8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8–K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 6, 2019

 

Thor Industries, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware (State or Other Jurisdiction of Incorporation) 1-9235 (Commission File Number) 93-0768752 (IRS Employer Identification No.)

601 East Beardsley Avenue, Elkhart, Indiana (Address of Principal Executive Offices) 46514-3305 (Zip Code)

Registrant’s telephone number, including area code: (574) 970-7460

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02 Results of Operations and Financial Condition

On March 6, 2019, Thor Industries, Inc. (the “Company”) issued a press release announcing certain financial results for the second quarter and six months ended January 31, 2019. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. The Company also posted an updated investor slide presentation and a list of investor questions and answers to the “Investors” section of its website. A copy of the Company’s slide presentation and investor questions and answers are attached hereto as Exhibit 99.2 and 99.3, respectively, and are incorporated by reference herein.

Item 7.01 Regulation FD Disclosure

The slide presentation attached hereto as Exhibit 99.2, and incorporated by reference herein, also provides updated information on industry wholesale shipments and retail market share. The Company also posted an updated list of investor questions and answers to the “Investors” section of its website. A copy of the Company’s investor questions and answers is attached hereto as Exhibit 99.3 and is incorporated by reference herein.

In accordance with general instruction B.2 to Form 8-K, the information set forth in Items 2.02 and 7.01 of this Form 8-K (including Exhibits 99.1, 99.2, and 99.3) shall be deemed “furnished” and not “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing thereunder or under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Copy of press release, dated March 6, 2019, issued by the Company
99.2	Copy of investor slide presentation, posted on the Company’s website on March 6, 2019.
99.3	Copy of investor questions and answers posted on the Company’s website on March 6, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Thor Industries, Inc.

Date: March 6, 2019 By: /s/ Colleen Zuhl

Name: Colleen Zuhl

Title: Senior Vice President and

Chief Financial Officer

EX-99.1

Exhibit 99.1

Thor Announces Results for Second Quarter of Fiscal 2019

- Acquisition of Erwin Hymer Group (EHG) completed immediately after the end of the second quarter, providing considerable opportunities for long-term global growth

- Second-quarter results reflect acquisition-related costs totaling $42.1 million and continued dealer inventory rationalization

- Company's outlook for long-term growth is supported by positive demographics, strong industry fundamentals and Thor's market-leading position

ELKHART, Ind., March 6, 2019 /PRNewswire/ -- Thor Industries, Inc. (NYSE: THO) today announced second- quarter results with net sales of $1.29 billion, compared with the record second-quarter revenue posted in the prior year. Net loss and diluted loss per share for the second quarter of fiscal 2019 were $(5.4) million and $(0.10), respectively. Second-quarter results reflect acquisition-related costs totaling $42.1 million, or $0.75 per share, and compare to record second-quarter net income and diluted earnings per share in the prior year of $79.8 million and $1.51, respectively.

Second quarter fiscal 2019 financial results reflect the impact of balancing production with market demand, as wholesale shipments declined relative to retail sales as dealers continued to sell through existing inventories before placing orders for new product, and various acquisition-related costs.

• Balancing Production and Demand: The dealer inventory rationalization process continued during the second quarter as industry wholesale shipments declined at a double-digit percentage compared with relatively stable retail registrations through the end of December 2018. This excess of retail sales over wholesale shipments resulted in reductions in dealer inventory ahead of the early spring retail shows and peak summer selling season. The overall levels of discounts and incentives increased compared with the unusually low levels recorded in the second quarter of fiscal 2018.
  
  
• Acquisition-Related Costs:
• Foreign Currency Forward Contract: On September 18, 2018, the Company entered into a foreign currency forward contract in the amount of €1.625 billion related to the anticipated cash portion of the purchase price of EHG. The contract does not qualify as a hedging instrument for accounting purposes; therefore, changes in fair value are reported in current-period earnings. As a result of the change in the U.S. dollar-Euro exchange rate from the date of the establishment of the contract to the end of the fiscal second quarter on January 31, 2019, and changes in the likelihood and timing of the acquisition closing, the Company recorded non-cash, mark-to-market losses on the forward contract of approximately $31.2 million and $73.7 million during the three and six-month periods ended January 31, 2019, respectively. At the completion of the EHG acquisition on February 1, 2019, the forward contract was closed, and the final settlement will be realized in the Company's third-quarter financial results.
  
  
• Transaction Costs: During the quarter, Thor incurred $10.9 million in expenses related to the recently completed acquisition of EHG, comprised primarily of ticking fees.

In aggregate, the acquisition-related costs for the foreign currency forward contract and transaction costs totaled approximately $42.1 million, or $0.75 per diluted share, in the fiscal second quarter.

"We made considerable progress on a number of fronts in the second quarter, supported by a positive start to the 2019 retail show season, with a number of the larger shows posting strong attendance levels, which supports our view of a stable long-term retail environment," said Bob Martin, Thor President and CEO. "We were also pleased to have closed our acquisition of EHG just after the end of the second quarter. This transformational acquisition represents a major step forward in our long-term strategic growth plan, and our entire team is focused on integrating EHG and providing strong returns for our shareholders. While we are optimistic for the long term, we also expect to face challenging conditions in the near term, as dealers continue to reduce inventory levels and we experience difficult comparisons to the record third-quarter results posted in fiscal 2018."

Second-quarter net sales decreased 35.8% for the Towable segment, 33.7% for the Motorized segment and 34.5% overall. Overall gross profit margins declined to 11.0% in the quarter, compared to 13.7% in the prior-year period, primarily reflecting the impact of lower sales levels and higher relative sales discounts and promotions compared with unusually low levels in the prior year. The levels of promotions and discounting during the quarter was more in line with our historical seasonal averages. Overhead costs increased as a percentage of sales due to lower fixed cost absorption over the reduced net sales in the quarter. Net income in the quarter was also adversely affected by an unusually high effective tax rate. The Company's second-quarter effective tax rate was 389.1% compared to a tax rate of 43.5% in the prior year because the $31.2 million non-cash, mark-to-market loss on the foreign currency forward contract is not deductible for income tax purposes. The Company expects to return to a more normalized effective tax rate of 23% to 25% by the end of its fiscal second half of 2019, before consideration of any discrete tax items and the acquisition of the Erwin Hymer Group.

As dealers continue to rationalize inventory levels following the unusually high seasonal order and wholesale delivery patterns in the first nine months of fiscal 2018, the Company has taken steps to adjust its production levels accordingly. A number of Thor's production facilities have reduced their production unit rates, while others have shifted to four-day production weeks. These reductions, combined with the start of the stronger spring and summer selling season, are expected to result in reductions in Thor's finished goods inventory. Finished goods inventory levels were elevated at January 31, 2019, in part due to the unusually bitter winter weather which forced most of the Company's operations to close for several days at the end of the fiscal second quarter. As a result of these factors, the Company expects that production and wholesale sales will be balanced with overall retail demand by the end of the normally stronger second half of the fiscal year.

Towable RVs

• Towable RV sales were $881.6 million for the second quarter, compared to the record second-quarter sales of $1.37 billion in the prior-year period. This decrease was driven primarily by lower unit volume compared with the record second-quarter unit sales last year, but was partially offset by a shift in product mix toward higher-priced units.
• Towable gross profit margin fell to 10.9% in the fiscal second quarter, reflecting increased discounting levels, as well as slightly increased warranty costs. Although warranty costs were elevated compared to year-ago levels, the rate of increase fell from the first quarter, partially due to the impact of improved quality metrics and warranty claims experience.
• Towable RV income before tax was $34.1 million, compared to $116.7 million in the second quarter last year. This decrease was driven primarily by lower sales, increased relative levels of discounting and the resulting decrease in gross profit.
• Towable RV backlog decreased $1.00 billion to $812.0 million, compared to $1.82 billion at the end of the second quarter of fiscal 2018, reflecting the positive impact of capacity additions, improved delivery times, and dealers' continuing to right-size inventory levels. The Company believes the current towable RV backlog is returning to a normalized level and is reflective of dealer trends toward smaller, but more frequent order patterns.

Motorized RVs

• Motorized RV sales were $371.5 million for the second quarter compared to the record second-quarter sales level of $559.9 million in the prior-year period. The decrease in motorized sales was driven primarily by lower unit sales compared to the record second-quarter unit sales last year, partially offset by a mix shift toward higher-priced product.
• Motorized gross profit margin fell to 9.8% in the fiscal second quarter as a result of reduced sales levels and reduced fixed overhead absorption for the quarter.
• Motorized RV income before tax was $17.2 million, compared to $37.5 million last year, driven primarily by the lower sales levels as well as the decrease in gross margin.
• Motorized RV backlog decreased $342.0 million to $639.9 million from $981.8 million a year earlier, reflecting the positive impact of capacity additions, improved delivery times, and dealers' continuing to right-size inventory levels. The Company believes the current motorized RV backlog is returning to a normalized level and is reflective of the shift in dealer order patterns to smaller and more frequent orders.

Erwin Hymer Group Acquisition
On February 1, 2019, Thor completed its acquisition of EHG. The acquisition excluded EHG's North American operations and the Canadian-specific Roadtrek brands. The Canadian-specific trademarks excluded from the transaction were such brands as Roadtrek, Aktiv, American Fastbacks and Fastbacks, and Ecotrek. To be clear, the acquisition does include the trademarks from all European Hymer brands including those formerly licensed to the North American operations. The acquisition is expected to be accretive to earnings in its first twelve months, before taking into account anticipated efficiencies, purchase accounting adjustments and transaction-related expenses.

