Winnebago Reports $5M 4Q Operating Profit
Motorhome builder Winnebago Industries Inc. today (Oct. 14) reported continued improvement in financial results during the company’s fourth quarter and fiscal year 2010.
“Results for the fourth quarter and fiscal 2010 were greatly improved in revenues and gross profit, and we were pleased to have profitability at the operating level for both the fourth quarter and the full year,” said Winnebago Industries’ Chairman, CEO and President Bob Olson. “Increased motor home delivery volume continues to be a driving force behind our improved results. However, we remain cautious until we see continued retail growth.”
Revenues for the fourth quarter ended Aug. 28 were $123.1 million, an increase of 107%, versus $59.5 million for the fourth quarter of Fiscal 2009.
The Forest City, Iowa-based firm reported an operating profit of $5 million for the quarter versus an operating loss of $9.2 million for the fourth quarter of fiscal 2009.
Fourth quarter net income was $4.9 million compared to a net loss of $50.2 million for the last stanza of fiscal 2009.
On a diluted per share basis, the company had net income of $0.17 for the fourth quarter of fiscal 2010 versus a net loss of $1.73 for the fourth quarter of fiscal 2009, which included a non-cash charge of $41.1 million related to the establishment of a full valuation allowance against the company’s deferred tax assets.
This year’s fourth quarter was positively impacted by increased motorhome deliveries, particularly in the Class A category, resulting in more fixed cost absorption and improved labor efficiencies, the company reported.
“There also was a positive benefit to cost of goods sold from the liquidation of last-in, first-out (LIFO) inventory values due to further reduction in inventory levels,” Winnebago’s release stated. “This had the effect of increasing gross profit by $750,000.”
While fiscal 2010 revenues were $449.5 million — an increase of 112.5% compared to revenues of $211.5 million for fiscal 2009 — Winnebago reported an operating income of $0.5 million for fiscal 2010 versus an operating loss of $59.5 million for Fiscal 2009.
Net income for 2010 was $10.2 million, or $0.35 per diluted share, versus a loss of $78.8 million, or $2.71 per diluted share for fiscal 2009. The $9.5 million of tax benefit recorded in fiscal 2010 primarily relates to $5.8 million of tax benefits associated with the carryback of fiscal 2009 net operating losses permitted by tax law changes and tax benefits associated with various tax planning initiatives and tax settlements.
“Dealer inventory increased 20.7% with 2,044 Class A, B and C motorhomes on our dealers’ lots as of August 28, 2010, compared to 1,694 on August 29, 2009,” said Olson. “Dealer inventory has remained at a consistent level since our second quarter of fiscal 2010 and we continue to believe that level of inventory is appropriate in today’s market environment. Dealers and their lending institutions continue to keep a close eye on the size and age of their inventories to ensure that the supply is current and is consistent with retail demand.”
Winnebago’s sales order backlog was 818 Class A, B and C motor homes as of Aug. 28, a decrease of 13% compared to the end of the fourth quarter of fiscal 2009.
“During the fourth quarter, we launched 2011 model year products and our dealers have expressed excitement about the new 2011 products — particularly the newly redesigned Winnebago Tour and Itasca Ellipse,” said Olson.
“As a testament to the strength of our new 2011 product offerings,” he added, “retail sales of Winnebago Industries’ products at the September 2010 Pennsylvania RV and Camping Show in Hershey, Pa., were 36% higher than the previous year, and particularly strong in Class A diesel sales. We are pleased with the results of this show, particularly since it is the largest retail show in the country and a key show early in the new model year.”