THOR INDUSTRIES INC
0000730263
--07-31
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<div align="left" style="font-family: Helvetica,Arial,sans-serif">
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<div align="left" style="font-size: 10pt; margin-top: 0pt"><u><b></b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">1.     Nature of Operations and Accounting Policies
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><i>Nature of Operations </i>— Thor Industries, Inc. was founded in 1980 and, together with its
subsidiaries (the “Company”), manufactures a wide range of recreation vehicles and small and
mid-size buses at various manufacturing facilities across the United States. These products are
sold to independent dealers and municipalities primarily throughout the United States and
Canada.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company’s core business activities are comprised of three distinct operations, which
include the design, manufacture and sale of motorized recreation vehicles, towable recreation
vehicles and buses. Accordingly, the Company has presented segment financial information for
these three segments in Note 6 to the Condensed Consolidated Financial Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The July 31, 2010 amounts are derived from the annual audited financial statements. The interim
financial statements are unaudited. In the opinion of management, all adjustments (which
consist of normal recurring adjustments) necessary to present fairly the financial position,
results of operations and change in cash flows for the interim periods presented have been
made. These financial statements should be read in conjunction with the Company’s Annual Report
on Form 10-K for the fiscal year ended July 31, 2010. Certain amounts for 2010 have been
reclassified to conform to current period presentation. Specifically, current and long-term
deferred income taxes, which were previously included with prepaid expenses and other long-term
assets, are presented separately in the Condensed Consolidated Balance Sheets. Due to
seasonality within the recreation vehicle industry, the results of operations for the six
months ended January 31, 2011 are not necessarily indicative of the results for the full year.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><i>Accounting Pronouncements — </i>In June 2009, the Financial Accounting Standards Board, (“FASB”),
issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167
amends ASC 810 (formerly FASB Interpretation No. 46(R)) by adding previously considered
qualifying special purpose entities (the concept of these entities was eliminated by SFAS No.
166). In addition, companies must perform an analysis to determine whether the company’s
variable interest or interests give it a controlling financial interest in a variable interest
entity. Companies must also reassess on an ongoing basis whether the company is the primary
beneficiary of a variable interest entity. The amendments to ASC 810 are effective for fiscal
years beginning after November 15, 2009. The Company adopted the amendments effective August 1,
2010. The adoption of the amendments did not have any impact on its financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In July 2010, the FASB issued Accounting Standards Update, or ASU, 2010-20 “Disclosures
about the Credit Quality of Financing Receivables and Allowance for Credit Losses.” The new
disclosure guidance expands the existing requirements. The enhanced disclosures provide
information on the nature of credit risk in a company’s financing of receivables, how that risk
is analyzed in determining the related allowance for credit losses, and changes to the
allowance during the reporting period. The new disclosures became effective for the Company’s
interim and annual reporting periods ending after December 15, 2010. The Company has included
applicable disclosures within Note 14 to the Condensed Consolidated Financial
Statements.
</div>
</div>
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<div align="left" style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">2.    Acquisitions
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On September 16, 2010, the Company purchased all of the outstanding capital stock of Towable
Holdings, Inc., which owned all of the outstanding equity interests of Heartland. Heartland is
engaged in the business of manufacturing and marketing recreation vehicles, consisting of
travel trailers and fifth wheel vehicles. Heartland operates as a wholly-owned subsidiary of
the Company and is managed as its own operating unit that is aggregated into the Company’s
towable recreation vehicle reportable segment. The assets acquired as a result of the
acquisition include equipment and other tangible and intangible property. The assets of
Heartland are used in connection with the operation of Heartland’s business of manufacturing
and marketing towable recreation vehicles.
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Pursuant to the purchase agreement entered into in connection with the acquisition, the
Company paid $99,562 in cash and issued 4,300,000 shares of the Company’s unregistered common
stock (“Thor Shares”) valued at an aggregate of $90,531. The value of the shares was based on
an independent appraisal. The cash portion of the consideration was funded entirely from the
Company’s cash on hand. The Company expensed $1,826 of transaction costs as part of corporate
selling, general and administrative expense in connection with the acquisition during the six
months ended January 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Members of management of Heartland who received Thor Shares also entered into a stock
restriction agreement with the Company, which, among other things, places restrictions on the
disposition of the Company’s common stock issued to such persons for a period of four years
after the closing of the transaction, which restrictions lapse in pro rata amounts beginning on
the first anniversary of the closing of the transaction and every six months thereafter, with
an exception for certain permitted acceleration events. In addition, the Company granted to the
former indirect security holders of Heartland, who received Thor Shares, registration rights to
register the resale of the Thor Shares.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The following table summarizes the preliminary approximate fair value of the net assets
acquired, which are based on internal and independent external evaluations, at the date of the
closing. Further adjustment of the allocation is not expected to be material.