As previously noted, Thor incurred a number of acquisition-related expenses within the second quarter. The Company expects to incur additional expenses relating to the acquisition, including professional, legal and advisory fees related to the closing of the transaction as well as the integration and implementation of enhanced controls consistent with SOX requirements. Capitalized fees related to the Company's former debt facility will be fully expensed in Thor's fiscal third-quarter results as that debt facility was terminated at the closing of the acquisition. The Company estimates that these acquisition-related costs will range from approximately $30 million to $40 million for the remainder of fiscal 2019, not including costs expected to be capitalized in connection with the debt facilities and purchase price accounting related charges. A large portion of these costs will be recognized within the fiscal third quarter.

"Now that we have completed our acquisition of EHG, we are focused on the integration of those operations as well as strengthening our balance sheet through the repayment of the debt incurred for the purchase," said Colleen Zuhl, Thor Senior Vice President and CFO. "As we review our cash priorities, our main focus will be to utilize free cash flow to reduce overall debt levels. Subsequent to the end of the quarter, we reduced borrowings under the ABL facility by $20 million. We will balance our goal of reducing our net debt level with our strategic needs to invest in the continuing growth of our business and returning cash to shareholders."

Outlook
Thor's management team and Board remain focused on creating long-term shareholder value. As a result of the combination of strong underlying industry demographics and fundamentals, Thor's leadership position in the RV industry, and the international growth opportunities presented by the EHG acquisition, the Company is optimistic about the long-term future.

"For the rest of fiscal 2019, we expect to face challenges that may impact our financial results as dealers continue to closely manage inventory to levels that better reflect current retail demand, and their ability to replenish inventory more quickly," added Bob Martin. "While we also face difficult year-over-year comparisons to the record third-quarter results for fiscal 2018, we are confident that Thor is on a path toward growth in fiscal 2020."

"We remain optimistic regarding the demographics and long-term fundamentals driving the global RV industry which gave us confidence to embark on the largest acquisition in our Company's history," commented Peter B. Orthwein, Executive Chairman of Thor. "With the acquisition of EHG now completed, we are focused on capturing synergies and driving positive cash flow which we will use to reduce our outstanding debt as quickly as possible."

Supplemental Earnings Release Materials
Thor has provided a comprehensive question and answer document, as well as a PowerPoint presentation, relating to its quarterly results and other topics. To view these materials, go to http://ir.thorindustries.com.

About Thor Industries, Inc.
Thor is the sole owner of 25 brand companies, supported by approximately 210 facilities in five countries that, combined, represent the world's largest manufacturer of recreational vehicles. For more information on the Company and its products, please go to www.thorindustries.com.

Forward Looking Statements

This release includes certain statements that are "forward looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management's current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations; raw material, commodity or chassis supply restrictions; the impact of tariffs on material or other input costs; the level and magnitude of warranty claims incurred; legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; legal and compliance issues including those that may arise in conjunction with recently completed or announced transactions; lower consumer confidence and the level of discretionary consumer spending; interest rate fluctuations; the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers; restrictive lending practices; management changes; the success of new and existing products and services; consumer preferences; the ability to efficiently utilize production facilities; the pace of acquisitions and the successful closing, integration and financial impact thereof; the potential loss of existing customers of acquisitions; our ability to retain key management personnel of acquired companies; a shortage of necessary personnel for production; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; cost structure changes; competition; the impact of potential losses under repurchase agreements; the potential impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market and political conditions; and changes to investment and capital allocation strategies or other facets of our strategic plan. Additional risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE (the "Erwin Hymer Group") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, changes in Euro-U.S. dollar exchange rates that could impact the mark-to-market value of outstanding derivative instruments, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and Erwin Hymer Group's business. These and other risks and uncertainties are discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2018 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended January 31, 2019.

We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

THOR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE
THREE AND SIX MONTHS ENDED JANUARY 31, 2019 AND 2018
($000's except share and per share data) (Unaudited)
	Three Months Ended January 31,						Six Months Ended January 31,
	2019		% Net Sales (1)	2018		% Net Sales (1)	2019		% Net Sales (1)	2018		% Net Sales (1)
Net sales	$	1,290,576		$	1,971,560		$	3,046,552		$	4,203,228
Gross profit	$	141,596	11.0%	$	270,328	13.7%	$	348,852	11.5%	$	603,513	14.4%
Selling, general and administrative expenses	85,069		6.6%	117,088		5.9%	187,762		6.2%	251,351		6.0%
Amortization of intangible assets	12,526		1.0%	13,796		0.7%	25,117		0.8%	27,354		0.7%
Acquisition-related costs	42,059		3.3%	—		—%	99,148		3.3%	—		—%
Interest income (expense), net	816		0.1%	(953)		—%	1,162		—%	(1,984)		—%
Other income (expense), net	(885)		(0.1)%	2,574		0.1%	(4,597)		(0.2)%	5,332		0.1%
Income before income taxes	1,873		0.1%	141,065		7.2%	33,390		1.1%	328,156		7.8%
Income taxes	7,290		0.6%	61,313		3.1%	24,854		0.8%	119,998		2.9%
Net and comprehensive income (loss)	$	(5,417)	(0.4)%	$	79,752	4.0%	$	8,536	0.3%	$	208,158	5.0%
Earnings (loss) per common share
Basic	$	(0.10)		$	1.51		$	0.16		$	3.95
Diluted	$	(0.10)		$	1.51		$	0.16		$	3.94
Weighted-avg. common shares outstanding - basic	52,806,981			52,694,680			52,766,739			52,653,303
Weighted-avg. common shares outstanding - diluted	52,867,687			52,861,140			52,883,645			52,839,752
(1) Percentages may not add due to rounding differences

SUMMARY CONDENSED CONSOLIDATED BALANCE SHEETS ($000)
	(Unaudited)					(Unaudited)
	January 31, 2019		July 31, 2018			January 31, 2019		July 31, 2018
Cash and equivalents	$	305,833	$	275,249	Current liabilities	$	750,643	$	769,330
Accounts receivable, net	344,782		487,235		Other long-term liabilities	72,624		71,594
Inventories, net	561,842		537,909		Stockholders' equity	1,906,931		1,937,741
Prepaid expenses and other	35,699		11,281
Total current assets	1,248,156		1,311,674
Property, plant & equipment, net	550,471		522,054
Goodwill	377,693		377,693
Amortizable intangible assets, net	363,231		388,348
Deferred income taxes and other, net	190,647		178,896
Total	$	2,730,198	$	2,778,665		$	2,730,198	$	2,778,665

Contact
Investor Relations:
Mark Trinske, Vice President of Investor Relations
mtrinske@thorindustries.com
(574) 970-7912

EX-99.2

Exhibit 99.2

www.thorindustries.com INVESTOR PRESENTATION MARCH 6, 2019

2 Forward Looking Statements This presentation includes certain statements that are “forward looking” statements within the meaning of the U . S . Private Securities Litigation Reform Act of 1995 , Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks . These forward looking statements are not a guarantee of future performance . We cannot assure you that actual results will not differ materially from our expectations . Factors which could cause materially different results include, among others, raw material and commodity price fluctuations ; raw material, commodity or chassis supply restrictions ; the impact of tariffs on material or other input costs ; the level and magnitude of warranty claims incurred ; legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppliers ; the costs of compliance with governmental regulation ; legal and compliance issues including those that may arise in conjunction with recently completed or announced transactions ; lower consumer confidence and the level of discretionary consumer spending ; interest rate fluctuations ; the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers ; restrictive lending practices ; management changes ; the success of new and existing products and services ; consumer preferences ; the ability to efficiently utilize production facilities ; the pace of acquisitions and the successful closing, integration and financial impact thereof ; the potential loss of existing customers of acquisitions ; our ability to retain key management personnel of acquired companies ; a shortage of necessary personnel for production ; the loss or reduction of sales to key dealers ; disruption of the delivery of units to dealers ; increasing costs for freight and transportation ; asset impairment charges ; cost structure changes ; competition ; the impact of potential losses under repurchase agreements ; the potential impact of the strength of the U . S . dollar on international demand for products priced in U . S . dollars ; general economic, market and political conditions ; and changes to investment and capital allocation strategies or other facets of our strategic plan . Additional risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE (the "Erwin Hymer Group") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, changes in Euro - U . S . dollar exchange rates that could impact the mark - to - market value of outstanding derivative instruments, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and Erwin Hymer Group's business . These and other risks and uncertainties are discussed more fully in Item 1 A of our Annual Report on Form 10 - K for the year ended July 31 , 2018 and Part II, Item 1 A of our quarterly report on Form 10 - Q for the period ended January 31 , 2019 . We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this presentation or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law .

