Winnebago Industries reported sales rose 13.8 percent in the fourth quarter and 36.6 percent in the fiscal year ending August 27. Quarterly sales and earnings exceeded Wall Street’s targets.

Fourth Quarter Fiscal 2022 Results
Revenues for the Fiscal 2022 fourth quarter ended August 27, 2022, were $1.2 billion, an increase of 13.8 percent compared to $1.0 billion for the Fiscal 2021 period. Revenues excluding the recently acquired Barletta business were $1.1 billion, representing an organic growth rate of 4.3 percent over the prior year period, primarily driven by pricing actions, partially offset by Towable unit declines. Gross profit was $210.4 million, an increase of 12.4 percent compared to $187.2 million for the Fiscal 2021 period. Gross profit margin decreased 30 basis points in the quarter to 17.8 percent, as a result of higher material and component costs and deleverage, partially offset by pricing actions. Operating income was $123.6 million for the quarter, an increase of 3.0 percent compared to $120.0 million for the fourth quarter of last year. Fiscal 2022 fourth-quarter net income was $82.6 million, a decrease of 1.8 percent compared to $84.1 million in the prior year quarter. Reported earnings per diluted share were $2.61, compared to reported earnings per diluted share of $2.45 in the same period last year. Adjusted earnings per diluted share were $3.02, an increase of 14.0 percent compared to adjusted earnings per diluted share of $2.65 in the same period last year. Consolidated Adjusted EBITDA was $139.2 million for the quarter, an increase of 7.9 percent compared to $129.0 million last year.

Sales of $1.2 billion topped Wall Street’s consensus estimate of $1.12 billion. Adjusted EPS of $3.02 surpassed Wall Street’s consensus estimate of $2.71.

President and Chief Executive Officer Michael Happe commented, “Winnebago Industries capped off a record year in Fiscal 2022 with solid fourth-quarter results. Our leading premium outdoor brands, distinguished by the golden threads of quality, innovation, and service, continue to resonate with our increasingly diverse outdoor recreation consumer base. We made important market advances in both the RV and marine industries, operating well in a volatile macroeconomic environment. I want to thank our entire Winnebago Industries team for their excellence in driving record gross margins and operating income, having successfully navigated supply chain disruptions and cost input inflation. Their efforts enabled our ability to return record cash to our shareholders during the year as well. While we expect uncertain market conditions to persist into our Fiscal 2023, we are confident that our transformed and evolving business platform positions us for continued success into the future.”

Full Year Fiscal 2022 Results
Fiscal 2022 represented record results with revenues of $5.0 billion increasing 36.6 percent from $3.6 billion in Fiscal 2021 driven by the recently acquired Barletta business, pricing actions and strong consumer demand for Winnebago Industries’ products. Record gross profit margin of 18.7 percent improved 80 basis points year-over-year driven primarily by improved operating leverage and price increases, partially offset by higher material and component costs and production inefficiencies caused by supply constraints. Operating income was $583.5 million for Fiscal 2022, compared to $407.4 million in Fiscal 2021. Net income was $390.6 million, an increase of 38.6 percent compared to $281.9 million the prior year. Earnings per diluted share was $11.84, an increase of 43.0 percent compared to earnings per diluted share of $8.28 in Fiscal 2021. Adjusted earnings per diluted share of $13.81 increased 55.5 percent compared to adjusted earnings per diluted share of $8.88 in the same period last year. Consolidated Adjusted EBITDA was $648.9 million, an increase of 48.8 percent from $436.1 million in Fiscal 2021.

Towable Fourth Quarter and Full Year Fiscal 2022 Results
Revenues for the Towable segment were $494.2 million for the fourth quarter Fiscal 2022, down 11.8 percent from the prior year, primarily driven by a decline in unit volume partially offset by pricing actions. Segment Adjusted EBITDA was $53.2 million, down 36.2 percent from the prior year period. Adjusted EBITDA margin of 10.8 percent decreased 410 basis points from the prior year reflecting higher material and component costs and deleverage, partially offset by pricing actions. The backlog decreased to $576.5 million, down 66.2 percent from the prior year due to normalized dealer inventories.

For the full year Fiscal 2022, revenues for the Towable segment were $2.6 billion, up 29.2 percent over Fiscal 2021 primarily driven by price increases related to higher material and component costs. Segment Adjusted EBITDA for the full year was $383.6 million, up 32.7 percent year-over-year. Adjusted EBITDA margin of 14.8 percent increased 40 basis points for the full year over Fiscal 2021.

