WINNEBAGO INDUSTRIES INC
For the period ended May 25, 2024. Filed Jun 20, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 25, 2024 · Filed Jun 20, 2024
WGO$31.34-5.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-02-24; filed 2024-03-21.
0000107687-24-000008
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-05-25; filed 2024-06-20.
0000107687-24-000017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 120 current paragraphs.
86 unchanged; 24 reworded; 10 added; 10 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Net revenues decreased primarily due to product mix and lower volume related to market conditions.
Current report
Adjusted EBITDA margin decreased primarily due to operational efficiency challenges and higher warranty expense due to a favorable prior year trend, partially offset by lower discounts and allowances.
Current report
Adjusted EBITDA margin decreased primarily due to deleverage and operational efficiency challenges, partially offset by cost containment efforts.
Current report
Net revenues decreased primarily due to a decline in unit volume related to market conditions and product mix.
Current report
Adjusted EBITDA margin decreased due to deleverage, partially offset by cost containment efforts.
Current report
Results of Operations - Nine Months Ended May 25, 2024 Compared to the Nine Months Ended May 27, 2023
Current report
Net revenues decreased primarily due to product mix and lower volume related to market conditions.
Current report
Adjusted EBITDA margin decreased primarily due to deleverage and higher warranty expense due to a favorable prior year trend, partially offset by lower discounts and allowances.
Current report
Net revenues decreased primarily due to a decline in unit volume related to market conditions and product mix.
Current report
Adjusted EBITDA margin decreased due to deleverage and operational efficiency challenges, partially offset by lower incentive-based compensation.
Removed paragraphs (10)
Previous report
Net revenues decreased primarily due to lower unit sales related to market conditions and unfavorable product mix.
Previous report
Adjusted EBITDA margin decreased primarily due to deleverage and higher warranty experience compared to prior year, partially offset by lower discounts and allowances.
Previous report
Adjusted EBITDA margin decreased due to deleverage, higher warranty experience, higher discounts and allowances, and operational efficiency challenges, partially offset by cost containment efforts.
Previous report
Net revenues decreased primarily due to a decline in unit volume related to market conditions, unfavorable product mix and higher discounts and allowances.
Previous report
Results of Operations - Six Months Ended February 24, 2024 Compared to the Six Months Ended February 25, 2023
Previous report
NM: Not meaningful.
Previous report
Net revenues decreased primarily due to lower unit sales related to market conditions and unfavorable product mix.
Previous report
Adjusted EBITDA margin decreased primarily due to deleverage and higher warranty experience compared to prior year, partially offset by lower discounts and allowances.
Previous report
Net revenues decreased primarily due to a decline in unit volume related to market conditions, unfavorable product mix, and higher discounts and allowances.
Previous report
Adjusted EBITDA margin decreased due to deleverage, higher discounts and allowances, and start up costs related to new facilities, partially offset by lower incentive-based compensation.
Reworded paragraphs (24)
Previous wording
Our business continues to be challenged by macroeconomic conditions impacting retail consumers and our dealers, such as inflation and elevated interest rates. These factors have contributed to lower consumer spending and reduced short-term demand for large discretionary products such as RVs and marine products. In response, our dealers continue to exercise caution when managing stocking levels. In the first six months of Fiscal 2024, these trends resulted in decreased sales due to declines in unit volume. We anticipate that as consumer demand stabilizes, dealers will exhibit a willingness to maintain inventory levels in calendar year 2024, consistent with a one-for-one retail-to-wholesale ordering pattern. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders.
Current wording
Our business continues to be challenged by macroeconomic conditions impacting retail consumers and our dealers, such as inflation and elevated interest rates. These factors have contributed to lower consumer spending and reduced short-term demand for large discretionary products such as RVs and marine products. In response, our dealers continue to exercise caution when managing stocking levels. In the first nine months of Fiscal 2024, these trends resulted in decreased sales due to declines in unit volume. We anticipate that as consumer demand stabilizes, dealers will exhibit a willingness to maintain stable inventory levels and ordering patterns. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders.
Previous wording
Included in "Results of Operations" below for the three and six months ended February 24, 2024 compared to the comparable prior year period is a reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable GAAP measure. We have included these non-GAAP performance measures as a comparable measure to illustrate the effect of non-recurring transactions that occurred during the reported periods and to improve comparability of our results from period to period. We believe Adjusted EBITDA provides meaningful supplemental information about our operating performance as this measure excludes amounts from net income that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, change in fair value of note receivable, contingent consideration fair value adjustment, loss on note repurchase, and non-operating income or loss.
