Winnebago Industries Inc. continues to ride the recovery of the RV industry in the U.S. and is poised to regain its position as the nation’s leading motorhome manufacturer.
That was one conclusion from a glowing conference call with investors today (Dec. 20) following release earlier in the day of the company’s fiscal 2013 first-quarter results for the period ending Dec. 1.
The Forest City, Iowa-based company reported revenues for the 14-week first quarter were $193.6 million, an increase of 46.8%, versus $131.8 million for the 13-week first quarter of fiscal 2012. Net income for the first quarter was $7.4 million, or 26 cents per share, versus $1.0 million, or 4 cents per share (a 550% increase), for the first quarter of fiscal 2012.
All aspects of the company’s production, save for fifth-wheels, were up from the corresponding quarter a year ago. Winnebago reported these unaudited delivery totals with increases in parentheses:
• Class A gas, 620 units, compared with 381 (62.7%).
• Class A diesel, 345 units, compared with 232 (48.7%).
• Class B, 90 units, compared with 79 (13.9%).
• Class C, 479 units, compared with 348 (37.6%).
• Travel trailers, 408 units, compared with 267 (52.8%).
• Fifth-wheels, 149 units, compared with 168 (down 11.3%).
Wall Street rewarded the upbeat report as company shares were up $1.96 or nearly 14% on trading of 366,000 shares by mid-morning. If investors liked the Q1 results, they could go “ga-ga” over Q2. Winnebago reported a 242.7% year-over-year hike in product backlog for the current quarter, led by the high-margin gas- and diesel-powered Class A motorhomes.
The company lists motorhome backlog valued at $226.5 million compared with $155.9 million a year ago, a 221% increase. Towable backlog totals $14 million, up 35.3% from $10.38 million a year ago.
Randy Potts, Winnebago president, chairman and CEO, reported growing acceptance by both dealers and retail consumers for Winnebago products and a larger market share across-the-board in declaring that Winnebago is “outpacing the industry.”
In particular, Potts reported “tremendous success” in the high-line Class A diesel products, including tag axle floorplans, following the company’s Open House in Elkhart County in September and at the National RV Trade Show in Louisville, Ky., last month. He also cited performance by new entry-level Class C units and the new Minnie Winnie towable which were shown at these events.
The company is still “working through operational issues that have challenged towable production” at the facility in Middlebury, Ind., which remains in the red, he said. However, he added, “We feel it’s on the right path.” The towable operation lost $1.4 million in the first quarter, which was a larger loss than a year ago.
In a far-ranging 45-minute discussion, company officials had these additional observations:
• Sarah Nielsen, vice president and CFO, noted that the company hired 160 additional workers in the quarter and continued to pay workers overtime in many areas of the company. She said the company is utilizing approximately 60% of its capacity in Iowa for motorhome operations and about 30% at its Middlebury facility for towable production. She sees both percentages rising in 2013 as the company ramps up production in both states.
• Winnebago reported its highest growth in profit margin since the first quarter of 2008, a reflection of fixed overhead absorption, Nielsen said. The retail environment is much different now than in the past few years, when the company had to offer discounts and promotional incentives to move product.
• During a discussion of order backlogs and lead times for wholesale deliveries, Potts said chassis availability plays a significant role. Potts said Winnebago is “working those folks very hard” at Ford Motor Co., which supplies the high-demand Class A gas chassis. He said the Ford Econoline or “chopped C’ chassis is readily available, as are chassis from Freightliner, while longer lead times exist for Mercedez-Benz chassis. In general, lead times for wholesale deliveries to dealers are six to eight weeks, “give or take,” he said.
Heightened demand and improved margins resulted in significant first-quarter gains for Winnebago Industries Inc., including a 46.8% increase in sales.
Revenues for the 14-week first quarter ended Dec. 1 were $193.6 million, an increase of 46.8% versus $131.8 million for the 13-week first quarter of fiscal 2012. Included within consolidated revenues was $12.1 million associated with towable products, compared to $10.1 million a year ago. The Forest City, Iowa-based company reported an operating income of $9.9 million for the quarter versus $627,000 for the first quarter of fiscal 2012.
Net income for the first quarter was $7.4 million, or $0.26 per diluted share, compared to $1.0 million, or $0.04 per diluted share, the previous year.
The first quarter was positively impacted by an additional week of operating performance s well as higher weekly production rates due to robust demand which resulted in increased motorhome deliveries and improved gross margins due to better overhead cost absorption.
“Winnebago Industries’ results for the first quarter of fiscal 2013 were outstanding,” said Winnebago Chairman, CEO and President Randy Potts. “Calendar year-to-date through October, we are growing at the wholesale and retail level at a faster rate than the overall industry due to the popularity of our products and the strength of our dealer network.
