Thor Industries Inc. announced double-digit gains in revenue and earnings for its fiscal second quarter, ended Jan. 31.
Sales for the second quarter totaled $741.6 million, up 24% from $597 million in the second quarter last year, while net income was $19.9 million, up 45% from $13.7 million in the prior-year second quarter. Diluted earnings per share (EPS) for the second quarter were 37 cents, up 48% from 25 cents in the second quarter last year.
For the six months, sales totaled $1.617 billion, up 27% from $1.270 billion in the prior-year period. Net income during the period was $50.9 million, up 41% compared to $36 million in the first six months of fiscal 2012. Diluted EPS were 96 cents versus 66 cents in the prior-year period.
The overall effective tax rate for the second quarter of fiscal 2013 was 22.1% compared to 36.4% for the second quarter last year and was favorably impacted by the settlement of certain state uncertain tax benefits and the retroactive reinstatement of various tax credits.
“We are pleased with the continued growth in revenues we were able to achieve in the second quarter,” said Bob Martin, Thor president and COO. “As we have said in our recent press releases, the RV and bus markets remain very competitive, with elevated levels of discounting on certain products. In the first and second quarters, we made the decision to defend our RV shelf space on dealer lots and maintain momentum with our dealers. Similarly, in our bus business we decided to strategically pursue and win certain bus contracts which required more aggressive pricing, including contracts for entry into new markets.”
Highlights from the report included:
• Total RV segment sales were $636.6 million, up 27% from $501.0 million in the second quarter last year. RV segment income before tax was $31 million, up 35% from $22.9 million in the prior-year period. As a percent of revenues, total RV income before tax rose to 4.9% from 4.6% in the prior year as an increase in sales of higher priced units was partially offset by increased discounts and incentives.
• Towable RV sales were $522.8 million, up 18% from $444.2 million in the prior-year period. Income before tax was $24.1 million, up 14% from $21.2 million in the second quarter last year. Towable RV income before tax fell to 4.6% of revenues from 4.8% a year ago, as increasing unit volumes were more than offset by increased discounts and incentives.
• Motorized RV sales were $113.8 million, more than double the $56.8 million in the prior-year second quarter. Income before tax was $6.9 million, up from $1.7 million last year. As a percent of revenues, motorized RV income before tax rose to 6.1% of revenues from 3.1% a year ago, as increased unit volumes resulted in improved operating leverage.
• Bus segment sales were $105.0 million, up 9% from $96.0 million in the second quarter last year. Income before tax was $1.3 million, compared to $2.6 million in the second quarter last year. Bus segment income before tax fell to 1.3% of revenues from 2.7% a year ago as a result of more aggressive pricing on certain contracts.
“Thor generated strong gains in both revenues and net income during the second quarter, driven primarily by continued strength in the RV market,” said Peter B. Orthwein, Thor chairman and CEO. “Our results for the second quarter reflect the dealer optimism that has been building over the past several months, which is now supported by improving retail traffic and sales at the early spring shows. Based on current market trends, we expect continued sales growth and second half operating margins consistent with the second half of fiscal 2012.”
To view the entire report click here.
The name of the game in the world of recreational vehicle sales is consumer confidence.
As reported by the South Bend (Ind.) Tribune, things appear to be heading consistently in the right direction there, based on the latest numbers from the Recreation Vehicle Industry Association (RVIA).
January numbers — 24,379 shipments — are up by 30.5% over January of 2012. And that comes on the heels of a 2012 that saw each and every month beat the corresponding month in 2011 when it comes to shipments.
In fact, 2012 RV shipments were up 13.2% over 2011, totaling 285,749. And 2011 was 4.1% higher than 2010.
Mark Bowersox, the executive director of the Recreation Vehicle Indiana Council (RVIC), was pleased with the January shipment news while also offering a unique perspective on the sequester and how it could affect consumer confidence and spending.
Bowersox thinks the sequester that’s poised to cut $85 billion in federal spending from March through September and with it thousands of government jobs might have very little effect.
“I think on March 2 the sun is still going to rise,” Bowersox said. “The interesting thing to me over the last couple years as the country has grown out of this recession is the fact that the American public seems to be getting more and more comfortable with the idea that they’re not going to be totally comfortable anymore.
“It used to be any little blip in the stock market, fuel prices or unemployment numbers … or whatever, it would have people stop and tighten the screws a little bit and wait until everything settled down.
“Those kinds of things that would have gotten an emotional reaction are more easily accepted these days.”
To read the entire story click here.
The RV industry saw just over 30% growth in January, a major surge into the new year, the Recreation Vehicle Industry Association (RVIA) announced Tuesday (Feb. 26).
The shipments of 24,379 RVs in advance of the spring/summer buying season bodes well for Indiana’s Elkhart County, which produces 83%t of all RVs in the U.S. and Canada, according to the RVIA.