Current wording
Included in "Results of Operations" below for the three and nine months ended May 25, 2024 compared to the comparable prior year period is a reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable GAAP measure. We have included these non-GAAP performance measures as a comparable measure to illustrate the effect of non-recurring transactions that occurred during the reported periods and to improve comparability of our results from period to period. We believe Adjusted EBITDA provides meaningful supplemental information about our operating performance as this measure excludes amounts from net income that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, change in fair value of note receivable, contingent consideration fair value adjustment, loss on note repurchase, and non-operating income or loss.
Previous wording
Gross profit as a percentage of revenue decreased primarily due to deleverage and higher warranty experience compared to prior year.
Current wording
Gross profit as a percentage of revenue decreased primarily due to deleverage, operational efficiency challenges, and higher warranty expense due to a favorable prior year trend, partially offset by cost containment efforts.
Previous wording
Operating expenses were relatively flat, primarily due to lower incentive-based compensation, offset by increased amortization related to Lithionics intangible assets.
Current wording
Operating expenses increased primarily due to strategic investments and increased amortization related to Lithionics intangible assets.
Previous wording
The change in our effective tax rate was primarily driven by the non-deductible loss on note repurchase, partially offset by an increase in tax credits year-over-year.
Current wording
The change in our effective tax rate was primarily driven by an increase in R&D credits year-over-year and a favorable reserve release in the current year over decreased income.
Previous wording
Net revenues decreased primarily due to a decline in unit volume related to market conditions and a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by lower discounts and allowances.
Current wording
Net revenues increased primarily due to an increase in unit volume, partially offset by a reduction in average selling price per unit related to product mix.
Previous wording
Net revenues decreased primarily due to a decline in unit volume related to market conditions, higher levels of discounts and allowances and unfavorable product mix, partially offset by price increases related to higher motorized chassis costs.
Current wording
Net revenues decreased primarily due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis costs.
Previous wording
The following is an analysis of changes in key items included in the Consolidated Statements of Income for the six months ended February 24, 2024 compared to the six months ended February 25, 2023:
Current wording
The following is an analysis of changes in key items included in the Consolidated Statements of Income for the nine months ended May 25, 2024 compared to the nine months ended May 27, 2023:
Previous wording
Gross profit as a percentage of revenue decreased primarily due to deleverage, higher warranty experience compared to prior year and higher discounts and allowances.
Current wording
Gross profit as a percentage of revenue decreased primarily due to deleverage, higher warranty expense due to a favorable prior year trend and operational efficiency challenges, partially offset by cost containment efforts.
Previous wording
The loss on note repurchase recorded in the three months ended February 24, 2024 is related to the refinancing of the 2025 Convertible Notes. Refer to Note 9 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.
Current wording
The loss on note repurchase recorded in the nine months ended May 25, 2024 is related to the refinancing of the 2025 Convertible Notes. Refer to Note 9 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.
Previous wording
Our effective tax rate increased primarily due to the impact of the non-deductible loss on note repurchase and net favorable benefit in the prior year related to stock compensation, partially offset by an increase in tax credits year-over-year over decreased income in the current year.
Current wording
Our effective tax rate increased primarily due to the impact of the non-deductible loss on note repurchase.
Previous wording
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the six months ended February 24, 2024 and February 25, 2023:
Current wording
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the nine months ended May 25, 2024 and May 27, 2023:
Previous wording
The following is an analysis of key changes in our Towable RV segment for the six months ended February 24, 2024 compared to the six months ended February 25, 2023:
Current wording
The following is an analysis of key changes in our Towable RV segment for the nine months ended May 25, 2024 compared to the nine months ended May 27, 2023:
Previous wording
Net revenues decreased primarily due to a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by lower discounts and allowances.
Current wording
Net revenues decreased primarily due to a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by an increase in unit volume.
Previous wording
The following is an analysis of key changes in our Motorhome RV segment for the six months ended February 24, 2024 compared to the six months ended February 25, 2023:
Current wording
The following is an analysis of key changes in our Motorhome RV segment for the nine months ended May 25, 2024 compared to the nine months ended May 27, 2023:
Previous wording
Net revenues decreased primarily due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis cost and favorable product mix.
Current wording
Net revenues decreased primarily due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis cost.
Previous wording
Adjusted EBITDA margin decreased due to deleverage, higher discounts and allowances, higher warranty experience and operational efficiency challenges, partially offset by cost containment efforts.