“We received very positive reception to our products at the recent National RV Show, which was held November 27-29 in Louisville, Ky. There was particular excitement for our newly introduced Winnebago Minnie Winnie and Itasca Spirit motorhomes that provide an economical entry into our Class C lineup, as well as the new Winnebago ultra-light towable entry introduced at the show.”
During the first quarter, Winnebago repurchased approximately 594,000 shares of the company’s common stock for $7.2 million, with calendar year-to-date cumulative repurchases of 1.2 million shares at an average price of $11.34 per share. “Given our improved financial performance and positive outlook, we felt the additional shares repurchased in our first quarter continued to enhance shareholder value,” said Winnebago Vice President, Chief Financial Officer Sarah Nielsen. “Through these efforts, we have reduced the total outstanding shares by nearly 4% this calendar year.”
Potts continued, “We are extremely pleased with the growing demand for our products, as evidenced in our sales order backlog, particularly as this is traditionally a seasonally slower time of year for our business. In light of such a strong order position, we are currently in a much better business environment and as a result, less sales incentives are necessary. We have continued to increase our production schedule and have hired additional employees to meet this improved demand during the last two fiscal quarters.
“Although we are ramping up production, we do face various constraints in the near-term that will impact our ability to immediately deliver product such as fewer production days due to the holidays, Class A gas chassis availability and the timing of production start for select new products. These are certainly better business challenges to face in a much improved market for our products than the difficult environment we endured for the past few years.”
Winnebago will conduct a conference call in conjunction with this release at 9 a.m. (Central) today (Dec. 20). Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the investor relations page of the company’s website at http://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days.
Class A, B and C motorhomes from Winnebago Industries Inc. recently received MotorHome magazine’s Readers’ Choice Awards.
According to a press release, Winnebago’s Class A and C motorhomes were named as this year’s Gold winners while the Class B Era received Silver status in MotorHome magazine’s first-ever Readers’ Choice Awards, which included many of North America’s most popular motorhomes, campgrounds, RV products and services. Winnebago’s motorhomes were the only recipients to receive this award in the Class A and C Gold category.
More than 130,000 MotorHome readers were invited to choose from 100 brands and cast votes online at www.MotorHomeMagazine.com for their favorites in 24 categories.
“We are very excited to receive this recognition from the readers of MotorHome magazine,” said Winnebago Vice President of Sales and Product Management Scott Degnan. “It is a true honor to be named by the RV consumer as the best in the industry and we will continue to strive for excellence in our products and services as we go into the future.”
Winnebago Industries Inc. unveiled a number of new floorplans at the 50th Annual Recreation Vehicle Industry Association (RVIA) National RV Trade Show in Louisville, Ky., Nov. 27-29.
“Our motorized and towable lineups at this year’s RVIA National Trade Show were phenomenal,” said Winnebago Industries Chairman, CEO and President Randy Potts in a press release. “Not only did we show some of our hottest floorplans, but also a number of concepts were shown in order to gauge dealer response. What we heard was positive and armed with this information – we are going to continue to take Winnebago Industries in exciting new directions that will meet and exceed the needs and demands of today’s RVers.”
Highlights of the company’s motorized division included:
• Winnebago Minnie Winnie 25B: The iconic Winnebago Minnie Winnie unveiled a new 25B floorplan at the show. This value-priced coach is perfect for consumers just entering the RV lifestyle or experienced RVer’s seeking a great value. Despite its shorter length, this 25-foot coach offers tons of sleeping accommodations. With a rear corner bed and bath, the front of the coach offers a dinette with opposing sofa/sleeper. An overhead bunk provides yet another place to sleep at night, while the galley is mid-coach.
• Winnebago Via 25P: Built on the Mercedes-Benz F50 cowl chassis, the new 25P features a rear corner bed and bath. A front slideout room provides great space including an extremely roomy wardrobe and either a standard dinette or optional sofa/sleeper. The fully equipped galley is located on the passenger side of the coach.
• Winnebago Sightseer 35G: The Winnebago Sightseer introduces a new floorplan, the 35G, features the new InTable. The InTable functions as an end table, dining table, island, countertop extension and desk. Plus, it offers built in storage and is moveable. Combined with the extendable sectional sofa sleeper, Euro recliner and innovative TV location, the InTable helps make the 35G incredibly functional and comfortable.
Innovative exteriors were also highlighted at the show with concept paint and graphics packages on display. Luxury Class A gas motor omes, the Winnebago Adventurer and Itasca Suncruiser, also unveiled new front-end styling.
“Not to be outdone, the towables line really turned heads,” said Potts. “At the forefront is the new Cherry Red Minnie. It is a truly striking trailer that is feature packed and fun. The new Winnebago Ultralite line was well received, and the full body paint Raven fifth-wheel is definitely appealing for consumers looking for a high-end trailer.”
