Winnebago Industries Reports Fourth Quarter and Full Year Fiscal 2024 Results
-- Full Year Operating Cash Flow of $143.9 Million Supports Company's Strategic Growth Investments --
-- $106.8 Million Returned to Shareholders via Repurchases and Dividends in FY 2024, Despite Challenging Market Environment --
-- Leadership Changes at Winnebago Branded Businesses Aimed at Strengthening Market Position --
-- Company Issues Fiscal 2025 Financial Guidance --
EDEN PRAIRIE, Minn., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Winnebago Industries, Inc. (NYSE:WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's fourth quarter and full year Fiscal 2024.
Fourth Quarter Fiscal 2024 Financial Summary
Revenues of $720.9 million
Gross profit of $94.2 million, representing 13.1% gross margin
Net loss per diluted share of $1.01 (includes goodwill impairment)
Adjusted net earnings per diluted share of $0.28(1)
Net cash from operations of $40.7 million
Full Year Fiscal 2024 Financial Summary
Revenues of $2,973.5 million
Gross profit of $433.5 million, representing 14.6% gross margin
Net earnings per diluted share of $0.44 (includes goodwill impairment and loss on note repurchase)
Adjusted net earnings per diluted share of $3.40(1)
Net cash from operations of $143.9 million
CEO Commentary
"Winnebago Industries' fourth quarter performance fell short of our expectations, primarily reflecting the sluggish retail demand environment and operating inefficiencies within our Winnebago branded businesses," said Michael Happe, the Company's President and Chief Executive Officer. "The RV industry continues to face various headwinds, including uncertain retail conditions, higher inventory carrying costs and slightly elevated inventories in the motorhome segment, leading to continued dealer hesitancy and increased promotional efforts. Despite the challenging operating conditions, in the fourth quarter we continued to focus on the variables within our control. We prioritized profitability and cash generation, aggressively managed inventory, and invested in new products and technologies to drive future growth.
"As evidenced by the recent launch of the Lineage Series M, Grand Design's first motorized RV, product innovation remains a centerpiece of our long-term strategy," Happe said. "We are continuously evolving our offerings to strike the right balance between cutting-edge features and the growing consumer preference for affordability, highlighted by products such as the Grand Design Reflection 100 Series, the Grand Design Influence and the Winnebago Access. As we begin Fiscal 2025, our RV and marine brands are intensifying their efforts to deliver exceptional value to consumers across a range of price points.
"In recent weeks, we have implemented leadership changes to enhance our Winnebago Motorhome and Winnebago Towables businesses, both of which have underperformed in recent quarters," Happe said. "Chris West, who previously served as Senior Vice President of Enterprise Operations and Barletta Boats, has been named President of the Winnebago branded Motorhome and Specialty Vehicles business. Don Clark, President of Grand Design and a proven leader with an unmatched track record of success and understanding of the RV industry over the last 40 years, has been promoted to Group President and will augment his responsibilities by providing executive oversight for the Winnebago Towables business. The extensive industry knowledge and leadership skills Chris and Don bring to their new roles will be invaluable in further enhancing Winnebago brand's influence, impact, and market share through new products and technology innovations."
Fourth Quarter Fiscal 2024 Results
Revenues were $720.9 million, a decrease of 6.5% compared to $771.0 million in the fourth quarter of last year, driven primarily by product mix, partially offset by higher unit volume.
Gross profit was $94.2 million, a decrease of 26.1% compared to $127.5 million in the fourth quarter of last year. Gross profit margin decreased 340 basis points in the quarter to 13.1%, reflecting higher warranty expense, operational challenges, and deleverage.
Operating expenses were $112.0 million, an increase of 60.4% compared to $70.0 million in the fourth quarter of last year. This increase was primarily driven by a $30.3 million impairment charge associated with the Chris-Craft reporting unit, start-up costs associated with the launch of the Grand Design motorized business, and strategic investments in engineering, digital technology development and increased data and information technology capabilities. The decline in fair value of the Chris-Craft reporting unit was driven primarily by softening in the marine industry as a result of sustained macroeconomic challenges impacting consumer demand, such as inflationary pressures and elevated interest rates, and the current uncertainty regarding the timing and degree of an economic recovery.
