THOR INDUSTRIES INC

Previous wording

•interest rates and interest rate fluctuations and their potential impact on the general economy and, specifically, on our profitability and on our independent dealers and consumers;

Current wording

•interest rates and interest rate fluctuations and their potential impact on the general economy and, specifically, on our independent dealers and consumers and our profitability;

Previous wording

•the impact of changing emissions and other related climate change regulations in the various jurisdictions in which our products are produced, used and/or sold;

Current wording

•the impact of changing emissions and other related climate change regulations (including the Securities and Exchange Commission's ("SEC") final climate rules and litigation regarding its enforceabilty) in the various jurisdictions in which our products are produced, used and/or sold;

Previous wording

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles (“RVs”) in the world based on units sold and revenue. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Statistical Surveys, Inc. (“Stat Surveys”), for the calendar year ended December 31, 2023, THOR’s combined U.S. and Canadian market share was approximately 41.8% for travel trailers and fifth wheels combined and approximately 48.7% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”) and based on unit registrations for Europe's original equipment manufacturer (“OEM”) reporting countries, our European market share for the calendar year ended December 31, 2023 was approximately 20.9% for motorcaravans and campervans combined and approximately 18.2% for caravans.

Current wording

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles (“RVs”) in the world based on units sold and revenue. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Statistical Surveys, Inc. (“Stat Surveys”), for the three months ended March 31, 2024, THOR’s combined U.S. and Canadian market share was approximately 40.2% for travel trailers and fifth wheels combined and approximately 47.9% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”) and based on unit registrations for Europe's original equipment manufacturer (“OEM”) reporting countries, our European market share for the three months ended March 31, 2024 was approximately 25.6% for motorcaravans and campervans combined and approximately 17.5% for caravans.

Previous wording

We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Ongoing supply chain challenges, particularly chassis issues within our European operations, have and could continue to impact our business and our consolidated financial results and financial position. In addition, the impact of ongoing inflation on consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with significantly higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during the first half of fiscal 2024 and are expected to continue to impact the remainder of our fiscal year. These risks to our business are more fully described in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.

Current wording

We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Ongoing supply chain challenges, particularly chassis sequence issues within our European operations, have and could continue to impact our business and our consolidated financial results and financial position. In addition, the impact of ongoing inflation on consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with significantly higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during the first three quarters of fiscal 2024 and are expected to continue to impact the remainder of calendar year 2024. These risks to our business are more fully described in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.

Previous wording

On November 15, 2023, the Company entered into amendments to both its term loan and ABL agreements to extend maturities and lower the applicable margins used to determine the interest rate on the U.S. dollar-denominated loan tranche. The maturity date for the term loan was extended from February 1, 2026 to November 15, 2030. Covenants and other material provisions of the term loan agreement remain materially unchanged. Following the amendments, the principal amounts outstanding under the term loan agreement were $450,000 on the U.S. dollar-denominated term loan tranche and 330,000 Euro on the Euro-denominated term loan tranche. Under the provisions of the amended term loan, both the U.S. and Euro tranches require annual principal payments of 1.0% of the new term loan balance, payable quarterly in 0.25% installments starting on May 1, 2024. Pursuant to the ABL amendment, the maturity date for loans under the ABL agreement was extended from September 1, 2026 to November 15, 2028. Maximum availability under the ABL remains at $1,000,000 and the applicable margin, covenants and other material provisions of the ABL remain materially unchanged. As a result of these amendments and associated maturity date extensions, the Company recognized total expense of $14,741 in the second quarter of fiscal 2024.

