CORPORATE PROFILE
Winnebago Industries, Inc., headquartered in Forest City, Iowa, is a leading
United States manufacturer of motor homes, self-contained recreation vehicles
used primarily in leisure travel and outdoor recreation activities. Motor home
sales represent more than 80 percent of the Company's revenues. These vehicles
are sold through dealer organizations primarily under the Winnebago(R),
Itasca(R), Vectra(R), Rialta(R) and LuxorTM brand names. The Company markets its
recreation vehicles on a wholesale basis to a broadly diversified organization
of approximately 360 dealers located throughout the United States, and to a
limited extent, in Canada and other foreign countries.
Winnebago Industries also owns an 80 percent interest in Cycle-Sat, Inc., a
telecommunications service firm that is a leading distributor of television and
radio commercials using satellite, fiber-optic and digital technologies. In
addition to Cycle-Sat, service revenue includes floor plan financing of dealer
inventories of the Company's products provided by the Company's subsidiary,
Winnebago Acceptance Corporation. In fiscal years prior to 1994, service
revenues also included revenues from the Company's subsidiary, North Iowa
Electronics, Inc., which was sold during fiscal 1993.
MOTOR HOME PRODUCT CLASSIFICATION
The principal kinds of recreation vehicles manufactured by the Company in fiscal
1995 include:
[GRAPHIC] CLASS A MOTOR HOMES
These are conventional motor homes constructed directly
on medium-duty truck chassis which include the engine and
drivetrain components. The living area and driver's
compartment are designed and produced by Winnebago
Industries, Inc. Class A motor homes from Winnebago
Industries include: Winnebago Adventurer(R), Brave(R),
and Warrior(R); and Itasca Suncruiser(R), Sunrise(R), and
Passage(R); Vectra(R); Vectra Grand TourTM; and LuxorTM.
[GRAPHIC] CLASS B VAN CAMPERS
A panel-type truck to which any two of the following
conveniences are added; sleeping, kitchen and toilet
facilities, also 110-volt electrical hook-up, fresh water
storage, city water hook-up and a top extension to
provide more head room. Winnebago Industries manufactures
the EuroVan Camper conversion for Volkswagen of America
and Volkswagen of Canada.
[GRAPHIC OMMITTED] CLASS C MOTOR HOMES (MINI)
These are mini motor homes built on van-type chassis onto
which Winnebago Industries constructs a living area with
access to the driver's compartment. Class C motor homes
from Winnebago Industries include: Winnebago MinnieTM and
Minnie Winnie(R); Itasca Spirit(R) and Sundancer(R); and
the Rialta(R).
ABOUT THE COVER
Winnebago Industries has greatly expanded its motor home lineup for 1996.
Enhancing the new lineup are several brand new products including the luxurious
Vectra Grand Tour model shown on the front cover.
FINANCIAL HIGHLIGHTS
Fiscal Year Ended
August 26, August 27, Percent
(dollars in thousands, except per share data) 1995 1994 Change
STATEMENT OF OPERATIONS
Manufactured products revenues $ 458,909 $ 432,406 6.1%
Service revenues 25,668 19,710 30.2
Income before taxes 19,756 16,133 22.5
Credit for income taxes (8,000) (1,312) 509.8
Income before cumulative effect of
accounting change 27,756 17,445 59.1
Cumulative effect of accounting change -- (20,420) NMF*
Net income (loss) 27,756 (2,975) NMF*
Income (loss) per common share:
Income before cumulative effect of accounting change 1.10 .69 59.4
Net income (loss) 1.10 (.12) NMF*
Weighted average number of shares of common
stock outstanding 25,286,000 25,187,000
BALANCE SHEET
Working capital $ 69,694 $ 58,523 19.1
Current ratio 2.4 to 1 2.1 to 1
Total assets $ 211,630 $ 181,748 16.4
Long-term debt 12,678 4,140 206.2
Stockholder's equity 100,448 79,710 26.0
Motor home unit sales:
Class A 5,993 6,820 (12.1)
Class B 1,014 376 169.7
Class C 2,853 1,862 53.2
9,860 9,058 8.9
Total
Total Net Revenues [bar chart graphic]
(in millions)
1992 $295
1993 $384
1994 $452
1995 $485
Income (Loss)** [bar chart graphic]
(in millions)
1992 $(1.8)
1993 $ 9.3
1994 $17.4
1995 $27.8
Income (Loss) Per Share** [bar chart graphic]
1992 $(0.07)
1993 $ 0.37
1994 $ 0.69
1995 $ 1.10
*Not meaningful figure.
**Before cumulative effect of accounting change and discontinued operations.
TO OUR SHAREHOLDERS
Winnebago Industries, Inc. experienced outstanding results in fiscal 1995.
For the fourth consecutive year, we have seen a rise in the Company's net
revenues, with this year's results setting an all-time record at $484.6 million.
This is an increase of 7.2 percent over net revenues of $452.1 million last
year.
Income for fiscal 1995 before the tax credits (recorded in the second and
fourth quarters) increased by 22.5 percent to $19.8 million, or 78 cents per
share, compared to income before tax credit and cumulative effect of accounting
change (see Note 1) of $16.1 million, or 64 cents per share for the previous
year. The Company recognized tax credits of $8.0 million, or 32 cents per share,
during fiscal 1995, resulting from the reduction of its deferred tax asset
valuation allowance which brought net earnings to $27.8 million, or $1.10 per
share.
As an indication of the fundamental strength of our business, cash
dividends aggregating 30 cents per share were paid to shareholders during fiscal
1995, the first cash dividends paid since January 1990. On October 19, 1995, the
Board of Directors declared a cash dividend of 10 cents per share, payable on
December 4, 1995 to shareholders of record as of November 3, 1995.
OPERATING REVIEW
Sales of manufactured products, primarily motor homes, increased 6.1
percent to $458.9 million in fiscal 1995. This gain was achieved despite a weak
motor home market in the third and fourth quarters. The Federal Reserve Board's
decisions to raise interest rates through much of 1994 and early 1995 slowed
industry demand for motor homes and consequently caused some misalignment of
inventory between dealers and motor home manufacturers.
Inventory levels have returned to a favorable balance and in fact, are now
lower than last year at this time. With our present strong backlog of orders, we
have made adjustments to our production schedule, increasing factory production
through January 1.
New orders were positively impacted by the warm reception of our 1996 motor
home product line by dealers. The Company's dealers recently met in St. Paul,
Minn., just two hours from our corporate office and manufacturing facility in
Forest City, Iowa. Because of the close proximity, we were able to provide
complete tours of our operations to dealers from throughout the U.S. and Canada,
giving them an opportunity to view first-hand the quality and scope of our
manufacturing processes. The theme for the meeting was "The Inside Story." This
report's Review of Operations will include details of that "Inside Story" and
our "Customer Driven" approach to developing and marketing our products. It is
our intent that customers and shareholders alike feel as good about Winnebago
Industries and its prospects as we do.
Our Cycle-Sat, Inc., subsidiary achieved an increase of 29.5 percent in
revenues to $24.4 million in fiscal 1995. The acquisition of the majority of
assets of New York based Tape Film, Inc. (TFI) has been finalized and the
process of facility consolidation is nearing completion.
MANAGEMENT
We continue to strengthen our management team. The Company's Board of
Directors named Bruce Hertzke chief operating officer on June 22, 1995. Bruce is
a 23-year employee who has risen through the production and engineering ranks
and thoroughly understands the quality, people and processes needed to
manufacture quality motor homes. Donald Olson, former president of Don Olson
Firestone was elected a director in December 1994, bringing the board to nine
members.
OUTLOOK
Retail market share of our conventional Class C motor homes has risen
approximately 16 percent to an 11.4 percent share in the calendar year-to-date
through August, 1995 versus 9.8 percent for the same period last year. We're
positioned to make further progress in 1996. Exciting new Class A models such as
the luxurious new Vectra Grand Tour have been introduced for 1996, creating
additional Class A motor home opportunities for Winnebago Industries as well.
We are also encouraged by long-term motor home buying trends. Buyers age 50
and older are increasing, and industry studies have shown that there are more
younger buyers, 35 to 49, purchasing motor homes for weekend and vacation travel
and to spend quality time with their families.
We also look forward to another year of continued growth at Cycle-Sat.
Thank you for your continued support and interest in Winnebago Industries.
Sincerely,
John K. Hanson Fred G. Dohrmann
Chairman of the Board President and Chief Executive Officer
November 3, 1995
REVIEW OF OPERATIONS
THE INSIDE STORY
Winnebago Industries has the largest and most technologically advanced
motor home manufacturing complex in the world. With 2.8 million square feet of
production space under roof, the Company manufactures more than 80 percent of
the components required for each motor home on a just-in-time basis.
"Customer Driven" has special meaning for the Company. We not only seek to
please our customers, we try to delight them as well. That makes quality a
priority issue. As a result of our Company-wide quality commitment, we have
earned Ford Motor Company's Motor Home Transit Bus Quality Award. Many quality
objectives were met to receive this award, including the establishment of a
Customer Satisfaction Index (CSI) program. Our CSI program includes two separate
customer surveys. One focuses on the sales process, while the second deals with
service after the sale. This information helps us to identify quality issues and
create solutions. CSI is now a critical foundation of our Circle of Excellence
dealer recognition program.
Quality is further ensured through many ongoing programs such as employee
empowered action teams, which work to help identify process improvements in
their own areas. The number of action teams increased by more than 14 percent in
fiscal 1995. The Company also has a team to analyze warranty claims. Through
this analysis, the team is able to cure problems in design and manufacturing
while avoiding similar warranty claims in the future. This process has reduced
the warranty cost per unit manufactured, and increased customer satisfaction in
the process.