3 Second Quarter 2019 Update ……………………………………………. . 4 Overview & Current Industry Conditions ………………………………… 12 Appendix: Financial & Market Data ………………………………………. 16 Table of Contents

4 Second Quarter 2019 Update

5 Second Quarter Overview Taking Action to Strategically Address Current Conditions While Also Optimistic on Long - Term Growth Opportunities • Helping North American dealers right - size their inventory by adjusting volumes to meet current demand and reduce delivery lead times • Executing on our long - term strategic plan ◦ Closed on acquisition of Erwin Hymer Group (EHG) on February 1, 2019. Transformational acquisition to provide platform for long - term, global growth ◦ Acquisition - related costs in the quarter totaled $42.1 million ◦ Named industry and Thor veteran, Troy James, as newly created Senior Vice President of International Operations to lead integration efforts ◦ Teams on the ground in Germany to identify and harvest initial synergy opportunities • Stable North American retail market is anticipated in calendar 2019, setting a foundation for future wholesale demand • Long - term consumer and demographic trends support continued RV industry growth in North America and Europe • North American dealer inventory correction continues moving from double - digit growth to year - over - year decreases in dealer inventory in the fiscal second quarter. Ongoing work to balance retail channel inventory will likely persist in fiscal 2019, setting up a resumption of growth in fiscal 2020 • EHG transaction costs will impact diluted EPS throughout FY 2019 • Focused on cash flow generation to reduce overall debt from the acquisition

6 Second Quarter 2019 Key Financial Metrics • Sales reduced to more normalized levels for our second quarter, reflecting historical seasonal patterns — prior year exhibited highly unusual strength in the first half of the fiscal year. Current year sales also impacted by ongoing dealer inventory reductions • Gross profit down due to sales decrease and elevated levels of promotions and discounts compared to prior year's unusually low levels • Second quarter diluted EPS of $(0.10), including approximately $42.1 million in acquisition - related costs resulting in an unfavorable impact of $0.75 per diluted share (including a non - cash, mark - to - market loss on the foreign currency forward contract of approximately $31.2 million) • Continuing to balance production with current demand as dealers look to optimize inventory levels to minimize financing costs and improve turns

7 Second Quarter 2019 Towable Segment • Sales of travel trailers and fifth wheels decreased by 35.4% and 36.4%, respectively • Gross profit was adversely impacted by lower sales levels, increased discounting and incentives, as well as slightly increased warranty costs • Market share down slightly for calendar year 2018, with U.S. Towable share decreasing from 48.4% to 48.2%, and Canadian Towable share down from 55.1% to 52.9%* • Backlog decrease due in part to continuing dealer inventory correction as well as increased capacity reducing lead times * Source: Statistical Surveys, Inc. YTD December 31, 2018 vs. YTD December 31, 2017 Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustm ent and is continuously updated, and is often impacted by delays in reporting by various states or provinces.

8 • Sales of Class A and Class C decreased by 32.5% and 34.6%, respectively • Gross profit fell in the fiscal second quarter as a result of reduced sales levels and reduced fixed overhead absorption for the quarter • U.S. Class A and C market share for calendar year 2018 increased from 41.2% to 42.5%* • Canadian Class A and C market share increased from 40.9% to 44.6% for calendar year 2018* • Backlog decreased in part due to ongoing dealer inventory correction as well as shorter lead times * Source: Statistical Surveys, Inc. YTD December 31, 2018 vs. YTD December 31, 2017 Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustm ent and is continuously updated, and is often impacted by delays in reporting by various states or provinces. Second Quarter 2019 Motorized Segment

9 Second Quarter Key Stats Fiscal Quarters Ended January 31 Income Statement Balance Sheet & Cash Flow * Includes $42.1M in acquisition - related costs. ** Includes $0.75 in unfavorable EPS impact from acquisition - related costs.

10 Erwin Hymer Group Acquisition Driving Global Growth • Transaction closed on February 1, 2019, integration teams already engaged in Germany • Creates the #1 global RV manufacturer with a leading portfolio of brands, dealer network and global reach • Establishes a leading position in growing European RV market with a complementary and geographically diverse product portfolio • Significant mutual benefits to be derived from sharing design, R&D, technology, engineering and manufacturing excellence • Proforma financials to be filed in 8 - K/A 75 days after closing • Aligned with Thor’s strategic plan to enhance shareholder value – transaction to be accretive to earnings in first 12 months (1) (1) Before anticipated efficiencies, purchase accounting adjustments and transaction - related expenses

11 Snapshot of Combined Company Based on FY 2018 Results Adds Scale Balances Product Mix Broadens Global Footprint + + + = = = Revenue ($billions) Revenue % Revenue % / / / Notes: 4Q CY2018 average exchange rate of USD / EUR 1.14; Revenue based on FYE 7/31/2018 for Thor (audited) and FYE 8/31/2018 fo r EHG, unaudited <

12 Overview & Current Industry Conditions

13 Long - Term Operational Excellence • 38 - year record of profitability – 23.3% compounded annual five - year EPS growth (1) ◦ Balance of organic growth and accretive acquisitions • Experienced leadership – c urrent Thor management team has an average of almost 20 years in the RV industry, leading through various market conditions and cycles • Focused on cash flow – primary focus on reducing debt and supporting existing operations, then returning cash to shareholders via dividends and stock buybacks (1) Based on Diluted EPS from continuing operations (2) 2Q19 YTD Diluted EPS includes forward currency forward contract and transaction costs related to the acquisition of EHG or ap pro ximately $99.1 million, or $1.77 per share (3) The declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any su ch future dividends are subject to compliance with the credit facilities and determination of the Board, and are dependent upon future earnings, cash flows and other factors. (27.5)% (95.9)%

14 Effectively Managing Through North American Dealer Inventory Correction Flexing Production and Costs Dealers Making Progress on Inventory Levels Continuing to Invest with a Long - term Focus • Dealer inventory levels showed solid progress in right - sizing inventory as total dealer inventory went from double - digit year - over - year growth rates in 4Q18, to single - digit growth in 1Q19 and then to a decrease of 11.4% in the second quarter • Current retail environment remains stable, with early retail shows posting strong attendance • Small percentage decrease in total RV industry wholesale unit shipments in 2018 still represents the second - highest year for total shipments since the 1970s • Regularly evaluating all capital expenditures to maintain adequate capacity to meet long - term demand • Completing large production expansions at Airstream and Jayco in FY19, while carefully considering opportunities to delay some capital projects until overall demand improves • Ensuring adequate production capacity for long - term growth to avoid significant volatility of demand similar to early FY18 • Reviewing current demand level by product line including assessing current dealer inventory levels • Aligning production volume through reduction of daily production rates or shortening production schedules • Focusing on building to dealer orders and limiting the number of open units produced • Reducing costs over time while taking advantage of our variable cost structure – with a large majority of costs that are variable, we can slow down quickly and remain profitable • Maintaining flexibility to react quickly to changing market conditions, consistent with long - term goals

15 Healthy North American RV Channel Dealer Inventory Approaching Normalized Levels: • Following inventory shortages in FY17, dealers ordered aggressively in early FY18 • Although retail demand grew modestly in calendar 2018, that growth was not sufficient to bring dealer inventory levels down • Thor responded by reducing production levels to meet current demand • Average age of RV inventory on dealer lots remains healthy • Used inventory levels generally remain low, supporting trade - in values and demand for new RVs Wholesale Financing Prompting Better Inventory Management: • Credit broadly available • Normal seasonal credit line utilization • Lenders remain disciplined with curtailments, which combined with modestly higher interest rates is motivating dealers to focus on turning inventory Retail Financing is Supportive of Growth: • Credit broadly available • Lenders remain disciplined on down payments and terms • Minimal sub - prime exposure; RV loan delinquency rates among the lowest of consumer loans tracked by the American Bankers Association, most recently at 0.75% in the third quarter of 2018

16 Appendix: Financial & Market Data

17 Thor Operating Entities As of February 1, 2019 Joint Venture

18 Thor's RV Product Range Towable Segment Motorized Segment Note: Retail prices noted above are general ranges. Class A fully enclosed, bus - style motorhome; retail price $80,000 - $750,000 Class C living area built on van or pickup chassis; retail price $80,000 - $250,000 Class B van motorhomes; retail price $150,000 - $250,000 Specialty Trailers includes camping trailers, truck campers and horse trailers with living quarters; retail price $12,000 - $110,000 Travel Trailers hitch to the bumper of the tow vehicle; retail price $12,000 - $150,000 Fifth Wheels hitch to a specially mounted hitch in the bed of a pickup truck; retail price $20,000 - $185,000

19 Motorized Recreational Vehicles : van motorhomes on van chassis Retail selling price: € 44,000 – € 85,000; $ 50 , 000 – $ 100 , 000 EHG's RV Product Range Caravans Note: Retail prices noted above are general ranges. Towable Recreational Vehicles : hitch to the bumper of the tow vehicle Retail selling price: € 17,000 – € 96,000; $19, 000 – $1 1 0, 00 0 Campervans Motorized Recreational Vehicles : fully enclosed, built on van or pickup chassis or bus - style motorhome Retail selling price: € 42,000 – € 260,000; $ 50 , 000 – $ 300 , 000 Motorcaravans

20 • Formed TH2 joint venture in 3Q18, with Thor investment to date of $53.9 million, to introduce new products and services focused on enhancing the enjoyment, safety, connectivity and convenience of RV ownership, while reinforcing loyalty to Thor brands • Providing innovation solutions to an ever - widening consumer base to capture interest and retain life - long customers • Launched Togo app, including functions such as: ▪ RV service and maintenance records, checklists, registration data and reminders ▪ Roadtrippers ( www.roadtrippers.com ) — trip planning app to help RV owners see the world ▪ Mighway ( www.mighway.com ) — connects RV owners and renters in the U.S. and New Zealand • TH2's platform targets numerous additional revenue streams, including subscriptions, advertisements and commissions through partnerships with trusted third - party service providers TH2: Enhancing the RV Experience

21 North American Consumer Trends Potential RV Buyers 77 Million Households Camping Each Year Consumers Interested in RVs Target • KOA study shows that 77 million households camped in 2017, an increase of 6 million from 2014, and they camped more often (1) • One fourth of campers use an RV, but 44% of those camping in an RV do not own the RV they are using. (1) Campers who borrow or rent an RV are the next logical target for the industry • Refining those interested in experiencing the outdoors in an RV are the core target audience for Thor (1) Source: KOA 2018 North American Camping Report (2) Source: RVIA, Spring RV Roadsigns, February 2019 THE OPPORTUNITY: With the RV market totaling approximately 500,000 units annually, even a small number of the millions of outdoor enthusiasts deciding to purchase an RV could have a significant impact on the total market. (2)

