Document
WINNEBAGO INDUSTRIES DELIVERS STRONG SECOND QUARTER FISCAL 2022 RESULTS
-- Second Quarter Revenues of $1.2 Billion Increased 39%, Including Robust Organic Growth of 29% --
-- Reported Quarterly Diluted EPS of $2.69 and Adjusted EPS of $3.14, Up 42% Over Prior Year --
-- RV Retail Market Share Gains Accelerate; 14.3%, +100 bps Over Prior Year, Trailing Three Months Through January --
-- $72 million in Cash Returned to Shareholders Through Second Quarter Fiscal Year-To-Date --
EDEN PRAIRIE, MINNESOTA, March 23, 2022 -- Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's Fiscal 2022 second quarter.
Second Quarter Fiscal 2022 Results
Revenues for the Fiscal 2022 second quarter ended February 26, 2022, matched the record of $1.2 billion set in the first quarter of Fiscal 2022, an increase of 38.7% compared to $839.9 million for the Fiscal 2021 period. Revenues excluding the recently acquired Barletta business were $1.1 billion, representing an organic growth rate of 29.4% over the prior year and 73.3% over the same period in Fiscal 2020 driven by continued strong consumer demand and pricing increases. Gross profit was $216.6 million, an increase of 38.3% compared to $156.6 million for the Fiscal 2021 period. Gross profit margin of 18.6% was equal to the prior year quarter, driven primarily by pricing ahead of known and anticipated cost input inflation, and operating leverage, offset by production inefficiencies related to supply constraints. Operating income, which includes $5.1 million of amortization and acquisition-related costs associated with the acquisition of Barletta, was $136.8 million for the quarter, an increase of 36.8% compared to $100.0 million for the second quarter of last year. Fiscal 2022 second quarter net income, which includes $6.5 million of contingent consideration fair value adjustment related to the Barletta acquisition, was $91.2 million, an increase of 32.0% compared to $69.1 million in the prior year quarter. Reported earnings per diluted share was $2.69, compared to reported earnings per diluted share of $2.04 in the same period last year. Adjusted earnings per diluted share was $3.14, an increase of 42.1% compared to adjusted earnings per diluted share of $2.21 in the same period last year. Consolidated Adjusted EBITDA was $150.7 million for the quarter, compared to $108.0 million last year, an increase of 39.6%.
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries delivered a strong second quarter performance, executing on sustained, elevated consumer demand for our expanded portfolio of premier outdoor lifestyle brands. Our second quarter performance and record sales results at recent RV and Marine trade shows further validate consumers’ embrace of the outdoor lifestyle. Winnebago Industries is capitalizing on that sustained demand – market share gains across our segments are evidence of deep affinity for our brands, which consumers recognize are differentiated due to our continued focus on quality, service and innovation. As of January 2022, our RV retail market share is 14.3% on a trailing three-month basis, reflecting an increase of 1.0 share point over the same period last year. In our Marine segment, Barletta continued to outperform pro-forma expectations and is now one of the top five pontoon brands as measured by retail market share. The healthy demand environment, and the unique strength of our brands, positioned Winnebago Industries well to take continued pricing actions to offset component and material cost inflation and continue to deliver strong margin performance across our segments.”
Towable
Revenues for the Towable segment were $646.6 million for the second quarter, up 47.2% over the prior year, primarily driven by pricing increases across the segment, in addition to unit growth of 13.2% as a result of continued, strong consumer demand. Segment Adjusted EBITDA was $100.6 million, up 61.3% over the prior year period. Adjusted EBITDA margin of 15.6% increased 140 basis points over the prior year due to operating leverage and the timing of pricing actions relative to inflationary impacts this year and the prior year. Backlog increased to $1.9 billion, up 55.2% over the prior year, and flat sequentially, due to continued strong consumer demand and pricing actions.
Motorhome
Revenues for the Motorhome segment were $417.6 million for the second quarter, up 9.1% from the prior year, primarily driven by pricing increases across the segment. Segment Adjusted EBITDA was $46.1 million, a decrease of 9.6% from the prior year, primarily driven by production inefficiencies caused by supply constraints, partially offset by pricing ahead of known and anticipated cost input inflation. Adjusted EBITDA margin of 11.0% decreased 230 basis points compared to the prior year and 90 basis points sequentially. Backlog increased to $2.2 billion, up 21.9% over the prior year and down $0.2 billion sequentially, as dealers continue to experience low levels of motorized inventory and strong consumer demand.