We also meet once a week with customers to review their observations and
ideas, and combine that with feedback from dealers and marketing research to
develop our innovative and functional motor home designs.
Our customers today are demanding more storage and additional features in
their motor homes. To meet these needs, the number of motor homes being built
with a sub-floor, or basement-style construction, have increased substantially.
In fact, approximately 60 percent of our 1996 motor home production will be
dedicated to basement-styled motor home construction.
To meet these increased demands, the largest RV manufacturing facility in
the world just became larger with the construction of a 34,000 square foot
addition to the south end of the Company's main assembly facility. Completed in
October, the addition allows the Company to manufacture the basement portion of
the motor home in an assembly line environment, increasing both our efficiencies
and unit capacity, while further improving the quality of these units.
Previously, the floor sections of basement-styled units were built in
stalls, requiring them to be driven in and out of the building several times
before reaching the actual assembly lines, not only exposing them to the
elements, but also delaying their progress down the main assembly line. The new
building addition includes an overhead floor delivery system for quicker
assembly and less material handling.
The addition has also provided the Company with more room to produce parts
for another current movement evolving in the motor home industry -- the
slide-out room extension system. This system expands the living room area of a
motor home by nearly three feet when parked. Winnebago Industries is tripling
its production of motor homes with slide-out systems in the 1996 model year. The
increased capacity created by the addition will allow us to meet the demands of
today's R.V. market and the R.V. market well into the future.
In 1993 the Vectra brand motor home was introduced. Since July of that same
year, Vectra retail sales have been among the top 10 selling brands within the
industry. Expanding on that success, our 1996 Class A motor home lineup is
joined by the Vectra Grand Tour. This new model is a completely redesigned,
wide-body version of our successful Vectra, enhanced to fill the market niche
just above the Vectra series.
The conventional width Vectra model offerings have also increased with the
addition of a model with an optional slide-out room extension system. Introduced
in the Itasca Suncruiser model last year, the slide-out system proved to be an
exceptionally popular option for the Company. As such, we are also introducing
the option in our Winnebago Adventurer line as well. The Adventurer and
Suncruiser will both offer conventional width/slide-out room models as well as
wide-body models in 1996.
The Winnebago Brave and Itasca Sunrise lines, historically very popular
units for the Company, have a brand new exterior design, plus attractive new
options such as a driver's door and ducted roof air conditioning to distribute
cooled air efficiently throughout the motor home.
The Winnebago Warrior and Itasca Passage lines offer a full complement of
value-priced motor homes in conventional, as well as new basement storage
versions.
New in 1995, the premium Luxor will have styling changes in 1996 with a
raised rail chassis and dynamic new graphics.
The Company experienced an exceptional year in the Class C market.
According to an independent research firm, Statistical Surveys, Inc., the
Company retailed 11.4 percent of the conventional Class C motor homes in this
calendar year through August, up 16.3 percent from our retail market share of
9.8 percent a year ago.
Our Class C models for 1996 provide unrivaled product flexibility with a
comprehensive product range. Winnebago Minnie Winnie and Itasca Sundancer lines
offer wide-body basement storage models plus a deluxe version as well. The
Winnebago Minnie and Itasca Spirit also offer new deluxe upgrade versions.
Further new product offerings will be available when the new chassis with higher
gross vehicle weight ratings become available from Ford and Chevrolet later this
model year.
The front-wheel-drive Rialta motor home line introduced last year has also
been expanded in the 1996 model year. Two new floor plans have been added that
include either a full-size corner bed or twin beds. These floorplans appeal to
an additional market of individuals who prefer the increased fuel economy and
ease of mobility of the Rialta, while still having the typical motor home
floorplan for long-range traveling.
Commercial Vehicle sales have shown a dramatic rise in the last year,
increasing over 200 percent from the number shipped in fiscal 1994. Because of
our comprehensive motor home design of interlocking joint construction,
extensive sidewall and roof support and steel foundation, we are one of very few
motor home manufacturers whose motor homes have the structural integrity to be
built as an empty shell. This allows us to build a vast array of interior
configurations. These motor home conversions are used for a wide variety of
mobile applications ranging from medical and dental clinics to law enforcement
offices to bank offices.
OTHER MANUFACTURING
Original equipment manufacturer (OEM) sales of component parts, such as
aluminum extrusions, metal stampings, rotational moldings, vacuum-formed
plastics and fiberglass, to outside manufacturers continued to increase. Growth
of over 34 percent was realized in fiscal 1995, with sales of $32.2 million
versus $24.0 million in the prior year. This increase in OEM sales represents
four consecutive years of over 20 percent growth. The Company continues to
aggressively utilize any excess operation and machine capacity to its fullest
advantage. Creative Aluminum Products Company (CAPCO), our largest OEM division,
processed over 27 million pounds of raw aluminum billet in fiscal 1995, over 80
percent of which was manufactured for outside customers.
CYCLE-SAT, INC.
Fiscal 1995 was another year of revenue growth for the Company's Cycle-Sat
subsidiary, the industry leader in the distribution of spot television
commercials via satellite and fiber optics. Sales grew 29 percent to $24.4
million from $18.9 million last year.
Cycle-Sat completed the acquisition of the majority of assets of New York
based Tape Film, Inc. (TFI) in March and now is nearing completion of the
consolidation process of duplicate offices in New York, Los Angeles and Chicago.
In addition, Cycle-Sat's broadcast duplication facility in Memphis, Tenn.
the nation's largest, has increased its capacity to better accommodate the
projected client base increase from the TFI acquisition.
Cycle-Sat recently inaugurated its newest fiber connection, representing a
major development in audio/video transmission. This extension in the "fiber
highway" initially stretches between Cycle-Sat's Los Angeles service center and
its duplication facility located in Memphis.
Announced in May 1994, Cycle-Sat became one of the early participants in
the Advanced Broadcast Video System (ABVS) fiber loop that Pacific Bell created
in Hollywood, Calif. The ABVS is a true digital fiber loop that links movie
studios and post-production facilities to Cycle-Sat. With this loop, component
digital video materials and CD-quality audio can be finished in post-production,
sent to another location for approvals, and then moved through the fiber loop to
Cycle-Sat for distribution.
With the continued growth in Cycle-Sat's client base, management intends to
expand the options for transporting completed materials in a high quality
format. With the blending of satellite and fiber technology, Cycle-Sat has
gained another pathway to complement its satellite distribution network. In
addition to increasing the number and locations of sources available for
transmission, they now are able to transport television spots to the Memphis
facility from Los Angeles at the same time that they are feeding spots from
other locations across the country via satellite, offering time and cost
efficiencies.
Cycle-Sat will continue to expand on a national basis the fiber system, as
well as the uplink transmission capabilities. The addition of the ABVS fiber
link to Memphis and later to the east coast will provide clients with the most
economical and time efficient high quality method available for television
commercial distribution.
Installation was also completed in fiscal 1995 of a new Sony BVC-400
Library Management System(TM) (LMS) which automated all daytime satellite feeds,
in addition to the nightly feeds. Prior to the conversion to the new enhanced
system, the nightly feed was assembled manually and controlled by the computer
systems. Now, the commercials are prepared upon receipt from clients and placed
on the new LMS system for a completely "hands off" delivery, saving both time
and money.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands) August 26, August 27,
1995 1994
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 8,881 $ 847
Marketable securities 2,144 3,301
Receivables, less allowance for doubtful accounts
($1,184 and $1,545 respectively) 37,807 36,602
Dealer financing receivables less allowance for
doubtful accounts ($255 and $279, respectively) 9,345 8,565
Inventories 53,161 55,450
Prepaid expenses 3,342 3,870
Deferred income taxes 6,224 2,252
Total current assets 120,904 110,887
PROPERTY AND EQUIPMENT, at cost
Land 1,512 1,539
Buildings 43,014 40,905
Machinery and equipment 77,998 75,139
Transportation equipment 7,965 7,985
130,489 125,568
Less accumulated depreciation 87,511 83,970
Total property and equipment, net 42,978 41,598
LONG-TERM NOTES RECEIVABLE, less allowances
($950 and $2,024, respectively) 2,465 4,884
INVESTMENT IN LIFE INSURANCE 15,942 15,479
DEFERRED INCOME TAXES, NET 14,107 4,049
INTANGIBLE AND OTHER ASSETS 15,234 4,851
TOTAL ASSETS $211,630 $181,748
See notes to consolidated financial statements.
