Like an NFL football team with the true grit to bounce back from a regrettable loss, Winnebago Industries Inc. has in many ways shown the world and the rest of the RV industry what it takes to shake off the bleak days of the Great Recession and – stretching that sports analogy — reset its gameplan, introduce a new playbook and redirect its energies toward the next game or, perhaps, the playoffs.
That drive to survive and redefine the company’s entire approach to the business world, in a nutshell, is why RVBusiness has named 55-year-old, Forest City, Iowa-based Winnebago as “RVB’s Newsmaker of the Year for 2013.”
RVB’s staff chose Winnebago over an array of other contenders that generated plenty of headlines in 2013 — Camping World Inc., the nation’s largest RV retailer; Thor Industries Inc., America’s highest volume RV builder; and Fleetwood RV, now part of Allied Specialty Vehicles Inc.’s Allied Recreation Group.
So, why, one might argue, pick Winnebago over other RV builders when it has clearly benefited from the same rising tides that have lifted other manufacturers?
Because the publicly held RV builder, located in the flatlands of northern Iowa about an hour south of Minneapolis — far from the industry’s Indiana RV-building hub — has to a great extent overachieved by “reinventing” itself as it strives to become more of sales-driven company versus a manufacturing-centric firm. From all we can tell, it’s largely a response to challenges posed by a revamped senior management team led for the past three years by Chairman, CEO and President Randy Potts, a 30-year Winnebago veteran, and more recently by Scott Degnan, a former Fleetwood Enterprises Inc. exec who now serves as vice president of sales and product management.
And because the rebirth of Winnebago – the nation’s fourth largest RV builder and a company billing itself as “The Most Recognized Name in Motor Homes” – is in many ways emblematic of the entire industry’s ongoing recovery.
Here’s a few highlights extracted from the pages of the January/February issue of RVBusiness:
The Employment Picture: Winnebago’s employment roster has gone from a pre-recessionary high of 4,000 down to 1,500 at its low point and now back up to an austere headcount of about 2,790.
Expanding Retail Sales: Winnebago posted an industry-best 63.8% rate of growth for retail sales of all RV’s combined from 2011 through the first 10 months of 2013, reports Tom Walworth, president of Statistical Surveys Inc., Grand Rapids, Mich.
Financial Performance: The Iowa firm finished its 2013 fiscal year Aug. 31 with revenues of $803.2 million, a 38.1% gain over $581.7 in fiscal 2012, and operating income of $44.4 million, a 366.1% increase from $9.5 million in fiscal 2012. And it again posted impressive numbers in Q1 of 2014, ended Nov. 30.
National Press Coverage: The Iowa RV manufacturer became somewhat of a media darling over the past year with coverage in everything from CNBC’s “Comeback Companies” to ABC News with Diane Sawyer’s “Made in America” plus a live interview with Randy Potts from New York on “CBS This Morning.”
Three Key Media Accolades: The company drew praise for its performance on a national scale with its selection this fall to Barron’s 400 Index and its listing in Fortune magazine’s “100 Fastest Growing Companies” and Chief Executive magazine’s “Mid-Market Elite.”
Also tipping the scales in Winnebago’s favor is a new brand-licensing program, an award-winning first entry into the commercial vehicle arena and the development of an array of new motorhomes, including the Travato Class B and Trend/Viva! Class C assembled on Chrysler’s Ram ProMaster van chassis, an Americanized version of Europe’s popular Fiat Ducato platform.
But Potts and Degnan make it clear in the current issue of RVBusiness that Winnebago is also keeping an eye on a variety of mainstream product categories, including gas-fueled Class A motorhomes. In fact, the industry can expect the next significant new Winnebago product debut by spring.
“All I can tell you is that we’ll be launching the next big splash to our dealers during our next Dealer Days event, which is the middle of April just before Easter,” said Degnan, “and it’s just really going to be cool.”
Winnebago Industries Inc. is highlighting its Winnebago, Itasca and Winnebago Touring Coach lineups, including the retail debut of several exciting new products during the Jan. 15-19 Florida RV SuperShow in Tampa.
According to a press release, Winnebago products on display will include:
• Winnebago Vista 36Y: True to its name, the gas-powered Class A Vista’s most distinguishing feature is the magnificent view available from the large front cab windows, or through the large, passenger side picture window looking out from the galley island. The triple-slide floorplan also features a StudioLoft drop-down bed in the cab area, new sofa with integrated recliner, three hidden TVs, walk-through bathroom and a luxurious bedroom. The 36Y floorplan is also available in the Sunstar product line.