Marine
Revenues for the Marine segment were $97.3 million for the second quarter. Segment Adjusted EBITDA was $13.0 million, an increase of $11.9 million over the prior year and Adjusted EBITDA margin was 13.3%. Backlog for the Marine segment was $277.9 million. Barletta’s achievement of performance milestones at the end of calendar 2021, as specified by the July 2021 purchase agreement, will result in full dispensation of the $15 million maximum payout for the first earnout period.
Balance Sheet and Cash Flow
As of February 26, 2022, the Company had total outstanding debt of $537.0 million ($600.0 million of debt, net of convertible note discount of $53.0 million, and net of debt issuance costs of $10.0 million) and working capital of $545.4 million. Cash flow from operations was $46.1 million for the first six months of Fiscal 2022, a decrease of $20.8 million from the same period in Fiscal 2021 due to investments in working capital driven by challenges in the supply chain.
Quarterly Cash Dividend and Share Repurchase
On March 16, 2022, the Company’s board of directors approved a quarterly cash dividend of $0.18 per share payable on April 27, 2022, to common stockholders of record at the close of business on April 13, 2022. This dividend is in line with the prior dividend of $0.18 per share paid in January, 2022 and represents a 50%, or $0.06 per share, increase from the dividend of $0.12 per share approved in March of 2021. Share buybacks totaling $40.0 million were executed during the second quarter of Fiscal 2022 and now total $59.6 million Fiscal 2022 year-to-date.
Mr. Happe continued, “Winnebago Industries is leading our industry in innovating for the future of the outdoor lifestyle experience. In the second quarter, we unveiled the e-RV concept vehicle, an entirely new, all-electric, zero-emission RV, developed by our Advanced Technology Group, that moves to meet the environmental and sustainability goals that Winnebago Industries has set, as well as the growing consumer demand for electric power applications. We are proud to continue our legacy of innovation and explore new frontiers in outdoor lifestyle products. Looking ahead, our world-class team remains committed to operational excellence, and working closely with our dealer partners to replenish their inventories. We are confident that Winnebago Industries has continued headroom for sustained market share gains and profitable growth across our portfolio, leading to enhanced value creation for our end consumers, dealers, employees and shareholders.”
Conference Call
Winnebago Industries, Inc. will discuss Fiscal 2022 second quarter earnings results during a conference call scheduled for 9:00 a.m. Central Time today. 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://investor.wgo.net. The event will be archived and available for replay for the next 90 days.
About Winnebago Industries
Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand
Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in leisure travel and outdoor recreation activities. The
Company builds quality motorhomes, travel trailers, fifth-wheel products, pontoons, inboard/outboard and sterndrive powerboats and commercial community outreach vehicles. Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida. The Company's common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to uncertainty surrounding the COVID-19 pandemic; general economic uncertainty in key markets and a worsening of domestic economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; ability to innovate and commercialize new products; ability to manage our inventory to meet demand; competition and new product introductions by competitors; risk related to cyclicality and seasonality of our business; significant increase in repurchase obligations; business or production disruptions; inadequate inventory and distribution channel management; ability to retain relationships with our suppliers; increased material and component costs, including availability and price of fuel and raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure to warranty claims; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related exposure to product liability claims; governmental regulation, including for climate change; impairment of goodwill; and risks related to our Convertible and Senior Secured Notes including our ability to satisfy our obligations under these notes. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
Contacts
Steve Stuber, Investor Relations
srstuber@wgo.net
(952) 828-8461
Media: Chad Reece, Corporate Relations
creece@wgo.net
(641) 585-6647
Winnebago Industries, Inc.
