2020		2019(1)		2018
Travel trailer and fifth wheels	10.7	%	9.8	%	10.4	%	9.2	%	7.8	%
Motorhome A, B, C	20.0	%	20.3	%	20.8	%	16.1	%	15.5	%
Total market share	11.6	%	11.0	%	11.5	%	10.0	%	8.7	%


	Nine Months Ended		Fiscal Year				Cumulative Investment
(in thousands)	May 29, 2021		2020		2019		Fiscal 2015-2021
Capitalized	$	3,838	$	3,891	$	3,875	$	30,515	59.2	%
Expensed	2,376		1,788		3,709		21,039		40.8	%
Total	$	6,214	$	5,679	$	7,584	$	51,554	100.0	%