<span style="color: #a1a1a1;">Winnebago Industries, seeing continuing strong demand for outdoor recreation, reported revenues jumped 39.1 percent in the fourth quarter ended August 29, to $737.8 million.

Excluding Newmar, which was acquired in the first quarter of fiscal 2020, organic sales climbed 15.3 percent primarily driven by growth in the Towable segment. Revenues for Newmar were $126.3 million in the period.

On a conference call with analysts, president and CEO Michael Happe said the company is entering its 2021 fiscal year with strong operational momentum, a record backlog and ample financial flexibility to manage through the ongoing uncertain environment.

Said Happe, “We are encouraged by the ongoing outdoor recreation demand trends we are experiencing. We have built a strong and growing position in the RV market, and our customers continue to view all our brands as a trusted and safe way to have extraordinary experiences as they travel, live, work, and play in the outdoors.”

Net earnings in the quarter rose 33.2 percent to $42.5 million, or $1.25 a share. The gains were driven by the growth in operating income partially offset by increased interest expense.

Gross margins improved 90 basis points in the quarter, driven by Motorhome segment lower input costs and Towable segment fixed cost leverage, partially offset by segment mix. Operating income increased 52.8 percent to $68.4 million.

Net interest expense increased due to a convertible bond issued to finance the Newmar acquisition and, separately, the write-off of certain debt issuance costs associated with the termination of the company’s Term Loan B which was refinanced by a bond issuance during the quarter. Adjusting to exclude the impact of these items, adjusted EPS expanded 45.0 percent to $1.45. Consolidated adjusted EBITDA climbed 50.5 percent to $76.5 million.

Revenues for the Towable segment were $414.0 million, up 34.8 percent over the prior year, primarily driven by strong consumer demand for outdoor experiences, particularly in Grand Design products. Segment Adjusted EBITDA was $61.3 million, up 45.8 percent. Adjusted EBITDA margin of 14.8 percent increased 110 basis points, primarily due to leverage, but also benefiting from profitability initiatives. Backlog increased to a record of $747.9 million, up 219.2 percent over the prior year, as dealers have experienced sizable reductions to their inventory as they have encountered extremely high levels of consumer demand in the fourth quarter.

In the Motorhome segment, revenues were $301.8 million, up 50.4 percent and driven by the addition of Newmar. Revenues excluding Newmar were $175.5 million, down 12.6 percent, as strong class B sales were more than offset by sales declines in class A and class C. Segment Adjusted EBITDA was $19.5 million, up 81.2 percent, due to improved profitability in the Winnebago branded business and the addition of Newmar, partially offset by the organic revenue decline and class mix. Adjusted EBITDA margin of 6.4 percent increased 100 basis points. Backlog increased to a record $1.1 billion, up 535.8 percent over the prior year, reflecting robust consumer demand.

For the full fiscal year, revenues increased by 18.6 percent to $2.4 billion. Excluding Newmar, revenues were roughly flat as a result of the impacts of COVID-19 and related suspension of manufacturing operations during the fiscal third quarter and disruptions across the dealer network, supply chain, and end consumers. For the full year, revenues for the Towable segment were $1.23 billion, up 2.5 percent from Fiscal 2019. Revenues for the Motorhome segment were $1.1 billion, up 49.5 percent from Fiscal 2019. Excluding Newmar, sales in the Motorhome segment were down 5.4 percent.

Happe told analysts the addition of Newmar, combined with Grand Design RV, and Chris-Craft provides the company with “four of the most respected brands in the outdoors industry.” Leadership team capabilities were also strengthened in the past year through the acquisition of Newmar and also through adding new talent to the team, including the recent hiring of Huw Bower, who formerly led Brunswick Corp.’s Boat Group, to lead Winnebago.

Said Happe, “Going forward, we are committed to managing our company in a highly disciplined fashion so that we are best positioned to build on our momentum in the marketplace, capture the numerous opportunities we believe lie ahead and deliver further value to the customers and communities we serve.”

Photo courtesy Winnebago