WGO - Earnings call transcript Q3 2018 | Winnebago Industries, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the Quarter Three Winnebago Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer-session and instructions will follow at that time [Operator Instructions].

As a reminder, this conference call is being recorded. to host like Mr. today’s now would introduce for your conference, I Stuber, Analysis and Financial Investor Steve Planning and Director, Relations. Sir, you may begin.

Steve Stuber

And and broadcast being call call Happe, live our Financial Chief Bryan on Company's joined earlier Officer. third is on Chief Good result Winnebago issued President a The ended May XXXX the and everyone. thank call at quarter call I site joining of which Vice our for Hughes, today. morning, is site am XXXX. us and this our and third will on morning. Industries' investor.wgo.net, quarter conference and release later This for today to Executive Web results the the available Officer; XX, with review posted President the news earnings fiscal Web Web you to for by replay site be Michael our

With over Company's the the Happe. said, which turn are Michael read. actual President factors differ results I to from to could remind of call its of beyond made like forward-looking statements would uncertain you our like call these a statements you I'd certain start, that considered maybe identified our involve The operations, that Winnebago control, encourage and SEC we regarding securities to Company I forward-looking Mike? statements cautions number number are you risks, to cause in materially now inherently Before many are and These laws. that in statements. of under to conference factors, Industries a today's CEO, during filings, and which

Michael Happe

joining on third Winnebago fiscal appreciate morning call and each the Steve good XXXX We as you, morning we of you results. year sincerely for in Thank review quarter Industries' this everyone.

begin always, financial to and are discuss. we the the summary financial our with high-level topics with Bryan will Q&A in of there will we morning's Bryan on then comments greater officer, as morning's over our progress Hughes. quarterly I chief performance. end results, detail review numerous session. closing with this And session hand a to return As call I describe will will initiatives. this will strategic a floor several

quarter third QX increasing a broader toward cost relative on with profitable side, the growth premier larger, company. more and continued year. team's lifestyle building reflects progress outdoor impressive Our bottom-line headwinds strong and drove our our in results performance Despite to last material top team

Our negotiations increased input select growth and on Motorized emerging supplier boat increased favorable And our see points, XX new also content XX% terms revenues Towables via yet of a price internal we consequence navigation June segments, Consolidated improved segment luxury and the traction outdoor by of third-quarter, we of cost into acquisition mix careful businesses. expansion to business of financial any announced reduction business on and product management, between in continue America's Towables gaining internal our third-quarter activities. the external driven way basis with portfolio within smart driven our our by and lifestyle segment Chris-Craft. X financial organic cost pressures strong builder, both of of signs led performance, again not year-over-year progress. increases, Gross through the market a positive margin while primarily

in segments the to Turning more detail.

segment. in for Backlog due for mentioned cost fixed increased for towables year-over-year, growth mitigation organic businesses which gain increased branded cost On RV share. positive again the our continued strong and and activities. our expanded XX% showing slightly leverage from expectations Towable to businesses. both branded supports XX% side, growth quarter the year-over-year, revenues Grand branded and the Towables the Winnebago previously outlook both outpace Towables Design Margins and to market future

both take wholesale are pleased in of to continue and market growth with overall share Towable the We continues Winnebago to RV and market retail our see Industries both that brands.

confidence in capacity our efforts. in is performance reflected expansion our Our

Towables brought announced we on previously our project expansion line. ground and the online broke Design a During quarter, Winnebago RV new production Grand

largest while are of as address well backlog to to The that the also velocity. excited we Winnebago gotten be and we additional continues product low and and the demonstrating a market, that customers growth. the trailers; healthy We have have category overall, innovative segment to which the a opportunity admit to share Towables retail giving the sub-segment, in solid deliver the love, much about branded toy we to And market product us in performance. work still branded into wheel dealer Grand more up RV future reminder our start, encouraging forward hauler Transcend strong represent Design placement capacity And products the towable to products as yet having mini-plus we new extremely of are too, continues a travel to Design largest gaining another that share off for our Stick-and-Tin fifth of line do in retail Winnebago lines, looking entry has initial introductory ramp to terms Grand The the lot market. bring arena. line within well, wheel fifth

a basis third Motorized ago for XXX another second we margin quarter to efficiency Encouragingly, our quarter the results. fiscal versus are quarter. operational XXXX to to improve as Turning points our EBITDA steady saw increase to yet make progress. continue were our yield we efforts Unit beginning versus consecutive margins measured year segment, shipments positive

content we adjustments RV Additionally, and suppliers, rising pricing augmented account with implemented select to for collaborated costs. input our

of problem effectively Class more toward and exceeded our Value helping the Class market market, products for line, capabilities, short-term have motorized is the quarter stronger demand leading a Outlook, continue ago The appeal, category and vehicle and finally, are of profitability quarter a continues Gas resonated gives third customers to C the that for Motorized end. evolving priced backlog in at increase and customer has versus recent materially And Retail share a the Motorhomes future, and value and we with the have actively a be good working the year. to XX% healthy with off to new intent to into the continues hit end market one us We higher year the C our supply Class which grid end aspirations record rental flexible entry we With three. respect bringing Revel B our diligently the for value will us development to product charge work the our our XXXX and product compete shorter segment on new alike. cycles. track of dealers and fiscal Class is with the better dealer as A motorized X-by-X

