Reflecting a marked rebound in the motorhome marketplace and heightened demand for a series of new product rollouts, Winnebago Industries Inc. reported that the company had shipped 2,005 motorized units during its fiscal first quarter.
“Our dealer network confidence continues to grow, which validates our belief that our motorized product introductions are being well received,” stated Randy Potts, chairman, president and CEO of the Forest City, Iowa-based builder, during a conference call today (Dec. 19).
Revenue improved 15% to $222.7 million during the first quarter while net income soared 51% to $11.1 million. Potts noted that “we believe we are well positioned to deliver these type of results in the future.”
Interestingly, as reported by Vice President/CFO Sarah Nielsen, the average motorhome selling price decreased during the quarter as Winnebago diversifies its offerings with an expanded focus on Class B and Class C product. A breakdown showed that Class B shipments rose 12 units to 102 while Class C’s increased 370 units to 796 – a total that includes a larger than normal rental unit total. Class A gas and diesel also showed gains, up 90 and 52 units respectively.
Accordingly the company is stepping up production, including utilization of the recently acquired former Cummins Inc. plant in nearby Lake Mills that is housing Class B production.
“We are busy to the point where we are working over the holidays,” Potts said, noting that Winnebago had scheduled four additional days in December. “This is very unusual for us, but we are focused on delivering product to our dealers in timely fashion.”
Included in the additional work hours is Winnebago’s “large rental order” that was also reflected in a motorhome backlog that ballooned to 3,534 unit compared to 2,118 in the prior first quarter. It represented the fifth straight quarter that Winnebago’s backlog had increased.
“We had previously indicated that we were going after the rental business, and we are very happy with the results,” said Potts, adding that he couldn’t go into specifics as far as the size of the order or the client. “We have to be careful in the rental business because there is a lot of pressure on margins, which is the main reason we haven’t been a big player in the past. But we have arranged a deal that allows both parties to conduct business. Deliveries will be going out in the spring, so we will be busy to that point.”
Nielsen reported that Winnebago was also experiencing strong Class A gas demand, although chassis shipment still remained problematic. “We anticipate more chassis late in the second quarter,” she said.
The only “red area” for Winnebago continues to be its towable interests, which lost $400,000 operationally for the quarter. The company entered the towable arena with the acquisition of SunnyBrook RV Inc. in late 2010.
“The current state of our towable business is not where we expected to be,” Potts said. “We continue to work toward improving results. It’s a big market with a lot of opportunity.”
He noted that Winnebago’s strategy was more in line with successful, smaller builders, opting not to battle in the trenches for overall market share but rather find niches that don’t directly compete in those high-volume segments.
“Our goal is to make our towable interests a profit-generating part of our business,” Potts said. “When we achieve that, we will have a discussion of how we can grow.”
He added, “We have seen that there are acquisition opportunities out there. But, again, we have not chosen to go that direction until we get all the pieces right.”