• Winnebago Minnie: The new Cherry Red exterior and a new bunk model, the 2301BH, were the highlights in the Minnie trailer lineup. The 2301GH is compact in size and weight, and packed with features usually found in much larger units. Features include a sofa, full sized dinette, queen bed, twin bunks, pantry, tremendous wardrobe and counter space – all in a compact 26-foot length.
• Winnebago Ultralite: The company’s newest towable entry is the Winnebago Ultralite travel trailer. The sleek exterior offers color-infused tan gel coat, poured fiberglass walls, eye-catching graphics and frameless windows. The designer interior features radius ceiling featuring LED lights, the new Ultralite features 80-inch beds, an island galley and mega bathroom. The trailer weighs less than 6,000 pounds allowing it to be towed with most of today’s smaller tow vehicles.
• SunnyBrook Remington: On the value side, the new Remington 2750BHS Ultralite was on display. Sporting a new cool grey high-gloss exterior fiberglass, new countertops and a low entry-level price point, the new Remington Ultralite provides a high quality, value-priced unit for those consumers that are more budget minded.
• SunnyBrook Raven: The 3300CK floorplan featuring full body paint was showcased in Louisville, offering an island kitchen with solid surface countertop and a swing-out cabinet end. Other features include a rear entertainment center, full sized sofa, residential swivel rocker recliners, and dining table and chairs.
Other notables include the Winnebago One travel trailers and Live Five fifth-wheels that have been gaining market share with unique floorplans, curved ceilings and exterior highlights like innovative paint packages and frameless windows, and the value-priced Sunset Creek Sport that offers new interior paneling and black cabinet hardware.
Winnebago Industries Inc. will be presented with its 17th consecutive Quality Circle Award during the Recreation Vehicle Dealers Association’s (RVDA) reception on Nov. 26, just prior to the opening of the National RV Trade Show in Louisville, Ky.
According to a press release, the ceremony will take place in the Elliot Room of the Crowne Plaza Hotel in Louisville. Thirteen manufacturers will be recognized based on results from RVDA’s Dealer Satisfaction Index (DSI) survey.
“We believe we have the best dealer network in the RV industry,” said Winnebago CEO and President Randy Potts. “We are especially honored to have our dealer partners recognize us with this prestigious award. We are particularly proud that Winnebago Industries is the only manufacturer to receive this award from RVDA every year since its inception.”
Winnebago was recognized as a Quality Circle Award winner based on overall dealer satisfaction for Winnebago, Itasca and Era motorized brands as measured in the DSI survey.
“The DSI is a valuable indicator of our dealers’ perspective on the quality of our products and services,” said Potts. “We wish to thank all our dealer partners for the confidence they have shown in Winnebago Industries in honoring us with this award. We also wish to thank our valued employees for their continued diligence to ensure that every Winnebago Industries motorhome, program and service provided is of the highest quality.”
He added, “We are particularly excited about our dynamic motorhome lineup and innovative new products that will be available soon. We plan to continue to deliver the most innovative and highest quality products, services and support in the industry for both our dealer partners and retail customers.”
After successful training events this summer, Winnebago Industries Inc.’s sales department hosted over 90 dealer personnel at its headquarters in Forest City, Iowa, for another round of training on its 2013 lineup. “We had dealers ask us to offer sales training again– especially after they had someone from their dealership attend the August training sessions,” said Mark McLaughlin, senior product trainer. “Our two-day sales training is designed to give sales personnel the tools to educate consumers on Winnebago Industries motorhomes and why they are the best in the industry. Our dealers don’t see this training as time away from the office – it is an investment for their staff that is well worth it.” Two consecutive sessions were held Nov. 12-13 and 14-15. Each two-day session included an “ultimate factory tour” of the Forest City campus, including support areas such as metal stamping and engineering, with the ability to see first-hand what makes Winnebago motorhomes and vertical integration process stand out from the competition. Attendees were also provided specific product training on the company’s model lines which highlighted new features and new 2013 model year floorplans.
Editor’s Note: To see an accompanying video on this story click here.
They’re called recreational vehicles or homes on wheels, allowing families to explore all corners of the country.
But, as reported by KAAL TV, with more than 50 years of RV building experience, Winnebago Industries Inc. is recovering from its toughest challenge yet, the recession.
“It was the worst we’d ever seen…we’ve spent the last four years recovering from that,” said Randy Potts, president, CEO and chairman of the Forest City, Iowa-based builder.
During the worst of it, thousands of employees were laid off, including Stephen Thomas.
“We go in cycles where you wonder what next week is going to bring,” said Thomas.
Over time, as the economy slowly grew and people started taking more vacations, the assembly line started moving quicker and people were rehired, including Thomas, who is an electrical inspector.
“They’ve taken good care of me, and there’s good benefits,” said Thomas.
Potts credits the men and women on the assembly line with the comeback, saying he’s thankful they stuck with the company.