realizing had profitability. meaningful and as the third to future on outlook make minimal sales forward motorized We to and look facing overall continuing the While product a quarters. will enhance our up remain we in challenges focused foundational our business, performance, contribution improvements impact laser on the quarter ramp drive addressing to portfolio

but you've these not performance. a me sustainable, fixes overnight As to stronger gradual rather say, heard progression are

we turn is driving are We to rationalize new continue happening models into to and their brands as product This the also pivot performing, dealer older a to that lifecycle. appear product over in brands that the inventory and retail work but internally early externally accretive be not healthier line introducing assortment. and obsoleting series

leaner of a across strong volume more is line products. objective Our

in third the Bryan I we portion a reform turn Hughes, Before want the just note over the call to to quarter, the benefit distributed form tax I in of that of of a much at two our financial the and earnings but in three. our bonuses discussed occurred quarter employee this meaningful contribution conference Foundation. quarter call, Winnebago We to in detail impact

overview, XXXX will dynamics share review acquisition. call strategic RV I our to Winnebago in quarter Chris-Craft this the and recent to hard-working very results that fiscal and via over turn Industries the our Bryan? Marine of as be them always, venture in benefit With American We’re course, Bryan their North discuss very to to dedication more thank with initiatives, Hughes and market, space return able now to third the I employees, pleased fluid new into our the financial will our detail. our for commitment. I

Bryan Hughes

everyone. and good Mike morning, Thanks,

year, pressures quarter was an of million the XX% primarily third were last driven organic XX% growth prudently. improvement, increase the last more profitable XX disclosed an which cost growth points, pricing by more quarter, $XXX and versus in of which market total inflationary of see, increase the offset million, $XX for to markets by basis Third and so an revenues we our our XX% by than by as can The adjustments, for aluminum tariff Towable monitor that in previously as margins for strong mix, combination accounted impacts are expanded in in a Towable materials, facility. and profit steel analyze Gross revenues to segment, that consolidated the to of year, spot have to versus West driven we Gross on Coast well segment. profit increase the we continued investments contributed driven beginning and quarter. the business react in these costs continue leverage, raw operational impact fixed domestic

XX% over and share, net increase income Third quarter per per quarter over of operating XX% increase $XX the an last million, diluted $XX $X.XX of was third year. Earnings $X.XX of income million, an were up share was the in XX%.

as the and share Company a $X.X benefit had was gross basis one-time third basis the distribution of bonuses impact Jobs Winnebago million and to Act. XX an and mentioned, in EBITDA Mike per Tax to expense This and Cuts OI points It an $X.XX related $X.X the XX comprised employee one-time a or million, our contribution the As received percent the to of ratios. recorded impact result foundation. quarter to margin point of

in release as between adjusted non-GAAP EBITDA. accompanying reconciliation We EBITDA and The and release have EBITDA a adjusted the income our press comparable schedules press measure. measures net performance show provided

for increase show, As year-over-year. was the $XX these EBITDA of million, consolidated schedules adjusted XX% quarter an

the reinvestments adjusted quarter, XX%. tax one-time the in the EBITDA be Excluding would to increase

growth In $XX segment, up increased $XXX the Winnebago up adjusted was the branded XX% by Turning were the continued Grand margins RV basis for Design revenues million quarter, now third from and quarter lines. the XX% the individual organic last Towable to million, Segment the EBITDA versus year driven prior strong and year, EBITDA for across points. adjusted segments. XX

by for increases cost where able to mitigate executing savings selective those While pressures inflationary necessary. have last Towable by our been brought new the for we million recently and price leverage quarter. through driven products, the on Class by including pressures introduced Segment in year, are C cost fixed backlog part initiatives, we the of XX% input, the was some reform began units, cost basis experiencing previously, about Outlook from the down the sales nearly strong $X EBITDA XXX new X% X.X% by previous XX% the both were year-over-year. reinvestments to retail million Motorized branded that points Adjusted outpace mentioned year sales tax RV basis had $XXX of lines. industry the EBITDA revenues and impact. in and up remains Winnebago quarter, the points Grand versus improvements adjusted XXX for X%, Design XX,XXX quarter, at of the which margin decreased continue growing driven

we our XX% at production startup still headwinds recently the West cost reflecting new Forest increased startup new last are City, and XXX of introduced strength quarters. we progress the over product product. the made on our Coast over at backlog While or steady just units, facing two facility Motorized have

million. to Company had million. million. was $X.X Working of $XXX $XXX.X quarter issuance of of the capital was of as Net Turning debt sheet debt debt $XXX.X our end, reported balance million, cost the outstanding

We X.X net million X.X nine first and ratio debt of with current track flow commitment targeted leverage to million quarter. to the from in of our with the Cash ratio range is repurchased operations X.X. of $XX Our months was line EBITDA our adjusted in XXXX. $X on in stock fiscal deleveraging

tax rate Our effective XX.X%. was third quarter in the

the amounting expect benefit we to benefit. the Winnebago share the gross that impact shareholders. employee tax tax distributions year, including $X.XX and the flow foundation year, $X.XX discussed to to for would we contribution $X.XX $X.XX we drive to and reform the Cuts Act contribute earlier to per the of $X.XX expect are to Jobs making, reinvestments the For to $X.XX rate Tax Net

on dividend pass share for per some on business $X.XX of of stockholders I Finally, will comments. a XXXX. record financials. call concludes recently XX, July June our our review Board common quarterly of of of That Mike back now cash XX, final of Directors as the quarterly to approved the XXXX my payable to close

