Contact: | Sheila Davis, PR/IR Manager 641/585-6803 sdavis@winnebagoind.com |
WINNEBAGO INDUSTRIES REPORTS SECOND QUARTER
AND FIRST SIX MONTHS FISCAL 2006 REVENUES AND EARNINGS
FOREST CITY, IOWA, March 16, 2006 – Winnebago Industries, Inc., (NYSE:WGO), the leading United States (U.S.) motor home manufacturer, today reported financial results for the Company’s second quarter and first six months ended February 25, 2006.
Net income for the second quarter was $7.7 million, a decrease of 38.7 percent compared to net income of $12.6 million for the second quarter last year. On a diluted per share basis, the Company earned 23 cents a share for the second quarter of fiscal 2006, compared to net income of 37 cents a share for the second quarter last year. Included as a reduction to net income in the second quarter of fiscal 2006 was $804,000, or 2 cents per diluted share, of stock option expense due to the adoption of Statement of Financial Accounting Standards No. 123R,Share-Based Payment beginning August 28, 2005, which was not effective in the second quarter of last year.
Revenues for the second quarter of fiscal 2006 were $206.4 million, a decrease of 13.8 percent compared to revenues of $239.4 million for the second quarter of fiscal 2005.
Net income for the first six months of fiscal 2006 was $22.3 million, a decrease of 30.7 percent compared to net income of $32.1 million for same period in fiscal 2005. On a diluted per share basis, the Company earned 67 cents a share for the first six months of fiscal 2006, compared to 94 cents a share for the first six months of fiscal 2004. Included as a reduction to net income for the first six months of fiscal 2006 was $2.3 million, or 7 cents per diluted share, of stock option expense.
Revenues for the first six months of fiscal 2006 were $438.7 million, a decrease of 13.2 percent compared to revenue of $505.5 million for the same period in fiscal 2005.
“Revenues and net income for the quarter and first six months were negatively impacted primarily by lower motor home deliveries as a result of decreased industry retail demand,” said Winnebago Industries’ Chairman and CEO Bruce Hertzke. “We were also impacted by a shift towards lower priced motor home products. This shift in product mix is occurring industry-wide. Based on statistics from the Recreation Vehicle Industry Association for calendar 2005, Class A motor home shipments decreased 12.7 percent while Class C shipments for the industry decreased only 1.7 percent for the same period.”
The Company’s sales order backlog was 1,581 units at February 25, 2006, compared to the backlog of 2,108 units at February 26, 2005. Hertzke continued, “As evidenced by the composition of the backlog, we continue to see a shift in the mix of products on order by our dealer partners to lower priced motor homes. The introduction of our new Winnebago View and Itasca Navion fuel efficient Class C diesel motor homes was particularly timely and continues to have a positive impact on our Class C backlog.”
According to Statistical Surveys, Inc., an independent retail reporting service, Winnebago Industries completed calendar 2005 in the number one position with combined Class A and Class C retail sales market share of 17.9 percent. “Manufacturers’ and dealers’ inventories were high at the beginning of calendar 2005, leading many manufacturers to promotionally discount their products into the marketplace,” said Winnebago Industries’ President Ed Barker. “As we’ve previously stated, our primary goal is profitability, so we did not participate in offering incentives at the same level as our major competitors. Consequently, our market share for the combined Class A and C markets declined from 19.0 percent for calendar 2004, driven primarily by lower Class A market share. However, as calendar 2005 progressed and discounts in the marketplace decreased, we did see recovery in our market share, achieving 19.3 percent of the combined Class A and C market for the fourth quarter of calendar 2005.”
Winnebago Industries repurchased 100,000 shares of the Company’s common stock for an aggregate consideration of approximately $3.1 million during the second quarter of fiscal 2006. The Company has approximately $21.7 million remaining on the current share repurchase authorization.
