WINNEBAGO INDUSTRIES INC

Previous wording

Winnebago Industries, Inc. is one of the leading North American manufacturers of recreation vehicles ("RVs") and marine products with a diversified portfolio used primarily in leisure travel and outdoor recreational activities. We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications. Other products manufactured by us consist primarily of original equipment manufacturing parts for other manufacturers and commercial vehicles. We produce our motorhome RV units in Iowa and Indiana; our towable RV units in Indiana; our marine units in Indiana and Florida; and our battery solutions in Florida. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer. We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S.

Current wording

Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta Boat brands, which are used primarily in leisure travel and outdoor recreation activities. We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications. Other products manufactured by us consist primarily of original equipment manufacturing parts for other manufacturers and commercial vehicles. We produce our motorhome RV units in Iowa and Indiana; our towable RV units in Indiana; our marine units in Indiana and Florida; and our battery solutions in Florida. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer. We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S.

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 three months of Fiscal 2025, these trends resulted in decreased sales due to declines in unit volume. We expect that as consumer demand stabilizes, which we anticipate will occur as we enter the spring selling season, dealers will return to more stable ordering patterns. 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 six months of Fiscal 2025, these trends resulted in decreased sales due to declines in unit volume. We expect that as consumer demand stabilizes, which we anticipate will occur as we enter the spring selling season, dealers will return to more stable ordering patterns. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders. In addition, we are closely monitoring the potential impact of new or additional U.S. tariffs and retaliatory measures from other countries, which may affect material costs or supply.

Previous wording

Included in "Results of Operations" below for the three months ended November 30, 2024 compared to the comparable prior year period is a reconciliation of EBITDA and Adjusted EBITDA from net (loss) 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 (loss) 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, contingent consideration fair value adjustment, and non-operating income or loss.

Current wording

Included in "Results of Operations" below for the three and six months ended March 1, 2025 compared to the comparable prior year period is a reconciliation of EBITDA and Adjusted EBITDA from net (loss) 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.

Previous wording

The change in our effective tax rate was driven primarily by the current year pre-tax book loss compared to pre-tax book income in the prior year.

Current wording

The change in our effective tax rate was driven primarily by the prior year non-deductible loss on convertible note repurchase and the current year pre-tax book loss compared to pre-tax book income in the prior year.

Previous wording

Net revenues decreased primarily due to lower unit volume related to market conditions.

Current wording

Net revenues decreased primarily due to lower unit volume related to current market conditions, partially offset by favorable product mix.

Previous wording

Net revenues increased primarily due to targeted price increases and higher unit volume, partially offset by a reduction in average selling price per unit related to product mix.

Current wording

Net revenues increased primarily due to unit volume, partially offset by a reduction in average selling price per unit related to product mix.

Previous wording

Adjusted EBITDA margin increased primarily due to targeted price increases, partially offset by product mix and higher warranty expense.

Current wording

Adjusted EBITDA margin increased due to targeted price increases, leverage and operational efficiencies, partially offset by product mix and higher operating expenses, including incentive-based compensation.

Previous wording

Gross profit as a percentage of revenue decreased primarily due to deleverage, higher warranty experience compared to the prior year and product mix, partially offset by operational efficiencies.

Current wording

Gross profit as a percentage of revenue decreased primarily due to deleverage, including that associated with product mix, and higher warranty experience compared to prior year, partially offset by operational efficiencies.

Previous wording

Adjusted EBITDA margin decreased primarily due to volume deleverage, higher discounts and allowances, and higher warranty experience compared to the prior year, partially offset by operational efficiencies.

Current wording

Adjusted EBITDA margin decreased primarily due to volume deleverage and higher discounts and allowances, partially offset by operational efficiencies.

Previous wording

During the three months ended November 30, 2024, net cash used in operating activities was $16.7 million compared to net cash used in operating activities of $21.4 million during the same period last year. The change in operating cash flow is primarily driven by favorable changes in inventory levels and a decrease in accounts receivable due to timing of invoicing and collections, partially offset by lower profitability adjusted for non-cash items and a decrease in accounts payable due to lower production levels.

Current wording

During the six months ended March 1, 2025, net cash used in operating activities was $27.2 million compared to net cash provided by operating activities of $3.8 million during the same period last year. The change in operating cash flow is primarily driven by lower profitability adjusted for non-cash items and an increase in inventory to support the spring selling season, partially offset by a change in accounts receivable due to timing of invoicing and collections.

Previous wording

Cash used in investing activities decreased primarily due to favorable changes in other investing activities and lower capital expenditures compared to the prior year. Other investing activities include cash proceeds from asset sales and certain strategic investments.

Current wording

Cash used in investing activities decreased primarily due to favorable changes in other investing activities and lower capital expenditures compared to the prior year. Other investing activities include cash proceeds from asset sales and strategic investment activity.

Previous wording

Cash used in financing activities decreased primarily due to lower share repurchases compared to the prior year.

Current wording

Cash used in financing activities increased primarily due to partial settlement of high-yield notes and higher share repurchases compared to the prior year.

Previous wording

As of November 30, 2024, we had $262.5 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 March 1, 2025, we had $115.5 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

On July 8, 2020, we closed our private offering (the “Senior Secured Notes Offering”) of $300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the “Senior Secured Notes”).

Current wording

On July 8, 2020, we closed our private offering (the “Senior Secured Notes Offering”) of $300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the “Senior Secured Notes”). On February 3rd, 2025, we executed a tender offer to purchase for cash up to $75.0 million aggregate principal amount of the Senior Secured Notes (the "Tender Offer"). On February 18, 2025, we amended the Tender Offer by increasing the maximum aggregate principal amount of Notes to $100.0 million. On February 20, 2025, $100.0 million aggregate principal amount of the Senior Secured Notes were validly tendered and accepted.

Previous wording

As of November 30, 2024, we had$59.2 million of net debt maturing in the next twelve months that is classified as current on our Consolidated Balance Sheets.

Current wording

As of March 1, 2025, we had$59.3 million of net debt maturing in the next twelve months that is classified as current on our Consolidated Balance Sheets.

Previous wording

Working capital at November 30, 2024 and August 31, 2024 was $556.1 million and $584.0 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 March 1, 2025 and August 31, 2024 was $438.4 million and $584.0 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 three months ended November 30, 2024, we repurchased approximately 533,000 shares of our own common stock at a cost of $30.0 million under this authorization, and approximately 62,000 shares at a cost of $3.6 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 November 30, 2024, we have $200.0 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 six months ended March 1, 2025, we repurchased approximately 951,000 shares of our own common stock at a cost of $50.0 million under this authorization, and approximately 62,000 shares at a cost of $3.6 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 March 1, 2025, we have $180.0 million remaining on our Board approved repurchase authorization.