Michael Happe

you, Bryan. Thank

the on open on I we to it industry to update developments Before exciting the Q&A, at Industries. want up recent Winnebago an some touch and provide of

Regarding in to retail. industry, the continue will believe for American shipments positive North XXXX RV be we that a year

XXXX. growth, we another been forecast versus in X.X% double-digit as increase the have believe Dealer choice record levels unit its is more projected years RVIA subscribe right of yet Industries’ to eight stable, each shipment shipment shipments remain an of do consumers recent their XXXX tremendous past XXXX the remains annual that the our While This in state projecting approximate lifestyle appeal investment. of sentiment given Winnebago inventory levels the at appropriate find for discretionary RV also the and we businesses. current the

terms Winnebago are We dealer to carefully, Industries’ and business that time. continue this present to those and stable monitor pleased report are inventory aging factors for our at very

through While positive and to aluminum affected driving welcomed the RV Despite more growth RV some of high It factors, macroeconomic elongated place, the in growth there in as which and all with overall the spring and we for economic such recently on these of broadly supply utilization market elements. year developments the retail, remain of steel enacted increasing remain as monitoring business winter is in-customer outdoor rising the is industry are sentiment. conditions in firmly trends associated by on American the challenges and summer activity front, the not rates, conducive quarter rest foreign tariffs, lifestyle early course demand product and macroeconomic Though, certainly energy. ’XX. is normal and two-thirds late of calendar fuel first exhibited in prices the three triggered undoubtedly rising pursuits retail alert interesting and consumer interest always time global an in volatility

the the vehicle Motiv launch in of division a leader in with our strategic an all-electric recent conjunction announced third we Vehicles in partnerships chassis. late terms electric Systems, platform mission developments, through zero of quarter, vehicle commercial Specialty In with medium U.S. duty Power

with and important investing We be technologies will chassis of priority could our vehicles innovations to new develop keeping power with and business Motiv specialty supply to in We needs, in the believe working to this look and evolve be electric key in enterprise numerous participating that to to the continue all meet forward. going vehicle electric actively market that we in future. forward space applications will and our

specialty Our division but are a Winnebago investment. for vehicles carefully of business one Industries, assessing increased is small we

all acquired builder, premier that earlier Chris-Craft, portfolio Additionally, boat Industries we this iconic I'm as you've our sure as our month, outdoor a Winnebago an and announced enhancing company. position seen diversifying recreational lifestyle

and significant its high for overlap well industry significant the natural market it lifestyle growing market position market for step And as fit Winnebago has the in of and Marine increasingly quality many Industries and key the heritage terms our product they RV We priorities an ownership a flagship is know, lines initial Chris-Craft legendary you new demographics, believe the make and in Chris-Craft boaters. shares strong believe runway our are towards As -- brand strategic The profitably and of one the with diversifying market Chris-Craft’s doing market, brand, Marine beyond Marine brand. us. The customer we own brand its RV so. and growth crossover. ideal premium similarities with attracting Winnebago is

their Chris-Craft and talented outdoor Marine we have soon. nurture sure to yet to thanking with like all intend work brand and the the my very want market to to providing few on-board, I disciplined team balanced I'll Chris-Craft pleased drive a hard portfolio their forward presence and hard employees end, customers improved have its on to a wrap exciting very employees grow there by lifestyle with as employee leadership look and to that, will that today. up shareholder get dealers with in broader and team to of and and of with for in questions, services. customers this quarter, to so products would comments during With work the quality manner. high value wonderful and we'll Industries’ a I'm commitment for for I know more products. continuing the profitability We’re We our continued our do, and always all Winnebago that of

We become employer. customers shareholders all our people we employees, end the Industries, in an better avenues our be express the difference value of here Company our to wil for the create have the even our dealer at extremely and and differentiating hard can Winnebago owners and been day, l our make we them end how partners. for that ensure it At proposition that the to working further of

all to are ensuring their place our We team of Winnebago summer. of and of Industries’ your finish their Thanks and morning. committed time safe the our all preferred rest very your employees much this wish make I organization to great and continue a careers. for you

back the will over the questions. to operator line turn We now for

Operator

Instructions]. [Operator you Thank

comes question with Craig from Baird. first Kennison Our

open. now is line Your

Craig Kennison

some Question you XXXX Wondered would along as could the about some showing which Trying if on as margin factors unpack motorhome the much improvements costs these well? imply of on especially sequentially. you impact commodity there, some margin really your your improvement comment margin with and you’re of long-term plan, better trajectory, of signs operational one-time there? influencing think to the

Bryan Hughes

the you numbers tax XXX including distribution, the affecting the that, hit the some that gave I one-time facts, margins the of in that during of points it the and quarter. benefit, call quarter,