Current wording

On November 15, 2023, the Company entered into amendments to both its term loan and ABL agreements to extend maturities and lower the applicable margins used to determine the interest rate on the U.S. dollar-denominated loan tranche. The maturity date for the term loan was extended from February 1, 2026 to November 15, 2030. Covenants and other material provisions of the term loan agreement remain materially unchanged. Following the amendments, the principal amounts outstanding under the term loan agreement were $450,000 on the U.S. dollar-denominated term loan tranche and 330,000 Euro on the Euro-denominated term loan tranche. Under the provisions of the amended term loan, both the U.S. and Euro tranches require annual principal payments of 1.0% of the new term loan balance, payable quarterly in 0.25% installments starting on May 1, 2024. As of April 30, 2024, the Company had made sufficient payments on the U.S term loan tranche to satisfy all annual principal payment requirements on the U.S. term loan over the term of the loan. Pursuant to the ABL amendment, the maturity date for loans under the ABL agreement was extended from September 1, 2026 to November 15, 2028. Maximum availability under the ABL remains at $1,000,000 and the applicable margin, covenants and other material provisions of the ABL remain materially unchanged. As a result of these amendments and associated maturity date extensions, the Company recognized total expense of $14,741 in the second quarter of fiscal 2024.

Previous wording

North American RV independent dealer inventory of our North American RV products as of January 31, 2024 decreased 27.6% to approximately 87,800 units, compared to approximately 121,300 units as of January 31, 2023. As of January 31, 2024, we believe North American dealer inventory levels for most products are generally at, or slightly higher than, the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs. We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels, due to a combination of factors such as retail activity, RV wholesale prices as well as interest rates and other carrying costs.

Current wording

North American RV independent dealer inventory of our North American RV products as of April 30, 2024 decreased 22.2% to approximately 87,900 units, compared to approximately 113,000 units as of April 30, 2023. As of April 30, 2024, we believe North American dealer inventory levels for most products are generally at, or slightly higher than, the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs. We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels, due to a combination of factors such as retail activity, RV wholesale unit prices as well as interest rates and other carrying costs.

Previous wording

THOR’s North American RV backlog as of January 31, 2024 decreased $1,092,226, or 36.4%, to $1,908,889 compared to $3,001,115 as of January 31, 2023. The decrease in backlog is primarily a result of a reduction in orders from dealers, which we believe is due to lower retail sales and dealer concerns over current interest costs and other carrying costs compared to the prior-year period.

Current wording

THOR’s North American RV backlog as of April 30, 2024 decreased $353,067, or 17.5%, to $1,667,131 compared to $2,020,198 as of April 30, 2023. The decrease in backlog is primarily a result of a reduction in orders from dealers, mainly for motorized products, which we believe is due to lower retail sales and dealer concerns over current interest costs and other carrying costs compared to the prior-year period.

Previous wording

In February 2024, RVIA issued a revised forecast for calendar year 2024 wholesale unit shipments. Under the RVIA’s most likely scenario, towable and motorized unit shipments are projected to be approximately 301,800 units and 48,300 units, respectively, for an annual total of approximately 350,100 units, up 11.8% from the 2023 calendar year wholesale shipments. The RVIA’s most likely forecast for calendar year 2024 of 350,100 total units could range from a lower estimate of approximately 334,700 total units to an upper estimate of approximately 365,500 total units.

Current wording

In June 2024, RVIA issued a revised forecast for calendar year 2024 wholesale unit shipments. Under the RVIA’s most likely scenario, towable and motorized unit shipments are projected to be approximately 301,500 units and 42,500 units, respectively, for an annual total of approximately 344,000 units, up 9.8% from the 2023 calendar year wholesale shipments. The RVIA’s most likely forecast for calendar year 2024 of 344,000 total units could range from a lower estimate of approximately 328,900 total units to an upper estimate of approximately 359,100 total units.

Previous wording

We believe that North American retail consumer interest remains high due to an ongoing interest in the RV lifestyle. While we anticipate that near-term demand will be influenced by many factors, including consumer confidence and the level of consumer spending on discretionary products, we believe future retail demand over the longer term will exceed historical, pre-pandemic levels as consumers continue to value the perceived benefits offered by the RV lifestyle, which provides people with the ability to connect with loved ones and nature as well as the potential to get away for short, frequent breaks or longer adventures.