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">48,913</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">9,993</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Dealer network
</div></td>
<td> </td>
<td> </td>
<td align="right">67,000</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">94,865</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">25,200</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology assets
</div></td>
<td> </td>
<td> </td>
<td align="right">21,300</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-compete agreements
</div></td>
<td> </td>
<td> </td>
<td align="right">4,130</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Backlog
</div></td>
<td> </td>
<td> </td>
<td align="right">690</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(42,767</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred income tax liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,221</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,840</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total fair value of net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">190,263</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company did not assume any of Heartland’s outstanding debt, other than existing capital
lease obligations of $429. Amortized intangible assets have a weighted average useful life of
14.9 years. The dealer network was valued based on the Discounted Cash Flow Method and will be
amortized on an accelerated cash flow basis over 12 years. The technology assets were valued
based on the Relief from Royalty Method and will be amortized on a straight line basis over 10
to 15 years. The non-compete agreements were valued based on a form of the Discounted Cash Flow
Method, the Lost Income Method, and will be amortized on a straight line basis over 5 years.
The trademarks were valued based on the Relief from Royalty Method and will be amortized on a
straight line basis over 25 years. The backlog was valued based on the Discounted Cash Flow
Method and was amortized over 3 weeks. Goodwill is not subject to amortization. Prior to the
acquisition, Heartland had historical net tax basis in goodwill of approximately $11,600 that
is deductible for tax purposes and will continue to be deductible.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The primary reasons for the acquisition include Heartland’s future earning potential, its fit
with our existing operations, its market share and its cash flow. The results of operations of
Heartland are included in the Company’s Condensed Consolidated Statement of Operations from the
September 16, 2010 date of acquisition through January 31, 2011. During this period, Heartland
recorded net sales of $134,031 and a net loss before tax of $1,204. Net loss before tax
includes one time costs of $746 related to the step-up in finished goods inventory and $690 for
amortization of backlog. In addition, Heartland’s results from September 16, 2010 through
January 31, 2011 included ongoing amortization costs of $3,435. The following unaudited pro
forma information represents the Company’s results of operations as if the acquisition had
occurred at the beginning of each of the respective periods. These performance results may not
be indicative of the actual results that would have occurred under the ownership and management
of the Company.
</div>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Six Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net sales
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">526,227</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">497,709</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,194,803</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,079,754</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">5,688</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11,301</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">32,504</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">37,113</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic earnings per common share
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.10</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.20</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.58</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.63</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per common share
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">.10</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.20</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.58</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">.63</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On March 1, 2010, the Company acquired 100% of SJC Industries Corp. (“SJC”), a
privately-held manufacturer of ambulances based in Elkhart, Indiana, for $19,756 in cash and
$325 of future cash obligations to the seller for a total purchase price of $20,081. The
Company believes that SJC is currently the second largest manufacturer of ambulances in the
United States. Its brands include McCoy Miller, Marque and Premiere, each of which is sold
through a nationwide network of dealers. The Company believes that the ambulance business is a
natural fit with Thor’s bus business and has included the operations of SJC in its Buses
reportable segment. Both manufacture and build a body on a purchased or supplied chassis. The
manufacturing process, sales process, and type of customers are all very similar between bus
and ambulance. Under the Company’s ownership, SJC continued as an independent operation through
January 2011, in the same manner as the Company’s recreation vehicle and bus companies. Going
forward, SJC will be operated under common management with Goshen Coach as one operating
company. The operations of SJC are included in the Company’s operating results from the date of
its acquisition.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Based on internal and independent external valuations, the Company allocated the purchase price
to the net assets of SJC as follows:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net working capital
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,412</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">2,459</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Dealer network
</div></td>
<td> </td>
<td> </td>
<td align="right">5,230</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">2,490</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">2,100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology
</div></td>
<td> </td>
<td> </td>
<td align="right">270</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-compete
</div></td>
<td> </td>
<td> </td>
<td align="right">120</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total net assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">20,081</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Amortized intangible assets have a weighted average useful life of 13.4 years. The dealer
network will be amortized on a straight line basis over 14 years, and the technology assets and
non-compete agreements will both be amortized on a straight line basis over 5 years. Goodwill
and trademarks are not subject to amortization. The entire goodwill balance is tax deductible.
Pro forma financial information has not been presented due to its insignificance.
