Winnebago Industries Inc. has held the national stage before in national TV news stories, movies and trade magazines but that stage has grown over the past several weeks.
As reported by the Forest City Summit, the Iowa-based motorhome manufacturer and its products have been featured on four national TV news segments within the past several weeks including CNBC, ABC and CBS. A Winnebago Industries unit was also featured on Fox News recently.
Another CNBC segment July 1 was featured on the show “Street Signs.” CNBC reporters interviewed Mike Ruth, general manager at Camping World, Island Lake, Ill., and motorhomes were featured prominently in the segment, said Sheila Davis, PR and investor relations manager for Winnebago.
While it’s not a national news outlet, the company’s long relationship with the syndicated TV game show “Wheel of Fortune” continues.
“They just picked up their brand new ‘Wheelmobile,’ a 2014 Winnebago Journey,” Davis said. “They will be using it for contestant searches throughout the country. They also offer one of our products periodically on the show.”
“It’s fantastic for the company,” said Winnebago President, CEO and Chairman Randy Potts. “It’s the brand that gets us there.”
Winnebago products are often synonymous with recreational vehicles and motor homes, Potts said, noting, “It’s the Winnebago legacy, the brand.”
But the company is also experiencing a major upturn in finances after weathering several years of decline in motorhome sales and profits. On June 27, the company reported it had doubled its operating profit in the third quarter of fiscal year 2013 when compared to the third quarter of fiscal year 2012.
The overall recreational vehicle industry is improving and Winnebago has been a leader in that improvement, which has drawn the attention of national media, Davis said.
Analysts often “look at the RV market and industries as one of the first indicators the economy is bouncing back,” Davis said.
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It’s quiet along the assembly line at Winnebago Industries Inc., but looks can be deceiving.
KIMT TV reported that many of the employees are off for the holiday week, and it’s a well deserved break says Vice President of Sales and Products Scott Degnan, adding that
business has been running full throttle.
“Sales are doing well, we’re profitable. We just released our earnings for last quarter and they were phenomenal every one of our business units is growing,” said Degnan.
That wasn’t the case just years ago.
“In 2008 and 2009, the industry goes from about 70,000 units to a little of 10,000 units,” Degnan said. “I mean from 70 to 10 was a huge drop and we’re slowly been coming back.”
And the state’s tax collection growth number is showing that with nearly 9% in state tax revenue.
A senior analyst for the Legislative Services Agency in Iowa says that when numbers are up like this, it means the economy is doing quite well.
Lou Ann Murhpy, owner of a tax and business planning company in Osage, agrees.
“It’s a pretty low unemployment rate that means people are working and when people are working they pay taxes that the way it works,” said Murphy.
In the end, Murphy says this boom in growth is all around good news for businesses like Winnebago and Iowans themselves.
“That means that Iowa has more money to spend on services. It also means that they’re more likely to mean tax cuts in other ways that keep talking about property tax relief this gives them money to do that,” said Murphy.
Winnebago Industries Inc.’s innovation has helped turn around the company’s bottom line and now the motorhome manufacturer must continue to be a leader in product development, said Randy Potts, president, CEO and chairman of the Forest City, Iowa-based builder.
“It’s one thing to build excitement, it’s another thing to keep it,” Potts said of products such as the Minnie Winnie that have helped the motorhome manufacturer finish another fiscal quarter with dramatically improved financial numbers.
According to a report by the Forest City Summit, Winnebago’s third quarter operating profit increased by 191% over the operating profit recorded in third quarter of fiscal year 2012.
Potts said Winnebago must continue to introduce new models and still maintain appeal across the market from lower priced to higher-end motorhomes to continue to maintain and increase sales.
Winnebago has always introduced new models and focused on innovations but now, “I think the market is more aggressive than in the past,” Potts said.
The company introduced a new Itasca model, the Solei, at a dealer event over the weekend of June 21-23 in Wyoming.
Although the lower priced models have done well, “that’s not to say the market will stay that way in the future,” Potts said. Products in a higher price range are also doing well, Potts said.
Although the company has a backlog of products on order that it needs to manufacture, CFO Sarah Nielsen said the orders aren’t artificial.
Some dealers are ordering products early because of the delay the company has in receiving Class A model Ford chassis, Nielsen said. The chassis issue is shared throughout the recreational industry, Nielsen said.
Dealers aren’t ordering product to be safe and with the expectation they could cancel those orders, Potts and Nielsen said.
“The growth we’ve seen in recent months is completely supportable,” Nielsen said.
Potts said as the company continues to make more motorhomes, the number of employees is “right where we need to be.”
Editor’s Note: The investment firm of Robert W. Baird & Co. issued a client newsletter following Thursday’s release of Winnebago Industries Inc.’s fiscal third quarter report. Portions of the Baird newsletter follow.