Current wording

While we anticipate that near-term demand will be influenced by many factors, including consumer confidence and the level of consumer spending on discretionary products, we believe future retail demand over the longer term will exceed historical, pre-pandemic levels. We believe interest remains high due to an ongoing interest in the RV lifestyle as consumers continue to value the perceived benefits offered by the RV lifestyle, which provides people with the ability to connect with loved ones and nature as well as the potential to get away for short, frequent breaks or longer adventures.

Previous wording

The Company’s North American wholesale RV shipments, for the calendar years ended December 31, 2023 and 2022 to correspond to the North American industry wholesale periods noted above, were as follows:

Current wording

The Company’s North American wholesale RV shipments, for the calendar quarters ended March 31, 2024 and 2023 to correspond to the North American industry wholesale periods noted above, were as follows:

Previous wording

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the calendar years ended December 31, 2023 and 2022 to correspond to the North American industry retail periods noted above, were as follows:

Current wording

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the calendar quarters ended March 31, 2024 and 2023 to correspond to the North American industry retail periods noted above, were as follows:

Previous wording

Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the rate of unemployment, the rate of inflation, the level of consumer confidence, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices. We believe these factors will continue to affect retail sales in 2024. In addition, due to inflationary pressures, higher interest rates and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis. It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the remainder of our fiscal 2024 will continue to be negatively impacted by these factors.

Current wording

Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the rate of unemployment, the rate of inflation, the level of consumer confidence, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices. We believe these factors will continue to affect retail sales in calendar year 2024. In addition, due to inflationary pressures, higher interest rates and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis. It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the remainder of calendar year 2024 will continue to be negatively impacted by these factors.

Previous wording

Despite the near-term challenges, we remain optimistic about future growth in North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the on-going value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The growth in industry-wide RV sales during late 2020 through early 2023 has also resulted in exposing a wider range of consumers to the RV lifestyle. We believe many of those who have been recently exposed to the industry for the first time will become future owners, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities. We also believe many consumers are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home. In addition, we believe that the availability of camping and RV parking facilities will be an important factor in the future growth of the industry and view both the significant recent investments and the future committed investments by campground owners, states and the federal government in camping facilities and accessibility to state and federal parks and forests to be positive long-term factors.

Current wording

Despite the near-term challenges, we remain optimistic about future growth in North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the ongoing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The growth in industry-wide RV sales during late 2020 through early 2023 resulted in exposing a wider range of consumers to the RV lifestyle. As a result, we believe many of those who have been recently exposed to the industry for the first time will become future owners, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities. We also believe many consumers are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home. In addition, we believe that the availability of camping and RV parking facilities will be an important factor in the future growth of the industry and view both the significant recent investments and the future committed investments by campground owners, states and the federal government in camping facilities and accessibility to state and federal parks and forests to be positive long-term factors.

Previous wording

Economic and industry-wide factors that have historically affected, and which we believe will continue to affect, our operating results include the costs of commodities, the availability of critical supply components and labor costs incurred in the production of our products. Material and labor costs are the primary factors determining our cost of products sold, and any future increases in raw material or labor costs will impact our profit margins negatively if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. Historically, we have generally been able to offset net cost increases over time.

Current wording

Economic and industry-wide factors that have historically affected, and which we believe will continue to affect, our operating results include the costs of commodities, the availability of critical supply components and labor costs incurred in the production of our products. Material and labor costs are the primary factors determining our cost of products sold, and any future increases in raw material or labor costs will impact our profit margins negatively if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. Historically, we have generally been able to offset net cost increases over time through these measures.

Previous wording

While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis raw material components, the supply chain is currently able to support our demand. If any factors were to impact our suppliers' ability to fully supply our needs for key components, our costs of such components and our production output could be adversely affected.

Current wording

While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis raw material components, the supply chain is currently able to support our demand. If any of these factors were to impact our suppliers' ability to fully supply our needs for key components, our costs of such components and our production output could be adversely affected.