(dollars in thousands) August 26, August 27,
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 3,564 $ 2,504
Notes payable 4,000 2,300
Accounts payable, trade 22,581 24,985
Accrued expenses:
Insurance 4,620 4,175
Product warranties 3,184 3,557
Vacation liability 3,287 3,241
Promotional 1,916 2,111
Other 8,058 9,491
Total current liabilities 51,210 52,364
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL
LEASES 12,678 4,140
POSTRETIREMENT HEALTH CARE AND DEFERRED
COMPENSATION BENEFITS 45,223 43,391
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 2,071 2,143
CONTINGENT LIABILITIES AND COMMITMENTS
STOCKHOLDERS' EQUITY
Capital stock common, par value $.50; authorized
60,000,000 shares 12,915 12,911
Additional paid-in capital 23,658 24,175
Reinvested earnings 69,440 49,270
106,013 86,356
Less treasury stock, at cost 5,565 6,646
TOTAL STOCKHOLDERS' EQUITY 100,448 79,710
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $211,630 $181,748
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
(dollars in thousands, except per share data) August 26, 1995 August 27, 1994 August 28, 1993
Revenues
Manufactured products $ 458,909 $ 432,406 $ 364,860
Service 25,668 19,710 19,223
Total net revenues 484,577 452,116 384,083
Costs and expenses
Cost of manufactured products 397,868 371,995 316,230
Cost of services 15,436 11,473 14,620
Selling and delivery 26,846 26,882 21,875
General and administrative 25,556 24,536 23,388
Other expense 485 262 188
Minority interest in net (loss) income
of consolidated subsidiary (72) 174 (505)
Total costs and expenses 466,119 435,322 375,796
Operating income 18,458 16,794 8,287
Financial income (expense) 1,298 (661) (96)
Income before income taxes 19,756 16,133 8,191
Credit for taxes (8,000) (1,312) (1,087)
Income before cumulative effect of
accounting change 27,756 17,445 9,278
Cumulative effect of accounting change -- (20,420) --
Net income (loss) $ 27,756 $ (2,975) $ 9,278
Income (loss) per share:
Income before cumulative effect of
accounting change $ 1.10 $ .69 $ .37
Cumulative effect of accounting change -- (.81) --
Net income (loss) $ 1.10 $ (.12) $ .37
Weighted average number of shares of
stock (in thousands) 25,286 25,187 25,042
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
August 26, August 27, August 28,
(dollars in thousands) 1995 1994 1993
Cash flows from operating activities:
Net income (loss) $ 27,756 $ (2,975) $ 9,278
Adjustments to reconcile net income (loss) to net cash
from operating activities:
Cumulative effect of accounting change -- 20,420 --
Depreciation and amortization 8,863 7,798 7,961
Loss (gain) on disposal of property, leases and
other assets 959 (74) 630
Provision (credit) for doubtful receivables 202 (546) 1,496
Realized and unrealized (gains) and losses on
trading securities, net (342) 395 (305)
Investments in trading securities (4,373) (9,869) (7,922)
Proceeds from sale of trading securities 5,872 8,482 7,133
Minority interest in net (loss) income of consolidated
subsidiary (72) 174 (505)
Change in assets and liabilities:
Increase in receivables and other assets (166) (6,858) (1,186)
Decrease (increase) in inventories 2,289 (14,758) (5,390)
(Decrease) increase in accounts payable and accrued
expenses (3,541) 455 4,333
Increase in deferred income taxes (14,030) (4,961) (1,340)
Increase in postretirement benefits 1,832 4,642 2,609
Other 155 (303) 339
Net cash provided by operating activities 25,404 2,022 17,131
Cash flows used by investing activities:
Purchases of property and equipment (9,348) (9,532) (7,671)
Proceeds from sale of property and equipment 499 801 101
Investments in dealer receivables (35,899) (35,120) (28,424)
Collections of dealer receivables 35,072 33,336 21,671
Investments in long-term notes receivables and
other assets (3,077) (4,930) (5,893)
Proceeds from long-term notes receivables
and other assets 3,029 1,076 294
Cash paid for acquisition (4,934) -- --
Net cash used by investing activities (14,658) (14,369) (19,922)
Cash flows from financing activities and capital
transactions:
Net proceeds from notes payable 1,700 2,300 --
Payments of cash dividends (7,586) -- --
Payments of long-term debt and capital leases (2,494) (1,850) (1,528)
Proceeds from issuance of long-term debt 5,100 952 1,934
Proceeds from issuance of common and treasury
stock 568 554 337
Net cash (used) provided by financing activities and capital
transactions (2,712) 1,956 743
Net increase (decrease) in cash and cash equivalents 8,034 (10,391) (2,048)
Cash and cash equivalents at beginning of year 847 11,238 13,286
Cash and cash equivalents at end of year $ 8,881 $ 847 $ 11,238
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY
Additional
Common Shares Paid-In Reinvested Treasury Stock
(amounts in thousands) Number Amount Capital Earnings Number Amount
Balance, August 29, 1992 25,806 $12,903 $ 25,157 $ 42,967 785 $ 8,949
Proceeds from the sale of common
stock to employees 9 5 (346) -- (60) (678)
Net income -- -- -- 9,278 -- --
Balance, August, 28, 1993 25,815 12,908 24,811 52,245 725 8,271
Proceeds from the sale of common
stock to employees 7 3 (503) -- (92) (1,055)
Contribution of treasury stock to
employee stock bonus plan -- -- (133) -- (50) (570)
Net loss -- -- -- (2,975) -- --
Balance, August 27, 1994 25,822 12,911 24,175 49,270 583 6,646
Proceeds from the sale of common
stock to employees 7 4 (517) -- (95) (1,081)
Cash dividends on common stock -
$.30 per share -- -- -- (7,586) -- --
Net income -- -- -- 27,756 -- --
Balance, August 26, 1995 25,829 $12,915 $ 23,658 $ 69,440 488 $ 5,565
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
In fiscal 1995, the Company operated predominantly in three industry segments:
the manufacture and sale of recreation vehicles and other manufactured products,
the satellite courier and tape duplication business, and floor plan and rental
unit financing for selected Winnebago, Itasca, Vectra, Rialta and Luxor dealers.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
parent company and subsidiary companies. All material intercompany balances and
transactions with subsidiaries have been eliminated.
In the Consolidated Statements of Operations, service revenues are generated by
the satellite courier and tape duplication business, electronic component
assembly business (which was sold in August 1993), and dealer floor plan and
rental unit financing.
STATEMENT OF CASH FLOWS. For purposes of these statements, cash equivalents
include all liquid debt instruments purchased with an original maturity of three
months or less. For cash equivalents, the carrying amount is a reasonable
estimate of fair value.
FISCAL PERIOD. The Company follows a 52/53 week fiscal year period. The
financial statements presented are all 52 week periods.
MARKETABLE SECURITIES. The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," effective the beginning of fiscal 1995. The adoption of SFAS No.
115 did not significantly affect the Company's financial condition or operating
results.
At August 26, 1995, marketable securities are primarily comprised of common
stocks and mutual funds. These investments are categorized as trading and, in
accordance with SFAS No. 115, are stated at fair value based on quoted market
prices. Unrealized gains and losses are included in earnings as a component of
financial income and expense. Net realized gains and losses on security
transactions are determined on the specific identification basis.
REVENUE RECOGNITION. Sales are recorded by the Company when products are shipped
to independent dealers. Interest income from dealer floor plan and rental
program notes receivable are recorded on the accrual basis in accordance with
the terms of the loan agreements. Satellite courier and tape duplication revenue
is recognized upon satellite transmission or shipment of information.
INVENTORIES. Inventories are valued at the lower of cost or market, with cost
being determined by using the last-in, first-out (LIFO) method and market
defined as net realizable value.
PROPERTY AND EQUIPMENT. Depreciation of property and equipment is computed using
the straight-line method on the cost of the assets, less allowance for salvage
value where appropriate, at rates based upon their estimated service lives.
Accelerated depreciation methods are used for tax purposes whenever permitted.
INTANGIBLE AND OTHER ASSETS. Included in intangible and other assets are
approximately $8.0 million of goodwill and $2.6 million of noncompete agreements
related to the acquisition described in Note 2. Amortization is provided using
the straight-line method over a 10 year period for goodwill and over the 5 year
term of the agreements, for the noncompete agreements.
Management of the Company periodically reviews the carrying value of goodwill
and covenants not to compete for potential impairment by comparing the carrying
value of these assets with their related, expected future net cash flows. Should
the sum of the related, expected future net cash flows be less than the carrying
value, management would determine whether an impairment loss should be
recognized. An impairment loss would be measured by the amount by which the
carrying value of the asset exceeds the fair value of the asset. To date,
management has determined that no impairment of these assets exists.
PROVISION FOR WARRANTY CLAIMS. Estimated warranty costs are provided at the time
of sale of the warranted products.
INCOME TAXES. The Company adopted SFAS No. 109, "Accounting for Income Taxes,"
effective the beginning of fiscal 1993. This Statement requires recognition of
deferred assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are determined based on the
differences between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the years in which the
differences are expected to reverse.
ALLOWANCE FOR DOUBTFUL ACCOUNTS. Allowance for doubtful accounts are based on
previous loss experience. Additional amounts are provided through charges to
income as management believes necessary after evaluation of receivables and
current economic conditions. Amounts which are considered to be uncollectible
are charged off and recoveries of amounts previously charged off are credited to
the allowance upon recovery.
FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS: The estimated fair value of
long term notes receivable approximates the net carrying value at August 26,
1995 and August 27, 1994, as management believes the respective interest rates
are commensurate with the credit, interest rate and prepayment risks involved.
The estimated fair value of the Company's notes payable and long term debt as of
August 26, 1995 and August 27, 1994 approximates the carrying value due to the
revolving nature of the Company's notes payable and the recent issuance of the
Company's debt obligations.
ACCOUNTING CHANGES. In fiscal 1994, the Company was required to adopt SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions"
related to health care and other benefits. SFAS No. 106 requires the Company to
accrue the estimated cost of retiree benefit payments during the years the
employee provides services. SFAS No. 106 allows recognition of the cumulative
effect of the liability in the year of adoption or the amortization of the
obligation over a period of up to 20 years. The Company elected to recognize the
cumulative effect of this obligation. The cumulative effect as of the beginning
of fiscal 1994 for adopting SFAS No. 106 was an accrual of postretirement health
care costs of $20,420,000 and a decrease in net earnings of $20,420,000 ($.81
per share).