Condensed Consolidated Statements of Income
(Unaudited and subject to reclassification)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| February 26, 2022 | | February 27, 2021 |
| Net revenues | $ | 1,164,731 | | | 100.0 | % | | $ | 839,886 | | | 100.0 | % |
| Cost of goods sold | 948,154 | | | 81.4 | % | | 683,304 | | | 81.4 | % |
| Gross profit | 216,577 | | | 18.6 | % | | 156,582 | | | 18.6 | % |
| Selling, general, and administrative expenses | 71,795 | | | 6.2 | % | | 53,016 | | | 6.3 | % |
| Amortization | 8,015 | | | 0.7 | % | | 3,591 | | | 0.4 | % |
| Total operating expenses | 79,810 | | | 6.9 | % | | 56,607 | | | 6.7 | % |
| Operating income | 136,767 | | | 11.7 | % | | 99,975 | | | 11.9 | % |
| Interest expense, net | 10,325 | | | 0.9 | % | | 10,052 | | | 1.2 | % |
| Non-operating loss (income) | 6,507 | | | 0.6 | % | | (311) | | | — | % |
| Income before income taxes | 119,935 | | | 10.3 | % | | 90,234 | | | 10.7 | % |
| Provision for income taxes | 28,760 | | | 2.5 | % | | 21,166 | | | 2.5 | % |
| Net income | $ | 91,175 | | | 7.8 | % | | $ | 69,068 | | | 8.2 | % |
| | | | | | | |
| Earnings per common share: | | | | | | | |
| Basic | $ | 2.75 | | | | | $ | 2.06 | | | |
| Diluted | $ | 2.69 | | | | | $ | 2.04 | | | |
| Weighted average common shares outstanding: | | | | | | | |
| Basic | 33,098 | | | | | 33,533 | | | |
| Diluted | 33,934 | | | | | 33,910 | | | |
| | | | | | | |
| Six Months Ended |
| February 26, 2022 | | February 27, 2021 |
| Net revenues | $ | 2,320,471 | | | 100.0 | % | | $ | 1,633,017 | | | 100.0 | % |
| Cost of goods sold | 1,874,482 | | | 80.8 | % | | 1,339,431 | | | 82.0 | % |
| Gross profit | 445,989 | | | 19.2 | % | | 293,586 | | | 18.0 | % |
| Selling, general, and administrative expenses | 146,665 | | | 6.3 | % | | 101,415 | | | 6.2 | % |
| Amortization | 16,187 | | | 0.7 | % | | 7,181 | | | 0.4 | % |
| Total operating expenses | 162,852 | | | 7.0 | % | | 108,596 | | | 6.7 | % |
| Operating income | 283,137 | | | 12.2 | % | | 184,990 | | | 11.3 | % |
| Interest expense, net | 20,567 | | | 0.9 | % | | 19,993 | | | 1.2 | % |
| Non-operating loss (income) | 12,864 | | | 0.6 | % | | (217) | | | — | % |
| Income before income taxes | 249,706 | | | 10.8 | % | | 165,214 | | | 10.1 | % |
| Provision for income taxes | 58,901 | | | 2.5 | % | | 38,723 | | | 2.4 | % |
| Net income | $ | 190,805 | | | 8.2 | % | | $ | 126,491 | | | 7.7 | % |
| Earnings per common share: | | | | | | | |
| Basic | $ | 5.75 | | | | | $ | 3.77 | | | |
| Diluted | $ | 5.58 | | | | | $ | 3.74 | | | |
| Weighted average common shares outstanding: | | | | | | | |
| Basic | 33,210 | | | | | 33,571 | | | |
| Diluted | 34,168 | | | | | 33,821 | | | |
Percentages may not add due to rounding differences.
Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited and subject to reclassification)
| | | | | | | | | | | |
| February 26, 2022 | | August 28, 2021 |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 134,832 | | | $ | 434,563 | |
| Receivables, net | 380,039 | | | 253,808 | |
| Inventories, net | 469,454 | | | 341,473 | |
| Prepaid expenses and other current assets | 25,139 | | | 29,069 | |
| Total current assets | 1,009,464 | | | 1,058,913 | |
| Property, plant, and equipment, net | 239,034 | | | 191,427 | |
| Goodwill | 484,176 | | | 348,058 | |
| Other intangible assets, net | 485,619 | | | 390,407 | |
| Investment in life insurance | 29,306 | | | 28,821 | |
| Operating lease assets | 43,473 | | | 28,379 | |
| Other long-term assets | 18,361 | | | 16,562 | |
| Total assets | $ | 2,309,433 | | | $ | 2,062,567 | |
| | | |
| Liabilities and Shareholders' Equity | | | |
| Current liabilities | | | |
| Accounts payable | $ | 211,280 | | | $ | 180,030 | |
| Income taxes payable | — | | | 8,043 | |
| Accrued expenses | 252,766 | | | 219,203 | |
| Total current liabilities | 464,046 | | | 407,276 | |
| Long-term debt, net | 536,990 | | | 528,559 | |
| Deferred income taxes | 11,458 | | | 13,429 | |
| Unrecognized tax benefits | 6,222 | | | 6,483 | |
| Long-term operating lease liabilities | 42,420 | | | 26,745 | |
| Deferred compensation benefits, net of current portion | 9,425 | | | 9,550 | |
| Other long-term liabilities | 29,885 | | | 13,582 | |
| Total liabilities | 1,100,446 | | | 1,005,624 | |
| Shareholders' equity | 1,208,987 | | | 1,056,943 | |
| Total liabilities and shareholders' equity | $ | 2,309,433 | | | $ | 2,062,567 | |
Winnebago Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited and subject to reclassification)
| | | | | | | | | | | |
| Six Months Ended |
| February 26, 2022 | | February 27, 2021 |
| Operating activities | | | |
| Net income | $ | 190,805 | | | $ | 126,491 | |
| Adjustments to reconcile net income to net cash provided by operating activities | | | |
| Depreciation | 10,767 | | | 8,559 | |
| Amortization | 16,187 | | | 7,181 | |
| Non-cash interest expense, net | 7,326 | | | 6,769 | |
| Amortization of debt issuance costs | 1,225 | | | 1,229 | |
| Last in, first-out expense | 2,772 | | | 552 | |
| Stock-based compensation | 6,891 | | | 6,981 | |
| Deferred income taxes | (1,977) | | | 914 | |
| Contingent consideration fair value adjustment | 12,887 | | | — | |
| Other, net | 2,212 | | | (3,460) | |
| Change in operating assets and liabilities, net of assets and liabilities acquired | | | |
| Receivables, net | (123,595) | | | (11,547) | |
| Inventories, net | (109,304) | | | (96,079) | |
| Prepaid expenses and other assets | 5,613 | | | 2,321 | |
| Accounts payable | 26,703 | | | 12,487 | |
| Income taxes and unrecognized tax benefits | (7,941) | | | (10,698) | |
| Accrued expenses and other liabilities | 5,570 | | | 15,222 | |
| Net cash provided by operating activities | 46,141 | | | 66,922 | |
| | | |
| Investing activities | | | |
| Purchases of property, plant, and equipment | (43,426) | | | (14,920) | |
| Acquisition of business, net of cash acquired | (228,159) | | | — | |
| Proceeds from the sale of property, plant, and equipment | 49 | | | 7,778 | |
| Other, net | (245) | | | (223) | |
| Net cash used in investing activities | (271,781) | | | (7,365) | |
| | | |
| Financing activities | | | |
| Borrowings on long-term debt | 1,943,583 | | | 1,647,764 | |
| Repayments on long-term debt | (1,943,583) | | | (1,647,764) | |
| Payments of cash dividends | (11,991) | | | (8,075) | |
| Payments for repurchases of common stock | (64,218) | | | (12,109) | |
| Payments of debt issuance costs | — | | | (224) | |
| Other, net | 2,118 | | | 1,291 | |
| Net cash used in financing activities | (74,091) | | | (19,117) | |
| | | |
| Net (decrease)/increase in cash and cash equivalents | (299,731) | | | 40,440 | |
| Cash and cash equivalents at beginning of period | 434,563 | | | 292,575 | |
| Cash and cash equivalents at end of period | $ | 134,832 | | | $ | 333,015 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | | | | | | | | | |
| Supplemental Disclosures | | | |
| Income taxes paid, net | $ | 71,344 | | | $ | 47,804 | |
| Interest paid | 11,891 | | | 12,244 | |
| | | |
| Non-cash investing and financing activities | | | |
| Issuance of common stock for acquisition of business | $ | 22,000 | | | $ | — | |
| Capital expenditures in accounts payable | 1,126 | | | 195 | |
| Increase (decrease) in lease assets in exchange for lease liabilities: | | | |
| Operating leases | 17,164 | | | (142) | |
| Finance leases | 1,698 | | | (10) | |
Winnebago Industries, Inc.