22 • Industry retail demand continued to grow in 2018, though the pace of growth moderated from the unusually high double - digit increases in 2016 and 2017. Consumers continue to value RVs as a flexible option for spending leisure time outdoors with friends and family • Wholesale units typically outpace retail in the early part of the calendar year; historically, sales become more balanced as we reach the peak retail selling season. These trends were reversed in 2018, as dealers responded to inventory shortages in the prior year with aggressive ordering and resulting inventory build. Dealers continue working to reduce overall inventory levels, enabling a return to more normal seasonal patterns to meet retail demand RV Industry Overview - North America Seasonal Shipment Patterns RV Industry Demand Calendar Year 2016 2017 2018 Industry Retail Registrations (1) 416,054 units 471,100 units 487,893 units +10.8% +13.2% +3.6% Industry Wholesale Shipments (2) 430,691 units 504,599 units 483,672 units +15.1% +17.2% (4.1)% Consumer Confidence vs. RV Retail Registrations (1) Source: Statistical Surveys, Inc., U.S. and Canada (2) Source: Recreation Vehicle Industry Association (3) Source: The Conference Board, Consumer Confidence Survey ®

23 RV Industry Overview - North America RV Wholesale Market Trends (Units 000's) Towable RV Wholesale Market Trends (Units 000's) YTD Shipments (Units) Dec 2018 Dec 2017 Unit Change % Change 483,672 504,599 (20,927) (4.1)% YTD Shipments (Units) Dec 2018 Dec 2017 Unit Change % Change 426,087 441,961 (15,874) (3.6)% Motorized RV Wholesale Market Trends (Units 000's) YTD Shipments (Units) Dec 2018 Dec 2017 Unit Change % Change 57,585 62,638 (5,053) (8.1)% Historical Data: Recreation Vehicle Industry Association (RVIA) (e) Calendar year 2019 represents most recent RVIA estimate as of Spring RV Roadsigns, published in February 2019

24 RV Industry Overview - North America Thor RV Retail Market Share Trend (1) Dealer Inventory of Thor Products RV Industry Retail Market Share (1) (1) Source: Statistical Surveys Inc., U.S. and Canada, calendar years 2014 - 2018; Thor historical results adjusted to include results of Jayco for all periods presented. Note: Towable market share includes Travel Trailers, Fifth Wheels, Camping Trailers and Park Models. (2) Forest River includes Palomino, Coachmen, Prime Time, Shasta and Dynamax • Inventory is approaching more appropriate levels given current retail demand trends, and will likely be rightsized by the end of fiscal 2019 • At the end of 2 Q FY 19 , levels decreased compared to the prior year, marking the significant progress being made to reduce inventory levels . Year over year, dealer inventory was up 4 . 9 % at October 31 , 2018 , compared to an 11 . 4 % decrease at January 31 , 2019 • Dealers actively managing inventory to ensure adequate supply for the spring show season and summer selling season • Current age of d ealer inventories of Thor products on dealers' lots remains low on a historical standard Dealer Inventory (Units) Jan 31, 2019 Jan 31, 2018 Unit Change % Change 137,900 155,650 (17,750) (11.4)% Y/E 12/31/18 Y/E 12/31/17 Y/E 12/31/16 Total Share % Total Share % Total Share % THOR 232,382 47.6 % 225,792 47.9 % 196,947 47.3 % Forest River (2) 161,782 33.2 % 160,437 34.1 % 145,482 35.0 % Grand Design 25,526 5.2 % 18,573 3.9 % 11,818 2.8 % Winnebago 15,661 3.2 % 15,104 3.2 % 13,127 3.2 % Gulfstream 5,533 1.1 % 5,661 1.2 % 5,148 1.2 % REV Group 3,717 0.8 % 4,012 0.9 % 3,540 0.9 % Subtotal 444,601 91.1 % 429,579 91.2 % 376,062 90.4 % All Others 43,292 8.9 % 41,521 8.8 % 39,992 9.6 % Grand Total 487,893 100.0 % 471,100 100.0 % 416,054 100.0 %

25 RV Industry Overview - Europe Source: European Caravan Federation (ECF), calendar years 2017 - 18 Country Touring Caravans Motor Caravans Leisure Vehicles - Total 2017 2018 Change % 2017 2018 Change % 2017 2018 Change % Austria 940 956 1.7 % 1,230 1,480 20.3 % 2,170 2,436 12.3 % Belgium 1,157 1,177 1.7 % 4,110 4,613 12.2 % 5,267 5,790 9.9 % Denmark 2,322 2,358 1.6 % 347 592 70.6 % 2,669 2,950 10.5 % Finland 652 681 4.4 % 1,390 1,573 13.2 % 2,042 2,254 10.4 % France 8,128 8,124 — % 21,333 23,878 11.9 % 29,461 32,002 8.6 % Germany 22,702 24,327 7.2 % 40,568 46,859 15.5 % 63,270 71,186 12.5 % Italy 764 763 (0.1 )% 5,101 6,114 19.9 % 5,865 6,877 17.3 % Netherlands 6,716 6,628 (1.3 )% 1,751 1,998 14.1 % 8,467 8,626 1.9 % Norway 2,883 2,779 (3.6 )% 3,630 4,166 14.8 % 6,513 6,945 6.6 % Portugal 76 57 (25.0 )% 219 256 16.9 % 295 313 6.1 % Slovenia 105 141 34.3 % 230 278 20.9 % 335 419 25.1 % Spain 1,767 1,829 3.5 % 3,953 4,857 22.9 % 5,720 6,686 16.9 % Sweden 3,440 3,349 (2.6 )% 6,405 7,218 12.7 % 9,845 10,567 7.3 % Switzerland 1,637 1,633 (0.2 )% 4,516 4,471 (1.0 )% 6,153 6,104 (0.8 )% UK 24,033 21,184 (11.9 )% 14,062 14,634 4.1 % 38,095 35,818 (6.0 )% Others 1,716 1,695 (1.2 )% 1,924 1,988 3.3 % 3,640 3,683 1.2 % Total 79,038 77,681 (1.7 )% 110,769 124,975 12.8 % 189,807 202,656 6.8 %

26 Sources: CIVD; Statistical Surveys RV Industry Overview New Vehicle Registrations by Continent ('000)

www.thorindustries.com

EX-99.3

Exhibit 99.3

601 East Beardsley Avenue, Elkhart, Indiana 46514-3305

Second Quarter 2019 Investor Questions & Answers

Published March 6, 2019

Forward Looking Statements

This document includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations; raw material, commodity or chassis supply restrictions; the impact of tariffs on material or other input costs; the level and magnitude of warranty claims incurred; legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; legal and compliance issues including those that may arise in conjunction with recently completed or announced transactions; lower consumer confidence and the level of discretionary consumer spending; interest rate fluctuations; the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers; restrictive lending practices; management changes; the success of new and existing products and services; consumer preferences; the ability to efficiently utilize production facilities; the pace of acquisitions and the successful closing, integration and financial impact thereof; the potential loss of existing customers of acquisitions; our ability to retain key management personnel of acquired companies; a shortage of necessary personnel for production; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; cost structure changes; competition; the impact of potential losses under repurchase agreements; the potential impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market and political conditions; and changes to investment and capital allocation strategies or other facets of our strategic plan. Additional risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE (the "Erwin Hymer Group") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, changes in Euro-U.S. dollar exchange rates that could impact the mark-to-market value of outstanding derivative instruments, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and Erwin Hymer Group's business. These and other risks and uncertainties are discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2018 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended January 31, 2019.

We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this document or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

1

Executive Overview

▪ Acquisition of Erwin Hymer Group (EHG) completed immediately after the end of the second quarter, providing considerable opportunities for long-term global growth

▪ Second-quarter results reflect acquisition-related costs totaling $42.1 million and continued dealer inventory rationalization

▪ Company's outlook for long-term growth is supported by positive demographics, strong industry fundamentals and Thor's market-leading position

For the second quarter fiscal 2019:

▪ Net sales decreased 34.5% to $1.29 billion

▪ Gross profit decreased 47.6% to $141.6 million

▪ Income before taxes down to $1.9 million, inclusive of acquisition-related costs

▪ Diluted EPS decreased to $(0.10), inclusive of acquisition-related costs

▪ Incurred acquisition-related costs of $42.1 million with an EPS impact of $0.75 per share

Outlook:

▪ Stable retail market is anticipated in fiscal 2019 with continued dealer inventory correction. Anticipate difficult comparison in the third quarter, followed by more favorable comparisons, setting a foundation for resumption of growth in fiscal 2020.

Planning assumptions reflect:

▪ Positive long-term RV industry fundamentals. This assumption is supported by favorable demographics, high consumer confidence rates, favorable employment and wage trends, adequate availability of credit at historically low rates and a healthy housing market

▪ High long-term dealer optimism. Dealer optimism remains high as demand continues to be driven by favorable demographic and lifestyle growth trends, including the ongoing strength of baby boomer customers, as well as first-time and younger buyers

▪ Challenging wholesale conditions in the North American market. Due to unusually strong dealer order and wholesale delivery patterns experienced in fiscal 2018 and the continuation and anticipated completion of dealer inventory correction, we are planning for tougher year-over-year comparisons in the first nine months of fiscal 2019, with more favorable top-line comparisons near the end of the year. Similar to the quarterly progression of our top line, we anticipate gross margin pressure to be greater in the first nine months of the year

▪ Impact of transaction costs on our diluted EPS in FY 2019. During the second quarter, Thor incurred $42.1 million in expenses related to the pending acquisition of EHG, comprised primarily of the impact of the foreign currency forward contract of $31.2 million and transaction costs of $10.9 million

▪ Effective tax rate. Our effective tax rate of 389.1%, compared to a tax rate of 43.5% in the prior year, is higher than usual because the $31.2 million non-cash, mark-to-market loss on the foreign currency forward contract recorded in the second fiscal quarter is not deductible for income tax purposes. The Company expects to return to an effective tax rate of 23-25% in its fiscal second half of 2019, before consideration of any discrete tax items and the acquisition of the Erwin Hymer Group

