Continued demand for motorhomes coupled with “firmer pricing” to protect margins helped fuel a robust first quarter for Winnebago Industries Inc., as the company reported a 50.8% gain in net income on 15% growth in revenue.
Sales for the 13-week fiscal first quarter, ended Nov. 30, were $222.7 million, compared with $193.6 million for the 14-week first quarter of fiscal 2013. The company reported operating income of $16 million for the quarter, an increase of 60.9% from $9.9 million a year ago, while net income was $11.1 million, or 40 cents per diluted share, compared with $7.4 million, or 26 cents per diluted share.
The Forest City, Iowa-based builder said earnings in the quarter were positively impacted by increased motorhome volumes as a result of higher dealer and retail consumer demand. Also in the quarter, shipping terms were revised to reflect delivery FOB Forest City to conform to standard industry practice which positively impacted shipments. The increased production and delivery volumes, along with firmer pricing, strong demand for new products and lower operating expense, provided more leverage that resulted in higher operating margins, net income and earnings per share as compared to the same quarter last year.
“Our strong first quarter results are a reflection of our dedicated team running the business well,” said Winnebago Chairman, CEO and President Randy Potts. “Everyone’s hard work and creativity contributes to the success of our business. We are keeping our fixed costs low, while continuing to grow our business with new and innovative products.”
He added, “New product entries in both motorized and towable categories displayed at the recent National RV Show in Louisville, Ky., were very well received, with the Winnebago Trend named as a “2014 Top RV Debut” by RV Business Magazine. We plan to continue to bring new and innovative products to market and believe we have tremendous growth opportunities ahead. In addition to our new products, the backlog reflects a large rental order to be delivered primarily in our third fiscal quarter, which is incremental to our normal rental business.”
“We will continue to make investments in working capital,” said Winnebago Vice President, CFO Sarah Nielsen. “Production increased 27% in the first quarter of fiscal 2014 compared to same period last year and 11% sequentially from the fourth quarter last year based on improved demand. A key component to our investment in working capital is the need for additional inventory to support the higher production rates.”