Motorhome Fourth Quarter and Full Year Fiscal 2022 Results
Revenues for the Motorhome segment were $555.8 million for the fourth quarter, up 23.8 percent from the prior year, driven by continued strong unit sales and pricing actions related to higher material and component costs. Segment Adjusted EBITDA was $77.4 million, an increase of 53.4 percent from the prior year. Adjusted EBITDA margin of 13.9 percent increased 270 basis points over the prior year due to pricing actions and production efficiencies, partially offset by higher material and component costs. Backlog decreased to $1.7 billion, down 26.7 percent from the prior year, driven by increased levels of dealer inventories.

For the full year Fiscal 2022, revenues for the Motorhome segment were $1.9 billion, up 24.2 percent from Fiscal 2021 driven by pricing actions related to higher material and component costs, and increased unit sales. Segment Adjusted EBITDA for the full year was $238.0 million, up 40.7 percent from Fiscal 2021. Adjusted EBITDA margin of 12.5 percent was up 150 basis points for the full year over Fiscal 2021.

Marine Fourth Quarter and Full Year Fiscal 2022 Results
Revenues for the Marine segment were $122.1 million for the fourth quarter. Excluding Barletta, revenues for the segment were $23.7 million, a 41.8 percent increase compared to the same period last year. Segment Adjusted EBITDA was $17.5 million, an increase of $15.8 million over the prior year and Adjusted EBITDA margin was 14.3 percent. The backlog for the Marine segment was $314.7 million and remains elevated as low dealer inventories persist. The Barletta brand continued to outperform pro-forma expectations and deliver margins that are accretive to the Winnebago Industries portfolio.

For the full year Fiscal 2022, revenues for the Marine segment were $425.3 million, up $365.1 million from Fiscal 2021 driven by the addition of the Barletta business. Segment Adjusted EBITDA for the full year was $60.8 million, up $55.7 million from Fiscal 2021. Full-year adjusted EBITDA margin was 14.3 percent for Fiscal 2022, up 570 basis points for the full year over Fiscal 2021.

Balance Sheet and Cash Flow
As of August 27, 2022, the company had total outstanding debt of $545.8 million ($600.0 million of debt, net of convertible note discount of $45.3 million, and net of debt issuance costs of $8.9 million) and working capital of $571.7 million. Cash flow from operations was $400.6 million in Fiscal 2022, an increase of $163.3 million compared to $237.3 million last year, driven by higher profitability, a $36.6 million increase in accrued expenses and other liabilities, and a $27.2 million increase in accounts payable to support the growth in the business, partially offset by a $171.3 million increase in inventory to support operational activities during a period impacted by continued supply chain challenges.

Winnebago Industries also secured an increased asset-based lending (ABL) credit facility of $350.0 million, replacing the previous ABL credit facility of $192.5 million, further enhancing the company’s liquidity position.

Quarterly Cash Dividend and Share Repurchases
On August 17, 2022, the company’s Board of Directors approved a quarterly cash dividend of $0.27 per share payable on September 28, 2022, to common stockholders of record at the close of business on September 14, 2022. This represents a 50 percent, or $0.09 per share, increase from the prior dividend and follows the 50 percent increase that the company announced in the prior year.

Additionally, in the fourth quarter, Winnebago Industries’ Board of Directors approved a new share repurchase authorization of up to $350 million of the company’s common stock. The share repurchase authorization replaces the previous $200 million share repurchase program that was fully depleted with $80.1 million of share repurchases completed in the fourth quarter of fiscal 2022, resulting in record quarterly cash of $85.8 million returned to shareholders.

Happe continued, “Looking ahead, our focused strategic priorities, strong premium brands, more diversified set of revenue streams, operational discipline, and especially our people will enable us to win in the marketplace, remain agile, and deliver robust profitability as we continue to chart our course through the next year. Winnebago Industries is entering Fiscal 2023 from a position of competitive and financial strength and will be extremely flexible in balancing strategic investments in profitable growth opportunities and managing our balance sheet with responsibility. We look forward to showcasing our strategic progress and intentions, along with a future outlook on our business and industries at our upcoming investor day on November 15, 2022.”

Photo courtesy Winnebago