2

Quick Reference to Contents

A.	Consolidated Financial Highlights	4
B.	Summary of Key Quarterly Segment Data – Towables	5
C.	Summary of Key Quarterly Segment Data – Motorized	6
D.	Second Quarter Operating Results	7
E.	Current Hot Topics	9
	a.   Acquisition of EHG
	b.   Dealer Inventory Levels
	c.   Material Costs, Including Discussion of Trade Tariffs
	d.   TH2 Joint Venture
F.	Drivers of Demand	14
	a.   Key Consumer Trends
	b.   Younger Buyers Entering the Marketplace
G.	Current Market Conditions	15
	a.   North American Market
	b.   Labor Conditions
	c.   Competitive Environment
	d.   Credit Conditions – Wholesale & Retail
	e.   Consolidation of Dealer Base
H.	Balance Sheet and Cash Flow	18
I.	Key Economic Indicators	21
J.	Outlook	22

3

Consolidated Financial Highlights

2Q data is as of January 31, 2019 and 2018; FY data is as of or for the applicable fiscal year ended July 31

(1) Q2FY19 includes $42.1M in acquisition-related costs

(2) Q2FY19 includes $0.75 in unfavorable EPS impact from acquisition-related expenses

(3) Does not reflect EHG acquisition-related debt incurred subsequent to the end of 2Q FY19 

4

Summary of Key Quarterly Segment Data – Towables

	Three Months Ended January 31, 2019		Three Months Ended January 31, 2018		% Change
NET SALES:
Towables
Travel Trailers and Other	$	535,779	$	829,318		(35.4	)%
Fifth Wheels		345,785		543,800		(36.4	)%
Total Towables	$	881,564	$	1,373,118		(35.8	)%

	Three Months Ended January 31, 2019		Three Months Ended January 31, 2018		% Change
# OF UNITS:
Towables
Travel Trailers and Other		25,222		42,979		(41.3	)%
Fifth Wheels		7,536		12,367		(39.1	)%
Total Towables		32,758		55,346		(40.8	)%

	As of January 31, 2019		As of January 31, 2018		% Change
ORDER BACKLOG:
Towables	$	812,020	$	1,816,520		(55.3	)%

MARKET SHARE SUMMARY (a)	Calendar Year
	2018			2017
U.S. Market		48.2	%		48.4	%
Canadian Market		52.9	%		55.1	%
Combined North American Market		48.7	%		49.2	%

^(a) Source: Statistical Surveys, Inc. YTD December 31, 2018 vs. YTD December 31, 2017 Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment and is continuously updated, and is often impacted by delays in reporting by various states or provinces.

Thor Unit Shipments versus Industry

Our Towable unit shipments for the quarter decreased by 40.8%. According to statistics published by RVIA, for the three months ended January 31, 2019, combined industry travel trailer and fifth wheel wholesale unit shipments decreased 28.1% compared to the same period last year. According to statistics published by Stat Surveys for the three-month periods ended December 31, 2018 and 2017, our market share for travel trailers and fifth wheels combined was 48.1% and 48.5%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year. 

5

Summary of Key Quarterly Segment Data – Motorized

	Three Months Ended January 31, 2019		Three Months Ended January 31, 2018		% Change
NET SALES:
Motorized
Class A	$	173,488	$	257,092		(32.5	)%
Class C		182,502		278,853		(34.6	)%
Class B		15,505		23,964		(35.3	)%
Total Motorized	$	371,495	$	559,909		(33.7	)%

	Three Months Ended January 31, 2019		Three Months Ended January 31, 2018		% Change
# OF UNITS:
Motorized
Class A		1,392		2,364		(41.1	)%
Class C		2,589		4,191		(38.2	)%
Class B		111		180		(38.3	)%
Total Motorized		4,092		6,735		(39.2	)%

	As of January 31, 2019		As of January 31, 2018		% Change
ORDER BACKLOG:
Motorized	$	639,876	$	981,837		(34.8	)%

MARKET SHARE SUMMARY (a)	Calendar Year
	2018			2017
U.S. Market		39.4	%		39.3	%
Canadian Market		38.2	%		35.2	%
Combined North American Market		39.3	%		39.1	%

^(a) Source: Statistical Surveys, Inc. YTD December 31, 2018 vs. YTD December 31, 2017

Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment and is continuously updated, and is often impacted by delays in reporting by various states or provinces.

Thor Unit Shipments versus Industry

Our Motorized unit shipments decreased by 39.2% for the quarter, compared to an industry decrease of 27.5% for the three months ended January 31, 2019. According to statistics published by Stat Surveys for the three-month periods ended December 31, 2018 and 2017, our market share for motorhomes was 36.2% and 37.1%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

6

Second Quarter Operating Results

1. Thor reported a decline in consolidated sales of 34.5% for the second quarter of fiscal 2019 versus the prior year. What factors drove the lower sales levels?

A. The decline in second quarter sales reflects several factors:

▪ Historical Unit Sales: Unit sales are more in line with historical seasonal sales trajectory which exclude the record quarter sales from 2017 and 2018. Second quarter sales are typically the lowest for the year. Historically our first half of the fiscal year has lower sales than the second fiscal half, however, this trend was reversed in fiscal 2018 which was caused by the unusually high dealer orders in the first half of 2018.

▪ Historical Growth Rates: We also faced more challenging comparisons to the prior fiscal year given the unusually strong level of sales in the second quarter of fiscal 2018. In fiscal 2018, dealers sought to ensure adequate supply and inventory levels following supply constraints in fiscal 2017, and as a result, our consolidated sales in the second quarter of fiscal 2018 grew 24.1%. Sales in the second quarter of fiscal 2019 is more closely aligned with historical seasonal retail demand and current dealer ordering patterns.

▪ Inventory: The decline in dealer orders as they sought to adjust their inventory levels has had its desired effect as it combined with modest retail demand growth in calendar 2018 to significantly improve the position of our dealers' inventories as they enter the peak seasonal retail selling season. We experienced a sizable decrease in total unit shipments amounting to a 40.8% decrease in towables and a 39.2% decrease in motorized, which is reflective of our continuing efforts to balance inventory levels in the channel. In addition to the reduction in unit shipments, dealers were disciplined in managing their own inventory levels as they sought to deleverage inventory financing costs in an environment of faster delivery times by manufacturers.

▪ Discounts: While elevated on a year over year basis because of the unusually low levels in the second quarter of 2018, the level of discounting in our second quarter of fiscal 2019 represented a return to our historical seasonal levels of discounting and incentives.

We plan to continue managing our production and shipments to provide our dealers with the appropriate levels of inventory to meet current and expected retail demand in a timely manner. Looking ahead, our objective is to align our sales (wholesale) with those of our dealers (retail) over time, which may result in quarterly variations in our top-line growth metrics. As the inventory adjustment period moves towards its conclusion, we anticipate that dealer order patterns will match retail demand in the near future.

2. Thor's second quarter gross margin decreased by 270 basis points on a year-over-year basis. What were the main factors causing this result?

A. The reduction in gross margin in the second quarter was the result of a continuation of a number of factors and issues we experienced in the first quarter of our fiscal year. As we disclosed after our first quarter of 2019, corresponding with the channel rebalancing, we have seen a year-over-year increase in the overall level of discounts, particularly on towable products. The increased discounts reflect a move to historical seasonal levels of discounts and incentives relative to the historically low levels experienced in the first half of fiscal 2018. Increased discounts reduce net sales, but with no corresponding reduction in cost of goods sold, discounts directly reduced gross margins. During the second quarter, we also experienced an increase in year-over-year warranty costs though the rate of increase fell from that experienced in the first quarter. Overhead costs as a percentage of sales also increased due to the sales reduction coupled with cost increases due to expanding facilities. Labor costs have stabilized as industry production levels have come down in recent months and did not significantly impact second quarter gross margins on a year-over-year basis.

7

3. Thor’s gross margin for the second quarter was 11.0% compared to 11.8% for the first quarter. What caused this sequential decrease in margin?

A. In general, our business does not lend itself to meaningful sequential analysis because of varying seasonal demand and production. Historically, our second quarter typically has been characterized by the lowest sales and margins when compared to the other quarters of the year.

4. On a percentage of sales basis, Thor’s Selling, General and Administrative (SG&A) expenses were up modestly compared to the prior year, at approximately 6.6% compared to 5.9% last year. What were some of the key factors that affected expenses during the quarter?

A. Our recent historical trend of SG&A expenses reflects a general range of 5.5% to 6.0% of net sales. The costs included in SG&A are primarily variable in nature and fluctuate with the level of sales and income before income taxes, however there are some elements that are more fixed in nature.

SG&A expenses at the segment, Corporate and consolidated levels were lower in dollar terms, primarily due to a reduction in our management incentive compensation costs which are based on pre-tax profitability and provides us with cost savings when profitability is lower, as was the case in the second quarter of this year. As a result of the fixed costs within SG&A and the significant decrease in sales, we saw a relative increase in SG&A as a percent of sales in the second quarter.

5. Thor reported a decline in income before income taxes of 98.7% on a decline in sales of 34.5% for the second quarter of fiscal 2019. What caused this result?

A. A number of factors contributed to Thor’s earnings performance for the second quarter including lower sales, lower gross margin percent, increased SG&A as a percent of sales, and the expenses associated with the acquisition of the Erwin Hymer Group which closed on February 1, 2019. Included in these acquisition-related expenses was a $31.2 million non-cash, mark-to-market loss on a foreign currency forward contract for the U.S. dollar-euro exchange rate covering the cash portion of the purchase price, as well as $10.9 million in transaction costs primarily related to ticking fees.