Robust backlog highlights impressive quarter. Winnebago drove home an impressive quarter, highlighted by strong retail growth and robust dealer orders. Big picture, bullish fundamental outlook is unchanged. We expect better shipments as consumer demand grows (fueled by new products and less negative equity) and confident dealers restock depleted inventory.
Strong retail and dealer demand. Winnebago reported an excellent quarter. The budding RV recovery is now in full bloom as once-reluctant consumers are starting to buy. We believe that the negative equity cloud (consumers that were under water in their RV, home and retirement portfolio) has begun to lift, stimulating better replacement demand. Better home values and a stronger stock market have helped – but Winnebago is also leading with new products that dealers crave. Confident dealers continue to replenish depleted dealer inventory, fueling robust orders and a stunning backlog.
Revenue. Revenue surged 40% on strong retail and dealer demand.
Retail. Implied motorhome retail jumped 23%, ahead of our forecast (strong rental).
Inventory. Dealer inventory increased 36%; checks confirm room for further restocking.
Backlog. The motorhome backlog surged 130%.
Dealer confidence and new products fuel huge backlog. The motorhome backlog increased 130% to 2,846 units, nearly 2 times our Q4 shipment forecast. The abnormally high backlog is a function of strong retail demand, confident dealers, new products, and the limited availability of motorhome chassis, which has encouraged some dealers to order aggressively to ensure some deliveries.
In a conference call today (June 27) with media and investors, Winnebago Industries Inc. expounded on a stellar fiscal third quarter that included a 94% increase in year-over-year earnings, a 40% rise in sales and the highest shipment total in five years.
The Forest City, Iowa-based company enjoyed higher profits due to a heightened demand for motorhomes coupled with lower discounting and an improved product mix. Winnebago Chairman, CEO and President Randy Potts noted that the company’s motorhome backlog had grown in each of the last six consecutive quarters.
“At the end of the third quarter, backlog had grown in every motorized category and was up 130% year-over-year,” Potts said. “This is a reflection of our dealer networks’ confidence in our motorhome products, as well as our confidence in the overall industry as they prepare for the summer season.”
Potts revealed that in line with demand Winnebago also continued to increase production levels.
“We’ve been increasing our production throughout the past 9 months,” he said. “When measured as units produced per production day, our production in the third quarter of fiscal ’13 increased nearly 48% compared to the units produced per production day in the same quarter last year.”
While the still evolving towable division incurred a $764,000 operating loss during the quarter, Potts said the unit was making progress.
“We had good response to new products that were introduced at our Dealer Days event in late April, as evidenced by the increase in sales order backlog compared to the second quarter of fiscal ’13,” he said.
To read the entire transcript from today’s conference call click here.
Winnebago Industries Inc.’s fiscal third-quarter earnings soared 94.4%, boosted by improved margins and heightened demand for motorhomes.
“We worked extremely hard to deliver significant improvement in the third quarter as compared to the prior year,” said Winnebago Industries Chairman, CEO and President Randy Potts. “We again increased our shipment volume in nearly every sector of our business due to the continued rise in customer demand.”
Revenues for the third quarter, ended June 1, increased 40.1% to $218.2 million versus $155.7 million for the third quarter of fiscal 2012. The Forest City, Iowa-based company. Net income for the period rose 94.4% to $7.7 million, or 27 cents per diluted share, from $3.9 million, or 13 cents per diluted share, a year ago. Winnebago reported operating income of $10.2 million for the quarter, an increase of 190.6%, versus $3.5 million for the third quarter of fiscal 2012.
Earnings in the third quarter were positively impacted by increased motorhome volumes, driven by higher dealer and retail consumer demand. The increased volumes, along with lower incentives, provided fixed cost leverage, higher operating margins, net income and earnings per share as compared to the same quarter last year. Net cash generated from operations was $19.2 million in the third quarter.
Revenues for the first 40 weeks of fiscal 2013 grew 40.5% to $588.9 million compared to $419.1 million for the first 39 weeks of fiscal 2012. Net income for the first nine months soared 425% to $21.3 million, or 76 cents per diluted share, versus $4.1 million, or 14 cents per diluted share, the year prior. Winnebago reported operating income of $29.1 million for the first nine months versus $3 million for the same period in fiscal 2012.
Potts noted, “We are very pleased with the marketplace response to our new 2014 motorhome and towable products, including the new Winnebago Forza and Itasca Solei. These products provide our dealers and retail customers with a new price point targeted at the largest growth component of the Class A diesel category. We are focused on bringing these exciting new products and others to market.
“Since the initial introduction to our dealer partners in late April at our Dealer Days event, we have moved forward with our planned staggered retail product rollouts which will continue throughout the coming months. We have had exceptional growth throughout fiscal 2013, experiencing the best shipment quarter in over five years, while still increasing our sales order backlog.”
