Winnebago Industries Inc. reported sales rose 40.4 percent in the fourth quarter and 54.1 percent in the year ended August 28.
Fourth Quarter Fiscal 2021 Results
Revenues for the Fiscal 2021 fourth quarter ended August 28, 2021, were $1.0 billion, an increase of 40.4 percent compared to $737.8 million for the Fiscal 2020 period. Revenue growth compared to the Fiscal 2020 period was driven by strong end-consumer demand, pricing initiatives across all segments driven by higher material and component costs, and segment and product mix. Gross profit was $187.2 million compared to $122.5 million for the Fiscal 2020 period, driven by increased unit growth and pricing, including lower discounts and allowances. Gross profit margin increased 150 basis points to 18.1 percent in the quarter driven by fixed cost leverage, increased pricing, including lower discounts and allowances, and profitability initiatives. Operating income was $120.0 million for the quarter, an increase of 75.4 percent compared to $68.4 million for the fourth quarter last year. Fiscal 2021 fourth-quarter net income was $84.1 million, an increase of 98.0 percent compared to $42.5 million in the fourth quarter of last year. Earnings per diluted share were $2.45, an increase of 96.0 percent compared to $1.25 in the same period last year. Adjusted earnings per diluted share were $2.57 for the fourth quarter, an increase of 77.2 percent compared to adjusted earnings per diluted share of $1.45 in the same period last year. Consolidated Adjusted EBITDA was $129.0 million for the quarter, compared to $76.5 million last year, representing an increase of 68.6 percent.
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries delivered a strong fourth quarter to finish a record Fiscal 2021. The new heights we were able to achieve in revenues and profitability demonstrate the unique strength and appeal of our growing platform of leading brands. Our resilient and focused team continues to successfully manage through a growing backlog and supply chain challenges while driving tremendous preferences for our premium outdoor lifestyle products. In an environment of high demand, low dealer inventories, tight supply chain, and dynamic cost pressures our market share gains accelerated in the fourth quarter as more consumers sought Winnebago Industries’ high-quality, innovative products and exceptional service. We announced the acquisition of Barletta Boat company in the fourth quarter, and completed the transaction in early Fiscal 2022, extending our marine platform into one of the fastest-growing boating segments in pontoons and advancing our premier outdoor lifestyle company vision. As always, I want to thank our 6,500-plus Winnebago Industries employees who have worked extremely hard during very dynamic and challenging times. It is their efforts that allow us to deliver on our customer, dealer and shareholder expectations.”
Full Year Fiscal 2021 Results
Fiscal 2021 record revenues of $3.6 billion increased 54.1 percent from $2.4 billion in Fiscal 2020 driven by strong consumer demand for Winnebago Industries’ products and increased pricing, including lower discounts and allowances. Fiscal 2021 record gross profit margin of 17.9 percent improved 460 basis points year-over-year driven primarily by robust operating leverage, increased pricing, including lower discounts and allowances, and favorable segment mix. Operating income was $407.4 million for Fiscal 2021, compared to $113.8 million in Fiscal 2020. Net income for Fiscal 2021 was $281.9 million, an increase of 358.8 percent compared to $61.4 million in Fiscal 2020. Fiscal 2021 earnings per diluted share were $8.28, an increase of 350.0 percent compared to earnings per diluted share of $1.84 in Fiscal 2020. Adjusted earnings per diluted share were $8.55 for Fiscal 2021, compared to adjusted earnings per diluted share of $2.58 in the same period last year. Fiscal 2021 consolidated Adjusted EBITDA was $436.1 million, an increase of 159.4 percent from $168.1 million in Fiscal 2020.
Towable Fourth Quarter and Full Year Fiscal 2021 Results
Revenues for the Towable segment were $560.0 million for the fourth quarter, up 35.3 percent over the prior year, primarily driven by unit growth due to the strong end consumer demand and increased pricing across the segment. Adjusted EBITDA margin of 14.9 percent increased 10 basis points over the prior-year period and 50 basis points sequentially. Backlog increased to a record $1,704.4 million, up 127.9 percent over the prior year and 12.0 percent sequentially, due to continued strong consumer demand combined with extremely low levels of dealer inventory.