</div>
</div>
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<!-- Begin Block Tagged Note 3 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">3.     Major Classifications of Inventories
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>January 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">96,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">78,481</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Chassis
</div></td>
<td> </td>
<td> </td>
<td align="right">53,040</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,335</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process
</div></td>
<td> </td>
<td> </td>
<td align="right">56,121</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,681</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">31,751</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,681</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td align="right">237,825</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">168,178</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Excess of FIFO costs over LIFO costs
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,848</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,498</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total inventories
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">211,977</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">142,680</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Of the $237,825 of inventory at January 31, 2011, all but $41,132 at certain subsidiaries
is valued on a last-in, first-out basis. The $41,132 of inventory is valued on a first-in,
first-out method.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">4.     Earnings Per Common Share
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="60%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average shares
outstanding for basic earnings
per share
</div></td>
<td> </td>
<td> </td>
<td align="right">55,812,526</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,665,620</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,717,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,551,272</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Stock options and restricted stock
</div></td>
<td> </td>
<td> </td>
<td align="right">117,963</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">96,908</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102,089</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">88,378</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total — for diluted shares
</div></td>
<td> </td>
<td> </td>
<td align="right">55,930,489</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,762,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,819,297</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,639,650</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company excludes stock options that have an antidilutive effect from its calculation of
weighted average shares outstanding assuming dilution. The Company had stock options
outstanding of 870,000 at January 31, 2011 and 122,000 at January 31, 2010, which
were excluded from this calculation.
</div>
</div>
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<!-- Begin Block Tagged Note 5 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">5.     Comprehensive Income
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,688</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,924</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,376</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35,353</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency
translation
adjustment, net of
tax
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Change in temporary
impairment of
investments, net of
tax
</div></td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">155</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,711</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,042</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,531</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35,362</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<!-- Begin Block Tagged Note 6 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">6.     Segment Information
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company has three reportable segments: (1) towable recreation vehicles, (2) motorized
recreation vehicles, and (3) buses. The towable recreation vehicle segment consists of product
lines from the following operating companies that have been aggregated: Airstream, CrossRoads,
Dutchmen (including Breckenridge and Komfort which were merged into Dutchmen effective January
1, 2011), Keystone and Heartland (since its acquisition on September 16, 2010). The motorized
recreation vehicle segment consists of product lines from the following operating companies
that have been aggregated: Airstream and Thor Motor Coach (formerly Damon and Four Winds). The
bus segment consists of the following operating companies that have been aggregated: Champion
Bus, General Coach, ElDorado California, ElDorado Kansas, Goshen Coach and SJC (since its
acquisition on March 1, 2010).
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net Sales:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Recreation vehicles:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Towables
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">364,802</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">280,704</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">787,251</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">622,840</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Motorized
</div></td>
<td> </td>
<td> </td>
<td align="right">72,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">55,092</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">156,423</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102,885</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total recreation vehicles
</div></td>
<td> </td>
<td> </td>
<td align="right">437,111</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">335,796</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">943,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">725,725</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Buses
</div></td>
<td> </td>
<td> </td>
<td align="right">89,116</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">94,229</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">189,237</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">206,852</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">526,227</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">430,025</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,132,911</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">932,577</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income (Loss) Before Income Taxes:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Recreation vehicles:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Towables
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,808</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,743</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,908</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">48,283</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Motorized
</div></td>
<td> </td>
<td> </td>
<td align="right">2,217</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,314</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,221</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,416</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total recreation vehicles
</div></td>
<td> </td>
<td> </td>
<td align="right">11,025</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,057</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">45,129</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49,699</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Buses
</div></td>
<td> </td>
<td> </td>
<td align="right">3,792</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,233</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,613</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,436</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,037</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17,173</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,806</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,381</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19,253</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,167</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">56,506</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Recreation vehicles:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Towables
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">701,454</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">413,112</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Motorized
</div></td>
<td> </td>
<td> </td>
<td align="right">112,426</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">86,726</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total recreation vehicles
</div></td>
<td> </td>
<td> </td>
<td align="right">813,880</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">499,838</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Buses
</div></td>
<td> </td>
<td> </td>
<td align="right">136,354</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">124,374</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate
</div></td>
<td> </td>
<td> </td>
<td align="right">176,886</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">339,861</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,127,120</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">964,073</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:ScheduleOfTreasuryStockByClassTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">7.     Treasury Stock
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In the second quarter of fiscal year 2010, the Company purchased 3,980,000 shares of the
Company’s common stock at $29.00 per share and held them as treasury stock at a total cost of
$115,420.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The shares were repurchased by the Company from the Estate of Wade F. B. Thompson (the
“Estate”) in a private transaction. The late Wade F. B. Thompson was the Company’s former
Chairman, President and Chief Executive Officer. The repurchase transaction was evaluated and
approved by the members of Thor’s Board who were not affiliated with the Estate. At the time of
the repurchase, the shares represented 7.2% of Thor’s common stock outstanding. The Company
used available cash to purchase the shares.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">8.     Investments and Fair Value Measurements
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">ASC 820, “<i>Fair Value Measurements and Disclosures”</i>, defines fair value, establishes a