Going tariffs we’re the forward, pressures we’ll seeing to the continue that . inflationary monitor from

companies markets a the today, of tariff I tariffs for think additional here how no threat war that's or and threat the domestically. and that trade of exception, the we’re affects spot unknown biggest many

and As it a spot we yet, all of the here, but steel buy reminder, market. domestically still impacts nearly our aluminum

that pass cost the those quarter then assessing do any What did what’s increases suppliers pricing, with good our them the mitigate in in partnership. to reacting mitigate I going impact. to and in prices. with we in also near net then which To to of and a along working say very early it's the will happen also, term, job So is impact to we to the a bit hard spot foretell continue

just upfront that I’ll relates to as So tariffs. make it statement

so We’re a managing job through doing pretty good far. it

some As we’ve startup Forest making are investments each line in including in new our there continuing, most more talked that quarter. the it and of been investments about of productivity and we’ve motorhome gradually notably relates are Those specifically the past the West quarters, City. facility Coast to improving terms in they

in And continue And time. those it a we our be so gradual over improvement to improvements metrics, in those seeing expect to we our are metrics.

them, where on the a journey We’re I reviewed still Mike his that highlighted we’re alluded as but we which focused in obviously sequentially, numbers fix. are to ago. it's were -- quick long-term we a We doing. But that's improving a when comments, is not year something in it's not that

so what cost forward. working improvement, will we going we on will confidence the emphasize. great that's And take continue got initiative to profit We've to show and out of improvement got teams that continue

Craig Kennison

of as your a production you year? have work. you’ve do Towables more have different added And in it days normal capacity numbers secondly, off terms relates one, to you’ve a summer of capacity your really you go work which would might much couple discussed; that drivers; year this how number to week schedule capacity, back you of in you but more to additional an include this Towables, versus I guess, might expect in which schedule? also And last work

Michael Happe

And a towables. return that our market Oregon obviously, not the have do that significant our a businesses. side and Motorized look the side, growth question, existing side, that run growing the efficiency away and been year. investment years in to But at should take Iowa $XX million, of not campus. business growth of that branded start on there we correctly. if is break on higher fiscal two really the unit we towables achieved The a in start Motorized a But that in standpoint, businesses campus. the smaller address rapidly last the we on RV are effectively are we the new productivity, their mostly facility almost North really we we over Towable each for that really focused we branded and I'll cost Winnebago really I'll Really capital and across two $XX management. And more doubling Winnebago facilities towables future quarter, that this expansion And believe within in really within essentially do will are three that to that to different is competes share. it operational trajectory from organically million incremental on we’ve that exciting Indiana 'XX with one, benefits Winnebago what's started project expansion the to ground capacity around the until reap sometime business

continued And And Grand we're that starting Design. at good to to brand to doing is amount have XXXX, team organically, the right of of now. for existing of continue momentum to of we that support done Design that. get in the job to capital. have November done business, Grand that Grand there projects. And infrastructure of when that a really team invest over with the production Design continuing acquired out to that we knew The time number order we fantastic And so that benefits different a we we've would work at the that see in

have so don’t terms of at right both I capacity obviously through it's capacity the unfortunately, tip businesses, my numbers exact inorganically but answer in expansion. also in year-over-year, organically within but itself through exhibiting of And the productivity tongue the an

very We share that about within those each their we that the regularly. time Design hard carefully in business. prepared anybody so to trajectories about manage output future. holidays, else more obviously your We workplace And expand we'll production can our of that support work families to runway for the growth, the share to around take that fit the have our Grand with especially And And employees you we business’ believe throughout bit. really time, we capacity that and we have to our the the schedule going needs the very continue the also retail something down in a growth we’ll definitely and that talk existing needs at production year schedules. don't campus our the forward. see don't we to so publicly. their is to business. workplace industry. away compare And certainly, production some to are employees in We’ll But respect from question re-energize schedules schedules of And really our with leaders major run but

continue our we do teams are managing so that And so. right to will believe appropriately that and now,

Operator

Thank you.

question Research. Our Woolf comes Seth with Northcoast from next

Your line now open. is

Seth Woolf

I wanted to start retail off, talking we Mike, were about in XQ.

think describe word used early acceleration I’m healthier could retail quantify you hoping you've to I late seen? the summer spring what trends. you

Michael Happe

you I for my Well, tell perspective entire that this the own -- is would and industry. I speak certainly don't

You data all a have access the to in some of industry. basis on lagging the SSI RV

would seen. I'm to that some RV the was above bit more it month line was each and warm as normal for pace was liked the weeks month, most as to due have a at to weather you was see a April And we businesses late month. of a I SSI I least as but it’s much also comparatively. thought have was on better were probably they in so same see. with typical I more for dry not thought for think March be. us think, of early that And of would relatively little of the track back a the our throughout businesses, where or lot characterize retail got I business, industry. dealers But that a early difficult industry the for for And the so data winter somewhat March in the as our that spring. increasingly Major we sure would the the our Mason-Dixon

and how regular on two businesses that dealers I would our on that's it. our Towable in share and obviously businesses, lines, are own basis. own focus business So again product describe and our taking have we a We our the

in pace Motorized, upwards of market long doing that a there. to A, great job have B, very pivot been some that than a So we to we work trying categories, growth. line product And still. think of and closer we like you exceeding we've time. industry there the share stable we And stabilize and taking in been Class on essentially we as Motorized. healthier are Class do we to know Class we’re upfront back that the there we’re on share we’re Cs have the business make

as liked. not there exactly been performance we would've Our has

So XXX as here but and a to next RV broad answer most retail during fall of the that it I be. we to of summer days think industry to the XX early are is your hope projecting question the positive

Seth Woolf

as then called very good they’re your inventory, right we direction, think measure inventory of the in that the I trending least some used industry, out peers have feel fact about your we that at about you stable. look inventory, the you they know all the around are If And metrics or really level. high to

results are So I guess you color that inventory, gives they to put that continue the least maybe you be now? confidence Any firing have can there towables what have we’re really all differentiated on you enough seeing heavy at confidence where if two Do you some of in or could up little you have speak the to the competitors on helpful. can would how that businesses are cylinders.