The effect of adopting SFAS No. 106 on income from operations for the fiscal
year ended August 27, 1994 was a decrease of $2,943,000 ($.12 per share). See
Note 10 for further information regarding the Company's postretirement health
care costs.
RECLASSIFICATIONS. Certain prior year information has been reclassified to
conform to the current year presentation.
NOTE 2: TFI ACQUISITION
On March 31, 1995, the Company's subsidiary, Cycle-Sat, finalized the purchase
of a majority of the assets of the TFI division of MPO Videotronics (MPO), a
private company headquartered in Newbury Park, California, for $10,100,000.
Cycle-Sat is financing the acquisition through a term loan with Firstar Bank and
through terms provided by MPO which aggregate $8,600,000. The agreement with
Firstar Bank is guaranteed by the Company.
The acquisition was accounted for as a purchase business combination and the
excess of the purchase price over the estimated fair value of the net assets
acquired, in the amount of $8,000,000, has been recorded as goodwill. The
acquisition had no significant pro forma effect on the Company's operating
revenues, net income, or earnings per share.
NOTE 3: SALE OF NORTH IOWA ELECTRONICS, INC.
In August 1993, the Company sold certain assets and liabilities of its
electronic component assembly business, North Iowa Electronics, Inc. (NIE).
Under the terms of the agreement, the net assets of NIE were sold for $1.7
million. NIE's operations were not material in relation to the Company's results
of operations or financial condition.
NOTE 4: DEALER FINANCING RECEIVABLES
Dealer floor plan receivables are collateralized by recreation vehicles and are
due upon the dealer's sale of the vehicle with the entire balance generally due
at the end of one year. At August 26, 1995, the Company had certain
concentration of credit risks whereby $8,534,000 of dealer financing receivables
were due from one dealer.
Rental program receivables are collaterialized by recreation vehicles and
provide for a 10 percent down payment and a 2 percent monthly reduction of the
outstanding balance with the balance due in full at the end of one year.
NOTE 5: INVENTORIES
Inventories consist of the following:
Aug. 26, Aug. 27,
(dollars in thousands) 1995 1994
Finished goods $ 19,855 $ 21,675
Work in process 14,223 13,807
Raw materials 34,704 33,800
68,782 69,282
LIFO reserve 15,621 13,832
$ 53,161 $ 55,450
The above value of inventories, before reduction for the LIFO reserve,
approximates replacement cost at the respective dates.
NOTE 6: GUARANTEED OPERATING LEASES
During fiscal years 1988 through 1992, Cycle-Sat entered into various
non-cancelable operating leases, of which certain leases have been guaranteed by
Winnebago Industries. These leases expire through 1999. Rent expense of
$2,549,000 , $2,070,000, and $2,218,000 was recorded under these leases during
the years ended August 26, 1995, August 27, 1994, and August 28, 1993,
respectively. Future minimum lease payments under such leases are as follows
(dollars in thousands); 1996 - $2,710, 1997 - $2,784, 1998 - $2,679, 1999 -
$2,514, 2000 - $2,589. Total future minimum lease payments are $13,276,000 of
which $820,000 is guaranteed by Winnebago Industries.
NOTE 7: LONG-TERM NOTES RECEIVABLE
Long-term notes receivable of $2,465,000 and $4,884,000 at August 26, 1995 and
August 27, 1994, respectively, are primarily collateralized by dealer
inventories and real estate. The notes had weighted average interest rates of
8.1 percent per annum and 7.4 percent per annum at August 26, 1995 and August
27, 1994, respectively, and have various maturity dates ranging through June
2001.
NOTE 8: NOTES PAYABLE
Short-term lines of credit and related borrowings outstanding at fiscal year-end
are as follows:
Available
Credit Lines Outstanding Interest Rate
Aug. 26 Aug. 27 Aug. 26 Aug. 27 Aug. 26 Aug. 27
(dollars in thousands) 1995 1994 1995 1994 1995 1994
Notes payable:
NationsCredit $30,000 $12,000 $ -- $ -- -- --
Firstar Bank 4,300 3,000 4,000 2,300 7.4% 9.0%
Total $34,300 $15,000 $4,000 $2,300
Maximum Average Weighted Average Interest
Outstanding Outstanding Rate During Year*
Aug. 26, Aug. 27, Aug. 28, Aug. 26, Aug. 27, Aug. 28, Aug. 26, Aug. 27, Aug. 28,
(dollars in thousands) 1995 1994 1993 1995 1994 1993 1995 1994 1993
Notes payable:
NationsCredit $2,000 $7,000 $10,500 $ 58 $ 951 $3,937 9.6% 6.1% 7.1%
Firstar Bank 4,000 2,300 -- 2,711 1,030 -- 8.5% 8.4% --
Total $2,769 $1,981 $ 3,937
*Based on the approximate average aggregate amount outstanding during the year
and the interest rate.
The Company and Cycle-Sat maintain a line of credit with Firstar Bank Cedar
Rapids. Terms of the agreement limit the amount advanced to the lesser of
$4,500,000 or the sum of the base of 80 percent of Cycle-Sat's eligible accounts
receivable and 50 percent of its inventory. The agreement bears interest at the
90 day LIBOR rate, plus 150 basis points. (7.4 percent per annum at August 26,
1995) and contains certain restrictive covenants as defined in the agreement.
Borrowings under the line of credit are secured by Cycle-Sat's accounts
receivable and inventories and have been guaranteed by the Company. The line of
credit expires February 1, 1996. The outstanding balance under the line of
credit at August 26, 1995 was $4,000,000. As of August 26, 1995, Cycle-Sat had
$300,000 of unused borrowings available.
Since March 1992, the Company has had a financing and security agreement with
NationsCredit Corporation (NationsCredit) formerly Chrysler First Commercial
Corporation.
Terms of the agreement limit borrowings to the lesser of $30,000,000 or 75
percent of eligible inventory (fully manufactured recreation vehicles and motor
home chassis and related components). Borrowings are secured by the Company's
receivables and inventory. The agreement bears interest at the prime rate, as
defined in the agreement, plus 50 basis points. The line of credit is available
through March 31, 1997, and continues during successive one-year periods unless
either party provides at least 90-days notice prior to the end of the one-year
period to the other party that they wish to terminate the line of credit. The
agreement also contains certain restrictive covenants including maintenance of
minimum net worth, working capital and current ratio. As of August 26, 1995, the
Company was in compliance with these covenants. There were no outstanding
borrowings under the line of credit at August 26, 1995 or August 27, 1994.
NOTE 9: LONG-TERM BORROWINGS AND OBLIGATIONS UNDER CAPITAL LEASES
Outstanding August 26, 1995 Outstanding August 27, 1994
Short Long Interest Short Long Interest
(dollars in thousands) Term Term Rate Term Term Rate
Long-term borrowings $2,567 $11,770 5.5 - 8.75% $ 765 $ 3,299 5.5-8.75%
Obligations under capital lease 997 908 8.7 - 13.7% 1,739 841 8.7-14.1%
Total Debt $3,564 $12,678 $ 2,504 $ 4,140
In March 1995, Cycle-Sat entered into a series of long-term borrowings to
finance the acquisition of a majority of the assets of the TFI division of MPO.
First Cycle-Sat entered into a $4,400,000 term loan agreement with Firstar Bank.
Terms of the agreement call for quarterly payments of interest for 18 months,
followed by quarterly payments of principal and interest to amortize the
remaining balance over 36 months. The note bears interest at the 90 day LIBOR
rate, plus 250 basis points. (8.4 percent per annum at August 26, 1995.) and is
guaranteed by the Company. The outstanding balance under this agreement at
August 26, 1995 was $4,400,000.
Second, Cycle-Sat entered into a $4,200,000 note payable with MPO. The note
requires quarterly payments of principal and interest through March of 1998 and
the interest rate is fixed at 8 percent per annum and is guaranteed by the
Company. The outstanding balance under this note at August 26, 1995 was
$3,886,000.
Finally, Cycle-Sat entered into a three-year note payable in the amount of
$1,425,000 requiring quarterly payments of principal and interest through
maturity of the note. Interest is fixed at 8 percent per annum and the note is
guaranteed by the Company. The outstanding balance under this note at August 26,
1995 was $1,319,000.
During fiscal 1994, the Company and Winnebago RV, Inc. entered into a $2,001,000
financing agreement with 1st Source Bank for the purchase of a 1990 King Air 350
airplane. Terms of the agreement call for 35 monthly installment payments
beginning August 28, 1994, and a 36th payment to pay off the remaining principal
and interest balance under the agreement. The agreement is secured by the
airplane. The outstanding balance under this agreement at August 26, 1995 and
August 27, 1994 was $1,855,000 and $2,001,000, respectively, with an interest
rate of 7.95 percent per annum.
During fiscal year 1993, the Company and Winnebago Industries Europe GmbH (WIE),
a wholly owned subsidiary of the Company, entered into a financing arrangement
with Volksbank Saarbrucken-St. Ingebert eG to finance the acquisition and
renovation of a new facility in Kirkel, Saarland, Germany. The financing
arrangement includes four loans with interest rates ranging from 5.5% to 8.75
percent per annum. All four of the loans have been advanced to WIE in the
aggregate amount of $2,039,000 which require various repayment terms through
2008. The loans are secured by real estate and improvements of the new facility.
During fiscal 1991 and 1990, the Company and Cycle-Sat entered into
sale/leaseback agreements for most of Cycle-Sat's equipment which provided cash
of approximately $5,600,000 and a gain of $766,000 which is being deferred and
amortized over the terms of the respective leases. These leases have terms of 60
to 72 months, have been recorded as capital leases, and are guaranteed by the
Company. Also, during fiscal 1995, 1994, and 1993, Cycle-Sat entered into
additional capital lease arrangements for property approximating $1,292,000,
$444,000, and $842,000, respectively.