Previous wording

The Company monitors industry conditions in the European RV market using a number of resources including its own performance tracking and modeling. The Company also considers retail trends in the European RV market as reported by the European Caravan Federation (“ECF”) and its members. On a monthly basis, the Company receives original equipment manufacturer ("OEM")-specific reports for most of the individual member countries that make up the ECF through the Caravaning Industrie Verband e.V. (“CIVD”). The timing of these reports may vary, but typically they are issued on a one-to-two-month lag. While most countries provide OEM-specific information, the United Kingdom, which made up 20.7% and 8.3% of the caravan and motorcaravan (including campervans) European market for the calendar year ended December 31, 2023, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Current wording

The Company monitors industry conditions in the European RV market using a number of resources including its own performance tracking and modeling. The Company also considers retail trends in the European RV market as reported by the European Caravan Federation (“ECF”) and its members. On a monthly basis, the Company receives original equipment manufacturer ("OEM")-specific reports for most of the individual member countries that make up the ECF through the Caravaning Industrie Verband e.V. (“CIVD”). The timing of these reports may vary, but typically they are issued on a one-to-two-month lag. While most countries provide OEM-specific information, the United Kingdom, which made up 22.3% and 9.6% of the caravan and motorcaravan (including campervans) European market for the three months ended March 31, 2024, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Previous wording

Independent dealer inventory of our European RV products as of January 31, 2024 was approximately 24,800 units. Independent RV dealer inventory levels of our European products are generally in line with historic levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product sales, independent dealer inventory levels are also generally in line with historical norms. Comparable independent dealer inventory unit information was not available as of January 31, 2023.

Current wording

Independent dealer inventory of our European RV products as of April 30, 2024 was approximately 24,700 units. Independent RV dealer inventory levels of our European products are generally in line with historic seasonal levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product sales, independent dealer inventory levels are also generally in line with historical norms. Comparable independent dealer inventory unit information was not available as of April 30, 2023.

Previous wording

THOR’s European RV backlog as of January 31, 2024 decreased $309,431, or 10.1%, to $2,746,307 compared to $3,055,738 as of January 31, 2023, primarily due to improved chassis supply availability as chassis constraints in the prior year resulted in elevated backlogs.

Current wording

THOR’s European RV backlog as of April 30, 2024 decreased $1,539,205, or 44.3%, to $1,935,119 compared to $3,474,324 as of April 30, 2023, primarily due to improved chassis supply availability as chassis constraints in the prior year resulted in significantly elevated backlogs as of April 30, 2023.

Previous wording

In Europe, we also continue to experience cost increases, supply shortages and delivery delays of other, non-chassis raw material components which negatively impacted the efficiency of our production in the current fiscal year, and which resulted in the continuation of an elevated level of work in process inventory on hand compared to historical norms. We believe these shortages and delays will continue to result in production inefficiencies and a continuation of the elevated level of work in process inventory in the near term, which will have a negative impact on our European operating results as well as on our consolidated results due to the negative impact of carrying excess inventory levels and the negative impact of completing units off the production line.

Current wording

In Europe, we also continue to experience cost increases, supply shortages and delivery delays of other, non-chassis raw material components which negatively impacted the efficiency of our production in the current fiscal year, which resulted in the continuation of an elevated level of work in process inventory on hand compared to historical norms. We believe these shortages and delays will continue to result in production inefficiencies and a continuation of the elevated level of work in process inventory in the near term, which will have a negative impact on our European operating results as well as on our consolidated results due to the negative impact of carrying excess inventory levels and the negative impact of completing units off the production line.

Previous wording

Consolidated net sales for the three months ended January 31, 2024 decreased $139,266, or 5.9%, compared to the three months ended January 31, 2023. The decrease in consolidated net sales is primarily due to lower dealer and consumer demand in comparison to the prior-year period, primarily in the North American RV markets. Approximately 35.4% of the Company’s consolidated net sales for the quarter ended January 31, 2024 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The decrease in consolidated net sales includes an increase of $26,558 from the change in currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period.