Michael Happe

appear, function we even to One, products dealer continue carefully recognized probably to Number to pace. new lot. the and at dealers. add amount two, to at continue as paper, factors. new inventory introduce the on of than an action dealers dealers’ in is and we get upgrade steady And times a No, segments that that creates continued we’ve significantly on inventory times on a market that ago. to we higher appropriate opportunity therefore, think of a major more they were levels we our that certainly our But Towable maintain, year three are

on some share Winnebago, Design Grand And as then and with comes so side dealers is, And the of are pipeline retail for giving appropriately we teams the and certainly gaining third also especially towable the those in those increased new the filling earning but in opportunity cases surely, still the products. And Winnebago of anticipated from lot on more that and their real well case dealers shipments. Grand are lots share. slowly Design for market are more and on

finance certainly inventory to of are. awareness views obviously businesses. not reports industry the are bit estimated we This projections is little and companies we probably focused retail so franchised. dealers a -- others your a stay have really via of some of some business what the of our and the as in read overall And of more But where

on business And on the RVIA focus industry adjustment growth recognize a channel recognize forecasting I single to transition in as we every on think And also over so will they that mid before that some something this by year to make normal probably non-Winnebago we with range. of working what seen have that see have heavy is QX sure adjust come impact But continue in indirect we they quarter compete that they that try is in that double-digit and the take on their to the working X.X% digits, an X%, manufacturers high business best can from to fiscal could and to inventory own our those And we’ll do industry results, ours. is. inventory or shipment and in time, new dealers our are reorder you rate a Industries But from brands, through lot to we 'XX. as as that normal third we’re and haven't potentially certainly that really if but day. down of earn some our transition a on that us

Operator

you. Thank

next Our O'Hara Company. question from with Stephen and comes Sidoti

is now Your line open.

Unidentified Analyst

about revenue drivers any products think was know It’s had the question, business? are there a about success on that was if wondering [Frank] Motorized. of the talked and the up strong. you other just Steve. of was on I side should there. on that just Obviously, backlog I But I we for new

Michael Happe

that we’re one The I focused and certainly attention gets the financial Motorized community, lot think those it. that capture probably one on of here. from is business a

the been Class the We months, to Gas ensure to a introduction of the some Horizon. is the earn some and new confidence we’ve XX a year, work fallen of carefully have we with of on the A dealers some comments, introduction I that And on busy continue the on the has that market. doing a Vista. several diesel extremely last it’s at our in assortment to inventory A with better some We’ve team And of the our products of some then of new talked within attention. lots with just been our Class literally the probably behind the outlook on products. Class backlog much that of continued Class slow work point more the to say their interested new there climb active better side would Intent, that and our C with The great And that products introduced Gas models I mean, reflective doing do on there. we’re to the the this the new C is about I Revel, also products. they're my RV XX on to work Travato. category line good market Motorized but hopefully healthier manufacturing. parts B work a category work the just is line, of Class new job is bringing the other that back dealer needs But those in the

haven't we some that’s market. But have that for that can We the initial job various would we’re operations those been future. and make so the efficiently, have those we’ll seeing Horizon Revel, make well and But liked meet able hanging us several continue sure that we good we and as There do with to demand. profitably have the that where reasons, can of as been we serve a and products, our the to believe demand to side dealers. in with better frustrated and they’re

Unidentified Analyst

just I one had then And other one. quick

was You the on been place put some partially recently And yet? about timing that’s how price some wondering offsetting inflationary increases, there’s you hasn’t think quarter anything that maybe I in hit if that? third costs. the mentioned of

Michael Happe

I we’re know, weeks month the or four June guess, into three here three -- you as Well, and weeks fourth quarter. our into of

year, So we our after industry, RV third has that anything any your the limited there maybe across the And the part new talk one-time you some taken quarter manage on increases to during the about throughout in business. quarter. times really introduce But can products. some hopefully amount were won’t price or businesses increases of price more a you stable certainly within third a happened when more year, the

adjustments have the actions of and cost an the in terms pricing in And more costs the to incredibly made material frequent of are we in think is volatile strategies But OEMs. years. nimble this members dynamic pricing we've that period or and as fiscal with We that that volatility value have price our the And such in last remain part and almost customers really as year to and right dealers, But market the determine we for we’re in know different costs we’re the suppliers, the difficult the working I if well. each fairly dealers than week, end of shared four certainly on probably we monitoring daily well. difficult that’s month three and each for parcel basis, hard is climate have today that's that now. chain, one fiscal across

Operator

you. Thank

from Our King. Scott next Stember question comes with C.L.