framework for measuring fair value under generally accepted accounting principles and enhances
disclosures about fair value measurements. Fair value is defined as the exchange price that
would be received for an asset or paid to transfer a liability (i.e., an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. Valuation techniques used to measure fair
value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The standard describes a fair value hierarchy based on three levels of inputs, of which the
first two are considered observable and the last unobservable, that may be used to measure fair
value, which are the following:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Level 1 — Quoted prices in active markets for identical assets or liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such
as quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data
for substantially the full term of the assets or liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Level 3 — Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The following table represents the Company’s fair value hierarchy for its financial assets
(cash and cash equivalents and investments) measured at fair value on a recurring basis as of
January 31, 2011 and July 31, 2010:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Cash and Cash</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Auction Rate</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Cash and Cash</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Auction Rate</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Equivalents</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Securities</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Equivalents</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Securities</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Levels of Input:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Level 1
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">96,613</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">247,751</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Level 2
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Level 3
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,977</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,327</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">96,613</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,977</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">247,751</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,327</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company’s cash equivalents are comprised of money market funds traded in an active market
with no restrictions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In addition to the above investments, the Company held non-qualified retirement plan assets of
$8,426 at January 31, 2011 ($7,499 at July 31, 2010). These assets, which are held for the
benefit of certain employees of the Company, represent Level 1 investments primarily in mutual
funds which are valued using observable market prices in active markets. They are included in
other assets on the Condensed Consolidated Balance Sheets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Level 3 assets consist of bonds with an auction reset feature (“auction rate securities” or
“ARS”) whose underlying assets are primarily student loans which are substantially backed by
the U.S. Federal government. Auction rate securities are long-term floating rate bonds tied to
short-term interest rates. After the initial issuance of the securities, the interest rate on
the securities is reset periodically, at intervals established at the time of issuance based on
market demand for a reset period. Auction rate securities are bought and sold in the
marketplace through a competitive bidding process often referred to as a “Dutch” auction. If
there is insufficient interest in the securities at the time of an auction, the auction may not
be completed and the rates may be reset to pre-determined “penalty” or “maximum” rates based on
mathematical formulas in accordance with each security’s prospectus.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The following table provides a reconciliation of the beginning and ending balances for the
assets measured at fair value using significant unobservable inputs (Level 3 financial assets):
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value Measurements</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>at Reporting Date Using</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Significant Unobservable</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid black"><b>(Level 3)</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at July 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,327</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net change in temporary impairment
</div></td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net loss included in earnings
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Purchases
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Sales/Maturities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,600</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 31, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,977</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><u><b>Auction Rate Securities</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">At January 31, 2011, the Company held $3,250 (par value) of
long-term investments comprised of tax-exempt ARS, which are
variable-rate debt securities and have a long-term maturity with
the interest being reset through “Dutch” auctions that are
typically held every 7, 28 or 35 days. The securities have
historically traded at par and are callable at par at the option of
the issuer. Interest is typically paid at the end of each auction
period or semi-annually. At January 31, 2011, the majority of the
ARS we held were AAA rated or equivalent, and none were below AA
rated or equivalent, with most collateralized by student loans
substantially backed by the U.S. Federal government. The Company
sold $2,600 of ARS at par during the six months ended January 31,
2011. During the year ended July 31, 2010 $115,850 of ARS were sold
at par.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Since February 12, 2008, most auctions have failed for these
securities and there is no assurance that future auctions on the
ARS in our investment portfolio will succeed and, as a result, our
ability to liquidate our investment and fully recover the par value
of our investment in the near term may be limited or not exist. An
auction failure means that the parties wishing to sell securities
could not.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">At January 31, 2011, there was insufficient observable ARS market
information available to determine the fair value of our ARS
investments. Therefore, management, assisted by Houlihan Capital
Advisors, LLC, an independent consultant, determined an estimated
fair value. In determining the estimate, consideration was given to
credit quality, final stated maturities, estimates on the
probability of the issue being called prior to final maturity,
impact due to extended periods of maximum auction rates and broker
quotes. Based on this analysis, we recognized a total temporary
impairment of $273 ($169 net of tax in accumulated other
comprehensive loss which is in the equity section of the balance
sheet) as of January 31, 2011 related to our long-term ARS
investments of $3,250 (par value).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">We have no reason to believe that any of the underlying issuers of
our ARS are presently at risk of default. Through January 31, 2011,
we have continued to receive interest payments on the ARS in
accordance with their terms. We believe we will be able to
liquidate our investments without significant loss primarily due to
the government guarantee of the underlying securities; however, it
could take until the final maturity of the underlying notes (up to
26 years) to realize our investments’ par value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Although there is uncertainty with regard to the short-term liquidity of these securities, the
Company continues to believe that the carrying amount represents the fair value of these
marketable securities because of the overall quality of the underlying investments and the
anticipated future market for such investments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In addition, the Company has the intent and ability to hold these securities until the earlier
of: the market for ARS stabilizes, the issuer refinances the underlying security, a buyer is
found outside of the auction process at acceptable terms, or the underlying securities have
matured.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">9.     Goodwill and Other Intangible Assets
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The components of amortizable intangible assets are as follows:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Accumulated</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortization</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Cost</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amortization</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Dealer networks
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">72,230</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,520</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,230</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">156</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-compete agreements
</div></td>
<td> </td>
<td> </td>
<td align="right">6,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,759</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,721</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,315</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks
</div></td>
<td> </td>
<td> </td>
<td align="right">25,200</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">378</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology and other intangibles
</div></td>
<td> </td>
<td> </td>
<td align="right">22,260</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,401</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">270</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total amortizable intangible assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">126,541</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,058</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,221</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,493</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Non-compete agreements, finite-lived trademarks, technology and other intangibles are amortized
on a straight-line basis. Dealer networks are generally amortized on an accelerated cash flow
basis. The weighted average remaining amortization period at January 31, 2011 is 14.53 years.