Current wording

Consolidated net sales for the three months ended April 30, 2024 decreased $127,707, or 4.4%, compared to the three months ended April 30, 2023. The decrease in consolidated net sales is primarily due to lower dealer and consumer demand in comparison to the prior-year period, primarily in the North American motorized market. Approximately 33.2% of the Company’s consolidated net sales for the quarter ended April 30, 2024 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The decrease in consolidated net sales includes a nominal increase from the change in currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period.

Previous wording

Consolidated gross profit for the three months ended January 31, 2024 decreased $12,088, or 4.3%, compared to the three months ended January 31, 2023. Consolidated gross profit was 12.3% of consolidated net sales for the three months ended January 31, 2024 and 12.1% for the three months ended January 31, 2023. The decrease in consolidated gross profit was primarily due to the impact of the decrease in consolidated net sales while the slight increase in the consolidated gross profit percentage is due to the favorable impacts of selling price increases, stable material costs and cost-saving initiatives in the current-year quarter compared to the prior-year quarter.

Current wording

Consolidated gross profit for the three months ended April 30, 2024 decreased $10,785, or 2.5%, compared to the three months ended April 30, 2023. Consolidated gross profit was 15.1% of consolidated net sales for the three months ended April 30, 2024 and 14.8% for the three months ended April 30, 2023. The decrease in consolidated gross profit was primarily due to the impact of the decrease in consolidated net sales while the slight increase in the consolidated gross profit percentage is due to the favorable impacts of selling price increases, stable material costs and cost-saving initiatives in the current-year quarter compared to the prior-year quarter.

Previous wording

The decrease of $25,824, or 78.9%, in income before income taxes for the three months ended January 31, 2024 as compared to the three months ended January 31, 2023 was primarily driven by the decrease in consolidated net sales and the increase in consolidated selling, general and administrative expenses noted above.

Current wording

The decrease of $13,101, or 8.4%, in income before income taxes for the three months ended April 30, 2024 as compared to the three months ended April 30, 2023 was primarily driven by the decrease in consolidated net sales and the increase in consolidated selling, general and administrative expenses noted above.

Previous wording

Corporate costs included in consolidated selling, general and administrative expenses increased $13,919 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023. This increase includes an increase of $7,990 in legal and professional fees, including the debt financing-related third-party fees of $7,175 discussed above. This increase also includes an increase in deferred compensation expense of $5,231 due to market value fluctuations between the two periods, an increase in innovation-led research and development costs of $2,578 and an increase in stock-based and other compensation of $1,015. These increases were partially offset by $4,200 of income from adjustments made during the quarter related to certain legal and recall matters as discussed in Note 14 to the Condensed Consolidated Financial Statements.

Current wording

Corporate costs included in consolidated selling, general and administrative expenses increased $7,531 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This increase is primarily due to an increase in deferred compensation expense of $2,922 due to market value fluctuations between the two periods and an increase in innovation-led research and development costs of $3,093.

Previous wording

Net expense in Corporate interest and other income and expense increased $9,697 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023. This net expense increase included an increase in net interest expense of $1,336 on our debt, primarily due to extinguishment charges of $7,566 related to the refinancing of our debt facilities as discussed in Note 12 to the Condensed Consolidated Financial Statements more than offsetting increased interest income received from higher average cash balances held and higher interest income rates and lower debt interest expense primarily due to lower average debt balances outstanding. In addition, the current-year period included a non-cash foreign currency loss of $2,627 on certain Euro-denominated loans as compared to a $6,923 gain in the prior-year period. The current-year period also included operating losses of $3,502 related to our Roadpass Digital joint venture as discussed in Note 8 to the Condensed Consolidated Financial Statements. These increases were partially offset by a favorable change of $5,156 in the fair value of the Company's deferred compensation plan assets due to market fluctuations between the two periods.

