Winnebago Industries, Inc., an outdoor lifestyle product manufacturer, today reported financial results for the company’s fiscal 2022 third quarter, sharing that revenues for the quarter that ended May 28, 2022 reached a record $1.5 billion.
This is an increase of 51.8% compared to $960.7 million for the fiscal 2021 third quarter, the company shared in a press release.
Revenues excluding the recently acquired Barletta business were $1.4 billion, representing an organic growth rate of 41.1% over the prior-year period. Results were driven by pricing increases and shipments related to the strong dealer order backlog, Winnebago noted.
Meanwhile, gross profit was $273.0 million, an increase of 60.9% compared to $169.6 million for the fiscal 2021 period. Gross profit margin increased 100 basis points in the quarter to 18.7%, driven primarily by operating leverage, price increases, and favorable segment mix, partially offset by higher material and component costs.
Operating income, which includes $4.6 million of amortization associated with the acquisition of Barletta, was $176.7 million for the quarter, an increase of 72.5% compared to $102.4 million for the third quarter of last year.
Fiscal 2022 third-quarter net income, which includes $11.8 million of contingent consideration fair value adjustment related to the Barletta acquisition, was $117.2 million, an increase of 64.4% compared to $71.3 million in the prior-year quarter.
Reported earnings per diluted share was $3.57, compared to reported earnings per diluted share of $2.05 in the same period last year. Adjusted earnings per diluted share was $4.13, an increase of 84.4% compared to adjusted earnings per diluted share of $2.24 in the same period last year. Consolidated Adjusted EBITDA was $191.7 million for the quarter, compared to $109.8 million last year, an increase of 74.7%.
“The trend in recent quarters continued, as Winnebago Industries delivered impressive third-quarter results, driven by our team’s focused execution and good progress on reducing our order backlog in the quarter from our expanded portfolio of premier outdoor lifestyle brands,” President and Chief Executive Officer Michael Happe commented.
He said that in the third quarter, Winnebago “capitalized on the prime spring selling season to further gain share and expand our pipeline of lifelong customers, as our golden threads of quality, innovation, and customer experience continue to differentiate the Winnebago portfolio and resonate with consumers.”
Happe added that the unique strength of the company’s brands positioned Winnebago Industries to not only gain market share but also to successfully take continued pricing actions to offset meaningful component and material cost inflation and enhance margin performance across its segments.
“We are incredibly proud of our results and the efforts of our talented team across the organization. As we look ahead to our last quarter in the fiscal year, we will maintain our focus on executing our proven strategy and build on our momentum to further grow and solidify our expanding market position, while driving long-term value for end customers, dealers, employees, and shareholders. We will also continue to demonstrate appropriate discipline in capacity utilization in accordance with matching our production schedule to dealer demand.”
Revenues for the Towable segment were $805.6 million for the third quarter, up 45.0% over the prior year, primarily driven by pricing increases, in addition to solid unit growth as a result of strong dealer order backlog. Segment Adjusted EBITDA was $117.8 million, up 47.0% over the prior year period. Adjusted EBITDA margin of 14.6% increased 20 basis points over the prior year. Backlog decreased to $1.3 billion, down 13.7% from the prior year and down 29.9% sequentially, as Winnebago Industries successfully replenished dealer inventories in the Towable segment.
Revenues for the Motorhome segment were $516.3 million for the third quarter, up 34.0% from the prior year, driven by pricing increases across the segment and strong unit sales. Segment Adjusted EBITDA was $64.4 million, an increase of 71.9% over the prior year. Adjusted EBITDA margin of 12.5% increased 280 basis points over the prior year driven by price increases and operating leverage, partially offset by increased material and component costs. Backlog increased to $2.3 billion, up 4.8% over the prior year, driven by increased ASP’s partially offset by a decrease of 16.3% in units.
Revenues for the Marine segment were $126.5 million for the third quarter. Segment Adjusted EBITDA was $19.8 million, an increase of $18.2 million over the prior year and Adjusted EBITDA margin was 15.7%. Backlog for the Marine segment was $245.4 million and remains at elevated levels as low dealer inventories persist. The Barletta brand continues to outperform pro-forma expectations and deliver margins accretive to the Winnebago Industries portfolio.
Balance Sheet and Cash Flow
As of May 28, 2022, the company had total outstanding debt of $541.5 million ($600.0 million of debt, net of convertible note discount of $49.1 million, and net of debt issuance costs of $9.4 million) and working capital of $582.7 million. Cash flow from operations was $245.2 million in the first nine months of Fiscal 2022, an increase of $97.3 million compared to $148.0 million in the same period last year.
Quarterly Cash Dividend and Share Repurchase
On May 18, 2022, the Company’s board of directors approved a quarterly cash dividend of $0.18 per share payable on June 29, 2022, to common stockholders of record at the close of business on June 8, 2022. This dividend is in line with the prior quarter’s dividend of $0.18 per share and represents a 50%, or $0.06 per share, increase from the dividend of $0.12 per share approved in May of 2021. Winnebago Industries executed record share buybacks of $70.0 million during the third quarter. On a fiscal year-to-date basis, share buybacks totaled $129.6 million and cash returned to shareholders totals $147.7 million.
Happe continued, “Looking at the broader economic trends, we have been successful in managing supply chain disruptions, improving dealer inventory levels, navigating cost inflation, and driving manufacturing productivity to deliver consistently strong results. We expect supply chain inconsistencies and inflation pressures to continue in the fourth quarter, and into our fiscal 2023, and we are focused on continuing to stay ahead of them by leveraging our resilient operating structure, deep and collaborative relationships with our dealers and suppliers, and highly-differentiated, premium portfolio of brands. We are confident that the continued execution of our strategy, including a focus on innovation and a differentiated product and overall customer experience, and unwavering commitment to our team and communities positions Winnebago Industries for sustained market share gains and strong profitability across our business.”
Winnebago Industries, Inc. will discuss Fiscal 2022 third-quarter earnings results during a conference call scheduled for 9:00 a.m. Central Time today. Members of the news media, investors, and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company’s website at http://investor.wgo.net. The event will be archived and available for replay for the next 90 days.
About Winnebago Industries
Winnebago Industries, Inc. is a North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta brands, which are used primarily in leisure travel and outdoor recreation activities. The company builds quality motorhomes, travel trailers, fifth-wheel products, pontoons, inboard/outboard, and sterndrive powerboats, and commercial community outreach vehicles. Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota, and Florida.
The company’s common stock is listed on the New York Stock Exchange and traded under the symbol WGO.
For access to Winnebago Industries’ investor relations material, visit http://investor.wgo.net.