The increase in amortizable intangibles since July 31, 2010 is related to the acquisition of
Heartland, which is more fully described in Note 2 to the Condensed
Consolidated Financial Statements.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Estimated Amortization Expense:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">For the fiscal year ending July 2011
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">9,942</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">For the fiscal year ending July 2012
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10,682</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">For the fiscal year ending July 2013
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10,490</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">For the fiscal year ending July 2014
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">10,222</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">For the fiscal year ending July 2015 and thereafter
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">82,711</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Goodwill and indefinite-lived intangible assets are reviewed for impairment by applying a
fair-value based test on an annual basis, or more frequently if circumstances indicate a
potential impairment. During the first quarter of fiscal 2011, management decided to combine
our Damon and Four Winds motorized operations to form Thor Motor Coach to optimize operations
and garner cost efficiencies. As a result, indefinite-lived intangible assets were reviewed for
a potential impairment, and the trademarks associated with one of the former operating
companies will be discontinued and was written off.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Goodwill and indefinite-lived intangible assets are not subject to amortization.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The change in carrying value in goodwill and indefinite-lived trademarks from July 31, 2010 to
January 31, 2011 is as follows:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Goodwill</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Trademarks</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at July 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">150,901</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,936</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Impairment of trademark in motorized reportable segment
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,036</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Heartland acquisition in towables reportable segment
</div></td>
<td> </td>
<td> </td>
<td align="right">94,865</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 31, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">245,766</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,900</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Goodwill and trademarks by reportable segment are as follows:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Goodwill</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Trademarks</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Goodwill</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Trademarks</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Recreation Vehicles
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Towables
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">238,660</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">34,559</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">143,795</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,737</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Motorized
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,036</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Buses
</div></td>
<td> </td>
<td> </td>
<td align="right">7,106</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,163</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,106</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,163</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">245,766</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37,722</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">150,901</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,936</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - us-gaap:ProductWarrantyDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">10.
</div>
<div align="left" style="font-size: 10pt; margin-top: -11pt; margin-left: 4%">Product Warranties
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company generally provides retail customers of its products with a one-year warranty
covering defects in material or workmanship, with longer warranties of up to five years on
certain structural components. The Company records a liability based on its best estimate of
the amounts necessary to settle future and existing claims on products sold as of the balance
sheet date. Factors used in estimating the warranty liability include a history of units sold,
existing dealer inventory, average cost incurred and a profile of the distribution of warranty
expenditures over the warranty period. A significant increase in dealer shop rates, the cost of
parts or the frequency of claims could have a material adverse impact on the Company’s
operating results for the period or periods in which such claims or additional costs
materialize. Management believes that the warranty reserve is adequate. However, actual claims
incurred could differ from estimates, requiring adjustments to the reserves. Warranty reserves
are reviewed and adjusted as necessary on a quarterly basis.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning Balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">62,474</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42,510</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">51,467</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41,717</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Provision
</div></td>
<td> </td>
<td> </td>
<td align="right">13,757</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,846</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,123</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,637</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,651</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,233</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28,189</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23,231</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Acquisitions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,179</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending Balance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">61,580</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43,123</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">61,580</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43,123</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<!-- Begin Block Tagged Note 11 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">11.   Contingent Liabilities and Commitments
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company is contingently liable under terms of repurchase agreements with certain financial
institutions providing inventory financing for certain dealers of certain of its products.
