THOR Industries, Inc. (NYSE: THO) today announced record results for its first fiscal quarter ended October 31, 2021.
“Building on our record-setting fiscal 2021, THOR delivered yet another quarter of strong financial results to begin our 2022 fiscal year. It seems the market focuses on the supply chain and labor challenges that our industry is facing right now more than it does our performance in the face of those challenges, but our performance has been consistent despite those challenges. Through outstanding operational execution, our teams continue to successfully navigate through these challenges at record levels. In the quarter, we delivered over 88,100 units, outpacing the RV industry’s growth rate of shipments. Our first quarter performance, which marks a third consecutive quarter of record net sales and diluted earnings per share, is a testament to the experience, flexibility and agility of our operating teams and their drive to meet the needs of our customers in a difficult and dynamic business environment,” said Bob Martin, President and CEO of THOR Industries.
Independent dealer sentiment remains positive and consumer demand for our RV products remains strong. In the first quarter, our global order backlog increased to more than $18 billion, reaffirming our view that the dealer restocking process will still take a number of quarters to complete and could possibly extend into calendar 2023,” said Martin.
“The strategic course we have set gives us many reasons to remain confident and optimistic about our future performance as well. Our acquisition of Airxcel in the first quarter is a manifestation of our bullish outlook for our industry and for THOR in particular. This acquisition is a key piece to our strategic positioning of the Company as we seek to strengthen our supply chain. The Airxcel integration has gone exceedingly well, and we continue to see a great opportunity for growth through innovation, additional product offerings and the aftermarket business,” added Martin.
First-Quarter Financial Results
Consolidated net sales were $3.96 billion in the first quarter of fiscal 2022, compared to $2.54 billion in the first quarter of fiscal 2021. This year’s first quarter net sales include $2.24 billion for the North American Towable RV segment compared to $1.39 billion in the first quarter of fiscal 2021, $925.0 million for the North American Motorized RV segment compared to $493.9 million in the first quarter of fiscal 2021, and $633.0 million for the European RV segment compared to $602.5 million in the first quarter of fiscal 2021. The increase in consolidated net sales is primarily due to the continuing demand for RVs and our recent acquisitions. The addition of the Tiffin Group, acquired in December of 2020, accounted for $228.3 million of the increase in net sales for the first quarter of fiscal 2022, while the addition of Airxcel, acquired in September of 2021, accounted for $88.8 million of the increase in net sales for the first quarter of fiscal 2022, net of intercompany sales.
Consolidated gross profit margin increased 170 basis points to 16.6% for the first quarter of fiscal 2022, compared to 14.9% in the corresponding period a year ago. The increase in the consolidated gross profit percentage was primarily driven by the increase in net sales, a reduction in sales discounts since the prior-year period and selective net selling price increases to cover known and anticipated material cost increases.
Net income attributable to THOR Industries and diluted earnings per share for the first quarter of fiscal 2022 were $242.2 million and $4.34, respectively, compared to $113.8 million and $2.05, respectively, in the prior-year period.
The addition of the Tiffin Group, acquired on December 18, 2020, accounted for $201.2 million of the $431.2 million increase in North American Motorized RV net sales.
Management Commentary
“In our first fiscal quarter of 2022, we delivered another record consolidated financial performance, reflecting the strong and ongoing demand for our RV products as we continue to demonstrate our ability to excel in challenging operating environments. THOR is strategically structured to enable it to excel during times of favorable market conditions and to outperform when the industry faces challenges like the supply and labor constraints the industry faces today. We are very pleased with our first quarter gross profit margin performance of 16.6% which is an improvement of 170 basis points from the first quarter of fiscal 2021. This increase in consolidated gross profit margin reflects our operating excellence initiatives, an increased mix of higher margin North American sales versus European sales this quarter and our decision to take price adjustments ahead of anticipated increases in our material costs. We do expect our consolidated gross margins to see some downward pressure as global revenue mix normalizes and cost increases continue to occur in future quarters of fiscal 2022,” said Colleen Zuhl, THOR Industries‘ Senior Vice President and Chief Financial Officer.
“During the first quarter of fiscal 2022, we issued $500 million of senior unsecured notes and expanded our ABL borrowing capacity to $1 billion. These transactions not only enhanced our liquidity and extended our debt maturities, but also secured access to long-term financing at attractive rates and provided funding for our acquisition of Airxcel. At the end of the first fiscal quarter, we had liquidity of over $1 billion, including approximately $336 million in cash on hand and approximately $810 million available under our ABL, providing significant financial flexibility moving forward as we continue to execute our long-term strategic plan through prudent and thoughtful capital deployment,” concluded Zuhl.
Outlook
“Our first quarter financial and operational performance was a phenomenal start to our fiscal 2022 year. As we look ahead, we expect continued supply chain constraints, logistical challenges and cost pressures. However, as we have consistently demonstrated, we also expect to continue to excel at our top and bottom lines. We remain steadfastly focused on the execution of our strategic plan while we continue our realization of operational excellence as we strive to meet the strong consumer demand for our products. Through continued strategic operational execution, the integration of our recent acquisitions, our positive outlook for the RV industry and with record backlog levels providing visibility beyond this fiscal year, we are confident that fiscal year 2022 will be another year of meaningful growth for THOR,” said Martin.
“Additionally, RVIA has recently increased its wholesale shipment forecast for calendar year 2021 to more than 602,000 units, and to over 613,000 for calendar year 2022, a projected increase of approximately 2% for next year. We agree with this outlook and expect THOR to continue to outperform the market and to grow at a higher rate than RVIA projects for the industry as whole,” added Martin.
We are pleased with the excellent progress we have made toward achieving our 2025 financial goals that we introduced in October 2019, and we look forward to seeing everyone at the 2022 Florida RV Supershow in January,” concluded Martin.
Supplemental Earnings Release Materials
THOR Industries has provided a comprehensive question and answer document, as well as a PowerPoint presentation, relating to its quarterly results and other topics.
To view these materials, go to http://ir.thorindustries.com.
About THOR Industries, Inc.
THOR Industries is the sole owner of operating subsidiaries that, combined, represent the world’s largest manufacturer of recreational vehicles.
For more information on the Company and its products, please go to www.thorindustries.com.