— Record First Quarter Revenues of $1.2 Billion Increased 46%, Including Robust Organic Growth of 38% —
— Record First Quarter Gross Margin of 19.8% Increased 250 Basis Points Year-Over-Year —
— Record Reported Quarterly Diluted EPS of $2.90 and Record Adjusted EPS of $3.51, Up 97% Over Prior Year —
— RV Market Share Gains Continue; 13.3%, or +1.3pp, Trailing Three Months thru October —
— New Marine Reporting Segment Reflects Expanded Portfolio of Premier Brands with the Acquisition of Barletta —
Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, Thursday reported financial results for the Company’s Fiscal 2022 first quarter.
First Quarter Fiscal 2022 Results
Revenues for the Fiscal 2022 first quarter ended November 27, 2021, were a record $1.2 billion, an increase of 45.7% compared to $793.1 million for the Fiscal 2021 period. Revenues excluding the recently acquired Barletta business were $1.1 billion, representing an organic growth rate of 37.5% over the prior year period driven by continued strong consumer demand and pricing increases related to current and anticipated higher material and component costs. Gross profit was $229.4 million, an increase of 67.4% compared to $137.0 million for the Fiscal 2021 period. Gross profit margin increased 250 basis points in the quarter to a record 19.8%, driven by operating leverage, price increases, productivity initiatives and favorable segment mix, partially offset by higher material and component costs. Operating income, which includes $3.4 million of acquisition-related costs and $4.6 million of incremental amortization of intangible assets related to the acquisition of Barletta, was $146.4 million for the quarter, an increase of 72.2% compared to $85.0 million for the first quarter of last year. Fiscal 2022 first quarter net income, which includes $6.4 million of contingent consideration fair value adjustment related to the Barletta acquisition, was $99.6 million, an increase of 73.5% compared to $57.4 million in the prior year quarter. Reported earnings per diluted share was $2.90, compared to reported earnings per diluted share of $1.70 in the same period last year. Adjusted earnings per diluted share was $3.51, an increase of 97.2% compared to adjusted earnings per diluted share of $1.78 in the same period last year. Consolidated Adjusted EBITDA was $167.2 million for the quarter, compared to $89.3 million last year, an increase of 87.3%.
President and Chief Executive Officer Michael Happe commented, “Winnebago Industries’ strong first quarter performance builds on our sustained momentum and continues to demonstrate the remarkable growth and profitability our expanded portfolio of premier outdoor lifestyle brands can deliver. Our golden threads of quality, service and innovation continued to differentiate our brands, driving continued market share gains across our portfolio. As of October, 2021, our RV retail market share is 13.3%, reflecting an increase of 1.3 share points over the same period last year, on a trailing three month basis per Statistical Surveys, Inc. Our outstanding team and commitment to operational excellence enabled us to deliver for consumers while simultaneously contributing to a record high consolidated gross margin of 19.8%, even in the face of ongoing supply chain constraints and increased input costs. We will continue to meet these challenges head on and work closely with our dealer partners to replenish their inventories, in a disciplined manner. This quarter also marks the first time we are reporting results for our new Marine segment. The results highlight the strength of Barletta’s unique pontoon offering and strong brand affinity, which integrated smoothly into our portfolio and has delivered on the high-growth and profitability expectations we anticipated. Overall, we see a meaningful runway for further profitable growth across our portfolio, as Winnebago Industries is well-positioned to continue to capitalize on the secular demand shift of consumers embracing the outdoor lifestyle, and provide significant value to our end consumers, dealers, employees and shareholders.”
Revenues for the Towable segment were $651.0 million for the first quarter, up 43.1% over the prior year, primarily driven by unit growth due to strong continued end consumer demand and pricing increases across the segment. Segment Adjusted EBITDA was $112.1 million, up 77.5% over the prior year period. Adjusted EBITDA margin of 17.2% increased 330 basis points over the prior year and 230 basis points sequentially, primarily due to pricing increases ahead of anticipated material and component cost inflation and operating leverage. Backlog increased to a record $1.9 billion, up 116.6% over the prior year and 10.0% sequentially, due to continued strong consumer demand combined with low levels of dealer inventory, and pricing actions.
Revenues for the Motorhome segment were $421.5 million for the first quarter, up 30.7% from the prior year, driven by an increase in Class B and Class A unit sales, and pricing increases across the segment. Segment Adjusted EBITDA was $50.2 million, up 65.3% from the prior year. Adjusted EBITDA margin of 11.9% increased 250 basis points over the prior year and 70 basis points sequentially, driven by operating leverage, pricing and productivity initiatives, partially offset by material and component cost inflation. Backlog increased to a record $2.4 billion, up 41.2% over the prior year and 4.7% sequentially, as dealers continue to experience low levels of dealer inventory and strong consumer demand.
The first quarter of Fiscal 2022 marks the first period in which this segment is being reported and is the combination of Chris-Craft, acquired in June, 2018 and Barletta, acquired on August 31, 2021. Revenues for the Marine segment were $79.3 million for the first quarter, an increase of $67.4 million compared to the same period last year. Segment Adjusted EBITDA was $10.6 million, an increase of $9.7 million over the prior year and Adjusted EBITDA margin was 13.3%, an increase of 610 basis points. Backlog for the Marine segment was $257.2 million, an increase of $195.4 million over the prior year. Revenue and EBITDA growth, in addition to the increase in EBITDA margin and backlog, are primarily a result of the recently acquired Barletta business.
Balance Sheet and Cash Flow
As of November 27, 2021, the Company had total outstanding debt of $532.7 million ($600.0 million of debt, net of convertible note discount of $56.7 million, and net of debt issuance costs of $10.5 million) and working capital of $502.5 million. Cash flow from operations was $56.5 million in the first quarter of Fiscal 2022 and compared favorably to last year’s cash outflow of $2.7 million.
Quarterly Cash Dividend and Share Repurchase
On December 15, 2021, the Company’s board of directors approved a quarterly cash dividend of $0.18 per share payable on January 26, 2022, to common stockholders of record at the close of business on January 12, 2022. This is in line with the prior 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 December of 2020. During the first quarter, Winnebago Industries executed share buybacks totaling $19.6 million.
Mr. Happe continued, “In addition to our strong financial results, we bolstered our initiatives that positively impact our communities during the quarter by mobilizing resources through our Winnebago Industries Foundation to support natural disaster relief, employee hardship and dependent scholarship programs and announcing a new goal of achieving net-zero greenhouse gas emissions by 2050 as part of joining the Business Ambition for 1.5°C. We recognize that our corporate responsibilities extend outside our organization and our recently published 2021 Corporate Responsibility Report contains more information on the many ways we are doing work to help people around the globe enjoy outdoor experiences. Looking ahead, we anticipate demand for our highly desirable brands to remain elevated, a result of executing our proven strategy of focusing on quality, innovation and service.”