Operating loss was $17.8 million compared to operating income of $57.5 million in the fourth quarter of last year.
Net loss was $29.1 million, compared to net income of $43.8 million in the fourth quarter of last year. Reported net loss per diluted share was $1.01, compared to reported net earnings per diluted share of $1.28 in the fourth quarter of last year. Adjusted earnings per diluted share was $0.28(1), a decrease of 80.1% compared to adjusted earnings per diluted share of $1.41(1) in the fourth quarter of last year.
Consolidated Adjusted EBITDA was $28.7 million, a decrease of 60.6%, compared to $72.9 million last year.
Full Year Fiscal 2024 Results
Revenues were $3.0 billion, a decrease of 14.8% compared to $3.5 billion in Fiscal 2023, driven primarily by product mix and lower unit sales related to market conditions.
Gross profit was $433.5 million, a decrease of 26.0% compared to $586.1 million in Fiscal 2023. Gross profit margin decreased 220 basis points year-over-year to 14.6% as a result of deleverage, higher warranty expense, and operational challenges.
Operating expenses were $333.3 million, an increase of 16.8% compared to $285.4 million in Fiscal 2023. The increase was primarily due to the goodwill impairment charge associated with the Chris-Craft reporting unit, a full year of Lithionics operations and increased intangible amortization, start-up costs associated with the launch of the Grand Design motorized business, and strategic investments in engineering, digital technology development, and increased data and information technology capabilities, partially offset by lower incentive-based compensation.
Operating income was $100.2 million, a decrease of 66.7% compared to $300.7 million in Fiscal 2023.
Net income was $13.0 million, compared to net income of $215.9 million in Fiscal 2023. Reported earnings per diluted share was $0.44, compared to reported earnings per diluted share of $6.23 in the same period last year. Adjusted earnings per diluted share was $3.40(1), a decrease of 49.8% compared to adjusted earnings per diluted share of $6.77(1) in Fiscal 2023.
Consolidated Adjusted EBITDA was $190.6 million, a decrease of 46.3%, compared to $354.7 million last year.
Fourth Quarter and Fiscal 2024 Segments Summary
Towable RV
Three Months Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
317.0
$
341.4
(7.2
)%
Adjusted EBITDA
$
20.6
$
42.7
(51.9
)%
Adjusted EBITDA Margin
6.5
%
12.5
%
(600
) bps
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Towable RV segment were down compared to the prior year, primarily driven by a reduction in average selling price per unit related to product mix, partially offset by an increase in unit volume.
Segment Adjusted EBITDA margin decreased compared to the prior year, primarily driven by higher warranty expense due to a favorable prior year trend, deleverage from a reduction in average selling price per unit related to product mix, and operational challenges in our Winnebago branded towable business.
Year Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
1,318.8
$
1,415.3
(6.8
)%
Adjusted EBITDA
$
122.4
$
172.1
(28.9
)%
Adjusted EBITDA Margin
9.3
%
12.2
%
(290
) bps
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Backlog
$
137.1
$
208.1
(34.1
)%
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Towable RV segment were down compared to the prior year, primarily driven by a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by an increase in unit volume.
Segment Adjusted EBITDA margin decreased compared to the prior year, primarily driven by deleverage, higher warranty expense due to a favorable prior year trend, and operational challenges at our Winnebago branded towable business.
Backlog decreased due to current market conditions and a cautious dealer network as well as reduced order lead times due to production capacity.
Motorhome RV
Three Months Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
308.0
$
317.7
(3.1
)%
Adjusted EBITDA
$
13.0
$
22.4
(41.9
)%
Adjusted EBITDA Margin
4.2
%
7.0
%
(280
) bps
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Motorhome RV segment were down from the prior year due to product mix and a decline in unit volume related to market conditions, partially offset by price increases related to higher motorized chassis costs.
Segment Adjusted EBITDA margin decreased compared to the prior year primarily due to deleverage, operational challenges, and higher warranty expense.
Year Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
1,279.8
$
1,560.1
(18.0
)%
Adjusted EBITDA
$
73.7
$
142.0
(48.1
)%
Adjusted EBITDA Margin
5.8
%
9.1
%
(330
) bps
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Backlog
$
234.4
$
688.6
(66.0
)%
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Motorhome RV segment were down from the prior year due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis cost.
Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage, higher warranty expense, and operational challenges, partially offset by cost containment efforts.
Backlog decreased due to current market conditions and a cautious dealer network.
Marine
Three Months Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
80.5
$
96.4
(16.6
)%
Adjusted EBITDA
$
5.5
$
10.3
(45.7
)%
Adjusted EBITDA Margin
6.9
%
10.6
%
(370
) bps
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Marine segment were down from the prior year, primarily driven by product mix, and a decline in unit volume related to market conditions and dealer destocking, partially offset by targeted price increases.
Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage, and higher discounts and allowances, partially offset by targeted price increases.
Year Ended
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Net revenues
$
325.5
$
469.7
(30.7
)%
Adjusted EBITDA
$
25.6
$
60.5
(57.6
)%
Adjusted EBITDA Margin
7.9
%
12.9
%
(500
) bps
($, in millions)
August 31, 2024
August 26, 2023
Change(1)
Backlog
$
260.0
$
194.7
33.5
%
(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Revenues for the Marine segment were down from the prior year, primarily driven by a decline in unit volume related to market conditions and product mix.
Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage, partially offset by lower incentive-based compensation and cost containment efforts.
Backlog increased primarily driven by the improvement in inventory position with dealers and continued market share growth.
Balance Sheet and Cash FlowAs of August 31, 2024, cash and cash equivalents were $330.9 million, compared with $309.9 million as of the end of Fiscal 2023. Total outstanding debt was $696.2 million ($709.3 million of debt, net of debt issuance costs of $13.1 million) with working capital of $584.0 million. Cash flow provided by operations was $40.7 million in the Fiscal 2024 fourth quarter. With a cash balance of $330.9 million and an undrawn asset-backed revolving credit facility of $350.0 million, the Company maintains meaningful financial flexibility, supported by its strong balance sheet and robust liquidity.
Quarterly Cash Dividend and Share RepurchasesOn August 15, 2024, the Company's Board of Directors approved a 10% increase in the quarterly cash dividend of $0.34 per share. The dividend was paid on September 25, 2024, to common stockholders of record at the close of business on September 11, 2024. In addition, Winnebago Industries executed share repurchases of $10.0 million during the Fiscal 2024 fourth quarter, bringing its total share repurchases for the Fiscal year to $70.0 million.
Business Outlook and Financial GuidanceFor calendar year 2025, Winnebago Industries anticipates total North American RV wholesale shipments in the range of 320,000 to 350,000 units. Based on this outlook and the current business environment, the Company expects Fiscal 2025 consolidated revenues in the range of $2.9 billion to $3.2 billion, reported earnings per diluted share of $2.40 to $3.90(2) and adjusted earnings per diluted share of $3.00 to $4.50(2). The Company's outlook takes into account prevailing trends in the RV sector, including competitive dynamics, shifts in consumer preferences, and key macroeconomic factors that may influence overall demand.
"We enter Fiscal 2025 confident in the long-term prospects of our business, optimism that is grounded in the strong market potential of our latest product innovations," Happe said. "Although the recent easing of interest rates is expected to bolster consumer demand as we move into the second half of the 2025 calendar year, near-term visibility remains limited due to the potential for further economic instability and the likelihood of continued industry-wide destocking within the motorhome RV category.
"Amid this complex and dynamic market environment, we are managing capacity, output, and cost in a highly disciplined manner," said Bryan Hughes, the Company's Senior Vice President and Chief Financial Officer. "We are focused on leveraging our strengths, optimizing our product mix, and maintaining operational flexibility to capitalize on opportunities that position our portfolio of premium brands to gain share as market conditions improve. We are committed to investing in our core competencies and enhancing the customer experience through new products and technologies, while maintaining a balanced approach to capital allocation that we believe will enable us to create value for our shareholders over the long term."
Q4 FY 2024 Conference CallWinnebago Industries, Inc. will discuss fourth quarter and full year Fiscal 2024 earnings results during a conference call scheduled for 9:00 a.m. Central Time today. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call and view the accompanying presentation slides via the Investor Relations page of the Company's website at http://investor.wgo.net. The event will be archived and available for replay for the next 90 days.