6. Thor reported a significant increase in its effective tax rate for the quarter, what caused this increase?

A. Although the Tax Act in 2017 favorably impacted Thor's effective tax rate, the primary reason for the increase in the second-quarter effective tax rate was the $31.2 million non-cash, mark-to-market foreign currency forward contract loss recorded in the fiscal second quarter which is not deductible for tax purposes. As a result, the entire amount of the mark-to-market loss reduced Thor's pre-tax and net income by the same amount.

7. What are the key factors affecting current backlog levels? Are you seeing any material cancellations to orders placed earlier in the year?

A. Our backlog of $1.45 billion reflects the impact of dealers' efforts to rightsize inventory levels and our ability, due to capacity additions over the past several quarters, to deliver dealer orders in a timely manner. We have not experienced any material cancellations to orders placed earlier in the fiscal year by our dealers, though we believe that dealers have shifted to smaller, more frequent orders to deleverage and to better manage inventory levels, which has also impacted backlogs.

8

8. Is there value today in the capacity expansion efforts in recent years?

A. Yes. While our expansions in capacity have impacted results, we remain confident that they will provide for more efficient and more disciplined growth in the long term. We continue to focus on our efforts to balance channel inventory levels with current demand and will remain flexible when managing production levels. In certain product categories, we took steps to further address current demand levels including the implementation of extended holiday plant shutdowns and reduced production rates.

9. What was Thor's adjusted EBITDA for the second quarter?

A. Although we do not disclose non-GAAP numbers, here are some items within our financial statements that might be helpful in considering this question:

▪ Income before income taxes of $1.9 million from our income statement

▪ Net interest income of $0.8 million calculated from our income statement

▪ Depreciation and amortization of intangibles totaling $23.5 million from our business segment footnote

▪ Expenses related to the acquisition of EHG of $42.1 million as shown on our income statement

▪ Increase in our LIFO reserve of $1.7 million calculated from the inventories footnote Q2 vs. Q1 2019

Current Hot Topics

1. What was your strategic rationale for acquiring the Erwin Hymer Group? Do you believe this acquisition will be accretive to earnings?

A. The EHG acquisition provides Thor with an entry into the 6 billion-plus Euro growing European RV market with a leadership position, enabling us to go to market with a company that has a 60+ year track record of excellence within the RV industry, represented by outstanding brands that are synonymous with innovation and quality.

Also, the Erwin Hymer Group has a complementary product lineup to Thor's that spans across multiple price points and categories, and is supported by a strong dealer network. As a result, this compelling combination has created a global platform that we expect will generate significant positive free cash flow and provide extensive synergy opportunities. Our customers and dealers can also enjoy distinct benefits from our combined design, R&D, technology, engineering and manufacturing excellence.

The transaction is expected to be accretive to earnings in the first 12 months, before taking into account anticipated synergies, purchase accounting adjustments and transaction-related costs.

2. What information can you provide us regarding EHG’s performance?

A. We will be providing pro forma financials for our combined Company in an amended 8-K filing 75 days after closing. The amended 8-K will include pro forma financial information for fiscal 2018 and the first quarter of fiscal 2019.

9

3. How does the European RV market compare to the North American RV market in terms of growth rates? Has the European RV market fully recovered from the 2008-09 recession?

A. Relative to the North American market, the European RV market has been growing at a slower rate over the past few years and is approximately a third of the size of the North American Market. The European RV market has not yet fully recovered from the recession of 2008-09, in part due to the negative effects of the European debt crisis which slowed the economy's growth considerably in 2012-14. As a result of these conditions, we view the prospects for continued growth in the European market positively, as their recovery appears 2-3 years behind the North American recovery, offering a compelling path to growth.

Based on recent reports from the European Caravan Federation, sales of European RVs rose by just under 7% in 2018, with total unit sales exceeding 200,000 for the first time in more than a decade. Total vehicle sales were 202,656, up 6.8% from 2017 levels, as caravans fell 1.7% to 77,681 units and motor caravans increased 12.8% to 124,975 units.

10

4. What is Thor's strategy for EHG's involvement in the Chinese RV market?

A. The Chinese RV market is still emerging and Thor’s strategy is to maximize EHG’s entry into this market through its joint venture with a Chinese manufacturer positioning Thor and EHG for success by leveraging the knowledge and insights of an experienced joint venture partner.

5. Can you provide any more insights into the sources and amounts of synergies you are targeting with EHG?

A. As we have previously disclosed, we expect the transaction to be accretive to earnings in the first 12 months, before taking into account anticipated synergies, purchase accounting adjustments and transaction-related expenses.

As for the types of synergies, similar to our previous acquisitions, we expect to gain synergies from sharing best practices, leveraging our size and global reach within the supply chain, identifying more advanced product features from the European market that may resonate with our consumers in North America, and vice-versa, and leveraging decades long relationships with important dealers on both continents.

Additionally, we recently named Thor and industry veteran, Troy James, to the newly created position of Senior Vice President of International Operations. With his extensive experience, Mr. James will be based in Germany and will lead a team to identify the best opportunities for near-term synergies. That team has already begun its work.

6. How do you expect to achieve significant synergies given how far apart the operations are geographically?

A. We have U.S. resources in Germany right now to help identify synergies and other efficiency opportunities. Many of the synergies we expect to achieve rely on improved efficiencies and the sharing of best practices, which are less dependent on geographic proximity.

Importantly, we also share a number of key suppliers, which have operations in North America and Europe, and we expect that our combined purchasing volumes will result in improved terms from these suppliers.

7. Are you concerned that you may have purchased EHG at the top of the cycle and potentially overpaid?

A. We were, and are, keenly aware of the timing of the acquisition in light of the market conditions. But consistent with past transactions, we evaluated the transaction with a long-term view. This opportunity was unique and transformational. The long-term opportunities for revenues and earnings more than justify our investment. An opportunity to acquire the well-established European market leader may not present itself more than once in a lifetime, so we saw the long-term value of such a rare opportunity as well as the great strategic fit between the companies as we made the decision. Our investors know that we are debt adverse and, rest assured, we remain so, but the long-term opportunity value of this acquisition demanded that we pursue the acquisition for our shareholders.

8. Will Thor have any liabilities associated with EHG's former North American operations?

A. EHG's existing contractual obligations consist of a handful of items that had been specifically guaranteed to third parties which were specifically valued in the price adjustment related to the carve out of the North American operations. EHG is not obligated to assume any operating liabilities, general creditor obligations or any other type of liability related to the North American businesses.

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9. How will the exclusion of EHG's former North American operations affect your ability to sell Hymer products in North America?

A. The acquisition excluded EHG's North American operations and the Canadian-specific Roadtrek brands. The Canadian-specific trademarks excluded from the transaction were such brands as Roadtrek, Aktiv, American Fastbacks and Fastbacks, and Ecotrek. To be clear, the acquisition does include the trademarks from all European Hymer brands including those formerly licensed to the North American operations.

10. What was the final purchase price of EHG and how will this price be allocated?

A. At closing, the Company paid cash consideration of approximately 1.5 billion Euro (approximately $1.7 billion at the exchange rate as of February 1, 2019) and issued 2,256,492 shares of the Company’s common stock to the sellers. The common stock will be valued at the February 1, 2019 closing price of $63.89. Therefore, the total purchase price amounts to 1.7 billion Euro, or approximately $1.9 billion at the February 1, 2019 exchange rate of $1.1471/Euro.

Due to the recent timing of the close of the acquisition, the Company has not yet allocated the purchase price to the fair value of the assets acquired and the liabilities assumed at the acquisition date. In our third quarter 10-Q, we will disclose the preliminary allocation of the purchase price based on the fair market values of assets and liabilities, including amortizable intangible assets, with any remaining value allocated to goodwill.

11. How will you report EHG's operating results? Will it be in a separate segment or combined with your existing segments?

A. Although we have not made a final determination, we anticipate EHG will fall within a separate reporting segment for "International Operations" based on its expected reporting structure. As a result, we anticipate reporting our results under Motorized, Towable, International and Other segments.

12. Has the additional capacity in the industry changed dealer ordering?

A. In this new environment, we have seen many dealers shifting their order patterns to smaller but more frequent ordering to meet evolving demand.

13. What are you seeing in terms of commodity price inflation?

A. Currently, we are seeing some improvements in material costs in the second quarter as steel and aluminum costs have stabilized. Although we have seen some stability in commodity costs in recent months, we may see renewed inflationary pressures if there are further tariffs imposed on Chinese or European imports.

14. Can you describe the TH2 business model for us?

A. TH2 offers a variety of products and services focused on enhancing the enjoyment, safety, connectivity and convenience of RV ownership and use. In addition to making our products more attractive to technologically savvy consumers and attracting more consumers to the RV market, we believe that TH2's functionality will provide numerous revenue streams, including subscriptions, advertisements and commissions.

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Under the tradename Togo^®, TH2 offers a suite of consumer apps. designed to offer transformational improvements to the RV user experience, Togo consists of products and services that inspire confidence and peace-of-mind in RV users.

In addition, the TH2 global joint venture is a comprehensive digital platform including Roadtrippers (www.roadtrippers.com) and Roadtrippers Australasia - leaders in digital trip planning services; Cosmos, a digital platform for RV fleet management, product pricing, and booking and rental management; Mighway (www.mighway.com) a leader in peer-to-peer RV rentals; and Campermate, Australia and New Zealand’s top camping app.

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15. What impact did the joint venture have on Thor’s earnings in the second quarter and year to date? What is the anticipated earnings impact of the joint venture in FY 2019?

A. TH2 has performed in line with our expectations. For the second quarter, Thor recorded a loss of $2.2 million which represents its 50% share of the financial results for the quarter. For the year-to-date period, Thor has recorded a loss of $3.7 million. The joint venture is expected to experience losses in fiscal 2019 as it continues its ramp-up phase, but such losses are not expected to have a material impact on Thor’s earnings for fiscal year 2019.

