-- Resilient Profitability, Supported by Solid Sequential Improvement in Towable RV and Marine Segments ---- Barletta Accelerates its Share Momentum in the U.S. Aluminum Pontoon Market Achieving Double Digit Market Share in the Most Recent Three- and Six-Month Periods(1) -- -- Company Returns $87.8 Million to Shareholders Through Share Repurchases and Dividends Through the First Nine Months of Fiscal 2024 -- EDEN PRAIRIE, Minn., June 20, 2024 (GLOBE NEWSWIRE) -- Winnebago Industries, Inc. (NYSE:WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's fiscal 2024 third quarter ended May 25, 2024. Third Quarter Fiscal 2024 Financial Summary Revenues of $786.0 million Gross profit of $118.2 million, representing 15.0% gross margin Diluted earnings per share of $0.96; adjusted diluted earnings per share of $1.13 Adjusted EBITDA of $58.0 million, representing 7.4% adjusted EBITDA margin Cash and cash equivalents of $318.1 million at quarter-end, up 2.6% from year-end fiscal 2023 CEO Commentary"While outdoor industry market conditions remain challenged given inconsistent retail patterns and sustained dealer discipline relative to field inventory levels, we are generally pleased with the resiliency of our portfolio, as our teams balance the pursuit of long-term share, profitability and customer satisfaction across our premium brands," said Michael Happe, President and Chief Executive Officer. "Driven by our Towable RV and Marine segments, we delivered sequential consolidated margin growth in the third quarter. Notwithstanding difficult retail headwinds in the Motorhome segment, our Towable RV business generated higher revenue versus the same period a year ago and our Barletta pontoon retail share grew to double digits for the trailing three- and six-month periods through April. We are also pleased to have returned more than $29 million to investors this quarter through share repurchases and dividends, while maintaining investments in future growth initiatives and managing a healthy balance sheet." "The combination of affordability and innovation remains a focal point of product development at Winnebago Industries – valued differentiation on respected brands our consumers can trust," Happe said. "Recent introductions of economical travel trailers from our Grand Design and Winnebago brands, plus continued market penetration with the opening price Aria line within our Barletta business are evidence of this focus. We are also particularly excited about the upcoming market release in our fourth quarter of the Grand Design Lineage motorhome product as well as the Winnebago Connect intelligent control system being introduced on the Winnebago Navion line. Both strategies open new growth opportunities for our organization." Third Quarter Fiscal 2024 ResultsRevenues were $786.0 million, a decrease of 12.7% compared to $900.8 million in the third quarter of last year, driven by product mix and lower volume related to market conditions. Gross profit was $118.2 million, a decrease of 22.0% compared to $151.4 million in the third quarter of last year. Gross profit margin decreased 180 basis points in the quarter to 15.0% as a result of deleverage, operational efficiency challenges, and higher warranty expense due to a favorable prior year trend, partially offset by cost containment efforts. Selling, general and administrative expenses were $69.1 million, an increase of 3.7% compared to $66.5 million in the third quarter of last year, driven by strategic investments in engineering, digital asset development and increased data and information technology capabilities. Operating income was $43.5 million, a decrease of 46.0% compared to $80.5 million in the third quarter of last year. Net income was $29.0 million, compared to net income of $59.1 million in the third quarter of last year. Reported earnings per diluted share was $0.96, compared to reported earnings per diluted share of $1.71 in the same period last year. Adjusted earnings per diluted share was $1.13, a decrease of 46.9% compared to adjusted earnings per diluted share of $2.13 in the third quarter of last year. Consolidated Adjusted EBITDA was $58.0 million, a decrease of 39.8%, compared to $96.4 million last year. "We have made strong progress during the fiscal year to reduce aging RV field inventory in a fiscally responsible manner; our teams continue to work closely with our dealer partners to monitor the complexion of their inventory and match production and shipments with retail demand," Happe said. "This discipline extends to our Marine segment as well, where we have particularly emphasized dealer inventory health and aggressively positioned ourselves well for the upcoming model year 2025 rollout. Overall, while the challenges of today require constant diligence to navigate, our Company and brands are stronger than ever