• Winnebago Destination: The Destination is Winnebago’s first full-size, luxury fifth-wheel that combines motorhome styling and high-end residential appeal. Exterior features include an aerodynamic exterior front cap design with an air dam for increased wind deflection along with an optional rear cap with automotive sport styling. Interiors offer custom hardwood cabinets, entertainment center with a 50-inch TV and an optional fireplace, complete with hearth. The master suite features 6 foot 9 inch ceilings, an optional “Reflection” Entertainment System that hides the TV when not in use with no moving parts, a Flex Bed system that adjusts the head of the bed and a full-size, cedar-lined, walk-in closet with four large radius shelves.
• Winnebago Trend and Itasca Viva!: The all-new Trend and Viva! Class C motorhomes are built on the fuel-efficient Ram ProMaster chassis with comfortable living space for up to six people at an affordable price. Both 23-foot floorplans offer a powered StudioLoft bed that fits tight to the ceiling to conserve space during the day. Other features include sleek euro-body styling, efficient LED lighting, available soft, easy-to-clean Ultraleather furniture and three-point seat belts in the dinette.
• Winnebago Forza and Itasca Solei: The Forza and Solei are new Class A diesel pusher models that can fit in a garage with a 12-foot door. Built on the Freightliner XCS chassis with a Cummins 340-hp diesel engine, the Forza and Solei feature polished Corian galley countertops, coffee-glazed cabinetry, upscale entertainment features and energy-saving LED lighting.
• Class B Travato: The Travato is also built on the Ram ProMaster chassis, offering fuel economy of 16-18 mpg highway. The newest Class B member of the Winnebago Touring Coach lineup, the Travato is 20 feet in length while also providing a functional floorplan. The Travato features a flip-up, rear double bed that allows for large storage items and is the first Class B to feature three-point seat belts in the forward-facing galley seat. Other features include swivel cab seats, efficient LED lighting, touch-screen navigation, fully functional galley, deep wardrobe and a rear wet bath, while the Flex Bed system provides additional sleeping space.
• Winnebago Minnie Winnie and Itasca Spirit: The Minnie Winnie and Spirit product line now features a new 31K floorplan that offers a single slide with U-shaped dinette and lounge sofa/bed. The Class C coach features a split bath, walk-around queen bed and large rear trunk storage compartment. The 31K and 31KP are available in the Minnie Winnie, Minnie Winnie Premier, Spirit and Spirit Silver model lines and is now available in a new champagne sidewall color.
• Winnebago Outdoor Adventures: Another Winnebago highlight at the SuperShow is the debut of Winnebago Outdoor Adventures. Formerly known as WIT Club Tours, this RV travel and adventure service has successfully provided planned travel opportunities with experienced, trained professionals to our WIT Club members for over 25 years and is now open to all RVers.
Winnebago Industries Inc. was named to the “Mid-Market Elite” list by Chief Executive Magazine.
According to a press release, Winnebago is featured in the “Mid-Market Elite” list that appeared in the January/February 2014 issue of Chief Executive Magazine. The listing was conducted in partnership with the National Center for the Middle Market at the Fisher School of Business at Ohio State University and GE Capital.
The publication identified 100 top performers among 197,000 middle market companies, both private and public, that “stand out amid the middle-market universe, outpace their industry peers, exceed expectations, and create value in unusual if not unique ways.” They indicated that Winnebago “weathered the recession and is poised to grow with the economy.”
Chief Executive Magazine indicated their purpose was to “draw attention to a vibrant and often neglected segment of the U.S. economy.” According to their research, the revenue growth of the mid-market is twice that of the S&P 500 and represents 3% of all U.S. companies, 1/3 of all jobs, almost 33% of private sector GDP, more than $10 trillion in annual revenue and 1.2-plus million new jobs in 2012-2013.
Forest City, Iowa-based Winnebago Industries Inc. announced the appointment of Randy Tegland to the position of assembly manager for its Lake Mills Assembly Facility (LMAF).
According to a press release, Tegland is responsible for managing and directing production within LMAF, including the assembly of the new Winnebago Touring Coach Travato, as well as the assembly of 110-volt components.