Drivers of Demand

1. What trends are you seeing with regard to new consumers entering the RV and camping markets and do you believe that new consumers will continue to support growth in the sector?

A. There are many positive consumer trends that bode well for the long-term future of the RV industry. According to the 2018 North American Camping Report from Kampgrounds of America (KOA):

▪ More than 6 million new households have started camping since 2014, with an increase of 2.6 million new camper households in 2017.

▪ As campers age, they generally begin to camp more using RVs. Approximately 7-in-10 current RVers are Millennials or Gen Xers.

▪ New campers are now more diverse than the overall U.S. population.

▪ In 2017, 61% of campers stayed in a tent – marking a prime target market for Thor to convert tent campers to RVers.

▪ The percentage of Millennial RV campers has increased from 29% in 2014 to 37% in 2017, marking a significant increase in market penetration for this important age demographic which tends to value experiences over possessions. This preference fits well with RVs providing the ideal vehicle to enhance those experiences.

Looking ahead, we believe we are uniquely positioned to capitalize on these favorable trends and we are optimistic about our future growth with new consumers.

2. What other trends are influencing growth in the RV lifestyle?

A. We believe the trends mentioned above will continue to drive long-term growth in the RV marketplace. RV camping continues to be viewed as an attractive way to spend time with family and friends. Other trends driving RV growth include:

▪ The strong correlation with the growth in recreational sports – reflecting a trend toward becoming more active and leading a healthy lifestyle, as well as a growing use of RVs with youth sports leagues and tournaments.

▪ The wide variety of RV uses, including tailgating at spectator sports, from college and professional football to auto racing and youth sports.

▪ The ability an RV provides to escape stress and relax on short notice for long weekends or other quick getaways.

▪ Key shifts in consumer travel preferences, including: the lower cost of RV vacations compared to other forms of travel, the increasing inconvenience of domestic air travel and increasing interest in more experiential vacations, which often include an outdoor element.

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3. What impact might RV sharing have on your business?

A. We believe that trends in RV sharing are a positive for Thor and the industry for a variety of reasons.

▪ First, peer-to-peer sharing allows more consumers to learn about RVs and experience how they can enhance their outdoor experiences.

▪ Second, RV sharing can help overcome one of the major concerns of potential RV owners that might prevent them from buying, which is how to maximize the use of their RV. If they can share the use and ultimately share the cost of their RV, that opens up RV ownership to a broader population.

▪ Finally, RV sharing has the potential to create a broader sense of community among RV owners and users which can further enhance the ownership experience for younger consumers or consumers new to the RV lifestyle. Thor also supports RV sharing through its investment in TH2, Togo and the Mighway app.

4. Do you have statistical data supporting the widely-stated claim that younger buyers are entering the RV market?

A. Yes – there are a number of sources that are supportive of this fact, including RVIA’s 2016 Industry Profile which references a Nielsen research study performed for Go RVing™, which found that the typical RV owner is 45 years old compared to a similar study from 2015 that indicated the typical owner was 48 years old. This study did not distinguish between owners of new versus used units, but is indicative of the reduction in the age of RV consumers. In addition, using data from Statistical Surveys, Inc., we have analyzed annual retail registrations of new RV units from 2014 through 2018 and noted that by age group, the 25-34 age group has more than doubled as a percentage of total U.S. RV registrations while the 35-44 age group has increased from 15.0% to 20.7% of U.S. RV registrations over the same period. In aggregate, consumers under age 55 have increased from 39.6% of total U.S. retail registrations in 2014 to 51.5% of total U.S. retail registrations in 2018, highlighting the increase in younger buyers entering the market.

Current Market Conditions

1. How would you describe the current health of the North American retail RV market?

A. Current retail data suggests that the market remains healthy, with modest levels of retail growth in calendar 2018 over record 2017 sales. For calendar year 2018, North American RV industry retail registrations, as reported by Statistical Surveys, Inc., increased by 3.6% versus the prior year, with towable registrations climbing 4.0% and motorized registrations finishing flat. This follows two years of unusually strong growth, as North American retail registrations saw increases of 13.2% and 10.8% in calendar years 2017 and 2016, respectively.

2. Through 2018, how have industry wholesale shipments to dealers performed versus the prior year? What is the current industry outlook by RVIA for industry wholesale shipments for calendar year 2019?

A. During the 12 months ended December 31, 2018, industry wholesale shipments to dealers, as reported by the RVIA, reflect a 4.1% decline, with towable RVs down by 3.6% and motorized RVs down 8.1% compared to the prior year. This was the third strongest year since the 1970's.

The February 2019 RVIA forecast estimates total industry wholesale shipments decreasing by 4.9% in 2019, as manufacturers continue to match their shipments with units being sold by their dealers. As a reminder, industry wholesale shipments in 2018 decreased 4.1% following a year of 17.2% growth in 2017. RVIA noted that except for the past two calendar years, RV shipments for 2019 are expected to be higher than any prior year since 1973.

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3. Can you comment on dealer sentiment?

A. Dealers continue to express strong long-term optimism and are demonstrating their optimism by investing in their businesses, by expanding their existing facilities, adding additional service facilities and building new dealer locations or by buying other dealers to expand their market footprint.

4. Can you comment on the early retail shows?

A. Attendance at the early spring retail shows has been positive, with many of the largest shows posting strong attendance. Strong attendance numbers are a positive leading indicator as many consumers buy at the shows, while others attend shows to assess product offerings and options and return to dealer lots to make purchases later in the season.

5. How are increasing interest rates affecting retail demand for RVs, and how are increasing interest rates affecting dealer stocking patterns?

A. At this point, we have not seen any significant impact of the recent increases in interest rates affecting consumer purchasing patterns, as rates are still very low by historical standards and the rate changes to date have had a modest impact on the average monthly financed payment.

The impact of higher interest rates on dealer floorplan financing costs have increased over the past year. As dealers seek to manage their interest expense, they appear more disciplined in the level of inventory they are willing to hold, particularly during the winter season.

6. How does your variable cost structure and flexible production model help you in challenging times like you are experiencing now?

A. With our variable cost structure, we are able to review specific market segments and product categories and evaluate immediate production needs in light of current demand, which may change seasonally. If necessary, we can reduce production on a specific line through a variety of methods, from reducing daily production rates and reducing the number of production days per week, to taking extended holiday shutdowns and temporarily closing plants. Historically, we employed all of these tactics to remain profitable, and as we have seen demand reduced from dealers reducing inventory levels, we have reduced daily production rates on some product lines, while on other product lines we took extended holiday shutdowns in the second quarter. We will continue to adjust production levels to reflect current demand in the coming quarters. Unlike many highly automated, vertically integrated manufacturers, our variable cost structure enables us to idle plants without significant ongoing cost of maintenance or high levels of non-cash costs such as depreciation.

We have also effectively managed headcount in production and non-production staff while being mindful of our need to maintain production capacity as seasonal demand increases. These actions allow us to better match levels of non-production workforce and overhead expenses with current production.

7. Given your variable cost structure, why did we see a larger relative decrease in profit relative to the decrease in net sales?

A. While we take pride in our variable cost structure, we note that even though the vast majority of our costs are variable, we do have fixed costs that will affect our profitability when we have significant decreases in sales as we saw during the first half of fiscal 2019. Also, it takes some time to adjust to new production levels.

We have said in the past that our incremental margins are within a few percentage points of our overall margins, and this relationship held during the second quarter, excluding the impact of the relative increase in discounting and incentives compared with the unusually low levels realized in the year-ago quarter

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8. How does your flexible production model help you as growth in the market resumes?

A. When we think about our flexible production model we view it both from the perspective of maintaining profitability in soft markets but also being able to more quickly respond to shifts in markets as they move higher, making us more responsive to market demand.

9. What is your current capacity utilization?

A. We don’t disclose capacity utilization, since it varies based on the type of product we are producing at each plant at that time (which is variable), but we have stated previously that a number of our subsidiaries pulled back production earlier than the industry, including taking some extended holiday shutdowns in December and January. We have adequate capacity to meet demand in the upcoming peak selling season as we flex production to meet demand from dealers.

10. What is the state of the labor market where you operate – in terms of the availability of employees as well as wage inflation?

A. The labor market remains relatively tight in Northern Indiana, however, with the recent slowdown in RV production industry wide, we have seen a stabilization in labor availability and cost. We have also implemented various initiatives to attract and retain the best workers and minimize the labor force pressures.

11. Can you describe the current competitive environment?

A. The RV industry remains highly competitive, as our subsidiaries and our outside competitors continue to drive the industry forward with new and better products for dealers and consumers.

During the first and second quarters of FY 2019, some competitors were being aggressive with promotions, and in order to protect our space on dealer lots, we experienced an increase in promotional costs and discounting compared to recent periods.

12. Did your market share change significantly in 2018?

A. No, our market share has generally been stable for 2018 vs 2017 as reported by Stat Surveys. For North America:

▪ Total market share down 30 basis points from 47.9% to 47.6%

▪ Towable market share down 50 basis points from 49.2% to 48.7%

▪ Motorized market share up 20 basis points from 39.1% to 39.3%

13. Have you been able to raise prices in this environment?

A. As we have stated previously, a number of our subsidiaries did selective price increases on some units at the beginning of calendar 2019, but this was done on a case-by-case basis.

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14. What is the nature of the current dealer and consumer credit environment?

A. Both dealer and consumer credit environments are healthy. The wholesale lending environment remains healthy, with historical seasonal credit line availability and utilization, as well as continued discipline among lenders concerning credit lines and curtailments.

Retail lending standards are also healthy, and credit is broadly available to credit worthy consumers with reasonable down payments and various length of term options available. The retail RV delinquency rate remains low and is significantly below the average delinquency rate of closed-end consumer loans.

