"Our innovative products and the breadth of products we offer at all price points along the spectrum, particularly within the entry-level and mid-price point categories, combined with our outstanding dealer network, resulted in market share gains during calendar 2017. We leveraged the combined strength in industry demand and share gains to drive increased profitability across both segments of our business through a combination of increased output from recently added production capacity, enhanced scheduling and optimization of production runs at our existing facilities, as well as various initiatives implemented across the Company over the last year to improve operating efficiencies. During the quarter, we continued to experience a tight labor market in Northern Indiana and began to experience some inflationary price increases in certain raw material and commodity-based components. We continue to manage these challenges through a combination of actions," Martin added.Towable RVs
- Towable RV sales were $1.37 billion for the second quarter, up 26.9% from $1.08 billion in the prior-year period, driven primarily by continued strong demand for our more affordably-priced travel trailers and fifth wheels.
- Towable RV income before tax was $116.7 million, up 49.7% from $78.0 million in the second quarter last year. This increase was driven primarily by the increase in sales; improved gross margins due to improved operating efficiencies and process improvements, primarily by Jayco; decreased Selling, General and Administrative (SG&A) expense as a percent of revenues; and slightly lower amortization expense.
- Towable RV backlog increased $493.1 million, or 37.3%, to $1.82 billion, compared to $1.32 billion at the end of the second quarter of fiscal 2017, reflecting the continued momentum and demand for our travel trailers in advance of the spring selling season.
- Motorized RV sales were $559.9 million for the second quarter, up 17.9% from $475.0 million in the prior-year second quarter. The increase in motorized RV sales was a result of the ongoing growth in our more moderately-priced gas Class A and Class C motorhomes, both of which continue to be in high demand by our dealers and end consumers.
- Motorized RV income before tax was $37.5 million, up 31.8% from $28.5 million last year, driven primarily by the growth in motorized sales and improved gross margins due to improved operating efficiencies, primarily by Jayco.
- Motorized RV backlog increased $214.9 million, or 28.0%, to $981.8 million from $766.9 million a year earlier, reflecting the continued strong demand for our smaller, affordably- priced gas Class A and Class C motorhomes.
"Subsequent to the end of the second quarter, Thor made a $46.9 million investment in a newly created joint venture, named TH2. TH2 was formed to own, improve and sell innovative and comprehensive digital platforms throughout the RV marketplace. This investment was funded by cash on hand at the closing, in early March 2018," concluded Zuhl.Outlook "Our healthy backlog is confirmation of the overall strength of the RV lifestyle and confirmation that our products are hitting the target of price and design for consumers," added Martin. "The overall health of the RV industry remains strong and is supported by solid growth of retail shipments, with our dealer inventories at appropriate levels for seasonal consumer demand. Demand continues to be driven by favorable economic conditions and demographic trends that are reflecting the growth of first-time and younger buyers. Dealer optimism remains high based on strong attendance and sales performance at the early spring retail trade shows." "As we look forward to the remainder of fiscal 2018, we will be facing tougher year-over-year comparatives during the second half of the fiscal year as the significant operating efficiencies and process improvements achieved at Jayco began to materialize in the third quarter of fiscal 2017. We are confident, however, that fiscal 2018 will be another year of meaningful growth," concluded Martin. Peter B. Orthwein, Thor Executive Chairman, added, "Looking ahead, we will continue executing the components of our strategic plan - investing in prudent capacity expansions to capitalize on demand, providing market-leading, innovative and high quality products that exceed customer expectations and maintaining our focus on operational efficiency improvements and cost management disciplines. In addition to our historically strong operating cash flow, the positive impact provided by the U.S. tax reform legislation on our cash flow will allow us to focus on funding growth, both organically and through acquisition, paying down our debt and increasing returns to our shareholders over time," Orthwein concluded.
Supplemental Earnings Release MaterialsThor announced that it 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 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. Forward-Looking Statements This release includes certain statements that are "forward looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management's current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations, raw material or chassis supply restrictions, the level of warranty claims incurred, legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers, the costs of compliance with governmental regulation, legal and compliance issues including those that may arise in conjunction with recent transactions, lower consumer confidence and the level of discretionary consumer spending, interest rate fluctuations, the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers, restrictive lending practices, management changes, the success of new and existing products and services, consumer preferences, the pace of obtaining and producing at new production facilities, the pace of acquisitions and the successful closing and financial impact thereof, the potential loss of existing customers of acquisitions, the integration of new acquisitions, our ability to retain key management personnel of acquired companies, a shortage of necessary personnel for production, the loss or reduction of sales to key dealers, the availability of delivery personnel, asset impairment charges, cost structure changes, competition, the impact of potential losses under repurchase agreements, the potential impact of the strength of the U.S. dollar on international demand, general economic, market and political conditions, changes to investment and capital allocation strategies or other facets of our strategic plan, and other risks and uncertainties including those discussed more fully in ITEM 1A of our Annual Report on Form 10-K for the year ended July 31, 2017 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended January 31, 2018.
We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any change in our expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
|THOR INDUSTRIES, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE 3 AND 6 MONTHS ENDED JANUARY 31, 2018 and 2017|
|($000's except share and per share data) (Unaudited)|
|3 MONTHS ENDED JANUARY 31,||6 MONTHS ENDED JANUARY 31,|
|2018||% Net Sales (1)||2017||% Net Sales (1)||2018||% Net Sales (1)||2017||% Net Sales (1)|
|Selling, general and administrative expenses||117,088||5.9%||96,969||6.1%||251,351||6.0%||199,279||6.0%|
|Amortization of intangible assets||13,796||0.7%||15,279||1.0%||27,354||0.7%||33,494||1.0%|
|Interest expense, net||(953||)||(0.0%)||(2,309||)||(0.1%)||(1,984||)||(0.0%)||(4,716||)||(0.1%)|
|Other income, net||2,574||0.1%||1,220||0.1%||5,332||0.1%||3,200||0.1%|
|Income before income taxes||141,065||7.2%||98,365||6.2%||328,156||7.8%||214,165||6.5%|
|Net income and comprehensive income||$||79,752||4.0%||$||64,782||4.1%||$||208,158||5.0%||$||143,527||4.4%|
|Earnings per common share|
|Weighted avg. common shares outstanding-basic||52,694,680||52,582,134||52,653,303||52,543,050|
|Weighted avg. common shares outstanding-diluted||52,861,140||52,740,959||52,839,752||52,723,450|
|SUMMARY CONDENSED CONSOLIDATED BALANCE SHEETS - JANUARY 31, ($000) (Unaudited)|
|Cash and equivalents||$||109,775||$||134,655||Current liabilities||$||817,117||$||680,732|
|Accounts receivable, trade and other||624,085||489,851||Long-term debt||80,000||325,000|
|Inventories||590,363||477,598||Other long-term liabilities||63,913||51,129|
|Prepaid expenses and other||9,979||13,505||Stockholders' equity||1,747,929||1,375,564|
|Total current assets||1,334,202||1,115,609|
|Property, plant & equipment, net||466,215||375,354|
|Amortizable intangible assets, net||416,112||473,897|
|Deferred income taxes and other, net||114,737||89,872|
|(1) Percentages may not add due to rounding differences|