Current wording

Net expense in Corporate interest and other income and expense decreased $11,776 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This net expense decrease included a decrease in net interest expense of $5,360 on our debt, due to increased interest income received from higher average cash balances held and higher interest income rates combined with lower debt interest expense primarily due to lower average debt balances outstanding. The net expense decrease also includes favorable changes of $2,997 in the fair value of the Company's deferred compensation plan assets and $3,263 in the fair value of certain other equity investments, both due to market value fluctuations between the two periods.

Previous wording

The decrease in total North American Towable net sales of 11.9% compared to the prior-year quarter resulted from a 10.2% increase in unit shipments and a 22.1% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments is primarily due to the heightened demand for the lower cost travel trailers units, which increased 13.9% over the prior-year quarter. According to statistics published by RVIA, for the three months ended January 31, 2024, combined North American travel trailer and fifth wheel wholesale unit shipments increased 12.9% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2023 and 2022, our North American market share for travel trailers and fifth wheels combined was 39.7% and 41.2%, 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.

Current wording

The decrease in total North American Towable net sales of 4.7% compared to the prior-year quarter resulted from a 15.1% increase in unit shipments and a 19.8% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments is primarily due to the heightened demand for the lower-cost travel trailer units, which increased 28.2% over the prior-year quarter. According to statistics published by RVIA, for the three months ended April 30, 2024, combined North American travel trailer and fifth wheel wholesale unit shipments increased 15.5% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended March 31, 2024 and 2023, our North American market share for travel trailers and fifth wheels combined was 40.2% and 42.1%, 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.

Previous wording

The decreases in the overall net price per unit within both the travel trailer product line of 24.6% and the fifth wheel product line of 11.1% were primarily due to the combined impact of sales price reductions due to lower input costs, higher sales discounting levels and product mix changes trending toward more moderately-priced units as compared to the prior-year quarter.

Current wording

The decrease in the overall net price per unit within the travel trailer product line of 22.3% was primarily due to the combined impact of sales price reductions due to lower input costs and product mix changes trending toward more moderately-priced units as compared to the prior-year quarter. The increase within the fifth wheel product line of 3.0% was primarily due to product mix changes.

Previous wording

North American Towable cost of products sold decreased $99,817 to $677,071, or 92.6% of North American Towable net sales, for the three months ended January 31, 2024 compared to $776,888, or 93.6% of North American Towable net sales, for the three months ended January 31, 2023. Changes in material, labor, freight-out and warranty costs comprised $91,773 of the $99,817 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales decreased to 82.2% for the three months ended January 31, 2024 compared to 83.5% for the three months ended January 31, 2023, primarily due to a decrease in the material costs percentage from the combined favorable impacts of cost-saving initiatives and product mix changes. This decrease was partially offset by an increase in the labor percentage primarily due to product mix changes.

Current wording

North American Towable cost of products sold decreased $47,132 to $933,290, or 87.1% of North American Towable net sales, for the three months ended April 30, 2024 compared to $980,422, or 87.2% of North American Towable net sales, for the three months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $44,186 of the $47,132 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales decreased to 79.6% for the three months ended April 30, 2024 compared to 79.8% for the three months ended April 30, 2023, primarily due to a decrease in the material costs percentage from the combined net favorable impacts of lower discounting, cost-saving initiatives and product mix changes being partially offset by an increase in the labor percentage.

Previous wording

The increase in North American Towable gross profit of $1,034 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023 was due to the decrease in net sales being more than offset by the favorable impact of the decrease in the cost of products sold percentage noted above.

Current wording

The slight decrease in North American Towable gross profit of $5,885 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was due to the decrease in net sales.

Previous wording

The increase in North American Towable selling, general and administrative expenses of $2,051 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023 is primarily due to increases in costs related to our repurchase obligations of $2,085 and legal and professional fees of $1,845, partially offset by the decrease in North American Towable net sales and income before income taxes causing related commissions, incentive and other compensation to decrease by $1,538. The increase in the overall selling, general and administrative expense as a percentage of North American Towable net sales is primarily due to the decrease in net sales.