Winnebago Industries will conduct a conference call in conjunction with this release at 10 a.m. ET today, Thursday, March 16, 2006. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Company’s website atwww.winnebagoind.com/html/company/investorRelations.html, orwww.vcall.com. The event will be archived and available for replay for the next 90 days.
About Winnebago Industries
Winnebago Industries, Inc. is the leading U.S. manufacturer of motor homes, self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes under the Winnebago and Itasca brand names with state-of-the-art computer-aided design and manufacturing systems on automotive-styled assembly lines. The Company’s common stock is listed on the New York, Chicago and Pacific Stock Exchanges and traded under the symbol WGO. Options for the Company’s common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries’ investor relations material, to add your name to an automatic email list for Company news releases or for information on a dollar-based stock investment service for the Company’s stock, visit,http://www.winnebagoind.com/html/company/investorRelations.html
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to reactions to actual or threatened terrorist attacks, declines in consumer confidence, the availability and price of fuel, a significant increase in interest rates, a slowdown in the economy, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new products introduced by competitors and other factors. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company’s filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or from the Company upon request.
Winnebago Industries, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except per share amounts)
Quarter Ended | Six Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
February 25, 2006 | February 26 2005* | February 25, 2006 | February 26, 2005* | |||||||||||
Net revenues | $ | 206,425 | $ | 239,359 | $ | 438,680 | $ | 505,492 | ||||||
Cost of goods sold | 186,105 | 210,098 | 387,196 | 436,167 | ||||||||||
Gross profit | 20,320 | 29,261 | 51,484 | 69,325 | ||||||||||
Operating expenses | ||||||||||||||
Selling | 4,505 | 4,564 | 9,178 | 9,118 | ||||||||||
General and administrative | 5,284 | 5,798 | 10,333 | 11,355 | ||||||||||
Total operating expenses | 9,789 | 10,362 | 19,511 | 20,473 | ||||||||||
Operating income | 10,531 | 18,899 | 31,973 | 48,852 | ||||||||||
Financial income | 1,314 | 639 | 2,236 | 1,133 | ||||||||||
Income before income taxes | 11,845 | 19,538 | 34,209 | 49,985 | ||||||||||
Provision for taxes | 4,145 | 6,967 | 11,939 | 17,870 | ||||||||||
Net income | $ | 7,700 | $ | 12,571 | $ | 22,270 | $ | 32,115 | ||||||
Income per common share: | ||||||||||||||
Basic | $ | 0.23 | $ | 0.37 | $ | 0.68 | $ | 0.95 | ||||||
Diluted | $ | 0.23 | $ | 0.37 | $ | 0.67 | $ | 0.94 | ||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 32,806 | 33,672 | 32,870 | 33,647 | ||||||||||
Diluted | 33,147 | 34,254 | 33,167 | 34,224 |
* As restated
Winnebago Industries, Inc.
Unaudited Consolidated Condensed Balance Sheets
(In thousands)
February 25, 2006 | August 27, 2005 | |||||||
---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,825 | $ | 19,484 | ||||
Short-term investments | 144,250 | 93,100 | ||||||
Receivables, net | 29,225 | 40,910 | ||||||
Inventories | 90,888 | 120,655 | ||||||
Other | 13,838 | 13,943 | ||||||
Total current assets | 297,026 | 288,092 | ||||||
Property and equipment, net | 60,349 | 63,853 | ||||||
Deferred income taxes | 24,236 | 24,997 | ||||||
Investment in life insurance | 20,437 | 22,066 | ||||||
Other assets | 15,849 | 13,952 | ||||||
Total assets | $ | 417,897 | $ | 412,960 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 33,436 | $ | 37,229 | ||||
Income taxes payable | 7,523 | 4,458 | ||||||
Accrued expenses | 42,217 | 48,936 | ||||||
Total current liabilities | 83,176 | 90,623 | ||||||
Postretirement health care and deferred | ||||||||
compensation benefits, net of current portion | 86,541 | 86,450 | ||||||
Stockholders’ equity | 248,180 | 235,887 | ||||||
Total liabilities and stockholders’ equity | $ | 417,897 | $ | 412,960 | ||||
Winnebago Industries, Inc.