“I think it speaks to the work ethic and value of Midwestern people,” said Potts.
The focus now is on adding more workers to keep pace with demand. “We’re not going to wait for the market to grow back to what it was,” said Potts.
The company famous for motorhomes is going into the bus business. The Mason City (Iowa) Globe Gazette reported that Winnebago Industries Inc. is getting ready to produce Metro Link, a new transit bus that the manufacturer said will use some of its motorhome technology in a shuttle-type bus.
According to Randy Potts, chairman, CEO and president for the Forest City-based company, it’s part of Winnebago’s effort to diversify its business in a way to avert a repeat of a downturn in 2008 that caused the company to close one factory and shrink its work force from a peak of 4,220 in August 2004 to 1,694 five years later.
“My challenge is to make Winnebago the leader in the industry in unit volume, in revenues and profits, naturally. Beyond that, we do need to look for ways of expanding our business, either parallel to or outside the RV market,” Potts said.
The first step was forming the Winnebago of Indiana LLC subsidiary, which builds SunnyBrook and Winnebago brand towable products. Now, Winnebago plans to turn out buses.
Three prototypes of the 25-seat vehicle already have been built and tested, Potts said, noting the tests came out “very well.”
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Winnebago Industries Inc. CEO Randy Potts flipped the pages of a recreational vehicle magazine until he got to the page with a new Winnebago advertisement.
The ad promises a new Mercedes Benz with a purchase of a Winnebago motorhome. The ad shows photos of the front end grills of several Winnebago and Itasca models, which have the Mercedes Benz logos. Winnebago uses Mercedes Benz’ chassis in many of its products and motorhomes carry the Mercedes Benz logo.
Potts said the ad is edgier than what Winnebago would have written and designed in the past, but it’s part of the culture he is fostering as he enters his second year as CEO, president and chairman of the board, the Mason City Globe Gazette reported.
“There is an excitement around here and I think everyone can share that with you,” Potts said.
Advertising, sales and marketing are just one example of how he wants employees and companies to be bolder and “more responsive to the market.”
Potts hired Scott Degnan as vice president of sales and product development within the past year. Degnan had worked for other recreational vehicle manufacturers before coming to Winnebago.
“My perception coming in was that Winnebago had built a reputation of very high quality products but that it was somewhat resistant to change as in ‘we’ve done it this way for years,’” Degnan said.
When he met Potts and visited the company, Degnan realized the company was ready for changes.
“Randy is a change agent,” Degnan said.
Potts said while the company needs to lead on trends and changes or be on the edge of those, it cannot sacrifice quality or the foundation that’s been built on that quality.
Still, “you have to be bold enough to take risks,” Potts said.
For Winnebago, advertisements such as the one that uses Mercedes Benz and others, are examples of taking risks and “empowering people to do it,” Potts said.
“There is more freedom,” said Kelli Harms, a public relations and marketing specialist with Winnebago. “I hate to use the cliched ‘think outside the box’ but that’s what it is.”
Degnan said Harms, her department director Chad Reece and other employees, “felt handcuffed.”
When Degnan said the department had more freedom, Reece responded with, ‘I’ve got such a great team we will blow your mind.’”
Advertising is just one example, Potts said.
The company released two new models with a price of $69,999 for 2013 to hit a price point it was missing before.
Potts said employees completely reconfigured existing motorhomes to get to the new models. They didn’t just remove or add pieces from prior models, Potts said.
He’s formed product development teams that will be responsible for specific products within the company.
Employees will be challenged and they will be encouraged to be creative, Potts said.
“It’s everything, from ads to product development to the way we conduct meetings,” Potts said. “It’s time to change what’s been done here but what won’t change is the quality of the product. That is non-negotiable.”
Winnebago Industries Inc. today (Oct. 11) reported its highest motorhomes order backlog since the recession, underscoring the recovery of the U.S. recreational vehicle market.
Reuters reported that the largest U.S. motorhome maker, known for its luxurious touring vehicles that provide home-like comfort on the road, said total order backlog nearly doubled to 1,884 units at the end of the fourth quarter.
The company’s order backlog for motorhomes was the highest since the fourth quarter of 2007, said Thompson Research Group analyst Kathryn Thompson.
“The dramatic increase in our sales order backlog reflects the positive dealer response to our new 2013 model year products,” Winnebago CEO Randy Potts said in statement.
The level of dealer inventory is lower than what it should be given the improved demand for the company’s products, Potts added on a conference call with analysts.
“To meet this increased demand, we’ve been ramping up production and hiring additional employees,” he said. The company’s headcount has increased 12% for the fiscal year ended Aug. 25, almost all of it in the fourth quarter.
The company plans to continue to increase production. Potts said Winnebago has been able to increase sales volumes in the recent quarter due to the popularity of its new low-priced models. Deliveries in the quarter jumped 38% to 2,016 units.