These arrangements, which are customary in the industry, provide for the repurchase of products
sold to dealers in the event of default by the dealer. The repurchase price is generally
determined by the original sales price of the product and pre-defined curtailment arrangements
and the Company typically resells the repurchased product at a discount from its repurchase
price. The risk of loss from these agreements is spread over numerous dealers. In addition to
the guarantee under these repurchase agreements, the Company also provides limited guarantees
to certain of its dealers, most of which guarantees are currently in the process of being wound
down.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company’s principal commercial commitments under repurchase agreements and guarantees at
January 31, 2011 are summarized in the following chart:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Commitment</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total Amount Committed</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Terms of Commitments</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Guarantee on dealer financing
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3,444</td>
<td> </td>
<td> </td>
<td colspan="3" align="right">Various</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Standby repurchase obligation on dealer financing
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">782,787</td>
<td> </td>
<td> </td>
<td colspan="3" align="right" nowrap="nowrap"><font style="white-space: nowrap">Up to eighteen months</font></td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The repurchase agreement obligations generally extend up to eighteen months from the date of
sale of the related product to the dealer. The repurchase and guarantee reserve balance as of
January 31, 2011, which is included in other current liabilities on the Condensed Consolidated
Balance Sheets, is $3,857 and includes the deferred estimated fair value of the implied
guarantee under outstanding repurchase obligations and the estimated loss upon the eventual
resale of expected repurchased product. The table below reflects losses incurred under
repurchase agreements in the periods noted. Management believes that any future losses under
these agreements will not have a significant effect on the Company’s consolidated financial
position or results of operations.
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>January 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of units repurchased
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,848</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,843</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,068</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,220</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Realization of units resold
</div></td>
<td> </td>
<td> </td>
<td align="right">2,400</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,636</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,677</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Losses due to repurchase
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">448</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">207</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">741</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">543</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company obtains certain vehicle chassis from automobile manufacturers under converter pool
agreements. These agreements generally provide that the manufacturer will supply chassis at the
Company’s various production facilities under the terms and conditions set forth in the
agreement. The manufacturer does not transfer the certificate of origin to the Company and,
accordingly, the Company accounts for the chassis as consigned, unrecorded inventory. Upon
being put into production, the Company becomes obligated to pay the manufacturer for the
chassis. Chassis are typically converted and delivered to customers within 90 days of delivery.
If the chassis is not converted within 90 days of delivery to the Company, the Company
generally purchases the chassis and records the inventory. At January 31, 2011, chassis on hand
accounted for as consigned, unrecorded inventory was approximately $20,153. In addition to this
consigned inventory, at January 31, 2011, an additional $9,246 of chassis provided by customers
were located at the Company’s production facilities pending further manufacturing. The Company
never purchases these chassis and does not include their cost in its billings to the customer
for the completed unit.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company has been subject to an SEC review since 2007 regarding the facts and
circumstances giving rise to the restatement of its previously issued financial statements as
of July 31, 2006 and 2005, and for each of the years in the three-year period ended July 31,
2006, and the financial results in each of the quarterly periods in 2006 and 2005, and its
financial statements as of and for the three months ended October 31, 2006 and related matters.
The Company has cooperated fully with the SEC, including from time to time responding to SEC
staff requests for additional information. The investigation by the SEC staff could result in
the SEC seeking various penalties and relief, including, without limitation, civil injunctive
relief and/or civil monetary penalties or administrative relief. The Company is currently
discussing the terms of a possible settlement of this matter with the SEC staff. However, there
can be no assurance that a settlement will be reached.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company has been named in approximately 800 complaints, some of which were originally
styled as putative class actions (with respect to which class certification was ultimately
denied) and some of which were filed by individual plaintiffs, filed against manufacturers of
travel trailers and manufactured homes supplied to the Federal Emergency Management Agency
(“FEMA”) for use as emergency living accommodations in the wake of Hurricanes Katrina and Rita.
The complaints have been transferred to the Eastern District of Louisiana by the federal panel
on multidistrict litigation for consideration in a matter captioned In re FEMA Trailer
Formaldehyde Products Liability Litigation, Case Number MDL 07-1873, United States District
Court for the Eastern District of Louisiana. The complaints generally assert claims for damages
(for health related problems, medical expenses, emotional distress and lost earnings) and for
medical monitoring costs due to the presence of formaldehyde in the units. Some of the lawsuits
also seek punitive and/or exemplary damages. Thus far, however, none of the lawsuits allege a
specific amount of damages sought and instead make general allegations about the nature of the
plaintiffs’ claims without placing a dollar figure on them. The Company strongly disputes the
allegations in these complaints, and intends to vigorously defend itself in all such matters.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In addition, the Company is involved in certain litigation arising out of its operations in the
normal course of its business, most of which are based upon state “lemon laws,” warranty
claims, other claims and accidents (for which the Company carries insurance above a specified
deductible amount). While it is impossible to estimate with certainty the ultimate legal and
financial liability with respect to the litigation arising out of the Company’s operations in
the normal course of business, including the pending litigation described above, the Company
believes that while the final resolution of any such litigation may have an impact on its
consolidated results for a particular reporting period, the ultimate disposition of such
litigation will not have any material adverse effect on its financial position, results of
operations or liquidity.