Scott Stember

back were -- talked into to efficient. back continue maybe did but with to are the mean think working your works? back things becoming the your and I Could how to works? And ago. about, clear price increases with that the through, And amount process on guys I great year and Just of obviously higher you a of on it that it's raw you and do little go you increases, material were employees, I you gone -- process depth just a a fair a guess you that price are give and environment. a margins question you Obviously, seems you job bit gross have that your this significantly more going than suppliers how obviously all navigating when you get because to more your suppliers add also if

done. getting It's to accepting end So increases. it’s it clear price clear customer you that the that seems the are be guys

figure Just go just And that more. works. pieces, whole bit into little how out a it maybe trying the of a moving dynamic lot to I there's so know

Bryan Hughes

pieces, And through talk pressures conversation the increases it's engineer Scott, for are mitigate we’ll cases of relationship. their need. a quick as a And the also supplier to It as are despite Obviously, pursue. try of we're something come that's you're working solutions and starts then of the that dynamic fix, to costs take on refrigerator, themselves. jointly environment there a they'll order are the our eyes to about moving in. with it’s out But can lot at business try cost what is kitchen right, you're a from first we them out a as there's those in of the cost negotiations stiff a that. that and sink, pretty And together, even engage we And us aggressively non-value television, we floor look the they the that end we plans more substitutes change component-by-component never them some of still viable but on out. or they in customer a the about that pieces increases the and look for basis, economic to that do that discussions, with how opportunities some natural also cost feel pricing look as to always occur. whether to as go talking in componentry, then we on us we of offset a material

coming we to basis and parts, And some for as the are fluid and at way that’s clear, always the understand just the other while the to looking that of of pass the so the trying what to a modest tweaks dealers still that he because the out as the the remain cost it looking end at scheme our through, price of support in end ways pricing redesigning alluded for to higher They're are markets on plans as hope the take. pushing And and customers. to out decisions, continue we're things, the Mike along rolling day, of that that's and can floor with we a they engineers we're processes in and doing, grand are actions increases and to to lifestyle And daily price RV as that contributor mitigating effect quite things. going on, that's very well. all we increases than the to past, our commented a

I guess that's process, I'd So how the characterize Scott.

Michael Happe

recognize of potential and RV of discretionary over the industry, fantastic years, keeping long-term arena. impact job cost we and has to and ask affordable. done thing market. recognize and and price any know increases other RV -- And that of XX very the I we that managing about I one a last consumer think I very seriously just in we're product the short-term add what generally everybody We that, I'll the that. because consciously Scott, a lifestyle want those We the the think take

the choices the climate impact have could our direction savings future ask tariffs that in that American overall the very spend very demand, on. war. of will market, tariffs of force paying to concerns is RV to them also to increases keep in with that in One but want North And terms and those in in work building the discretionary we dollars they it -- in case lifestyle that and moving those trade terms price because seriously that slowing of their fully we up of really trade this real demand. the take an end customers we the right certainly is aware the we’re ultimately the And that for to make customer have end will where on make will

on anxiously these are look of else to as how we’ll does So some as resolved. everybody topics

Scott Stember

just And that in it’s on now backlog. is And Outlook C, of out the the product there the to now. the Were getting quarter? Class sales know right any Outlook, in I there clearly, Correct? the

Michael Happe

the were quarter. the hard happens portfolio sales the was be we’re in an talked introduction example we the there And that few are to line certainly in this as happened that product over. late careful backlog. Motorized a to quarter, that's There in and its working latest the overemphasize always product turn But one orders just of business any to about, our new in

teams where market. that placement earn we’ll the on share is do to the Cs of in C new And addition But so need all to there working and There with other or you the happening in got to product sales the some got refreshed. Class future. our definitely Class Outlook. that in one products Outlook things are to hard latest that the we’ve work several improved we’ve And be more there are

Scott Stember

what you last potentially brand with do you see on they expand types the not. either at and the give very Obviously, and some of boat equally them or envision But what on ability Winnebago capacity, be question -- iconic both what as out And brands come do. as Chris-Craft, good the you new are they side. to pontoons

expand? the talk as expansion Chris-Craft hands and you future type or allow maybe expansion. envision you them get What product to So about just your brand of on

Michael Happe

make obviously the difficulty]. very this growth organic the plan our that we’re had every side. really of. their organic They of reason era more elements. And [technical very They the, we also like number of they it continue line I elements some ultimately was addition first dealer announcement, to would components, the on team a product part growth hard portfolio. within to an models when that why strengthen in existing for we to And are ultimately ownership is consummated the that I think but is Chris-Craft believe as existing we Industries we of that inorganic Winnebago weeks the wave base. includes that about their Scott, more including ago guess, excited stated Well, transaction have day of Chris-Craft And working several made to

brand, certainly with we at think But It's begin we one not The always that to that's on as I has we’re disciplined then are not that team The about very opportunity leadership hopefully, of priority talk future infers, Marine an many in in is market. And to the possible have opportunity, brand expanded as that But the probably to a a we help future. growth secondary Chris-Craft but Marine stated, integration of look business now. that those as can more dealers on, it actively We the working consider. number get potentially it’s imminent has with or Chris-Craft the there's great permission a from about in of another in right the tell we process. we that the end with would can for you the that the time. expansion us some obviously, support. to again, segments at ideas opportunities your rolling. later some the short-term of is, brand, capacity And unlike to question the But work flagship their a brand other part short-term strategy thing customers. participate Winnebago a the

Operator

you. Thank

Our Gerrick from Capital with next comes BMO question Johnson Markets.

line Your is now open.