Supplemental Information by Reportable Segment - Towable
(in thousands, except unit data)
(Unaudited and subject to reclassification) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | $ | 646,601 | | | | | $ | 439,284 | | | | | $ | 207,317 | | | 47.2 | % |
| Adjusted EBITDA | 100,573 | | | 15.6 | % | | 62,366 | | | 14.2 | % | | 38,207 | | | 61.3 | % |
| | | | | | | | | | | |
| Three Months Ended |
| Unit deliveries | February 26, 2022 | | Product Mix(1) | | February 27, 2021 | | Product Mix(1) | | Unit Change | | % Change |
| Travel trailer | 10,764 | | | 70.4 | % | | 8,876 | | | 65.7 | % | | 1,888 | | | 21.3 | % |
| Fifth wheel | 4,530 | | | 29.6 | % | | 4,632 | | | 34.3 | % | | (102) | | | (2.2) | % |
| Total towables | 15,294 | | | 100.0 | % | | 13,508 | | | 100.0 | % | | 1,786 | | | 13.2 | % |
| | | | | | | | | | | |
| Six Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | $ | 1,297,625 | | | | | $ | 894,185 | | | | | $ | 403,440 | | | 45.1 | % |
| Adjusted EBITDA | 212,650 | | | 16.4 | % | | 125,509 | | | 14.0 | % | | 87,141 | | | 69.4 | % |
| | | | | | | | | | | |
| Six Months Ended |
| Unit deliveries | February 26, 2022 | | Product Mix(1) | | February 27, 2021 | | Product Mix(1) | | Unit Change | | % Change |
| Travel trailer | 21,907 | | | 69.1 | % | | 18,036 | | | 65.1 | % | | 3,871 | | | 21.5 | % |
| Fifth wheel | 9,818 | | | 30.9 | % | | 9,686 | | | 34.9 | % | | 132 | | | 1.4 | % |
| Total towables | 31,725 | | | 100.0 | % | | 27,722 | | | 100.0 | % | | 4,003 | | | 14.4 | % |
| | | | | | | | | | | |
| February 26, 2022 | | | | February 27, 2021 | | | | Change | | % Change |
Backlog(2) | | | | | | | | | | | |
| Units | 47,438 | | | | | 39,855 | | | | | 7,583 | | | 19.0 | % |
| Dollars | $ | 1,873,159 | | | | | $ | 1,206,695 | | | | | $ | 666,464 | | | 55.2 | % |
| Dealer Inventory | | | | | | | | | | | |
| Units | 21,738 | | | | | 15,952 | | | | | 5,786 | | | 36.3 | % |
(1) Percentages may not add due to rounding differences.
(2) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
Winnebago Industries, Inc.