</div>
</div>
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<!-- Begin Block Tagged Note 12 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">12.    Provision for Income Taxes
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company accounts for income taxes under the provisions of ASC 740, “<i>Income Taxes</i>”. The
objectives of accounting for income taxes are to recognize the amount of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax
consequences of events that have been recognized in the Company’s financial statements or tax
returns. Judgment is required in assessing the future tax consequences of events that have
been recognized in the Company’s financial statements or tax returns. Fluctuations in the
actual outcome of these future tax consequences could materially impact the Company’s financial
position or its results of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">It is the Company’s policy to recognize interest and penalties accrued relative to unrecognized
tax benefits in income tax expense. For the six month period ended January 31, 2011, the
Company released approximately $5,100 of gross uncertain tax benefit reserve and related
interest and penalties recorded at July 31, 2010 related to the effective settlement of certain
uncertain tax benefits, which resulted in a net income tax benefit of approximately $3,900. The
Company accrued $600 in interest and penalties related to the remaining uncertain tax benefits
recorded at July 31, 2010, and accrued an additional uncertain tax benefit reserve of $100
related to prior periods. For the three month period ended January 31, 2011, the Company
released $550 of uncertain tax benefit reserve recorded at July 31, 2010, recorded $100 of
additional uncertain tax benefit reserve related to prior periods, and accrued $300 in interest
and penalties.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company and its corporate subsidiaries file a consolidated U.S. federal income tax
return, multiple U.S. state income tax returns and multiple Canadian income tax returns. The
Company has been audited for U.S. federal purposes through fiscal 2007. Periodically, various
state and local jurisdictions conduct audits and therefore a variety of other years are subject
to state and local review. The Company is currently being audited by the State of California
for the tax years ended July 31, 2007 and July 31, 2008. The Company has reserved for this
exposure in its liability for unrecognized tax benefits.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company anticipates a decrease of approximately $2,900 in unrecognized tax benefits, and
$700 in accrued interest and penalties related to these unrecognized tax benefits, within the
next twelve months from (1) expected settlements or payments of uncertain tax positions, and (2)
lapses of the applicable statutes of limitations. Actual results may differ materially from
this estimate.
</div>
</div>
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<!-- Begin Block Tagged Note 13 - tho:RetainedEarningsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">13.   Retained Earnings
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The components of changes in retained earnings are as follows:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of July 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">745,204</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net Income
</div></td>
<td> </td>
<td> </td>
<td align="right">29,376</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Dividends Paid
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,160</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of January 31, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">763,420</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<!-- Begin Block Tagged Note 14 - us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">14.   Loan Transactions and Related Notes Receivable
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On January 15, 2009, the Company entered into a Credit Agreement (the “First Credit Agreement”)
with Stephen Adams, in his individual capacity, and Stephen Adams and his successors, as
trustee under the Stephen Adams Living Trust (the “Trust” and together with each of the
foregoing persons, the “Borrowers”), pursuant to which the Company loaned $10,000 to the
Borrowers (the “First Loan”). The Borrowers own, directly or indirectly, a controlling interest
in FreedomRoads Holding Company, LLC (“FreedomRoads Holding”), the parent company of
FreedomRoads, LLC (“FreedomRoads”), the Company’s largest dealer. Pursuant to the terms of the
First Credit Agreement, the Borrowers agreed to use the proceeds of the First Loan solely to
make an equity contribution to FreedomRoads Holding to enable FreedomRoads Holding or its
subsidiaries to repay its principal obligations under floor plan financing arrangements with
third parties in respect of products of the Company and its subsidiaries.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The principal amount of the First Loan is payable in full on January 15, 2014 and bears
interest at a rate of 12% per annum. Interest is payable in kind for the first year and is
payable in cash on a monthly basis thereafter, and all interest payments due to date have been
paid in full.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On January 30, 2009, the Company entered into a second Credit Agreement (the “Second Credit
Agreement”) with the Borrowers pursuant to which the Company loaned an additional $10,000 to
the Borrowers (the “Second Loan”). Pursuant to the terms of the Second Credit Agreement, the
Borrowers agreed to use the proceeds of the Second Loan solely to make an equity contribution
to FreedomRoads Holding to be used by FreedomRoads Holding or its subsidiaries to purchase the
Company’s products.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The maturity date of the Second Loan is June 30, 2012. Principal is payable in semi-annual
installments of $1,000 each commencing on June 30, 2010, with a final payment of $6,000 on June
30, 2012. Interest on the principal amount of the Second Loan is payable in cash on a quarterly
basis at a rate of 12% per annum. All payments of principal and interest due to date have been
paid in full.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On December 22, 2009, the Company entered into a Credit Agreement (the “Third Credit
Agreement”) with Marcus Lemonis, Stephen Adams, in his individual capacity, and Stephen Adams
and his successors, as trustee under the Trust (each of the foregoing persons, on a joint and
several basis, the “Third Loan Borrowers”), pursuant to which
the Company loaned $10,000 to the Third Loan Borrowers (the “Third Loan”). The Third
Loan Borrowers own, directly or indirectly, a controlling interest in FreedomRoads Holding, the
indirect parent company of FreedomRoads. Pursuant to the terms of the Third Credit Agreement,
the Third Loan Borrowers agreed to use the proceeds of the Third Loan solely to provide a loan
to one of FreedomRoads Holding’s subsidiaries which would ultimately be contributed as equity