Winnebago Industries Inc. introduced the Itasca Solei for the first time to retail consumers at the Family Motor Coach Association’s (FMCA) Gillette 2013 Family Reunion and Motorhome Showcase event held in Gillette, Wyo., this weekend. According to a press release, the Gillette gathering is a culmination of FMCA’s 50th birthday celebration.
Hundreds of motorhomes are on hand for the event where the Itasca Solei made its debut. The all-new, attractively priced Solei is built on a Freightliner XCS straight-rail chassis featuring a 340 hp Cummins diesel engine coupled with a six-speed Allison transmission .
Interior amenities include polished Corian galley countertops, coffee-glazed cabinetry, LED ceiling lights and upscale entertainment features. Smart Storage, an integral part of both the 34T and 38R floorplans, also offers plenty of room for storing items.
“This 34-foot Solei is smaller in length than the unit I am in now, but actually has more usable storage and floorplan space,” said John Dogger of Hinkley, Ohio, during the rally. “It’s also less than 12 feet tall, so I could fit it in my garage. I love the 340hp Cummins diesel engine on such a well-priced motorhome.
“I’ve owned motorhomes for 25 years and have always known Winnebago to be the best in the market, but I’ve never owned one before now. That may change soon. The Solei is a home run, an absolute home run.”
Solei standard features include:
• Powered driver and passenger seats in leatherette.
• Radio/rearview color monitor system with six-inch touch screen and powered mirrors with defrost/side-view cameras.
• Powered MCD visor shade for the front windshield and MCD blackout shades in the coach area.
• Soft vinyl ceilings, Comfort sofa/sleeper (38R) and extendable Comfort sofa/sleeper and movable drop leaf table (34T).
BenchMark dinette with Dream Dinette table (38R), vinyl tile flooring throughout and home theater sound bar with DVD/CD player.
• Full-coach water filtration system, 6,000-watt Cummins Onan diesel generator, 2,000-watt inverter/charger.
• Roof A/C with heat pump, hydraulic leveling jacks, dual-glazed coach windows.
• Fireplace, +Lounger, powered StudioLoft (34T only), stackable washer/dryer, automatic HDTV satellite antenna system, satellite radio, and Ideal Rest Noveau air sleep system.
Today’s video features Winnebago Industries Inc. Chairman, CEO and President Randy Potts appearing on the set of CBS This Morning today (June 21) in an interview with Senior Economics Correspondent Anthony Mason and show hosts Norah O’Donnell and Gayle King. To view the video click here or scroll down down the right side of the RVBUSINESS.com home page.
Winnebago Industries Inc. introduced the Forza Class A diesel motorhome for the first time to retail consumers at The Rally, the Camping World/Good Sam event held in Syracuse at the New York State Fairgrounds held last weekend.
According to a press release, thousands of RVers and enthusiasts were on-hand for the event to view the Forza, built on the Freightliner XCS straight-rail chassis with a Cummins 340-hp diesel engine and Allison six-speed transmission. Winnebago said the Class A also offers increased storage capacity with its Smart Storage design. Interior amenities include polished Corian galley countertops, coffee glazed cabinetry, upscale entertainment features and LED lighting.
Arnold and Jean Bye from Waunakee, Wis., were impress with the new Forza, according to the company. “We are looking for a small diesel with a queen bed in the traditional position so we could use it without putting the slides out,” the couple stated. “We love the mid-entry. We have a 40-footer now and we want to downsize – this is perfect for us. We can get eight people around the sectional table. The side swing doors allow easy access to great storage for a small unit. I also love the passenger seat with the table for all my maps and the laptop.
Available in two affordably-priced floorplans – the 34T and 38R – Forza standard features include:
• Powered driver and passenger seats in leatherette.
• Radio/rearview color monitor system with 6-inch touch screen and powered mirrors with defrost/side-view cameras.
• Powered MCD visor shade for the front windshield and MCD blackout shades in the coach area.
• Soft vinyl ceilings, LED ceiling lights and vinyl tile flooring throughout.
• Home theater sound bar with DVD/CD player.
• Full-coach water filtration system, 6,000-watt Cummins Onan diesel generator, 2,000-watt inverter/charger and roof A/C with heat pump.
• Hydraulic leveling jacks, dual-glazed coach windows, heated holding tank compartment and winterization package.
• Powered patio awning with LED lighting and exterior wash station.
• Low profile allows unit to fit through 12-foot door opening while having storage oup to 228 cubic feet (38R).
Options include a fireplace, lounger, powered StudioLoft (34T only), stackable washer/dryer, automatic HDTV satellite antenna system, satellite radio, and Ideal Rest Noveau air sleep system.
Winnebago Industries Inc. will release its fiscal third-quarter financial results, ended June 1, prior to the market’s opening on June 27.
According to a news release, the company will also host a conference call on June 27 at 9 a.m. (CT) to discuss the report.
Winnebago’s conference call may be heard live via the company’s website, http://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days on the website.