About Winnebago IndustriesWinnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds high-quality motorhomes, travel trailers, fifth-wheel products, outboard and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging vertical integration in key component areas, Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida. The Company's common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit winnebagoind.com/investors.
Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the business outlook and financial guidance for Fiscal 2025. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to general economic uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers and retail purchasers; competition and new product introductions by competitors; ability to innovate and commercialize new products; ability to manage our inventory to meet demand; risk related to cyclicality and seasonality of our business; risk related to independent dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations; ability to retain relationships with our suppliers and obtain components; business or production disruptions; inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure to warranty claims and product recalls; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related exposure to product liability claims; governmental regulation, including for climate change; increased attention to environmental, social, and governance ("ESG") matters, and our ability to meet our commitments; impairment of goodwill and trade names; risks related to our 2025 Convertible Notes, 2030 Convertible Notes, and Senior Secured Notes, including our ability to satisfy our obligations under these notes; and changes in recommendations or a withdrawal of coverage by third party security analysts. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
ContactsInvestors: Ray Posadas
Media: Dan
Winnebago Industries, Inc.Footnotes to News Release
Footnotes:
(1)
Beginning in the fourth quarter of Fiscal 2024, the Company updated its definition of Adjusted EPS to no longer adjust for theimpact of a call spread overlay that was put in place upon the issuance of convertible notes, and which economically offsetsdilution risk. Prior period amounts have been revised to conform to current year presentation.
(2)
Fiscal 2025 adjusted EPS guidance excludes the pretax impact of intangible amortization of approximately $22 million.
Winnebago Industries, Inc.Condensed Consolidated Statements of Income(Unaudited and subject to reclassification)
Three Months Ended
(in millions, except percent and per share data)
August 31, 2024
August 26, 2023
Net revenues
$
720.9
100.0
%
$
771.0
100.0
%
Cost of goods sold
626.7
86.9
%
643.5
83.5
%
Gross profit
94.2
13.1
%
127.5
16.5
%
Selling, general, and administrative expenses
75.6
10.5
%
64.3
8.3
%
Amortization
6.1
0.8
%
5.7
0.7
%
Goodwill impairment
30.3
4.2
%
—
—
%
Total operating expenses
112.0
15.6
%
70.0
9.1
%
Operating (loss) income
(17.8
)
(2.5
)%
57.5
7.5
%
Interest expense, net
5.9
0.8
%
4.1
0.5
%
Non-operating loss (income)
2.2
0.3
%
(1.3
)
(0.2
)%
(Loss) income before income taxes
(25.9
)
(3.6
)%
54.7
7.1
%
Provision for income taxes
3.2
0.4
%
10.9
1.4
%
Net (loss) income
$
(29.1
)
(4.0
)%
$
43.8
5.7
%
(Loss) earnings per common share:
Basic
$
(1.01
)
$
1.46
Diluted
$
(1.01
)
$
1.28
Weighted average common shares outstanding:
Basic
28.8
30.0
Diluted
28.8
35.1
Year Ended
(in millions, except percent and per share data)
August 31, 2024
August 26, 2023
Net revenues
$
2,973.5
100.0
%
$
3,490.7
100.0
%
Cost of goods sold
2,540.0
85.4
%
2,904.6
83.2
%
Gross profit
433.5
14.6
%
586.1
16.8
%
Selling, general, and administrative expenses
280.0
9.4
%
267.7
7.7
%
Amortization
23.0
0.8
%
17.7
0.5
%
Goodwill impairment
30.3
1.0
%
—
—
%
Total operating expenses
333.3
11.2
%
285.4
8.2
%
Operating income
100.2
3.4
%
300.7
8.6
%
Interest expense, net
21.1
0.7
%
20.5
0.6
%
Loss on note repurchase
32.7
1.1
%
—
—
%
Non-operating loss
8.0
0.3
%
1.0
—
%
Income before income taxes
38.4
1.3
%
279.2
8.0
%
Provision for income taxes
25.4
0.9
%
63.3
1.8
%
Net income
$
13.0
0.4
%
$
215.9