Tegland is a 36-year veteran of Winnebago and has over 13 years management and supervisory experience, having most recently served as supervisor of Winnebago’s shipout facility.
A graduate of Forest City High School, Tegland received a machinist certificate from North Iowa Area Community College, Mason City. Tegland also served in the United States Marine Corp.
Forest City, Iowa-based Winnebago Industries Inc. announced that Zach Raulie has relocated to the Northwest in his position of district sales manager.
According to a press release, Raulie is responsible for sales of the company’s Winnebago, Itasca and Winnebago Touring Coach motorhomes, as well as dealer development and training for dealers in the states of Washington, Oregon, Northern Idaho, Montana, Alaska and the Canadian provinces of British Columbia and Alberta.
Raulie is a 10-year veteran of Winnebago and most recently served as a district sales manager in the Southeast region. Prior to joining Winnebago in 2004, he served as territory sales manager for an outdoor products and accessory manufacturer and an assistant manager for a sporting goods, hunting gear and accessories store.
A graduate of Forest City High School, Raulie earned his bachelor’s from Waldorf College in Forest City.
Forest City, Iowa-based Winnebago Industries Inc. announced the promotion of Mark McLaughlin to the position of district sales manager.
According to a press releaase, McLaughlin is responsible for sales of the company’s Winnebago, Itasca and Winnebago Touring Coach motorhomes, as well as dealer development and training in Mississippi, Alabama, Georgia, South Carolina, Southern North Carolina and Northern Florida.
McLaughlin is an 18-year veteran of Winnebago and has served in a variety of product and customer-related positions, most recently serving as senior product trainer since 2006. Prior to joining Winnebago in 1995, he served as assistant service manager and master service consultant/service manager for several auto dealerships.
McLaughlin is a native of Belmond, Iowa, and graduated from the General Motors University in Automotive Management. He serves on the North Iowa Community College Automotive Advisory Council, the National Motorcycle Safety Foundation as an instructor/mentor and is BRC, ERC, RRBRC and 3WBRC certified. McLaughlin is also an Iowa DOT Motorcycle Safety Instructor and serves as a high school soccer referee and certified coach for the Iowa High School Athletic Association.
Winnebago Industries Inc. earned a “Top 2014 RV Debut” from RVBusiness Magazine for the company’s Winnebago Trend Class C motorhome.
“Just as the North American RV industry itself continues its impressive recovery, the compact, 9,350-pound GVWR Trend and Viva! companion lines of Class C motorhomes offer living proof that the RV industry is also regaining its edge in terms of authentically new and creative product development, said RVBusiness Publisher Sherman Goldenberg. “The Trend, Viva! and Winnebago’s new Travato Class B van camper, each built on Chrysler’s Ram ProMaster chassis, should serve the industry well in attracting the next generation of motorhome buyers.”
“We agree wholeheartedly with RVBusiness’ recognition of the Trend,” said Winnebago Vice President of Sales and Product Management Scott Degnan. “The Trend and the Viva!, are true game changers. They are fuel-efficient, unique and innovative motorhomes that we believe will take the industry by storm. We are excited to receive recognition by RVBusiness and look forward to the great success we believe the Trend and Viva! will have in the marketplace.”
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.”
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.”
RV Trader and Winnebago Industries Inc. jointly announced the launch of a real-time inventory tool to assist customers searching for RVs on Winnebagoind.com sites: GoWinnebago.com, GoItasca.com, WinnebagoTouring.com, WinnebagoTowables.com and SunnyBrookRV.com.
According to a press release, when a consumer browses RVs on Winnebago websites, the new search tool will display a dealer’s inventory, product photos and MSRP, as determined by the local dealer. This new feature displays the inventory directly from RV Trader.com, enabling the consumer to quickly and easily locate the exact Winnebago, Itasca, Winnebago Touring Coach or SunnyBrook model they are searching for. This results in faster turn-around times and more leads for Winnebago dealers, the company said.
“This is a terrific program for our dealers and ultimately our customers,” said Winnebago Marketing and Sales Promotion Manager Kelli Harms. “Customers can find their closest dealer quickly and simultaneously view their inventory of that particular model without leaving the website. This partnership with RV Trader is a true ‘win-win,’ and we are excited to promote it to our motorized and towable dealers.”
“This is a feature that will bring the buyer and seller together seamlessly,” said Tim Custer, general manager of RV Trader. “Consumers will now be able to view local dealer inventory with the click of a button.”