Gerrick Johnson

G&A and First, donation million COGS cost that the out all to in the foundation, just bonus be between was broken clear, goods $X.X that’s to nicely? because is or of G&A, and sold up

Bryan Hughes

Yes, some as in it’s of G&A it both. does Gerick, show split between up well,

Gerrick Johnson

a XX-XX I and Can today? it call go

Bryan Hughes

Little towards heavily bit more of weighted cost goods and SG&A.

Gerrick Johnson

on me labor, that us helpful cetera. next inputs given between input be leads what you discussion the then warranty, It remind are overhead, down question, And broken to goods et sold and of breakdown would inflation. inputs, your if the of cost

Bryan Hughes

to other. And clearly, are it’s material. Yes, overheads each pretty comparable labor and then heavily most

Gerrick Johnson

And one last then Chris-Craft. is my again

same run Just some the try be in the Thanks. the model What And it all you because to we’re will can done rate going past, direction. model nice has sales? of numbers going honestly it to it. it annual please. going all What we -- if see in do as

Michael Happe

the And little give single-digit you of very But quarter I now in other little we look this business Chris-Craft just the of as likely We to probably that beginning obviously into you we again, the with a of end probably Yes, it's point, it's that element right something bit business. future. can the there. I more for of acquired grows, request at put a transparent certainly, we've business understand that of some will will think fourth segment very And at a that reporting the information idea in But the at business not opportunity the different bit starting portfolio better will QX. will 'XX. think that it's our become segments. at disclosing. small And bit reporting a have And a more that been QX, visible. size fiscal that believe that have that we’re grow structure most of probably

in especially was the team that are and looking businesses their brand. products for earlier, we have, non-RV buy, think the growth We leadership way their the We future. the in they of capable. business on operate similar to love side. I not market to approach types said viable they the models plan dealers as we��re with a RV grow have the are very We very thought that think distressed the they trying business We arenas. And the to dramatically

we’re are weeks we’ll the that we’re team, And three sharing at start things well. two what going point. and all to But half, into to so that’s and work integration with and this get

Operator

Thank you.

Our Citi. with from Greg Badishkanian next comes question

Your line is now open.

Fred Wightman

was Wightman turn, some do could I makes commentary, more to It’s had that We've and quarter then the seen coming quarter? on cautious online. just Is offered actually some Mike, start productions. Fred or Greg. for of capacity last in think you looking that online that come there at industry-wide you capacity what OEM anything versus that the market either last in comfortable less for

Michael Happe

bit has RV the significant the tremendous popular had earlier. is a with I more industry I more consumer. about that becoming that and overall awareness of Well, one transition little think the This American a mainstream is industry talked

RVIA the bring. I all especially also making on customers suppliers I'm with RV the And excited grow, from last hard lifestyle. OEMs more industry about to decade think attractive. ’XX have partnership of great But high aftermarket working the the the the products, we’re that in and but And RV of in last what the done for lifestyle XXXX dealers initiatives all in I job engaged growth earlier, the new RV grow the RVDA single of come the one a some the will going this enough a we are And to future. recently elements have almost really sure that's think we’ll the that take still service digit RV forecast and working make working be here the the getting see announcement that centers in as projected of range. independent RVIA mid to digit dealers Indiana RV transition with jointly at double service and and the is days, service we’ll in to but in industry including Institute probably ’XX I line of that mid care XX by technicians Technical on, in the fully that of have at end industry, and important

So for OEMs, sure am I businesses. to in all seeing what all great not dealers decisions are to and feedback end about making think their as they're shy engaged are right from giving that people inventory I but they're partners, the level. are customers And their

So I think and forward. house we’re trying our all take move of own to care

Fred Wightman

dealer mentioned was inventory or dealers, of that a builds? the as quantitative meaningfully terms stable sentiment more Is you year And in we in patterns anything speak either fall think you to back of with dealers, then but I manner. anecdotally or when defer will the half that there Winnebago think you for transition order

Michael Happe

up keep with good demand. think to last couple I years, Yes, some manufacture the it's ways, do and In capacity in a racing I was thing. RV

capacity could fill other work dealers decisive were their six their fact has We generated. backlogs certainly trying best dealers and coming were the of improved not the being frustrated as products, to in the sure right backlogs do situation them, to like. fair the OEMs that with didn't they down. make And to And with their so dealers, retail. to that OEMs keep and online to ability that to full lose OEMs last backlogs were many And the that with quickly lots their those months as think be would

still talked efforts in basis. job timely expansion Q&A bit more we are session early little orders the we the filling about continue a do and a in As here, of better our active capacity to

and And buying think the of as open the fall in the so we house week is period the approach dealers. for in and Indiana, larger -- third September in which will time one I generally especially dealers periods of

end will for I with -- they that in products fill that able the as reasonable time well. And to reasonable order a the orders to in mentality are orders think a into time the they they'll the future. those a fill show be expect that walk right that

climbed that here will so up I will frenzy, and stabilize bit remains all future. industry bit good that what a if has order And positive, certainly with hoping for. flywheel in keep news the retail and so that's is the The spinning, think we're a the

Operator

Thank you.

