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Winnebago reports strongest quarterly revenues since 2005

winnebagoFOREST CITY – Winnebago Industries, Inc. (NYSE:WGO), a leading United States (U.S.) recreation vehicle manufacturer, on Thursday reported financial results for the Company’s third quarter fiscal period ended May 31, 2014.

Revenues for the Fiscal 2014 third quarter were $247.7 million, an increase of 13.5%, versus $218.2 million for the Fiscal 2013 third quarter. Comparing the Fiscal 2014 third quarter to the same period of Fiscal 2013, operating income rose 52.1% to $15.6 million, net income grew 48.6% to $11.4 million, and diluted earnings per share increased 55.6% to $0.42 from $0.27.

Year over year, third quarter earnings growth was driven by higher motorhome unit sales, gross margin improvement, operating expense leverage, and in part a significant improvement in towables operating income. Motorhome unit growth of 17.8% was partially offset by lower motorhome average selling prices (ASP) of 4.1% as a result of product mix, leading to motorhome revenue growth of 13.6%. Additionally, third-quarter towable unit deliveries grew 2.0% and towable ASP increased 11.5%, contributing to towable revenue growth of 11.9% compared to the same period of last year.

Gross profit as a percentage of revenues improved to 10.7% in the Fiscal 2014 third quarter compared to 9.7% in the same period of Fiscal 2013, an improvement of 100 basis points. The increase was primarily attributable to greater delivery volumes, favorable product mix and year-over-year price changes.

Fiscal 2014 third quarter operating expenses as a percentage of revenues were favorably leveraged given virtually flat year-over- year operating expenses, combined with higher revenues, to contribute 60 basis points to the improvement in operating income margin.

Based on internally reported retail information, the Company has shown a 60% increase in motorhome retail registrations in the third quarter of Fiscal 2014 compared to the same period last year, and a 34% year-over-year increase on a rolling 12-month basis.

Revenues for the 39 weeks of Fiscal 2014 were $699.2 million, an increase of 18.7%, from $588.9 million for the 40 weeks of Fiscal 2013. Comparing the first nine months of Fiscal 2014 to the same period of Fiscal 2013, operating income rose 57.0% to $45.6 million, net income grew 50.6% to $32.1 million, and diluted earnings per share increased 52.6% to $1.16 from $0.76.

Chairman, CEO and President Randy Potts commented, “Driven by strong demand for our products, we achieved the highest quarterly revenue figure since 2005, which led to substantial year-over-year profit growth in the third quarter. This was in spite of not including revenue of approximately $18 million related to certain rental units subject to repurchase option. During the quarter our team operated efficiently and effectively to successfully meet increased demand for our rental units all while maintaining deliveries with our other customers. We are very pleased with our retail growth during the quarter, which is driven by increased rental sales and increased retail consumer demand.

“At our Dealer Days event this April, we introduced several new products and floorplans that were well received by our dealer partners. As evidenced by continued strength in our dealer and retail demand, we believe we will continue to capitalize on future growth opportunities.”

Chief Financial Officer Sarah Nielsen added, “We generated nearly $40 million in operating cash flow during the third quarter driven by profitability and positive changes in working capital. With over $50 million in cash and no debt, our balance sheet is in a strong position.”Strongest Quarterly Revenues Since 2005 Contributes to Operating Income
Growth of 52% and Earnings Per Share Growth of 56%

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