Current wording

The increase in North American Towable selling, general and administrative expenses of $4,715 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 is primarily due to an increase in legal and professional fees and settlement costs of $3,495 and compensation costs of $3,211, partially offset by a reduction in sales-related travel and entertainment costs of $1,152. The increase in the overall selling, general and administrative expense as a percentage of North American Towable net sales is primarily due to the decrease in net sales and the cost increases noted above.

Previous wording

The increase in North American Towable income before income taxes of $7,780 for the three months ended January 31, 2024 compared to the loss before income taxes for the three months ended January 31, 2023 was primarily attributable to lower amortization costs and larger gains on the sales of fixed assets in the current-year quarter.

Current wording

The decrease in North American Towable income before income taxes of $9,174 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily attributable to the decrease in North American Towable net sales, and the primary reason for the decrease in percentage was the increase in the selling, general and administrative expense percentage noted above.

Previous wording

The decrease in total North American Motorized net sales of 22.8% compared to the prior-year quarter resulted from a 18.4% decrease in unit shipments and a 4.4% decrease in the overall net price per unit due to the combined impact of changes in product mix and price, which included elevated sales discounts compared to the prior-year quarter. The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior-year quarter, which included independent dealer restocking of certain motorized products. According to statistics published by RVIA, for the three months ended January 31, 2024, combined North American motorhome wholesale unit shipments decreased 15.8% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2023 and 2022, our North American market share for motorhomes was 47.3% for both periods. 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.

Current wording

The decrease in total North American Motorized net sales of 18.7% compared to the prior-year quarter resulted from a 20.0% decrease in unit shipments and a 1.3% increase in the overall net price per unit due to the combined impact of changes in product mix and price, which included elevated sales discounts compared to the prior-year quarter. The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior-year quarter. According to statistics published by RVIA, for the three months ended April 30, 2024, combined North American motorhome wholesale unit shipments decreased 19.9% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended March 31, 2024 and 2023, our North American market share for motorhomes was 47.9% for both periods. 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.

Previous wording

The decreases in the overall net price per unit within the Class A product line of 0.3%, the Class C product line of 4.2% and the Class B product line of 5.2% were all primarily due to higher discounting levels since the prior-year quarter, and consumers trending toward more moderately-priced units compared to the prior-year quarter.

Current wording

The increases in the overall net price per unit within the Class A product line of 2.2% and the Class B product line of 0.1% were primarily due to increases from product mix changes and selling price increases being mostly offset by higher discounting levels since the prior-year quarter. The decrease in the overall net price per unit within the Class C product line of 0.4% was primarily due to higher discounting levels.

Previous wording

North American Motorized cost of products sold decreased $121,668 to $509,703, or 89.4% of North American Motorized net sales, for the three months ended January 31, 2024 compared to $631,371, or 85.5% of North American Motorized net sales, for the three months ended January 31, 2023. The changes in material, labor, freight-out and warranty costs comprised $114,854 of the $121,668 decrease primarily due to the decreased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales increased to 82.3% for the three months ended January 31, 2024 compared to 79.1% for the three months ended January 31, 2023, with the increase due to an increase in the material cost percentage, primarily due to higher sales discounting, which effectively decreases net selling prices and correspondingly increases the material cost percentage, as well as increased chassis costs.

Current wording

North American Motorized cost of products sold decreased $127,438 to $575,195, or 88.9% of North American Motorized net sales, for the three months ended April 30, 2024 compared to $702,633, or 88.3% of North American Motorized net sales, for the three months ended April 30, 2023. The changes in material, labor, freight-out and warranty costs comprised $118,533 of the $127,438 decrease primarily due to the decreased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales increased to 83.1% for the three months ended April 30, 2024 compared to 82.5% for the three months ended April 30, 2023, with the increase mainly due to an increase in the material cost percentage, primarily due to higher sales discounting effectively decreasing net selling prices and correspondingly increasing the material cost percentage, partially offset by a decrease in the labor percentage.

