Winnebago Industries, Inc. reported strong earnings gains in the second quarter ended February 26 as sales grew 39 percent, including organic growth of 29 percent.

Second Quarter Fiscal 2022 Results

  • Revenues for the Fiscal 2022 second quarter, ended February 26, 2022, matched the record of $1.2 billion set in the first quarter of Fiscal 2022, an increase of 38.7 percent compared to $839.9 million for the Fiscal 2021 period.
  • Revenues excluding the recently acquired Barletta business were $1.1 billion, representing an organic growth rate of 29.4 percent over the prior year and 73.3 percent over the same period in Fiscal 2020 driven by continued consumer demand and pricing increases.
  • Gross profit was $216.6 million, an increase of 38.3 percent compared to $156.6 million for the Fiscal 2021 period.
  • Gross profit margin of 18.6 percent was equal to the prior-year quarter, driven primarily by pricing ahead of known and anticipated cost input inflation, and operating leverage, offset by production inefficiencies related to supply constraints.
  • Operating income, which includes $5.1 million of amortization and acquisition-related costs associated with the acquisition of Barletta, was $136.8 million for the quarter, an increase of 36.8 percent compared to $100.0 million for the second quarter of last year.
  • Fiscal 2022 second-quarter net income, which includes $6.5 million of contingent consideration fair value adjustment related to the Barletta acquisition, was $91.2 million, an increase of 32.0 percent compared to $69.1 million in the prior-year quarter.
  • Reported earnings per diluted share were $2.69, compared to reported earnings per diluted share of $2.04 in the same period last year.
  • Adjusted earnings per diluted share were $3.14, an increase of 42.1 percent compared to adjusted earnings per diluted share of $2.21 in the same period last year.
  • Consolidated Adjusted EBITDA was $150.7 million for the quarter, compared to $108.0 million last year, an increase of 39.6 percent.

President and Chief Executive Officer Michael Happe commented, “Winnebago Industries delivered a strong second-quarter performance, executing on sustained, elevated consumer demand for our expanded portfolio of premier outdoor lifestyle brands. Our second-quarter performance and record sales results at recent RV and Marine trade shows further validate consumers’ embrace of the outdoor lifestyle. Winnebago Industries is capitalizing on that sustained demand – market share gains across our segments are evidence of deep affinity for our brands, which consumers recognize are differentiated due to our continued focus on quality, service and innovation. As of January 2022, our RV retail market share is 14.3 percent on a trailing three-month basis, reflecting an increase of 1.0 share points over the same period last year. In our Marine segment, Barletta continued to outperform proforma expectations and is now one of the top five pontoon brands as measured by retail market share. The healthy demand environment, and the unique strength of our brands, positioned Winnebago Industries well to take continued pricing actions to offset component and material cost inflation and continue to deliver strong margin performance across our segments.”

Towable
Revenues for the Towable segment were $646.6 million for the second quarter, up 47.2 percent over the prior year, primarily driven by pricing increases across the segment, in addition to unit growth of 13.2 percent as a result of continued consumer demand. Segment Adjusted EBITDA was $100.6 million, up 61.3 percent over the prior-year period. Adjusted EBITDA margin of 15.6 percent increased 140 basis points over the prior year due to operating leverage and the timing of pricing actions relative to inflationary impacts this year and the prior year. Backlog increased to $1.9 billion, up 55.2 percent over the prior year and flat sequentially due to continued consumer demand and pricing actions.

Motorhome
Revenues for the Motorhome segment were $417.6 million for the second quarter, up 9.1 percent from the prior year, primarily driven by pricing increases across the segment. Segment Adjusted EBITDA was $46.1 million, a decrease of 9.6 percent from the prior year, primarily driven by production inefficiencies caused by supply constraints, partially offset by pricing ahead of known and anticipated cost input inflation. Adjusted EBITDA margin of 11.0 percent decreased 230 basis points compared to the prior year and 90 basis points sequentially. Backlog increased to $2.2 billion, up 21.9 percent over the prior year and down $0.2 billion sequentially, as dealers continue to experience low levels of motorized inventory and strong consumer demand.

Marine
Revenues for the Marine segment were $97.3 million for the second quarter. Segment Adjusted EBITDA was $13.0 million, an increase of $11.9 million over the prior year and Adjusted EBITDA margin was 13.3 percent. The backlog for the Marine segment was $277.9 million. Barletta’s achievement of performance milestones at the end of calendar 2021, as specified by the July 2021 purchase agreement, will result in the full dispensation of the $15 million maximum payout for the first earnout period.

Balance Sheet and Cash Flow
As of February 26, 2022, the Company had total outstanding debt of $537.0 million ($600.0 million of debt, net of convertible note discount of $53.0 million, and net of debt issuance costs of $10.0 million) and working capital of $545.4 million. Cash flow from operations was $46.1 million for the first six months of Fiscal 2022, a decrease of $20.8 million from the same period in Fiscal 2021 due to investments in working capital driven by challenges in the supply chain.

Quarterly Cash Dividend and Share Repurchase
On March 16, 2022, the company’s board of directors approved a quarterly cash dividend of $0.18 per share payable on April 27, 2022, to common stockholders of record at the close of business on April 13, 2022. This dividend is in line with the prior dividend of $0.18 per share paid in January 2022 and represents a 50 percent, or $0.06 per share, increase from the dividend of $0.12 per share approved in March of 2021. Share buybacks totaling $40.0 million were executed during the second quarter of Fiscal 2022 and now total $59.6 million Fiscal 2022 year-to-date.

Happe continued, “Winnebago Industries is leading our industry in innovating for the future of the outdoor lifestyle experience. In the second quarter, we unveiled the e-RV concept vehicle, an entirely new, all-electric, zero-emission RV, developed by our Advanced Technology Group, that moves to meet the environmental and sustainability goals that Winnebago Industries has set, as well as the growing consumer demand for electric power applications. We are proud to continue our legacy of innovation and explore new frontiers in outdoor lifestyle products. Looking ahead, our world-class team remains committed to operational excellence and working closely with our dealer partners to replenish their inventories. We are confident that Winnebago Industries has continued headroom for sustained market share gains and profitable growth across our portfolio, leading to enhanced value creation for our end consumers, dealers, employees, and shareholders.”