Supplemental Information by Reportable Segment - Motorhome
(in thousands, except unit data)
(Unaudited and subject to reclassification) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | $ | 417,565 | | | | | $ | 382,575 | | | | | $ | 34,990 | | | 9.1 | % |
| Adjusted EBITDA | 46,095 | | | 11.0 | % | | 50,969 | | | 13.3 | % | | (4,874) | | | (9.6) | % |
| | | | | | | | | | | |
| Three Months Ended |
| Unit deliveries | February 26, 2022 | | Product Mix(1) | | February 27, 2021 | | Product Mix(1) | | Unit Change | | % Change |
| Class A | 588 | | | 20.8 | % | | 704 | | | 24.4 | % | | (116) | | | (16.5) | % |
| Class B | 1,641 | | | 58.0 | % | | 1,419 | | | 49.2 | % | | 222 | | | 15.6 | % |
| Class C | 602 | | | 21.3 | % | | 762 | | | 26.4 | % | | (160) | | | (21.0) | % |
| Total motorhomes | 2,831 | | | 100.0 | % | | 2,885 | | | 100.0 | % | | (54) | | | (1.9) | % |
| | | | | | | | | | | |
| Six Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | $ | 839,044 | | | | | $ | 704,964 | | | | | $ | 134,080 | | | 19.0 | % |
| Adjusted EBITDA | 96,248 | | | 11.5 | % | | 81,312 | | | 11.5 | % | | 14,936 | | | 18.4 | % |
| | | | | | | | | | | |
| Six Months Ended |
| Unit deliveries | February 26, 2022 | | Product Mix(1) | | February 27, 2021 | | Product Mix(1) | | Unit Change | | % Change |
| Class A | 1,332 | | | 23.9 | % | | 1,302 | | | 25.0 | % | | 30 | | | 2.3 | % |
| Class B | 3,088 | | | 55.5 | % | | 2,517 | | | 48.3 | % | | 571 | | | 22.7 | % |
| Class C | 1,146 | | | 20.6 | % | | 1,396 | | | 26.7 | % | | (250) | | | (17.9) | % |
| Total motorhomes | 5,566 | | | 100.0 | % | | 5,215 | | | 100.0 | % | | 351 | | | 6.7 | % |
| | | | | | | | | | | |
| February 26, 2022 | | | | February 27, 2021 | | | | Change | | % Change |
Backlog(2) | | | | | | | | | | | |
| Units | 17,255 | | | | | 14,974 | | | | | 2,281 | | | 15.2 | % |
| Dollars | $ | 2,214,470 | | | | | $ | 1,816,503 | | | | | $ | 397,967 | | | 21.9 | % |
| Dealer Inventory | | | | | | | | | | | |
| Units | 3,099 | | | | | 2,739 | | | | | 360 | | | 13.1 | % |
(1) Percentages may not add due to rounding differences.
(2) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
Winnebago Industries, Inc.
Supplemental Information by Reportable Segment - Marine
(in thousands, except unit data)
(Unaudited and subject to reclassification)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | $ | 97,309 | | | | | $ | 14,463 | | | | | $ | 82,846 | | | 572.8 | % |
| Adjusted EBITDA | 12,953 | | | 13.3 | % | | 1,024 | | | 7.1 | % | | 11,929 | | | 1,164.9 | % |
| | | | | | | | | | | |
| Three Months Ended |
| Unit deliveries | February 26, 2022 | | | | February 27, 2021 | | | | Unit Change | | % Change |
| Boats | 1,322 | | | | | 69 | | | | | 1,253 | | | 1,815.9 | % |
| | | | | | | | | | | |
| Six Months Ended |
| February 26, 2022 | | % of Revenues | | February 27, 2021 | | % of Revenues | | $ Change | | % Change |
| Net revenues | 176,627 | | | | | 26,357 | | | | | $ | 150,270 | | | 570.1 | % |
| Adjusted EBITDA | 23,523 | | | 13.3 | % | | 1,878 | | | 7.1 | % | | 21,645 | | | 1,152.6 | % |
| | | | | | | | | | | |
| Unit deliveries | February 26, 2022 | | | | February 27, 2021 | | | | Unit Change | | % Change |
| Boats | 2,457 | | | | | 130 | | | | | 2,327 | | | 1,790.0 | % |
| | | | | | | | | | | |
| February 26, 2022 | | | | February 27, 2021 | | | | Change | | % Change |
Backlog(1) | | | | | | | | | | | |
| Units | 3,059 | | | | | 339 | | | | | 2,720 | | | 802.4 | % |
| Dollars | $ | 277,860 | | | | | $ | 72,595 | | | | | $ | 205,265 | | | 282.8 | % |
| Dealer Inventory | | | | | | | | | | | |
| Units | 2,062 | | | | | 180 | | | | | 1,882 | | | 1,045.6 | % |
(1) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
Winnebago Industries, Inc.
Non-GAAP Reconciliation
(Unaudited and subject to reclassification)
Non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”), have been provided as information supplemental and in addition to the financial measures presented in the accompanying news release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the news release. The non-GAAP financial measures presented may differ from similar measures used by other companies.