Assets and accumulated amortization related to capital leases were approximately
$7,368,000 and $5,013,000 at August 26, 1995 and $7,606,000 and $4,978,000 at
August 27, 1994, respectively.
Maturities of long-term debt for the next five years are as follows (dollars in
thousands); 1996 - $3,564; 1997 - $5,752; 1998 - $3,514; 1999 - $1,819; 2000 -
$264.
NOTE 10: EMPLOYEE RETIREMENT PLANS
The Company has a qualified profit sharing and contributory 401(k) plan and a
stock bonus retirement plan for eligible employees. The plans provide for
contributions by the Company in such amounts as the Board of Directors may
determine. Contributions to the plans in cash and common stock valued at market
for fiscal years 1995, 1994 and 1993 were $2,106,000, $1,444,000, and
$2,084,000, respectively.
The Company has an Executive Split Dollar Life Insurance Plan. Investments in
the plan consist of life insurance policies, with the cash surrender values
recorded in the accompanying balance sheets. Upon the termination or death of a
participating executive, the Company receives its cash investment in the policy,
with any excess proceeds remitted directly to the policy beneficiary.
The Company also has a nonqualified deferred compensation program which permits
key employees and directors to annually elect (via individual contracts) to
defer a portion of their compensation until their retirement. The retirement
benefit to be provided is fixed based upon the amount of compensation deferred
and the age of the individual at the time of the contracted deferral. An
individual generally vests at the age of 55, with five years of service since
the first deferral was made. For deferrals prior to December 1992, vesting also
occurs after 20 years of service. Deferred compensation expense was $1,629,000,
$2,056,000 and $2,619,000 in fiscal 1995, 1994 and 1993, respectively. Total
deferred compensation liabilities were $20,673,000, and $20,322,000 at August
26, 1995 and August 27, 1994, respectively.
Also, to assist in funding the retirement benefits of the program, the Company
has invested in corporate-owned life insurance policies. The cash surrender
value of these policies are presented as assets (net of borrowings of
$7,054,000, and $3,683,000 at August 26, 1995 and August 27, 1994, respectively)
of the Company in the accompanying balance sheets.
The Company provides certain health care and other benefits for certain retired
employees who have fulfilled eligibility requirements at age 55 with 15 years of
continuous service. Retirees are required to pay a monthly premium for medical
coverage based on years of service at retirement and current age. In fiscal
1993, the Company recognized on a "pay-as-you-go" basis expense of $501,000 for
postretirement health care benefits, which is not comparable with subsequent
years' expenses. As discussed in Note 1, the Company implemented SFAS No. 106 as
of August 29, 1993 on the immediate recognition basis. The Company's
postretirement health care plan currently is not funded. The status of the plan
is as follows:
Accumulated postretirement benefit obligation at August 26, 1995 and August 27,
1994:
Aug. 26, Aug. 27,
(dollars in thousands) 1995 1994
Retirees $ 3,232 $ 2,336
Fully eligible active plan
participants 3,864 2,777
Other active plan
participants 14,345 9,651
21,441 14,764
Unrecognized net gain 3,109 8,305
Accrued postretirement
benefit liability
recognized in financial
statements $24,550 $23,069
Net postretirement benefit expense for the fiscal years ended August 26, 1995
and August 27, 1994 consisted of the following components:
Aug. 26, Aug. 27,
(dollars in thousands) 1995 1994
Service cost-benefits
earned during the year $1,047 $1,624
Interest cost on
accumulated postretirement
obligation 1,171 1,319
Net amortization and
deferral (379) --
$1,839 $2,943
The assumed pre-65 and post-65 health care cost trend rates used in measuring
the accumulated postretirement benefit obligation as of August 26, 1995 was 10.1
percent and 9.1 percent, respectively for 1995, decreasing each successive year
until it reaches 5.5 percent in 2020 after which it remains constant. A
one-percentage point increase in the assumed health care cost trend rate for
each year would increase the accumulated postretirement benefit obligation as of
August 26, 1995 by approximately $5,407,000. The effect of this change on the
net postretirement health care cost for fiscal 1996 would be to increase it by
approximately $841,000.
The discount rate used in determining the accumulated postretirement benefit
obligation was 7.25 percent at August 26, 1995 and 8.0 percent at August 27,
1994. Unrecognized net gains result primarily from changes in discount rates, as
well as increases in the premiums charged to retirees. The unrecognized net gain
will be amortized over the average remaining service of active participants (18
years).
NOTE 11: CONTINGENT LIABILITIES AND COMMITMENTS
It is customary practice for companies in the recreation vehicle industry to
enter into repurchase agreements with lending institutions which have provided
wholesale floor plan financing to dealers. Most dealers are financing on a
"floor plan" basis under which a bank or finance company lends the dealer all,
or substantially all, of the purchase price, collateralized by a lien upon, or
title to, the merchandise purchased. Upon request of a lending institution
financing a dealer's purchases of the Company's products, and after completion
of a credit investigation of the dealer involved, the Company will execute a
repurchase agreement. These agreements provide that, in the event of default by
the dealer on his agreement to pay the lending institution, the Company will
repurchase the financed merchandise. The agreements provide that the Company's
liability will not exceed 100 percent of the dealer invoice and provide for
periodic liability reduction based on the time since the date of the original
invoice. The Company's contingent liability on all repurchase agreements was
approximately $120,487,000 and $118,954,000 at August 26, 1995 and August 27,
1994, respectively. Included in these contingent liabilities are approximately
$37,616,000 and $36,231,000, respectively of certain dealer receivables subject
to recourse agreements with NationsCredit and John Deere Credit, Inc. In fiscal
1992, the Company entered into an Inventory Floor-Plan Finance Agreement with
NationsCredit, whereby NationsCredit provides financing to certain dealers
subject to NationsCredit approval and full recourse to the Company. In addition,
John Deere Credit, Inc. provides financing to the Company's dealers on a partial
and full recourse basis. The Company had reserves of $1,086,000 and $1,204,000
at August 26, 1995 and August 27, 1994, respectively, for sales subject to
repurchase and recourse provisions. Historically, the Company's repurchases
under these agreements have been immaterial with losses of approximately
$212,000, $101,000, and $295,000 recorded during fiscal years 1995, 1994 and
1993, respectively.
The Company self-insures for product liability claims. Self-insurance retention
liability varies annually based on market conditions and ranges from $2,750,000
to $5,000,000 per occurrence and $8,750,000 to $12,000,000 in aggregate per
policy year (fiscal 1988 to fiscal 1995). Liabilities in excess of these amounts
are the responsibility of the insurer.
During fiscal 1995, the Company guaranteed certain debt obligations of an
unaffiliated party totaling $4,500,000. The Company believes that this
obligation will be repaid and has therefore provided no reserve for this
contingency at August 26, 1995.
From time to time, the Company is involved in various legal proceedings which
occur in the ordinary course of its business, some of which are covered in whole
or in part by insurance. Counsel for the Company, has advised management that,
while the outcome of litigation is uncertain, he is of the opinion based on his
present knowledge of pending legal proceedings and after consultation with trial
counsel, that it is unlikely that these proceedings will result in any recovery
which will materially exceed the Company's reserve for estimated losses. On the
basis of such advice, management is of the opinion that the pending legal
proceedings will not have any material adverse effect on the Company's financial
position, results of operations or liquidity.
NOTE 12: INCOME TAXES
The components of the provision (credit) for income taxes for operations are as
follows:
Year Ended
(dollars in August 26, August 27, August 28,
thousands) 1995 1994 1993
Current $ 6,030 $ 3,649 $ 253
Deferred (14,030) (4,961) (1,340)
(8,000) (1,312) (1,087)
The following is a reconciliation of the U.S. statutory tax rate to the
effective income tax rates before the cumulative effect of accounting change:
Year ended
August 26, 1995 August 27, 1994 August 28, 1993
U.S. federal statutory rate 35.0% 35.0% 34.0%
Cash surrender value (1.5) (6.6) (10.6)
Life insurance premiums .8 7.4 10.6
Tax credits (2.0) (10.8) (4.0)
Utilization of net operating loss carryforwards -- -- (34.0)
Effect of change in valuation allowance (77.9) (32.5) 1.3
IRS settlement -- -- (13.3)
Net loss of German subsidiary not included in
consolidated return 1.7 3.1 3.1
Other 3.4 (3.7) (.4)
Total (40.5)% (8.1)% (13.3)%
The tax effect of significant items comprising the Company's net deferred tax
assets are as follows:
August 26, 1995 August 27, 1994
(dollars in thousands) Assets Liabilities Total Total
CURRENT
Miscellaneous reserves $ 3,076 $ (124) $ 2,952 $ 3,281
Non-deductible warranty reserves 1,114 -- 1,114 1,245
Bad debt reserves 700 -- 700 967
Self-insurance reserve 1,458 -- 1,458 1,088
Less valuation allowance -- -- -- (4,329)
Subtotal 6,348 (124) 6,224 2,252
NONCURRENT
Postretirement health care benefits 8,592 -- 8,592 8,074
Deferred compensation 7,599 -- 7,599 7,424
Accelerated depreciation -- (2,315) (2,315) --
Property basis differences -- -- -- (1,892)
AMT credit -- -- -- 1,494
Other 231 -- 231 --
Less valuation allowance -- -- -- (11,051)
Subtotal 16,422 (2,315) 14,107 4,049
Total $22,770 $(2,439) $ 20,331 $ 6,301
As discussed in Note 1, in fiscal 1993, the Company adopted SFAS No. 109 which
permits the recognition of future tax benefits only to the extent that
realization of such benefits are more likely than not. The likelihood of
realizing the Company's gross deferred tax assets (and reduction of the
valuation allowance) was reviewed at the beginning of fiscal 1993 and is
reviewed and updated periodically with any required adjustments recorded in the
period in which the developments on which they are based become known.