15. How does consolidation within the dealer base impact demand for Thor products? Do you anticipate increased pressure on margins as a result of dealer consolidation?

A. Competition for dealers is inherent in our industry. Recent dealer consolidation has not impacted this reality, nor do we expect this to significantly change in the foreseeable future. Thor’s ability to develop long-standing relationships with the most productive dealers in the market has been, and will always be, crucial to our success, with or without further consolidation.

To date, our margins have not been considerably impacted by dealer consolidation. We do not anticipate significant pressure from further consolidation because our dealers appreciate the value that Thor offers, with our breadth of products and brands, people and day-to-day support. Larger dealers, in particular, value partnering with a company that has the ability to provide a large volume of units within a reasonable time period throughout the year.

Balance Sheet and Cash Flow

1. What was working capital at January 31, 2019 and January 31, 2018? What drove the change in working capital year over year?

A. Working capital at January 31, 2019, was $497.5 million compared to $517.1 million at January 31, 2018, a decrease of $19.6 million. Excluding the non-operational forward contract of $73.7 million, working capital at January 31, 2019 would have been $571.2 million, or a $54.1 million increase from last year. This $54.1 million increase is primarily due to an increase of $196.1 million in cash and cash equivalents and a reduction in accounts payable of $134.6 million, mostly offset by a decrease in receivables of $279.3 million. The reductions in accounts receivable and accounts payable are due to the reduction in sales and production compared to a year ago.

2. What is Thor’s current capital expenditure estimate for fiscal 2019, and what were capital expenditures year to date for fiscal 2019?

A. For fiscal 2019, for our North American operations consisting of the organic Thor entities, we are working on previously announced expansion projects, including:

▪ Jayco's expansion in Twin Falls, ID, to improve service to dealers in the Western US and Canada. This facility is expected to be completed in the fall of 2019.

▪ Airstream's 700,000 square foot facility, in Jackson Center, OH, that will include new production space for its iconic travel trailers as well as a state-of-the-art training center and visitor center. The new facility is expected to be completed in the fall of 2019.

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As a result of these and other capital projects, we anticipate North American capital expenditures to total approximately $115 million for fiscal 2019. Through the second quarter of fiscal 2019, capital expenditures totaled $54.8 million. We are currently in discussions with EHG regarding their capital expenditure needs for the remainder of fiscal 2019 and will provide additional details in future communications.

As we look ahead, we see continued long-term demand in both our industry and specifically for Thor’s products, including our newly acquired EHG products globally. Our recent capital investments in additional capacity provide us the ability to respond timely to dealer orders and will benefit us for the long-term as the industry continues to grow.

Management remains committed to balancing financial prudence with the goals of our strategic plan, as we endeavor to best position Thor to seize the opportunities presented by the demand for our products and our growing market.

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3. Will Thor utilize its share buyback program in light of its commitment to paying down the acquisition debt?

A. We will continue to evaluate repurchases strategically and opportunistically, but our first priority will be to pay down debt. Over time, we plan to repurchase stock to offset the issuance of 2.3 million shares to the Hymer family in connection with the acquisition of EHG.

4. What is your free cash flow, and how quickly do you plan to pay down the debt?

A. While we do not publish non GAAP numbers, key cash flow components for the six months ended January 31, 2019 are:

▪ Net cash provided by operations of $134.6 million;

▪ Capital expenditures of $54.8 million

▪ Regular dividends paid of $41.2 million

Select key cash flow components (exclusive of EHG) for the past five years were as follows:

	Cash Flow from Operations		CapEx		Regular Dividends		Debt Payments
2018	$	466,508	$	138,197	$	77,989	$	145,000
2017		419,333		115,027		69,409		215,000
2016		341,209		51,976		62,970		—
2015		247,860		42,283		57,381		—
2014		149,261		30,406		49,024		—

Historically Thor has not carried significant levels of debt for long periods, so our first priority is to pay down the debt from the EHG acquisition as quickly as possible. Subsequent to the end of the second quarter, we have already paid down $20 million on the borrowing under the ABL that was incurred at closing.

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Key Economic Indicators

Health of North American Economy Supports Expected Continued Market Growth

Sources: (1) Statistical Surveys, Inc.; (2) The Conference Board, Consumer Confidence Survey®; (3) Recreation Vehicle Industry Association; (4) U.S. Bureau of Economic Analysis

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Outlook

1. What are the key factors that have been supporting the growth in the North American RV industry and do you anticipate this growth to continue?

A. Several factors have been supporting long-term growth in the RV industry, including (1) the health of the U.S. and Canadian economies, (2) demographic trends and lifestyle changes that are favorably contributing to RV usage and ownership and (3) the continued focus on product innovation and affordability – providing the benefits of the RV experience to a growing base of potential consumers.

The health of the overall U.S. economy is evidenced by certain key indicators that our management team closely monitors, including:

▪ A growing economy (GDP), healthy consumer confidence levels and increased personal income and discretionary consumer spending, which should continue to benefit from lower tax rates stemming from the recent enactment of the Tax Act as well as increases in wages.

▪ Strong job growth and low unemployment which forms a foundation for consumer spending. A healthy job market and improving wages provide consumers with the confidence they need to make large discretionary purchases like RVs.

▪ Historically low interest rates with adequate credit availability, relatively stable fuel prices and a healthy housing market.

▪ See prior page for historical correlation between RV growth and certain key economic metrics.

Favorable demographic trends and lifestyle changes are influencing a greater level of RV participation and continue to drive retail sales, including:

▪ Increasing North American camping trends, as described earlier in this document, and further described in KOA’s 2018 annual survey report. Findings in this report reflect the growth in the number of overall campers and the frequency in which they camp, as well as a younger and more diverse group of new participants.

▪ Specifically, Millennials comprised 31% of the total population in the most recent census, yet accounted for 40% of the total campers in 2017, which increased from 38% of the total campers in 2016, and 34% in 2015. Of note, the percentage of Millennials camping in RVs has increased from 29% of total RV campers in 2014 to 37% of total RV campers in 2017, indicating that this important demographic group is increasingly embracing RVs for their outdoor experiences.

▪ An expanding array of uses for RVs are driving incremental demand – such as outdoor recreation (an increasing contributor to overall U.S. GDP), tailgating at spectator sports and other lifestyle events.

Finally, the continued focus on innovation and affordability is providing compelling products, as well as enhancing the overall RV experiences by offering:

▪ Award-winning products across the entire price spectrum, reflecting innovative and contemporary floor plans and designs, as well as improved control systems and technologies. We also anticipate that the recent acquisition of EHG will provide even more opportunities to commercialize technology innovations that will resonate with our evolving consumer base.

We anticipate the factors mentioned above will continue to support industry growth for the foreseeable future, specifically solid macroeconomic fundamentals and the strong secular trends influencing new consumer growth and market expansion. Unlike many of the expansions we have experienced over the past three decades, the current expansion has been driven largely by new consumers adopting the RV lifestyle. We view such an expansion to be more sustainable over the long term.

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2. What is your current outlook for the European RV market?

A. Based on recent industry statistics, caravan registrations in Germany rose 7.2% in calendar 2018, and for January 2019 were up 9.3% compared with January 2018. For motor caravans, registrations in Germany were up 15.5% in calendar 2018 and were up 10.1% in January 2019. We have seen many of the same demographic and market growth drivers in the European market that we have seen in the North American market, but we believe the recovery in the European market is two to three years behind the North American recovery. Given the stronger growth we have seen in the German market in particular and the European market more broadly, we expect the overall RV market in Europe will grow at a somewhat faster pace than the North American market in calendar 2019.

3. Given that you posted your first quarterly loss since the Great Recession in the fiscal second quarter, are you expecting to return to profitability in the fiscal third quarter?

A. While we posted a small net loss on a GAAP basis in the fiscal second quarter, it was primarily due to costs associated with the EHG closing as well as the foreign exchange forward contract loss, which was not deductible for income tax purposes. The foreign exchange contract was closed at the beginning of the fiscal third quarter, and we are heading into the seasonally strongest time of year, but we do not provide guidance on future financial results.

4. What is your outlook for Thor for fiscal year 2019?

A. We anticipate a relatively challenging environment to persist in the second half of the fiscal year. We continue to expect a stable North American retail market to provide support for dealers as they rightsize their inventory levels. While we believe we are closer to the end of the dealer inventory correction than the beginning, it will likely take until the end of the fiscal year to complete. Once it does end, wholesale sales will match retail sales which have remained steady. Our dealers remain optimistic about current and near-term economic conditions and new consumers entering the RV market, prompting many to expand their dealership and invest in long-term growth. Demand for Airstream products in particular remains robust and supports our plans to expand this facility.

With respect to organic growth, we will likely continue to face challenges for both the top line and gross margin as we navigate the dealer inventory rebalancing. As a result, we expect a difficult organic growth comparison in the fiscal third quarter, with a somewhat more favorable comparison in the fourth quarter. As our dealers balance their inventory levels, we have seen a shift in order patterns toward smaller, more frequent orders reflecting our ability to serve their needs with shorter delivery lead times.

As dealer orders and our resulting production schedules return to a more historical pattern, we will be in a strengthened position for a resumption of organic growth in North America for fiscal 2020.

5. What are your strategic plans for fiscal 2019 and beyond?

A. We remain focused on driving organic growth in our current businesses through prudent investments in capital projects, technology and product innovation. In addition, we will be focused on integrating our acquisition of the Erwin Hymer Group, which marks our first acquisition outside of North America. We already have teams on the ground in Germany to identify and implement the best near-term opportunities for sharing best practices, coordinating technological innovations and achieving operational synergies. Through all of these strategic plans, we remain focused on quickly paying down debt and increasing returns to shareholders through dividends and share repurchases. We believe these combined actions will enhance shareholder value.

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