The following table reconciles diluted earnings per share to Adjusted diluted earnings per share:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| February 26, 2022 | | February 27, 2021 | | February 26, 2022 | | February 27, 2021 |
| Diluted earnings per share | $ | 2.69 | | | $ | 2.04 | | | $ | 5.58 | | | $ | 3.74 | |
Acquisition-related costs(1) | 0.01 | | | — | | | 0.11 | | | — | |
Gain on sale of property, plant and equipment(1) | — | | | — | | | — | | | (0.11) | |
Litigation reserves(1) | — | | | — | | | 0.12 | | | — | |
Amortization(1) | 0.24 | | | 0.11 | | | 0.47 | | | 0.21 | |
Non-cash interest expense(1,2) | 0.11 | | | 0.10 | | | 0.21 | | | 0.20 | |
Contingent consideration fair value adjustment(1) | 0.19 | | | — | | | 0.38 | | | — | |
Tax impact of adjustments(3) | (0.13) | | | (0.04) | | | (0.31) | | | (0.07) | |
Impact of convertible share dilution(4) | 0.03 | | | 0.01 | | | 0.09 | | | — | |
Adjusted diluted income per share(5) | $ | 3.14 | | | $ | 2.21 | | | $ | 6.65 | | | $ | 3.98 | |
(1) Represents a pre-tax adjustment.
(2) Non-cash interest expense associated with the convertible notes issued as part of our acquisition of Newmar.
(3) Income tax charge calculated using the statutory tax rate for the U.S. of 24.2% and 21.0% for Fiscal 2022 and Fiscal 2021, respectively.
(4) Represents the dilution of convertible notes which is economically offset by a call/spread overlay that was put in place upon issuance.
(5) Per share numbers may not foot due to rounding.
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| February 26, 2022 | | February 27, 2021 | | February 26, 2022 | | February 27, 2021 |
| Net income | $ | 91,175 | | | $ | 69,068 | | | $ | 190,805 | | | $ | 126,491 | |
| Interest expense, net | 10,325 | | | 10,052 | | | 20,567 | | | 19,993 | |
| Provision for income taxes | 28,760 | | | 21,166 | | | 58,901 | | | 38,723 | |
| Depreciation | 5,461 | | | 4,399 | | | 10,767 | | | 8,559 | |
| Amortization | 8,015 | | | 3,591 | | | 16,187 | | | 7,181 | |
| EBITDA | 143,736 | | | 108,276 | | | 297,227 | | | 200,947 | |
| Acquisition-related costs | 486 | | | — | | | 3,870 | | | — | |
| Litigation reserves | — | | | — | | | 4,000 | | | — | |
| Restructuring expenses | — | | | — | | | — | | | 93 | |
| Gain on sale of property, plant and equipment | — | | | — | | | — | | | (3,565) | |
| Contingent consideration fair value adjustment | 6,517 | | | — | | | 12,887 | | | — | |
| Non-operating income | (10) | | | (311) | | | (23) | | | (217) | |
| Adjusted EBITDA | $ | 150,729 | | | $ | 107,965 | | | $ | 317,961 | | | $ | 197,258 | |
Non-GAAP performance measures of Adjusted diluted earnings per share, EBITDA and Adjusted EBITDA have been provided as comparable measures to illustrate the effect of non-recurring transactions occurring during the reported periods and to improve comparability of our results from period to period. Adjusted diluted earnings per share is defined as diluted earnings per share adjusted for after-tax items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as
net income before interest expense, provision (benefit) for income taxes, depreciation and amortization expense and other pretax adjustments made in order to present comparable results from period to period. Management believes Adjusted diluted earnings per share and Adjusted EBITDA provide meaningful supplemental information about our operating performance because these measures exclude amounts that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted diluted earnings per share include acquisition-related costs, gain on sale of property, plant and equipment, litigation reserves, amortization, non-cash interest expense, contingent consideration fair value adjustment, impact of convertible share dilution and the tax impact of the adjustments. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, litigation reserves, restructuring expenses, gain or loss on sale of property, plant and equipment, contingent consideration fair value adjustment, and non-operating income or loss.
Management uses these non-GAAP financial measures (a) to evaluate historical and prospective financial performance and trends as well as assess performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our Board of Directors to enable our Board of Directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for the Company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with restricted activities under the terms of our asset-based revolving ("ABL") credit facility and outstanding notes. Management believes these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry.