The Elkhart Truth reported that the total was 30.5% higher than in January, 2012, according to the RVIA. “All vehicle categories participated in the gains this month,” said RVIA spokesman Bill Baker. The biggest growth in sheer numbers came in conventional travel trailers, according to RVIA spokesman Bill Baker. They saw 35.3% growth, with more than 15,000 shipping out in January.
Class A and C motorhomes both saw shipment boosts of 30% more in January than in the previous January, Baker pointed out. In fact, Class A motorhomes grew by 30.9%, shipping nearly 1,400, while the smaller Class C motorhomes saw a rise of 38.6%t, shipping more than 1,000 to dealers.
If normal trends hold out, those numbers will rise in February and March during the peak season of RV shows aimed at consumers.
To view the entire report click here.
Editor’s Note: Following this week’s release of the wholesale RV shipments report from the Recreation Vehicle Industry Association (RVIA), the investment firm of Robert W. Baird & Co. distributed a routine advisory note to its investors. Highlights of that note follow.
October RV shipments up 31%. Wholesale shipments improved 31% on strong growth across all categories. Key categories drove the robust growth, with both motorhome (Class A and C) and towable (travel trailer and fifth-wheel) shipments growing 32% in the month. The growth is consistent with elevated dealer sentiment and reportedly strong orders out of the Elkhart open house. Class A and C shipments are now up 8% YTD, and travel trailer and fifth-wheel shipments have grown 14% YTD.
Towable (TT and 5W) shipments up 32%. Travel trailer shipments grew 33%, while fifth-wheel shipments jumped 29%. The strong October growth followed robust shipments in July (+30%), August (+15%), and September (+13%). Combined, travel trailer and fifth-wheel shipments were up 14% YTD.
Motorhome (A and C) shipments grew 32%. Robust motorhome growth continued for the fourth consecutive month as Class A shipments grew 26% while Class C shipments jumped 43%. Class A and C shipments are now up 8% YTD.
Thor. October marks the third month of Thor’s fiscal 1Q13. Thor reported quarterly results on Nov. 26 — towable shipments increased 27% and motorhome shipments jumped 78%.
Winnebago. October marks the second month of Winnebago’s fiscal 1Q13. The October industry growth in motorhomes (A and C; +32%) compares favorably to our +24% expectation for Winnebago shipments.
RVIA updates shipment forecast. RVIA released its updated RV shipment forecast in conjunction with the Association’s annual National RV Trade Show. RV shipments are projected to have increased nearly 10% by the end of 2012, and 2013 shipments are projected to grow 4.5% to nearly 290K units.
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Shipments to retailers of all RVs were reported at 24,947 units in the October 2012 manufacturer survey, up 31.5% over last month and up 31.0% ahead of this same month last year, the Recreation Vehicle Industry Association (RVIA) reported.
Double-digit percentage gains were recorded in all vehicle types with Class C motorhomes and conventional travel trailers climbing the most.
Year-to-date, total shipments rose to 246,228 units through October this year, up 12.4% ahead of the same 10-month period last year. On a seasonally adjusted basis, all RV shipments were at an annualized rate of 280,000 units through October this year.
See the accompanying chart for more information.
Wholesale shipments to retailers of all RVs continued to improve in 2012, reporting totals of 18,976 units in RVIA’s September survey of manufacturers – a gain of 12.7% over the same month one year ago. On a seasonally adjusted basis, shipments in September were at an annualized rate of 254,400 units, down 10.6% from the August pace and the lowest annualized total since January of this year. Even so, actual September shipments of all towable RVs were up 10.3% from the same month one year ago while all motorhome shipments were up 34.6%.
Comparing the past nine-month period to the same period one year ago, all RVs were reported at 221,281 units in 2012, a gain of 10.7% year-to-date. Travel trailer shipments have grown by 16,446 units this year and continue to command the largest unit volume of all vehicle types. Fifth-wheel travel trailers have gained 3,986 units while Class A motorhomes were up 719 units and Class C motorhomes improved by 385 units compared to this same period one year ago. Only folding camping trailers were lower in volume through September this year as compared to the corresponding nine-month period in 2011.
RV shipments are expected to total 273,600 units in 2012, a gain of 8.4% over 2011’s total of 252,300 units and the highest level since 2007, according to the fall quarterly forecast of wholesale RV deliveries to dealers prepared for the Recreation Vehicle Industry Association (RVIA) by Richard Curtin of the University of Michigan Consumer Survey Research Center.
Curtin expects RV shipments to edge up in 2013 to 275,000 units, with conventional travel trailers again posting most of the gains.
Indeed, the story of the industry’s gradual resurgence from the global recession is pretty consistent in terms of categorical strengths, with travel trailers posting particularly good numbers in a second quarter that grew 5.7% overall – the best performance, again, in nearly five years and the fifth best quarter ever.
Despite the challenging economy, notes Curtin, the strong appeal of these towable RVs has powered the revival.