before and with ongoing investments in product, people, systems, and capabilities like digital connectivity we are well situated to grow profitably as the cycle turns more positive in the future." Third Quarter Fiscal 2024 Segments Summary Towable RV   Three Months Ended ($, in millions) May 25, 2024   May 27, 2023   Change(1) Net revenues $ 386.3     $ 384.1     0.6 % Adjusted EBITDA $ 41.9     $ 53.8     (22.0 )% Adjusted EBITDA Margin   10.9 %     14.0 %   (310) bps ($, in millions) May 25, 2024   May 27, 2023   Change(1)   Backlog $ 153.1     $ 236.0     (35.1 )% (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. Revenues for the Towable RV segment were up compared to the prior year, primarily driven by an increase in unit volume, partially offset by a reduction in average selling price per unit related to product mix. Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to operational efficiency challenges, partially offset by lower discounts and allowances. In addition, results for the third quarter of fiscal 2023 benefited from a favorable warranty expense trend, which did not recur in the third quarter of fiscal 2024. Backlog decreased due to current market conditions and a cautious dealer network. Motorhome RV   Three Months Ended   ($, in millions) May 25, 2024   May 27, 2023   Change(1)   Net revenues $ 299.0     $ 374.4     (20.1 )% Adjusted EBITDA $ 13.4     $ 26.8     (50.2 )% Adjusted EBITDA Margin   4.5 %     7.2 %   (270) bps   ($, in millions) May 25, 2024   May 27, 2023   Change(1)   Backlog $ 354.9     $ 800.4     (55.7 )% (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. Revenues for the Motorhome RV segment were down from the prior year, due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis costs. Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage and operational efficiency challenges, partially offset by cost containment efforts. Backlog decreased due to current market conditions and a cautious dealer network. Marine   Three Months Ended   ($, in millions) May 25, 2024   May 27, 2023   Change(1)   Net revenues $ 87.9     $ 129.0     (31.8 )% Adjusted EBITDA $ 8.5     $ 17.3     (50.9 )% Adjusted EBITDA Margin   9.7 %     13.4 %   (370) bps   ($, in millions) May 25, 2024   May 27, 2023   Change(1)   Backlog $ 62.0     $ 146.3     (57.6 )% (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.   Revenues for the Marine segment were down from the prior year, primarily driven by a decline in unit volume related to market conditions and product mix. Segment Adjusted EBITDA decreased compared to the prior year, due to deleverage, partially offset by cost containment efforts. Backlog decreased primarily driven by a cautious dealer network. Balance Sheet and Cash FlowAs of May 25, 2024, cash and cash equivalents totaled $318.1 million. The Company had total outstanding debt of $695.4 million ($709.3 million of debt, net of debt issuance costs of $13.9 million) and working capital of $581.9 million. Cash flow provided by operations was $99.4 million in the fiscal 2024 third quarter. Quarterly Cash Dividend and Share RepurchaseOn May 15, 2024, the Company's Board of Directors approved a quarterly cash dividend of $0.31 per share payable on June 26, 2024, to common stockholders of record at the close of business on June 12, 2024. Winnebago Industries executed share repurchases of $20 million during the third quarter. Q3 FY 2024 Conference CallWinnebago Industries, Inc. will discuss third quarter fiscal 2024 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 and view the accompanying presentation slides 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 IndustriesWinnebago Industries, Inc. is a leading 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 high-quality motorhomes, travel trailers, fifth-wheel products, outboard and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging vertical integration in key component areas, 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 or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net. Forward-Looking StatementsThis press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to general economic uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; competition and new product introductions by competitors; ability to innovate and commercialize new products; ability to manage our inventory to meet demand; risk related to cyclicality and seasonality of our business; risk related to independent dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations; ability to retain relationships with our suppliers and obtain components; business or production disruptions; inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure to warranty claims; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related exposure to product liability claims; governmental regulation, including for climate change; increased attention to environmental, social, and governance ("ESG") matters, and our ability to meet our commitments; impairment of goodwill and trade names; and risks related to our 2025 Convertible Notes, 2030 Convertible Notes and Senior Secured Notes, including our ability to satisfy our obligations under these notes. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to reflect any changes in the Company's 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. ContactsInvestors: Ray Posadas Media: Dan Winnebago Industries, Inc.Footnotes to News Release Footnotes: (1) Data reported by Statistical Surveys, Inc., representing trailing three- and six-month U.S. aluminum pontoon market share through April 2024. This data is continuously updated and often impacted by delays in reporting by various states. Winnebago Industries, Inc.Condensed Consolidated Statements of Income(Unaudited and subject to reclassification)   Three Months Ended (in millions, except percent and per share data) May 25, 2024   May 27, 2023 Net revenues $ 786.0   100.0 %   $ 900.8   100.0 % Cost of goods sold   667.8   85.0 %     749.4   83.2 % Gross profit   118.2   15.0 %     151.4   16.8 % Selling, general, and administrative expenses   69.1   8.8 %     66.5   7.4 % Amortization   5.6   0.7 %     4.4   0.5 % Total operating expenses   74.7   9.5 %     70.9   7.9 % Operating income   43.5   5.5 %     80.5   8.9 % Interest expense, net   5.8   0.7 %     5.2   0.6 % Non-operating loss   2.2   0.3 %     0.2   — % Income before income taxes   35.5   4.5 %     75.1   8.3 % Provision for income taxes   6.5   0.8 %     16.0   1.8 % Net income $ 29.0   3.7 %   $ 59.1   6.6 %                 Earnings per common share:               Basic $ 0.99       $ 1.95     Diluted $ 0.96       $ 1.71     Weighted average common shares outstanding:               Basic   29.2         30.4     Diluted   30.4         35.4                       Nine Months Ended (in millions, except percent and per share data) May 25, 2024   May 27, 2023 Net revenues $ 2,252.6   100.0 %   $ 2,719.7   100.0 % Cost of goods sold   1,913.3   84.9 %     2,261.1   83.1 % Gross profit   339.3   15.1 %     458.6   16.9 % Selling, general, and administrative expenses   204.4   9.1 %     203.4   7.5 % Amortization   16.9   0.7 %     12.0   0.4 % Total operating expenses   221.3   9.8 %     215.4   7.9 % Operating income   118.0   5.2 %     243.2   8.9 % Interest expense, net   15.2   0.7 %     16.4   0.6 % Loss on note repurchase   32.7   1.5 %     —   — % Non-operating loss   5.8   0.3 %     2.3   0.1 % Income before income taxes   64.3   2.9 %     224.5   8.3 % Provision for income taxes   22.2   1.0 %     52.4   1.9 % Net income $ 42.1   1.9 %   $ 172.1   6.3 %                 Earnings per common share:               Basic $ 1.43       $ 5.66     Diluted $ 1.40       $ 4.95     Weighted average common shares outstanding:               Basic   29.3         30.4     Diluted   30.6         35.5     Amounts in tables are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. In addition, percentages may not add in total due to rounding. Winnebago Industries, Inc. Condensed Consolidated Balance Sheets(Unaudited and subject to reclassification) (in millions) May 25, 2024   August 26, 2023 Assets       Current assets       Cash and cash equivalents $ 318.1   $ 309.9   Receivables, net   199.3     178.5   Inventories, net   441.5     470.6   Prepaid expenses and other current assets   24.8     37.7   Total current assets   983.7     996.7   Property, plant, and equipment, net   335.5     327.3   Goodwill   514.5     514.5   Other intangible assets, net   485.1     502.0   Investment in life insurance   30.2     29.3   Operating lease assets   48.1     42.6   Deferred income tax assets, net   8.9     —   Other long-term assets   19.0     20.0   Total assets $ 2,425.0   $ 2,432.4           Liabilities and Shareholders' Equity       Current liabilities       Accounts payable $ 134.0   $ 146.9   Income taxes payable   3.1     —   Current maturities of long-term debt, net   59.0     —   Accrued expenses   205.7     249.1   Total current liabilities   401.8     396.0   Long-term debt, net   636.4     592.4   Deferred income tax liabilities, net   —     11.7   Unrecognized tax benefits   6.0     6.1   Long-term operating lease liabilities   47.3     42.0   Deferred compensation benefits, net of current portion   6.9     7.9   Other long-term liabilities   8.2     8.2   Total liabilities   1,106.6     1,064.3   Shareholders' equity   1,318.4     1,368.1   Total liabilities and shareholders' equity $ 2,425.0   $ 2,432.4   Winnebago Industries, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited and subject to reclassification)   Nine Months Ended (in millions) May 25, 2024   May 27, 2023 Operating activities       Net income $ 42.1     $ 172.1