Upon adoption of SFAS No. 109 at the beginning of fiscal 1993, the Company
recorded $16,900,000 of deferred tax assets which represented future tax
benefits resulting from differences in the tax basis of assets and liabilities
versus their financial accounting basis. At the same time, the full amount of
the $16,900,000 deferred tax assets was offset by recognizing a deferred tax
assets valuation allowance due to the uncertainty of realizing these future tax
benefits as a result of the Company's losses in the preceding four years.
Accordingly, there was no cumulative effect of this change in accounting
principle in fiscal 1993.
During the second quarter of fiscal 1993, the Company received notice that the
Joint Committee on Taxation approved the IRS audits of the Company's tax returns
for fiscal 1986 through 1988. As a result, the Company recorded an income tax
benefit of $1,087,000 from the reversal of income tax reserves previously
recorded for the pending IRS audits. However, no additional tax benefits were
recorded in fiscal 1993 due to the continuing uncertainty of the Company's
ability to realize its deferred tax assets.
In fiscal 1994, the Company recorded a $1,300,000 tax benefit due to the level
of earnings achieved in fiscal 1994 which increased the likelihood of the
Company realizing a portion of its gross deferred tax assets in the future.
At the beginning of fiscal 1995, the Company had a valuation allowance of
$15,400,000 related to its deferred tax assets due to uncertainty as to future
utilization of those assets. During 1995, the valuation allowance was reduced as
income was earned. In addition, in the second and fourth quarters of fiscal
1995, the Company recognized tax benefits of $6,000,000 and $2,000,000,
respectively, due to continued trend of earnings which increased the likelihood
that the Company will realize its gross deferred tax assets in the future, thus
eliminating the need of the valuation allowance.
NOTE 13: FINANCIAL INCOME AND EXPENSE
The following is a reconciliation of financial income (expense):
Year ended
(dollars in thousands) August 26, August 27, August 28,
1995 1994 1993
Net realized gains on sale of
trading securities $ 101 $ 257 $ 355
Net unrealized gains (losses) on trading
securities 241 (652) (50)
Gains (losses) on foreign currency
transactions 1,213 (88) (245)
Interest income from investments and
receivables 1,310 1,032 407
Dividend income 184 137 35
Interest expense (1,751) (1,347) (598)
$ 1,298 $ (661) $ (96)
NOTE 14: DIVIDEND DECLARED
On October 19, 1995, the Board of Directors declared a cash dividend of $.10 per
common share payable December 4, 1995, to shareholders of record November 3,
1995.
NOTE 15: STOCK OPTION PLANS
Options to purchase common stock have been granted at 100 percent of the market
price at time of grant, generally pursuant to plans approved by the
shareholders. A summary of stock option activity for the years ended August 26,
1995, August 27, 1994 and August 28, 1993 is as follows:
1995 1994 1993
Price Price Price
per per per
Shares share Shares share Shares share
Outstanding at beginning of year 900,500 $4-$18 1,028,000 $4-$18 1,103,000 $4-$18
Options granted 10,000 10 170,000 9 10,000 9
Options exercised (94,833) 4 - 9 (92,500) 4-6 (59,500) 4-6
Options canceled (51,667) 9 - 18 (205,000) 4-15 (25,600) 6-15
Outstanding at end of year 764,000 $4 - $12 900,500 $4-$18 1,028,000 $4-$18
Options for 654,000, 674,100, and 817,000 shares at exercise prices of $4-$18
per share were exercisable at August 26, 1995, August 27, 1994, and August 28,
1993, respectively.
NOTE 16: SUPPLEMENTAL CASH FLOW DISCLOSURE Cash paid during the year for:
Year ended
(dollars in thousands) August 26, 1995 August 27, 1994 August 28, 1993
Interest $1,911 $ 927 $467
Income taxes 6,989 4,269 242
In fiscal 1995, the Company entered into $5.7 million of financing transactions
in conjunction with the acquisition described in Note 2 which did not effect
cash.
NOTE 17: BUSINESS SEGMENT INFORMATION
The Company defines its operations into three business segments; Recreation
Vehicles and Other Manufactured Products, which includes all data relative to
the manufacturing and selling of its recreational and other manufactured
products; Satellite Courier, which relates to Cycle-Sat's satellite courier and
tape duplication business, and Financing, which relates to the WAC subsidiary
operation. Identifiable assets are those assets used in the operations of each
industry segment. General Corporate assets consist of cash and cash equivalents,
marketable securities, deferred income taxes and other corporate assets. General
Corporate income and expenses include administrative costs. Inter-segment sales
and expenses are not significant.
For the years ended August 26, 1995, August 27, 1994 and August 28, 1993, the
Company's segment information is as follows:
Recreation
Vehicles
and Other Electronic
Manufactured Satellite Component General
(dollars in thousands) Products Courier Assembly (1) Financing Corporate Total
1995
Net revenues $458,909 $ 24,448 $ -- $ 1,220 -- $484,577
--------
Operating income (loss) 19,053 282 -- NA* (1,866) 17,469
Identifiable assets 135,036 21,300 -- 12,690 42,604 211,630
Depreciation and
amortization 5,292 2,700 -- 12 859 8,863
Capital expenditures 7,977 822 -- 16 533 9,348
Summary information for the German subsidiary is as follows: Net revenues -
$ 8,834. Operating loss - $ (1,209), Identifiable assets - $9,426. These amounts
are included in the Recreation Vehicles and Other Manufactured Products segment
above.
1994
Net revenues $432,406 $ 18,879 $ -- $ 831 -- $452,116
Operating income (loss) 16,740(2) 1,139 -- NA* (1,825) 16,054
Identifiable assets 138,884 9,919 -- 11,373 21,572 181,748
Depreciation and
amortization 4,903 2,299 -- 10 586 7,798
Capital expenditures 7,923 381 -- 16 1,212 9,532
Summary information for the German subsidiary is as follows: Net revenues -
$3,456. Operating loss - $(892), Identifiable assets - $5,939. These amounts are
included in the Recreation Vehicles and Other Manufactured Products segment
above.
1993
Net revenues $364,860 $ 14,837 $ 3,791 $ 595 -- $384,083
Operating income (loss) 12,888 (1,873) (108) NA* (2,296) 8,611
Identifiable assets 110,608 10,361 -- 9,936 26,145 157,050
Depreciation and
amortization 4,916 2,246 92 4 703 7,961
Capital expenditures 5,979 1,288 33 17 354 7,671
Summary information for the German subsidiary is as follows: Net revenues -
$3,184. Operating loss - $(562), Identifiable assets - $3,779. These amounts are
included in the Recreation Vehicles and Other Manufactured Products segment
above.
* Excludes financing operations as they do not report operating income.
(1) The Electronic Component Assembly segment, North Iowa Electronics, Inc. was
sold by the Company during fiscal 1993.
(2) See Note 1 regarding the cumulative effect of accounting change which
principally affects this segment.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The primary use of recreation vehicles for leisure travel and outdoor recreation
has historically led to a peak retail selling season concentrated in the spring
and summer months. The Company's sales of recreation vehicles are generally
influenced by this pattern in retail sales, but can also be affected by the
level of dealer inventory. The Company has generally manufactured recreation
vehicles during the entire year, both for immediate delivery and for inventory
to satisfy the peak selling season. During fiscal years when interest rates are
high and/or market conditions are uncertain, the Company attempts to maintain a
lower level of inventory of recreation vehicles.
RESULTS OF OPERATIONS
FISCAL 1995 COMPARED TO FISCAL 1994
Net revenues for manufactured products were $458,909,000 for fiscal 1995 an
increase of $26,503,000, or 6.1 percent, from fiscal 1994. Motor home shipments
(Classes A, B and C) were 9,860 units, an increase of 802 units, or 8.9 percent,
during fiscal 1995 compared to fiscal 1994. The relatively higher growth in unit
sales is due to an increase in volume of the lower-priced Class C models and the
favorable market acceptance of the Class B model. Due to the initial favorable
order position the Company is experiencing starting off the 1996 fiscal year,
the Company is optimistic that the demand for its RV products will remain
strong.
Service revenues were $25,668,000 for fiscal 1995 an increase of $5,958,000, or
30.2 percent from fiscal 1994. Cycle-Sat recorded revenues of $24,448,000, an
increase of $5,569,000, or 29.5 percent, primarily due to increased revenues of
$5,259,000 during fiscal 1995 generated through the acquisition of TFI.
Cost of manufactured products, as a percent of manufactured product revenues,
was 86.7 percent for fiscal 1995 compared to 86.0 percent for fiscal 1994. This
increase primarily reflects the shift in mix during fiscal 1995 from Class A to
Class C motor homes, which typically carry lower margins.
Cost of services, as a percent of service revenues, increased during fiscal 1995
to 60.1 percent from 58.2 percent during fiscal 1994. This increase can be
attributed to increased operating costs at Cycle-Sat which amounted to 63.1
percent in fiscal 1995 compared to 60.8 percent in fiscal 1994.
Selling and delivery expenses remained fairly stable in fiscal 1995 as compared
to fiscal 1994 and decreased in fiscal 1995, as a percentage of net revenues, to
5.5 percent in fiscal 1995 from 5.9 percent in fiscal 1994, primarily due to
increased revenue during fiscal 1995.