Unaudited Condensed Statement of Cash Flows
(Dollars in thousands)
Six Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|
February 25, 2006 | February 26, 2005* | |||||||
Operating activities: | ||||||||
Net income | $ | 22,270 | $ | 32,115 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation | 5,328 | 4,931 | ||||||
Stock-based compensation | 2,895 | 41 | ||||||
Deferred income taxes | 1,538 | (3 | ) | |||||
Deferred compensation and postretirement expense | 638 | 630 | ||||||
Excess tax benefit from stock-based compensation | (174 | ) | — | |||||
Other | (212 | ) | 33 | |||||
Change in operating assets and liabilities: | ||||||||
Receivable and other assets | 10,986 | 18,210 | ||||||
Inventories | 29,767 | (12,926 | ) | |||||
Accounts payable and accrued expenses | (10,336 | ) | (3,436 | ) | ||||
Income taxes payable | 3,257 | 7,005 | ||||||
Postretirement and deferred compensation benefits | (663 | ) | (352 | ) | ||||
Net cash provided by operating activities | 65,294 | 46,248 | ||||||
Investing activities: | ||||||||
Purchases of short-term investments | (110,100 | ) | (147,473 | ) | ||||
Proceeds from the sale or maturity of short-term investments | 58,950 | 101,094 | ||||||
Purchases of property and equipment | (1,968 | ) | (4,178 | ) | ||||
Other | 70 | (365 | ) | |||||
Net cash used in investing activities | (53,048 | ) | (50,922 | ) | ||||
Financing activities: | ||||||||
Payments for purchase of common stock | (8,284 | ) | (1,787 | ) | ||||
Payment of cash dividends | (5,922 | ) | (4,712 | ) | ||||
Proceeds from issuance of treasury stock | 1,127 | 2,835 | ||||||
Excess tax benefit from stock-based compensation | 174 | — | ||||||
Net cash used in financing activities | (12,905 | ) | (3,664 | ) | ||||
Net decrease in cash and cash equivalents | (659 | ) | (8,338 | ) | ||||
Cash and cash equivalents at beginning of period | 19,484 | 24,445 | ||||||
Cash and cash equivalents at end of period | $ | 18,825 | $ | 16,107 | ||||
Certain prior period information has been reclassified to conform to the current year presentation.
* As restated
Winnebago Industries, Inc.
Unaudited Motor Home Deliveries
Quarter Ended | Six Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2/25/2006 | 2/26/2005 | 2/25/2006 | 2/26/2005 | |||||||||||
Unit deliveries | ||||||||||||||
Class A gas | 658 | 1,117 | 1,559 | 2,443 | ||||||||||
Class A diesel | 471 | 550 | 893 | 1,146 | ||||||||||
Class C | 1,139 | 887 | 2,310 | 1,790 | ||||||||||
Total deliveries | 2,268 | 2,554 | 4,762 | 5,379 |
Winnebago Industries, Inc.
Unaudited Backlog and Dealer Inventory
(Units)
As of | ||||||||
---|---|---|---|---|---|---|---|---|
2/25/2006 | 2/26/2005 | |||||||
Sales order backlog | ||||||||
Class A gas | 464 | 683 | ||||||
Class A diesel | 245 | 453 | ||||||
Class C | 872 | 972 | ||||||
Total backlog* | 1,581 | 2,108 | ||||||
Total approximate revenue dollars (in thousands) | $ | 127,800 | $ | 181,400 | ||||
Dealer inventory | 5,436 | 5,601 |
* The Company includes in its backlog all accepted purchase orders from dealers scheduled to be shipped within the next six months. Orders in backlog can be canceled or postponed at the option of the purchaser at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.
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