to FreedomRoads to be used for working capital purposes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The maturity date of the Third Loan is December 22, 2014. The principal amount of the Third
Loan is payable on the following dates in the following amounts: December 31, 2011 — $500;
December 31, 2012 — $1,000; December 31, 2013 — $1,100; and December 22, 2014 — $7,400. The
principal amount of the Third Loan bears interest at a rate of 12% per annum. Interest is
payable, at the option of the Third Loan Borrowers, either in cash or in kind at each calendar
quarter end from March 31, 2010 through September 30, 2011, and thereafter in cash quarterly in
arrears from December 31, 2011 through the maturity date. The Third Loan Borrowers opted to pay
the interest due at March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010 in
kind and it was capitalized as part of the long-term note receivable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The First Credit Agreement, the Second Credit Agreement and the Third Credit Agreement each
contain customary representations and warranties, affirmative and negative covenants, events of
default and acceleration provisions for loans of this type. Quarterly, as provided for in the
Credit Agreements’ Affirmative Covenants, the Company receives financial and operational
information from the Borrowers and from the companies the Borrowers have significant ownership
interests in, including FreedomRoads Holding. This financial and operational information is
evaluated as to any changes in the overall credit quality of the Borrowers. Based on the
current credit review, the Company does not consider these receivables impaired or requiring an
allowance for credit losses.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In connection with the First Loan, the Borrowers caused FreedomRoads Holding and its
subsidiaries (collectively, the “FR Dealers”), to enter into an agreement pursuant to which the
FR Dealers agreed to purchase additional recreation vehicles from the Company and its
subsidiaries. The term of this agreement, as subsequently amended in connection with the Second
Loan and the Third Loan, continues until December 22, 2029 unless earlier terminated in
accordance with its terms.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">15.    Concentration of Risk
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">One dealer, FreedomRoads, accounted for 14% of the Company’s consolidated recreation
vehicle net sales for the six months ended January 31, 2011, and 12% of its consolidated total
net sales for the six months ended January 31, 2011. The loss of this dealer could have a
significant effect on the Company’s business.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">16.    Fire at Bus Production Facility
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On February 14, 2010, a fire occurred at the northern production facility (the “Facility”) at
the Company’s manufacturing site located near Imlay City, Michigan. The Facility is one of the
Company’s principal manufacturing locations for its Champion and General Coach America bus
lines. The fire resulted in the destruction of a significant portion of the work in process,
raw materials and equipment contained in the Facility. There were no reported injuries and the
origin of the fire is undetermined. The southern production plant, paint facility and other
buildings at the site were not affected by the fire and remained intact. Shortly after the
fire, the Company resumed limited production activities for its Champion and General Coach
America buses in the southern manufacturing facility, and the Company addressed equipment and
staffing reallocation. Many employees continued to work out of the southern manufacturing
facility and an office building on this site on a temporary basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Company maintains a property and business interruption insurance policy that it believes
will provide substantial coverage for the currently foreseeable losses arising from this
incident, less up to the first $5,000 representing the Company’s deductible per the policy.
</div>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">During the six months ended January 31, 2011, the Company received and recognized $7,648
of insurance proceeds which included $4,517 for business interruption. For the six months ended
January 31, 2011, a gain on involuntary conversion of $6,833 was reported in the Company’s
Condensed Consolidated Statement of Operations as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Gain on Involuntary Conversion:
</div>
<div align="left" style="margin-left: 4%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Six Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Cumulative Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>FY 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>January 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Since Fire</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance recoveries recognized
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">18,079</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,648</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,727</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deductible
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,000</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,000</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process and raw
material destroyed
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,305</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,305</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Property and equipment destroyed
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(578</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(165</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(743</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Clean up and other costs
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(603</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(650</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,253</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Gain on Involuntary Conversion
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,593</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,833</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,426</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The costs incurred to date of reconstructing the Facility and replacing inventory have been
accounted for in the normal course of business. The costs incurred as of January 31, 2011 to
reconstruct the Facility totaled $6,203. The Facility was substantially completed and
operational as of September 28, 2010. The replacement cost of the property and equipment has
substantially exceeded the previous carrying costs and the lost profits covered under business
interruption and future clean-up and related costs are being reimbursed under the policy.
However, an accurate estimate of the remaining potential gain resulting from the involuntary
conversion cannot be made at this time.
</div>
</div>