General and administrative expenses increased by $1,020,000 to $25,556,000
comparing fiscal 1995 to fiscal 1994 but decreased as a percentage of net
revenues to 5.3 percent from 5.4 percent. The increase in dollars primarily
reflects an increase in Cycle-Sat spending, increases in the Company's
provisions for product liability expenses and increases in Winnebago Industries
Europe GmbH (WIE) spending, offset partially by a reduction in the Company's
cost for postretirement benefits.
Other expense was $485,000 in fiscal 1995 compared to $262,000 in fiscal 1994.
The primary reasons for the increase were the write-off of $673,000 by Cycle-Sat
of its flat antenna assets (discontinued during fiscal 1995) and the closing of
the Company's customer service facility in Texas. Partially offsetting these was
an increase in lease income from the Company's public warehousing activities.
For fiscal 1995, the Company had net financial income of $1,298,000 compared to
net financial expense of $661,000 during fiscal 1994. During fiscal 1995, the
Company recorded foreign currency transaction gains of $1,213,000 and $342,000
of realized and unrealized gains in its trading securities portfolio. During
fiscal 1994, the Company recorded an interest payment to the Internal Revenue
Service of $419,000 relating to the resolution of pending income tax issues and
$395,000 of realized and unrealized losses in its trading securities portfolio.
For fiscal 1995, the Company reported income from operations of $19,756,000
which consisted primarily of income from manufactured products operations of
$17,698,000 and a loss from Cycle-Sat operations of $179,000. Credit for income
taxes of $8,000,000 is the result of reductions of the Company's deferred tax
asset valuation allowance.
For fiscal 1994, the Company reported income before the cumulative effect of an
accounting change of $17,445,000 which consisted primarily of income from the
manufactured products operations of $13,800,000 and from Cycle-Sat operations of
$695,000. Credit for income taxes of $1,312,000 was the result of the increased
likelihood of the Company realizing a portion of the deferred tax assets in the
future because of improved earnings. In fiscal 1994, the Company was required to
adopt FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" related to health care and other benefits. This change in
accounting principle resulted in a cumulative non-cash charge at the beginning
of fiscal 1994 of $20,420,000, or $.81 per share.
For fiscal 1995, the Company had net income of $27,756,000, or $1.10 per share,
compared to fiscal 1994's net loss of $2,975,000, or $.12 per share.
FISCAL 1994 COMPARED TO FISCAL 1993
Net revenues for manufactured products for fiscal 1994 increased $67,546,000, or
18.5 percent, from fiscal 1993. Motor home shipments (Classes A, B and C)
increased by 965 units, or 11.9 percent, during fiscal 1994 compared to fiscal
1993. The relatively higher growth in dollar sales was due to an increase in
volume of higher-priced Class A models.
Service revenues for fiscal 1994 increased $487,000, or 2.5 percent from fiscal
1993. Cycle-Sat recorded revenues of $18,879,000, an increase of $4,042,000, or
27.2 percent, due to increased revenues from established customers as well as
revenues generated with new customers. Negatively impacting fiscal 1994 service
revenues, was the absence of revenues of North Iowa Electronics, Inc. (NIE) (an
electronic component assembly business), which was sold during August 1993.
Cost of manufactured products, as a percent of manufactured product revenues,
was 86.0 percent for fiscal 1994 compared to 86.7 percent during fiscal 1993.
This decrease primarily reflected a shift in shipments to a more favorable
product mix and to increased motor home production volume.
Cost of services, as a percent of service revenues, decreased during fiscal 1994
to 58.2 percent from 76.1 percent during fiscal 1993. This percentage decrease
can be attributed to the increase in Cycle-Sat revenues and to a reduction in
lease expense at Cycle-Sat due to a renegotiation of its satellite lease
agreement.
Selling and delivery expenses increased $5,007,000 to $26,882,000 and, as a
percentage of net revenues, to 5.9 percent from 5.7 percent comparing fiscal
1994 to fiscal 1993. The increases can be attributed primarily to increased
promotional and advertising expenses.
General and administrative expenses increased by $1,148,000 to $24,536,000
comparing fiscal 1994 to fiscal 1993, but decreased as a percentage of net
revenues to 5.4 percent from 6.1 percent. The increase in dollars primarily
reflected an increase in the Company's product liability settlements and
increased spending by Cycle-Sat.
Other expense was $262,000 in fiscal 1994 compared to $188,000 in fiscal 1993.
The primary reasons for the change were an expiration of leases which generated
lease income for Winnebago Acceptance Corporation (WAC) during fiscal 1993
offset partially by reduced costs incurred by the Company under its repurchase
agreements with lending institutions who have provided wholesale floor plan
financing to the Company's dealers.
For fiscal 1994, the Company had net financial expense of $661,000 compared to
net financial expense of $96,000 during fiscal 1993. During fiscal 1994, the
Company recorded an interest payment to the Internal Revenue Service of $419,000
relating to the resolution of pending income tax issues and $395,000 of realized
and unrealized losses in its trading securities portfolio. During fiscal 1993,
the Company recorded a consolidated foreign exchange loss of $245,000,
principally due to WIE operations and interest expense of $598,000. Partially
offsetting this was income from interest and dividends of $442,000 and realized
gains of $355,000 in the Company's trading securities portfolio.
For fiscal 1994, the Company reported income before the cumulative effect of an
accounting change of $17,445,000 which consisted primarily of income from the
manufactured products operations of $13,800,000 and from Cycle-Sat operations of
$695,000. Credit for income taxes of $1,312,000 was the result of the increased
likelihood of the Company realizing a portion of the deferred tax assets in the
future because of improved earnings. In fiscal 1994, the Company was required to
adopt FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" related to health care and other benefits. This change in
accounting principle resulted in a cumulative non-cash charge at the beginning
of fiscal 1994 of $20,420,000, or $.81 per share.
For fiscal 1993, the Company reported net income of $9,278,000 which consisted
primarily of income from the manufactured products operations of $11,922,000 and
a loss from Cycle-Sat operations of $2,021,000. Credit for income taxes of
$1,087,000 was the result of an IRS settlement. During fiscal year 1993, taxable
income was offset by net operating loss carryforwards.
For fiscal 1994, the Company had a net loss of $2,975,000, or $.12 per share,
compared to fiscal 1993's net income of $9,278,000, or $.37 per share.
ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY AND RESOURCES
The Company meets its working capital and capital equipment requirements and
cash requirements of subsidiaries with funds generated internally and funds from
agreements with financial institutions.
At August 26, 1995, working capital was $69,694,000, an increase of $11,171,000
from the amount at August 27, 1994. Cash provided by operations was $25,404,000,
$2,022,000 and $17,131,000 during fiscal years ended August 26, 1995, August 27,
1994, and August 28, 1993, respectively. Operating cash flows were lower in
fiscal 1994 due primarily to an increase in inventory levels. Cash flows used by
investing activities, which includes investments in dealer receivables,
long-term notes receivables and capital expenditures, amounted to $14,658,000,
$14,369,000 and $19,922,000 for the fiscal years ended August 26, 1995, August
27, 1994, and August 28, 1993, respectively. Capital expenditures were
$9,348,000 in fiscal 1995 compared to $9,532,000 in fiscal 1994 and $7,671,000
in fiscal 1993. Net cash used by financing activities was $2,712,000 in fiscal
1995 compared to cash provided by financing activities of $1,956,000 and
$743,000 during fiscal years 1994 and 1993, respectively. The change from
provided by to used by was due primarily to the Company's decision in fiscal
1995 to pay cash dividends.(See Consolidated Statements of Cash Flows.).
The Company's principal sources of liquidity consisted principally of cash and
marketable securities in the amount of $11,025,000 at August 26, 1995 compared
to $4,148,000 at August 27, 1994.
The Company also has available a line of credit for $30,000,000, (or 75 percent
of eligible inventory, whichever is less) through a financing and security
agreement with NationsCredit Corporation. There were no outstanding borrowings
under the line of credit at August 26, 1995. Additionally, Cycle-Sat has a line
of credit for $4,500,000 (or the sum of the base of 80 percent of Cycle-Sat
eligible accounts receivable and 50 percent of its inventory, whichever is less)
with Firstar Bank Cedar Rapids, NA. Cycle-Sat had $300,000 of unused borrowings
available under the line of credit at August 26, 1995.
(See Note 8.)
Principal expected demands at August 26, 1995 on the Company's liquid assets for
fiscal 1996 include approximately $7,800,000 of capital expenditures (primarily
equipment replacements), payments on maturities of long-term debt of $3,564,000
and payment of cash dividends.
Management currently expects its cash on hand, funds from operations and
borrowings available under existing credit facilities to be sufficient to cover
both short term and long term operating requirements.
IMPACT OF INFLATION
Historically, the impact of inflation on the Company's operations has not been
significantly detrimental, as the Company has usually been able to adjust its
prices to reflect the inflationary impact on the cost of manufacturing its
products.