Whiston with Our next Morningstar. David question comes from

open. now is line Your

David Whiston

course. top about customers? customers just you top that hunting? it to in can and your other know a But lifestyle like your some it outdoor or you things and or are its activities want then little Chris-Craft, do? the integrate bit activity And interested two you Is boating to of On talk relationship fishing three I

Michael Happe

Throughout But being process the fishing, around hard a Chris-Craft, the both And use to similar the tell correlation a and And multiple in and And between wakeboarding, there certainly that we can reasonable as find with the and can do go continue it’s and to we can that were correlation take are pleased go industry work friends. you try an due the cases fact positive in during within I a you industry, well. the RVer. understand cruise industry, you your always to use we sunset between use industry cocktail RV around family pretty RV for boater cases those that generally almost family time. lifestyles. friends. boating diligence the two and you people -- those RV many did are each activities can you around

positive be there correlation. opportunities marketing very felt a we it boaters The overlap to, strong be to from a together. we synergy that a so both correlation in promote find one-for-one wise. a like enough certainly between dealer and but standpoint, that lifestyle a that separate drive did careful may but strong adjacency we'll RVers trying was are us for maybe And It’s some way. about through bases was jointly And not in largely

So that in look is on. something continue that we'll to

David Whiston

or are detail specific is you a where And I What leeway Motorized. getting there towables is increases, in Is to some product have do it just just is Or more price on the in where towables? helpful. in prices? [BMC] raise going. more am on portfolio Any little can as get it to you more these the say branded at Winnebago

Michael Happe

room we'll I we signal parts where we more have via comment don't take line. the other public price than more think to think here of increases

prices products higher as ago. serious sensitive certainly Gas bit the no we just And inputs. they're they earlier, not where both mentioned are towables for material costs more Certainly, have them. bit to well. Both motorized a it's take I these even little were As your products. than a are matter increased the lower-priced and transportation a cost costs, year

is pressures. to believe the just times are look what on broader costs we so And market part would say it. agnostic the that can at we’re model And retail the seeing I because of necessary been pricing times it's models at has that line, some But bear our targeted to to at that. a activity been or the brand

can Bryan and to earlier, described and dealers do so is mitigate on suppliers the -- to what And pass before the we again, And obligation everything the first look ourselves really higher increases take to we Hughes the we cost with more environment see to price our as end we don’t We’ll to in try customer our does. those that drive future on. productivity and per our own, se.

will And obviously how as continue so need tell much time do. to we more to to

David Whiston

of Bryan. cash much more And consideration just hand? on one Can debt from Chris-Craft comment the new how question you on was versus

Bryan Hughes

the and It’s our tapped ABL in short-term. of both, a mix we

in QX to the cost about question, with charge ask expect with that just we $X.XX take to deal. didn’t of that you anticipating also to Chris-Craft, In $X.XX as more topic permanent We’re say are down. on to the QX benefit deal, transaction important. it’s we a Chris-Craft forms or debt of of the I I on the evaluating everybody, pay we the want will for related but whether explore think

So I going things that you’re like of. be look think one what modeling know aware and all I important you should that’s forward, input

Operator

you. Thank

We follow up Woolf. have a question Seth from

open. Your line now is

Seth Woolf

Mike, you a transition high digits. a single mid mentioned double-digit of couple to from times to environment

forecast. RVIAs I you're the referencing think

categories? transitioning then transition? are positioned where to occurs, that a if in this toy how speaking, Stick-and-Tins, there And wondering do wheel, sales? laminated cetera. you any haulers, Thank Winnebago, Just these better broadly categories trailers, about with that you. is are retail And play handle the transition think there et fifth does

Michael Happe

everything that, through work starts to with try I’ll retail.

more So inevitably believe very as driven still we the rate, industry transitions moderate retail from a activity. that higher positive a rate is that’s by growth growth to one the

comps put six and certainly retail is So is harder year-over-year will just logged some to ago. industry it It's in industry numbers. RV the bit, XXX,XXX retail the and little begin already of a of probably unit that XXX,XXX than to years moderate seven industry or on unit double-digit have,

RVIA the in forecast I shipment all but a forecast plays materially that that, will out. moderate. is, got So Again, how think to again than we’ve think, believe XXXX The reasonable we see this XXXX we RVA that different we time is one.

that are. As line the meaning really dangerous into complete what as deep at sense the competitor businesses impact of that diving time a in could looking other less I time what probably the that more, I industry spend data, strengths bit much parts far the that’s of some our that question a of so spend

a job, For that in player. share starting a low segment small But example, we’re our very Grand category. foothold have gain in still the Design a Transcend we to and is nice very doing such Stick-and-Tin

affect future. form. bit little that doesn’t impacted And much affect the it is in Hopefully, us good more as in materially, our segment current or so if more that us bad, will a

as to at of lower little because And if going with the probably a material bill on So prevalent you bit bigger could don’t be any that increase focus cost I companies the faced further a there, to priced material are those want are little on more maybe really we bit that costs or transportation a little their cost of that, challenge. comment costs. our just bit retail for percent and in that look But prices, one surmise products higher business.

Operator

for I I any to this call to at turn not you. am over remarks. time. the Thank showing now further questions Steve like Stuber would back any further

Steve Stuber

day. you Great. call a certainly for Thanks many a everyone our to great of quarter. today. look have and speaking forward We the throughout with Thanks, joining

Operator

Ladies and have you conclude Everyone, thank program today's a conference. great may you day. does in and all participating for today's This disconnect. gentlemen,

Winnebago Industries (WGO) 20 Jun 182018 Q3 Earnings call transcript