“The dominance of conventional and fifth-wheel travel trailers has transformed the industry by acquiring shares from motorhomes and folding campers,” writes Curtin. “For every motorhome shipped, 9.4 travel trailers are expected to be shipped in 2012, nearly double the 4.8 recorded in the last decade, and well above the 2.2 to 1 ratio in the 1990s and the 1.3 to 1 in the 1980s. Folding camping trailers now account for 1 of every 25 RV shipments, down from 1-in-5 in the 1980s and 1990s.”
Curtin, meanwhile, points out in RVIA’s quarterly Roadsigns newsletter what it will take in his view for the weaker product categories to regain more relative strength.
“While the RV segments that are now the weakest will always retain devoted buyers, to regain the old segment shares requires new innovative products that provide consumers with more value for the dollar,” maintains Curtin, reiterating a theme he focused on back at RVIA Committee Week in June. “Winning back customers is never easy. In the absence of robust growth in consumer’s ability to buy, new products must energize their willingness to buy.”
Shipments to retailers of all RV products were reported at 27,534 units in the June survey of manufacturers, a decline of 5.3% compared to last month but an increase of 3.2% over this same month last year. Towable RVs improved 3.7% on shipments of 25,208 units while motorhome shipments were off 1.4% on 2,326 units shipped to dealers in June. Seasonally adjusted, June’s total represented an annualized rate of 270,000 units. Year to date, shipments of all RVs were reported at 154,988 units and were ahead of the halfway point last year by almost 11,000 units. Through June, towable RVs led the way, increasing 8.6% over this same period a year ago on shipments of 140,412 units while motorhomes were off 1.2% on shipments of 14,576 units.
Editor’s Note: Robert W. Baird & Co. issued a client newsletter to investors following the May shipments report from the Recreation Vehicle Industry Association (RVIA). The following offers a summary of the results.
May shipments up 6%. Total RV wholesale shipments improved 6% in May on growth in both motorhomes and towables. The trend represents an acceleration from a weak start to the year in motorhomes and a slowdown in towable shipments — possibly reflecting relatively lower dealer inventory in motorhomes heading into the summer months.
• Towable shipments up 6%. Travel trailer shipments grew 9%, while fifth-wheel shipments fell 3%. Wholesale growth slowed in May following a stronger April (+14%). Through the first five months of 2012, towable shipments were up 11%.
• Motorhome shipments up 5%. Class A shipments improved 8%, while Class C shipments grew 3%. Motorhome shipments grew in May due to lean dealer inventory and an easier prior-year comparison. Through the first five months of 2012, motorhome shipments were down 2%.
• Winnebago results. Winnebago recently reported motorhome shipments flat in its May quarter, versus a 3% decline in industry shipments over the same period, implying a modest share gain in motorhomes.
• SAAR. We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments increased to 30.5K units in May, from 23.6K units in April (24.8K units were shipped in 2011). The SAAR of towable shipments increased to 264K units in May, from 228K units in April (213K units were shipped in 2011).
This summary of a Baird research report is not intended as investment advice. To participate in Baird surveys and receive research reports, contact Craig R. Kennison, CFA, at email@example.com.
The recreational vehicle industry’s shipments are expected to reach 269,700 units in 2012, 6.9% above the 2011 total of 252,300.
According to a new forecast by RV industry analyst Richard Curtin, released at the Recreation Vehicle Industry Association’s (RVIA) Joint Committee Luncheon today (June 11), shipments will rise to 280,000 units in 2013, a gain of 3.8% from the projected total for 2012.
“RVs are a bellwether industry,” said Curtin, director of consumer surveys at the University of Michigan who produces the monthly Index of Consumer Sentiment, during his presentation to RVIA members at the association’s annual Committee Week in Washington, D.C. “I expect the RV market to consistently grow at a moderate pace over the next two years.”
The industry’s growth is a sign of the RV’s position in American culture, Curtin told RVIA members at the luncheon. According to Curtin, RVs have always been purchased as a means of achieving some valued outcome. Evidence from recent studies continue to support the traditional industry label of RVs being a family-oriented product.
The positive RV outlook comes at a time when fundamental changes have taken root in the economy, in consumer demand, and in the RV market.
“Future RV buyers will be both younger and older than before,” said Curtin. “They will likely have more limited budgets, own smaller tow vehicles, and will live and play in different locations.”
“The RV’s iconic status is based on consumers’ strong desire to own an RV,” said Curtin. “This reflects deeply held family values, the enduring appeal of the natural environment, and people’s desire to instill in the next generation their cherished traditions.”
While Curtin anticipates that core demand for RVs will remain strong in the decades ahead, he said the RV units themselves will continue to evolve at an escalating pace.
“Just as today’s vehicles are similar, but completely different than yesterday’s, tomorrow’s RVs need to be transformed to meet the needs of an ever-changing consumer,” Curtin said.
“Consumers have only begun express their changing RV preferences to match their changing economic circumstances and lifestyles,” Curtin said. “Consumers want an equivalent RV experience at a price that meets their new budget constraints. These limitations are likely to persist for some years to come. Importantly, lasting gains will come from innovative features and quality improvements based on a consumer-centric approach to each segment.”