Current wording
Adjusted EBITDA margin decreased due to deleverage, higher discounts and allowances, higher warranty expense and operational efficiency challenges, partially offset by cost containment efforts.
Previous wording
The following is an analysis of key changes in our Marine segment for the six months ended February 24, 2024 compared to the six months ended February 25, 2023:
Current wording
The following is an analysis of key changes in our Marine segment for the nine months ended May 25, 2024 compared to the nine months ended May 27, 2023:
Previous wording
During the six months ended February 24, 2024, net cash provided by operating activities was $3.8 million compared to net cash provided by operating activities of $16.8 million in the same period last year. The decrease in operating cash flow is primarily driven by lower profitability adjusted for non-cash items, partially offset by net favorable changes in operating assets and liabilities over the same period last year, primarily accounts payable due to timing of payments.
Current wording
During the nine months ended May 25, 2024, net cash provided by operating activities was $103.2 million compared to net cash provided by operating activities of $156.4 million in the same period last year. The decrease in operating cash flow is primarily driven by lower profitability adjusted for non-cash items and an increase in accounts receivable due to timing of invoicing and collections, partially offset by favorable changes in accounts payable due to lower purchasing requirements and timing of payments.
Previous wording
Cash used in investing activities decreased primarily due to elevated capital expenditures in the first six months of Fiscal 2023 to support operational expansion and organic growth.
Current wording
Cash used in investing activities decreased primarily due to our acquisition of Lithionics during the third quarter of Fiscal 2023 and elevated capital expenditures in the first nine months of Fiscal 2023 to support operational expansion and organic growth.
Previous wording
Cash used in financing activities increased primarily due to higher stock repurchases and dividends compared to prior year, partially offset by $39.6 million of net cash proceeds related to the debt refinancing.
Current wording
Cash used in financing activities increased primarily due to higher share repurchases compared to prior year, partially offset by $39.1 million of net cash proceeds related to the debt refinancing.
Previous wording
As of February 24, 2024, we had $265.7 million in cash and cash equivalents and $350.0 million in unused ABL Credit Facility. Our cash and cash equivalent balances consist of high quality, short-term money market instruments.
Current wording
As of May 25, 2024, we had $318.1 million in cash and cash equivalents and $350.0 million in unused ABL Credit Facility. Our cash and cash equivalent balances consist of high quality, short-term money market instruments.
Previous wording
Working capital at February 24, 2024 and August 26, 2023 was $649.0 million and $600.7 million, respectively. We currently expect cash on hand, funds generated from operations, and the borrowing available under our ABL Credit Facility to be sufficient to cover both short-term and long-term operating requirements.
Current wording
Working capital at May 25, 2024 and August 26, 2023 was $581.9 million and $600.7 million, respectively. We currently expect cash on hand, funds generated from operations, and the borrowing available under our ABL Credit Facility to be sufficient to cover both short-term and long-term operating requirements.
Previous wording
On August 17, 2022, our Board of Directors authorized a new share repurchase program in the amount of $350.0 million with no time restriction on the authorization, which took effect immediately and replaced the prior program. In the six months ended February 24, 2024, we repurchased approximately 671,000 shares of our own common stock at a cost of $40.0 million under this authorization, and approximately 73,000 shares at a cost of $4.2 million to satisfy tax obligations on employee equity awards vested. We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL Credit Facility and Senior Secured Notes, we may purchase shares in the future. As of February 24, 2024, we have $260.0 million remaining on our Board approved repurchase authorization.
Current wording
On August 17, 2022, our Board of Directors authorized a new share repurchase program in the amount of $350.0 million with no time restriction on the authorization, which took effect immediately and replaced the prior program. In the nine months ended May 25, 2024, we repurchased approximately 989,000 shares of our own common stock at a cost of $60.0 million under this authorization, and approximately 74,000 shares at a cost of $4.3 million to satisfy tax obligations on employee equity awards vested. We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL Credit Facility and Senior Secured Notes, we may purchase shares in the future. As of May 25, 2024, we have $240.0 million remaining on our Board approved repurchase authorization.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Adjusted EBITDA margin decreased due to deleverage and higher discounts and allowances, partially offset by lower incentive-based compensation.
Previous report — wording carried elsewhere
The loss on note repurchase recorded in the six months ended February 24, 2024 is related to the refinancing of the 2025 Convertible Notes. Refer to Note 9 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.