SELECTED FINANCIAL DATA
August 26, August 27, August 28, August 29, August 31,(1)
(dollars in thousands, except per share data) 1995 1994 1993 1992 1991
STATEMENT OF OPERATIONS
Net revenues $ 484,577 $ 452,116 $ 384,083 $ 294,994 $ 222,648
Income (loss) before taxes 19,756 16,133 8,191 (1,673) (21,669)
(Credit) provision for income taxes (8,000) (1,312) (1,087) 96 (5,398)
Income (loss) from continuing operations 27,756 17,445 9,278 (1,769) (16,271)
Loss from discontinued operations -- -- -- (1,026) (13,110)
Cumulative effect of accounting change -- (20,420) -- (7,774) --
Net income (loss) 27,756 (2,975) 9,278 (10,569) (29,381)
Per share data:
Income (loss) from continuing operations 1.10 .69 .37 (.07) (.65)
Loss from discontinued operations -- -- -- (.04) (.53)
Cumulative effect of accounting change -- (.81) -- (.31) --
Net income (loss) 1.10 (.12) .37 (.42) (1.18)
Cash dividends .30 -- -- -- --
BALANCE SHEET
Total assets $ 211,630 $ 181,748 $ 157,050 $ 139,761 $ 135,132
Long-term debt 12,678 4,140 3,183 3,113 3,938
Stockholders' equity 100,448 79,710 81,693 72,078 82,584
Working capital 69,694 58,523 44,669 37,424 35,442
Current ratio 2.4 to 1 2.1 to 1 1.9 to 1 1.8 to 1 1.9 to 1
(1) The fiscal year ended August 31, 1991 contained 53 weeks, all other fiscal
years in the table contained 52 weeks.
This selected financial data should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements and Notes thereto which appear elsewhere in
this report.
INTERIM FINANCIAL INFORMATION (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Quarter ended
FISCAL 1995 November 26, 1994 February 25, 1995 May 27, 1995 August 26, 1995
Net revenues $130,759 $115,448 $125,093 $113,277
Operating income (loss) 7,803 5,067 6,121 (533)
Net income 7,609 12,085 6,578 1,484
Net income per share .30 .48 .26 .06
Operating income for the quarter ended August 26, 1995 was negatively impacted
by year-end inventory adjustments and increases in valuation allowances of the
Company's German subsidiary in the amount of approximately $2.5 million.
The Company recognized tax credits of $6 million and $2 million in the quarters
ended February 25, 1995 and August 26, 1995, respectively, due to continued
trend of earnings which increased the likelihood that the Company will realize
its gross deferred tax assets in the future, thus eliminating the need of the
valuation allowance.
Quarter ended
FISCAL 1994 November 27, 1993 February 26, 1994 May 28, 1994 August 27, 1994
Net revenues $104,556 $ 99,001 $129,666 $118,893
Operating income 3,577 1,271 8,093 3,853
Income from continuing operations (2) 3,742 1,281 7,335 5,087
Net (loss) income (16,678) 1,281 7,335 5,087
Income from continuing operations
per share (2) .15 .05 .29 .20
Net (loss) income per share (.66) .05 .29 .20
(2) Before cumulative effect of accounting change.
The Company recognized a tax credit of $1.3 million in the quarter ended August
27, 1994, as a result of the Company's improved operating results which
increased the likelihood of the Company realizing its tax assets.
NET REVENUES BY MAJOR PRODUCT CLASS
Fiscal year ended (1)
August 26, August 27, August 28, August 29, August 31,
1995 1994 1993 1992 1991
Motor homes $402,435 $385,319 $326,861 $245,908 $180,878
83.1% 85.2% 85.1% 83.4% 81.2%
Other recreation vehicle revenues (2) 21,446 21,903 17,655 17,126 15,586
4.4% 4.8% 4.6% 5.8% 7.0%
Other manufactured products revenues (3) 35,028 25,184 20,344 18,090 13,974
7.2% 5.6% 5.3% 6.1% 6.3%
Total manufactured products revenues 458,909 432,406 364,860 281,124 210,438
94.7% 95.6% 95.0% 95.3% 94.5%
Service revenues (4) 25,668 19,710 19,223 13,870 12,210
5.3% 4.4% 5.0% 4.7% 5.5%
Total revenues $484,577 $452,116 $384,083 $294,994 $222,648
100.0% 100.0% 100.0% 100.0% 100.0%
(1) The fiscal year ended August 31, 1991 contained 53 weeks; all other fiscal
years in the table contained 52 weeks.
2) Primarily recreation vehicle related parts, service and van conversions.
(3) Principally sales of extruded aluminum and component products for other
manufacturers.
(4) Principally Cycle-Sat revenues from satellite courier and tape duplication
services. Also includes in years prior to the year ended August 27, 1994,
NIE revenues from contract assembly of a variety of electronic products;
and in the last three fiscal years, WAC revenues from dealer financing.
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
WINNEBAGO INDUSTRIES, INC.
FOREST CITY, IOWA
We have audited the consolidated balance sheets of Winnebago Industries, Inc.,
and subsidiaries (the Company) as of August 26, 1995 and August 27, 1994 and the
related consolidated statements of operations, cash flows and changes in
stockholders' equity for each of the three years in the period ended August 26,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of Winnebago Industries, Inc. and
subsidiaries at August 26, 1995 and August 27, 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
August 26, 1995 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company changed its
method of accounting for postretirement health care and other benefits during
the year ended August 27, 1994.
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
October 19, 1995
COMMON STOCK DATA
The Company's common stock is listed on the New York, Chicago and Pacific Stock
Exchanges.
Ticker symbol: WGO
Shareholders of record as of October 16, 1995: 12,555
Shares outstanding at year-end: 25,341,042
Below are the New York Stock Exchange high, low and closing prices of Winnebago
Industries, Inc. stock for each quarter of fiscal 1995 and fiscal 1994.
FISCAL 1995 High Low Close FISCAL 1994 High Low Close
First Quarter $11.375 $7.625 $9.250 First Quarter $ 8.875 $6.750 $8.250
Second Quarter 10.375 8.750 9.625 Second Quarter 13.625 8.250 12.625
Third Quarter 10.750 9.125 9.625 Third Quarter 13.875 10.750 11.875
Fourth Quarter 9.625 7.875 8.375 Fourth Quarter 11.875 8.375 10.250
CASH DIVIDENDS PER SHARE
FISCAL 1995
Amount Date Paid
$ .10 January 6, 1995
.10 April 7, 1995
.10 July 7, 1995
FISCAL 1994
No dividends paid
QUARTERLY REPORT DISCONTINUATION
Winnebago Industries previously has sent quarterly
reports to all shareholders. Unfortunately, due to delays
caused by production and distribution time, this information
may have reached shareholders as long as six weeks following
our announcement of the quarterly earnings results to the news
media.
To alleviate these delays, while at the same time
reduce corporate expense, it has been decided to suspend the
publication of quarterly reports. Instead, the Company will
make available on a continuing basis to those shareholders who
request to be added to the mailing list, the earnings news
release that is generally sent to the financial press. This
change will be effective starting with the quarter ending
December 2, 1995. All shareholders will continue to receive
annual reports and proxy statements as before.
If you wish to be placed on the mailing list to
receive our quarterly earnings releases, please contact the
Company by writing or calling the Shareholder Relations
Department at the following address and phone number:
Public Relations Department
Winnebago Industries, Inc.
P.O. Box 152
Forest City, IA 50436
515/582-3535
DIRECTORS AND OFFICERS
DIRECTORS OFFICERS
John K. Hanson John K. Hanson
Chairman of the Board, Winnebago Industries, Inc. Chairman of the Board
Fred G. Dohrmann Fred G. Dohrmann
President and Chief Executive Officer, President and Chief Executive Officer
Winnebago Industries, Inc.
Bruce D. Hertzke
Gerald E. Boman Chief Operating Officer
Former Senior Vice President,
Winnebago Industries, Inc. Edwin F. Barker
Vice President, Controller and Chief Financial Officer
David G. Croonquist
Former Director and member of the Executive Committee, Raymond M. Beebe
H.B. Fuller Company Vice President, General Counsel and Secretary
Keith D. Elwick Jerome V. Clouse
Former Executive Officer, Vice President, Treasurer and International Development
Chromalloy Farm and Industrial Equipment Co.
Paul D. Hanson
Donald W. Olson Vice President, Strategic Planning
Former Chairman, Don Olson Firestone, Inc.
James P. Jaskoviak
Joseph M. Shuster Vice President, Sales and Marketing
Chairman, Teltech
Frederick M. Zimmerman
Professor of Manufacturing Systems Engineering, The
University of St. Thomas
Francis L. Zrostlik
President/Director, Stellar Industries
Luise V. Hanson
Director Emeritus
SHAREHOLDER INFORMATION
PUBLICATIONS SHAREHOLDER ACCOUNT ASSISTANCE
A notice of Annual Meeting of Shareholders and Proxy Registration and Transfer Agent to contact for address
Statement is furnished to shareholders in advance changes, account certificates and stock holdings:
of the annual meeting.
Norwest Bank Minnesota, N.A.
Copies of the Company's quarterly financial news releases 161 North Concord Exchange, P.O. Box 738
and the annual Form 10-K (without exhibits), required to South St. Paul, Minnesota 55075-0738
be filed by the Company with the Securities and Exchange Telephone: (800) 468-9716 or (612) 450-4064
Commission, may be obtained without charge from the
corporate offices as follows: ANNUAL MEETING
The Annual Meeting of shareholders will be held on
Public Relations Department Wednesday, December 13, 1995 at 7:30 p.m. (CST) in
Winnebago Industries, Inc. Friendship Hall, Highway 69 South, Forest City, Iowa.
P.O. Box 152
605 West Crystal Lake Road AUDITOR
Forest City, Iowa 50436 Deloitte & Touche LLP
Telephone: (515) 582-3535 400 One Financial Plaza
Fax: (515) 582-6966 120 South Sixth Street
Minneapolis, Minnesota 55402-1844
Bulk Rate
U.S. Postage
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Winnebago Industries, Inc.
P.O. Box 152
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