Previous wording

The decrease in North American Motorized gross profit of $46,491 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023 was driven by the decrease in net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

Current wording

The decrease in North American Motorized gross profit of $21,554 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was driven by the decrease in net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

Previous wording

The decrease in North American Motorized selling, general and administrative expenses of $11,626 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023 was primarily due to the decrease in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $10,228. The decrease in commissions, incentive and other compensation also drove the slight decrease in the overall selling, general and administrative expense as a percentage of North American Motorized net sales.

Current wording

The decrease in North American Motorized selling, general and administrative expenses of $7,391 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily due to the decrease in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $7,822. Selling, general and administrative expense as a percentage of North American Motorized net sales was consistent with the prior year.

Previous wording

The decrease of $122,465 in North American Motorized income before income taxes for the six months ended January 31, 2024 compared to the six months ended January 31, 2023 was primarily due to the decrease in North American Motorized net sales, and the primary reason for the decrease in percentage was the increase in the cost of products sold percentage noted above.

Current wording

The decrease in North American Motorized income before income taxes of $15,014 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily due to the decrease in North American Motorized net sales, and the primary reason for the decrease in percentage was the increase in the cost of products sold percentage noted above and an increase in amortization expense as a percentage of net sales.

Previous wording

The increase in total European Recreational Vehicle net sales of 20.9% compared to the prior-year quarter resulted from a 3.9% increase in unit shipments and a 17.0% increase in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $135,356 includes an increase of $26,558, or 4.1%, due to the increase in foreign exchange rates since the prior-year quarter.

Current wording

The increase in total European Recreational Vehicle net sales of 7.4% compared to the prior-year quarter resulted from a 1.5% decrease in unit shipments and an 8.9% increase in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $64,310 includes no change due to foreign exchange rates since the prior-year quarter.

Previous wording

The overall net price per unit increase of 17.0% includes a 4.1% increase due to the impact of foreign currency exchange rate changes and a 12.9% increase due to the combined impact of product mix and selling prices, primarily due to the much higher concentration of Motorcaravan sales in the current-year quarter due to improved chassis supply and fewer other component constraints in the current-year quarter.

Current wording

The overall net price per unit increase of 8.9% includes no impact of foreign currency exchange rate changes and an 8.9% constant-currency increase due to the combined impact of product mix and selling prices, primarily due to the much higher concentration of Motorcaravan sales in the current-year quarter due to improved chassis supply and fewer other component constraints in the current-year quarter.

Previous wording

The constant-currency increase in the overall net price per unit within the Motorcaravan product line of 1.3% was primarily due to the impact of selling price increases and product mix changes. The constant-currency decreases in the overall net price per unit within the Campervan product line of 7.9% and the Caravan product line of 1.7% are primarily due to product mix changes and increased sales discounting. In addition, the current-year quarter included a higher concentration of Campervan units with a customer-supplied chassis that is not included in the unit sales price as opposed to a purchased chassis that is included in the unit sales price.

Current wording

The constant-currency increase in the overall net price per unit within the Motorcaravan product line of 1.3% was primarily due to the impact of selling price increases and product mix changes. The constant-currency decreases in the overall net price per unit within the Campervan product line of 6.3% and the Caravan product line of 1.0% are primarily due to product mix changes and increased sales discounting. In addition, the current-year quarter included a higher concentration of Campervan units with a customer-supplied chassis that is not included in the unit sales price as opposed to a purchased chassis that is included in the unit sales price.

Previous wording

European Recreational Vehicle gross profit increased $27,895 for the three months ended January 31, 2024 compared to the three months ended January 31, 2023 primarily due to the increase in European Recreational Vehicle net sales, and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

Current wording

European Recreational Vehicle gross profit increased $11,135 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 primarily due to the increase in European Recreational Vehicle net sales, and the gross profit percentage remained consistent with the prior-year quarter.