Winnebago Industries doubled its earnings in the second quarter ended February 27  as revenues rose 34.0 percent. The maker of motorhomes said interest in the outdoors remains high as evidenced by elevated order backlogs and retail sales growth.

Second Quarter Fiscal 2021 Results
Revenues for the Fiscal 2021 second quarter ended February 27, 2021, were $839.9 million, an increase of 34.0 percent compared to $626.8 million for the Fiscal 2020 period. Gross profit was $156.6 million, an increase of 96.3 percent compared to $79.8 million for the Fiscal 2020 period. Gross profit margin increased 590 basis points in the quarter, driven by pricing, including lower discounts and allowances, operating leverage, motorhome segment productivity initiatives and favorable segment mix. Operating income was $100.0 million for the quarter, an increase of 237.3 percent compared to $29.6 million for the second quarter last year. Fiscal 2021 second-quarter net income was $69.1 million, an increase of 300.0 percent compared to $17.3 million in the prior-year quarter. Reported earnings per diluted share were $2.04 compared to reported earnings per diluted share of $0.51 in the same period last year. Consolidated adjusted earnings per diluted share increased 216.4 percent to $2.12 for the second quarter compared to adjusted earnings per diluted share of $0.67 in the same period last year. Consolidated Adjusted EBITDA was $108.0 million for the quarter, compared to $45.4 million last year, an increase of 137.7 percent.

President and CEO Michael Happe commented, “We are pleased with the outstanding market and financial results from our second quarter of fiscal 2021, as they reflect the sustained strength of our leading brand portfolio and our world-class team’s commitment to safely deliver high-quality products to our valued dealer network. Winnebago Industries’ golden threads of quality, innovation, and service consistently resonate with end consumers who continue to flock to the great outdoors in search of extraordinary experiences with family and friends and aspire to choose a premium OEM partner. We are seeing strong retail momentum heading into the prime spring season. I am especially excited and extremely grateful for our team’s ability to deliver strong profitability in the midst of a very dynamic environment—this is a testament to their resiliency, the appeal of our innovative product lines, and sustained continuous improvement efforts operationally. Looking forward, our relentless focus on building a premier outdoor lifestyle company to maximize value for our employees, consumers, dealers, and shareholders remains steadfast.”

Towable
Revenues for the Towable segment were $439.3 million for the second quarter, up 55.0 percent over the prior year, driven by elevated consumer demand for Grand Design and Winnebago branded products. Segment Adjusted EBITDA was $62.4 million, up 79.5 percent over the prior-year period. Adjusted EBITDA margin of 14.2 percent increased 190 basis points, primarily due to pricing and operating leverage. Backlog increased to 39,855 units, an increase of 307.1 percent over the prior-year period, as dealer inventories continue to experience a significant reduction amidst heightened levels of consumer retail demand since the summer of 2020.

Motorhome
Revenues for the Motorhome segment were $382.6 million for the second quarter, up 17.5 percent from the prior year, driven by continued strong demand for motorhomes, particularly Winnebago branded Class B products. Segment Adjusted EBITDA was $51.0 million, up 241.0 percent from the prior year. Adjusted EBITDA margin increased 870 basis points to 13.3 percent over the prior year, driven by pricing, operating leverage and productivity initiatives. Backlog increased to 14,974 units, an increase of 424.3 percent over the prior-year period, as dealers have experienced sizable reductions to their inventory due to encountering extremely high levels of consumer demand since the summer of 2020.

Balance Sheet and Cash Flow
As of February 27, 2021, the company had total outstanding debt of $520.3 million ($600.0 million of debt, net convertible note discount of $67.5 million, and net debt issuance costs of $12.2 million) and working capital of $544.0 million. Cash flow from operations was $66.9 million for the first six months of Fiscal 2021, a decrease of $52.2 million from the same period in Fiscal 2020, due to year-over-year changes in working capital that have been required to support increased production and the rapid growth in sales.

Quarterly Cash Dividend
On March 17, 2021, the company’s board of directors approved a quarterly cash dividend of $0.12 per share payable on April 28, 2021, to common stockholders of record at the close of business on April 14, 2021.

Happe continued, “While we are pleased with the exceptional financial and operating results delivered for the second quarter, we are also optimistic about the positive retail and wholesale conditions for the rest of our fiscal year. Our Winnebago Industries teams are working diligently with supplier partners to deliver higher volume levels of product to the market for the foreseeable future. Strong retail demand, low field inventory, and record committed dealer orders set the table for continued robust performance, but it should be specially noted we also believe there is secular and ongoing growth in outdoor lifestyle products as consumer priorities have changed due to the pandemic. We are making well-considered capital investments across our premium brand portfolio to increase capacity to meet this elevated demand and will remain disciplined in managing future production to match healthy market behavior and economic conditions. Winnebago Industries is encouraged by the ramp-up of vaccinations in North America and continues to encourage all our stakeholders to keep their families and themselves healthy as they enjoy the outdoors. Lastly, our company is committed to building a more diverse, equitable, and inclusive culture and working to create more equitable outdoor experiences in our communities. Recent exciting announcements on new Board of Director appointments and a renewed enterprise partnership with the National Park Foundation are proof points of positive progress on this critical journey with much more work ahead to do.”

Photo courtesy Winnebago