For the full year Fiscal 2021, revenues for the Towable segment were $2.0 billion, up 63.7 percent over Fiscal 2020 driven by heightened consumer demand for Grand Design and Winnebago branded products and increased pricing. Segment Adjusted EBITDA for the full year was $289.0 million, up 94.9 percent from Fiscal 2020. Adjusted EBITDA margin of 14.4 percent increased 230 basis points for the full year over Fiscal 2020.
Motorhome Fourth Quarter and Full Year Fiscal 2021 Results
In the fourth quarter, revenues for the Motorhome segment were $448.9 million, up 48.7 percent from the prior year, driven by an increase in Class B and Class A unit sales, and pricing across the segment. Segment Adjusted EBITDA was $50.4 million, up 159.1 percent from the prior year due to higher revenues and profitability initiatives. Adjusted EBITDA margin of 11.2 percent increased 480 basis points over the prior year and 150 basis points sequentially, driven by leverage and profitability initiatives. Backlog increased to a record $2.3 billion, an increase of 119.1 percent over the prior year and 5.7 percent sequentially, as dealers continue to experience significant reductions in inventories due to high levels of consumer demand.
For the full year Fiscal 2021, revenues for the Motorhome segment were $1.5 billion, up 45.6 percent from Fiscal 2020 driven by increased unit sales and pricing. Segment Adjusted EBITDA for the full year was $169.2 million, up 413.5 percent from Fiscal 2020. Adjusted EBITDA margin of 11.0 percent was up 790 basis points for the full year over Fiscal 2020.
Balance Sheet and Cash Flow
As of August 28, 2021, the company had total outstanding debt of $528.6 million ($600.0 million of debt, net of convertible note discount of $60.4 million, and net of debt issuance costs of $11.1 million) and working capital of $651.6 million. Cash flow from operations was $237.3 million for the full year Fiscal 2021, a decrease of $33.2 million from the $270.4 million generated in Fiscal 2020 driven by higher net income which was more than offset by an increase to working capital that was driven by growth in the business and supply chain challenges.
Cash Dividend and Share Repurchase
On August 18, 2021, its Board of Directors approved a quarterly cash dividend of $0.18 per share payable on September 29, 2021, to common stockholders of record at the close of business on September 15, 2021. This represents a 50 percent, or $0.06 per share, increase from the prior dividend of $0.12 per share. During the fourth quarter, Winnebago Industries executed share buybacks totaling $35.4 million. For the full year Fiscal 2021, dividend payments of $16.2 million and share buybacks of $45.4 million combined for total cash returned to shareholders of $61.6 million. As previously announced on October 13, 2021, the company’s Board of Directors authorized a new share repurchase program. This authorization, which does not have an expiration date, grants the company the authority to repurchase $200.0 million of the company’s common stock and replace the prior program.
Happe continued, “As we reflect on 2021, we are proud of the financial, organizational and cultural strides we have made together with our talented team. In addition to delivering improved profitability and market share growth, Winnebago Industries continued our deep commitment to corporate responsibility initiatives that impact our communities and shareholders. During the year, Winnebago Industries increased its sustainability efforts by renewing our partnership with the National Park Foundation and joining the UN Global Compact, welcomed a new Head of Diversity, Equity and Inclusion, and added two independent directors to our Board. Looking ahead, our confidence in our ability to profitably grow revenues and gain market share is reflected in the 50 percent increase to our quarterly cash dividend announced in late August, our share buybacks in our Fiscal 2021 fourth quarter, and the newly authorized share repurchase program of up to $200 million. We look forward to continuing our momentum into Fiscal 2022 through a continued focus on quality, service and innovation as well as an expanded portfolio of high-quality outdoor lifestyle products that empower our customers to have extraordinary outdoor experiences as they travel, live, work and play.”
