WINNEBAGO INDUSTRIES INC - FORM 8-K - EX-99.1 - EXHIBIT - October 11, 2012

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Contact: Sheila Davis - PR/IR Mgr. - 641-585-6803 - sdavis@winnebagoind.com

WINNEBAGO INDUSTRIES REPORTS RESULTS FOR
FOURTH QUARTER AND FISCAL 2012
-- Fourth Quarter Operating Income Increase of 270 Percent--


FOREST CITY, IOWA, October 11, 2012 - Winnebago Industries, Inc. (NYSE:WGO), a leading United States (U.S.) recreation vehicle manufacturer, today reported financial results for the Company's fourth quarter and fiscal year 2012.

Revenues for the fourth quarter ended August 25, 2012 were $162.5 million, an increase of 24.5%, versus $130.5 million for the fourth quarter of Fiscal 2011. Included within consolidated revenues for the fourth quarter of Fiscal 2012 was $15.8 million associated with towable products, compared to $7.8 million for the fourth quarter of Fiscal 2011. The Company reported an operating income of $6.5 million for the quarter, versus $1.8 million for the fourth quarter of Fiscal 2011. Net income for the fourth quarter of Fiscal 2012 was $40.9 million, or $1.41 per diluted share, versus $3.5 million, or $0.12 per diluted share for the fourth quarter of Fiscal 2011. A tax benefit was recorded in the fourth quarter of Fiscal 2012 due to a $36.9 million reduction in the valuation allowance on deferred tax assets that was established in Fiscal 2009. Excluding the non-cash tax benefit of the reduction in valuation allowance, net income for the fourth quarter of Fiscal 2012 was $4.0 million or $0.14 per diluted share.

The fourth quarter of Fiscal 2012 as compared to the fourth quarter of Fiscal 2011 was positively impacted by increased motor home deliveries and improved gross margins due to better fixed cost absorption.

Revenues for Fiscal 2012 were $581.7 million, an increase of 17.2%, versus revenues of $496.4 million for Fiscal 2011. Included within consolidated revenues was $56.8 million associated with towable products, compared to $16.7 million for Fiscal 2011. The Company reported operating income of $9.5 million for Fiscal 2012, versus $11.3 million for Fiscal 2011. Net income for Fiscal 2012 was $45.0 million, or $1.54 per diluted share, versus $11.8 million, or $0.41 per diluted share for Fiscal 2011. A tax benefit was recorded in the fourth quarter of Fiscal 2012 due to a $37.7 million reduction in the valuation allowance on deferred tax assets. Excluding the impact of the non-cash tax benefit of the reduction in valuation allowance, net income for Fiscal 2012 was $7.3 million or $0.25 per diluted share.
Revenues were higher for Fiscal 2012 as compared to Fiscal 2011 with increased motor home and towable deliveries and increased average selling prices for all RV products due to the mix of higher priced products delivered. Operating income for Fiscal 2012 was lower as compared to the prior period most notably due to increased inflationary pressures and higher discounts incurred during the first half of Fiscal 2012 and the fact that Fiscal 2011 results included a $3.5 million pre-tax benefit from the results of an annual physical inventory of work-in-process, due to lower actual inventory scrap and production loss.
“We were pleased with the results for the fourth quarter,” said Winnebago Industries' Chairman, CEO and President Randy Potts, "particularly as they related to our motor home business. Our new value priced Winnebago Vista and Itasca Sunstar 26HE models introduced to our dealers at the Dealer Days event in May have been very popular in the marketplace and contributed to the increased demand in our fourth quarter, along with the continued success of our Class A and C diesel products."

"The dramatic increase in our sales order backlog reflects the positive dealer response to our new 2013 model year products," said Potts. "As a result of the improved demand, we ramped up production throughout the fourth quarter. We will continue to increase production during Fiscal 2013 to meet the growing demand for our products."

During the fourth quarter of Fiscal 2012, the Company repurchased 592,000 shares of the Company's common stock for $6.3 million at an average price of $10.57. "We believe the timing was right to repurchase shares and in the best interest of our shareholders, allowing us to enhance shareholder value this past quarter," said Winnebago Industries' Vice President, Chief Financial Officer Sarah Nielsen.

On a forward-looking basis, Fiscal 2013 is a 53-week year and includes a 14-week first quarter.

Conference Call
Winnebago Industries, Inc. will conduct a conference call in conjunction with this release at 9 a.m. Central Time today, Thursday, October 11, 2012. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company's website at http://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days.

About Winnebago Industries
Winnebago Industries, Inc., "The Most Recognized Name in Motor Homes®, is a leading U.S. manufacturer of recreation vehicles, which are used primarily in leisure travel and outdoor recreation activities. The Company builds quality motor homes, travel trailers and fifth wheel products under the Winnebago, Itasca, Era and SunnyBrook brand names. Winnebago Industries has received the Quality Circle Award from the Recreation Vehicle Dealers Association every year since the award's inception in 1996. The Company's common stock is listed on the New York and Chicago Stock Exchanges and traded under the symbol WGO. Options for the Company's common stock are traded on the Chicago Board Options Exchange. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit,




http://www.winnebagoind.com/investor.html.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to increases in interest rates, availability of credit, low consumer confidence, significant increase in repurchase obligations, inadequate liquidity or capital resources, availability and price of fuel, a slowdown in the economy, increased material and component costs, availability of chassis and other key component parts, sales order cancellations, slower than anticipated sales of new or existing products, new product introductions by competitors, the effect of global tensions, integration of operations relating to mergers and acquisitions activities and other factors. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.
# # #




Winnebago Industries, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except percent and per share data)

 
Quarter Ended
 
August 25, 2012
 
August 27, 2011
Net revenues
$
162,533

 
100.0
 %
 
$
130,546

 
100.0
 %
Cost of goods sold
146,266

 
90.0
 %
 
122,018

 
93.5
 %
Gross profit
16,267

 
10.0
 %
 
8,528

 
6.5
 %
Operating expenses:
 
 
 
 
 
 
 
Selling
4,352

 
2.7
 %
 
4,122

 
3.2
 %
General and administrative
5,329

 
3.3
 %
 
2,640

 
2.0
 %
Asset impairment
50

 
—
 %
 
—

 
—
 %
Total operating expenses
9,731

 
6.0
 %
 
6,762

 
5.2
 %
Operating income
6,536

 
4.0
 %
 
1,766

 
1.4
 %
Non-operating income
32

 
—
 %
 
108

 
0.1
 %
Income before income taxes
6,568

 
4.0
 %
 
1,874

 
1.4
 %
Benefit for taxes
(34,340
)
 
(21.1
)%
 
(1,673
)
 
(1.3
)%
Net income
$
40,908

 
25.2
 %
 
$
3,547

 
2.7
 %
Income per common share:
 
 
 
 
 
 
 
Basic
$
1.41

 
 
 
$
0.12

 
 
Diluted
$
1.41

 
 
 
$
0.12

 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,065

 
 
 
29,130

 
 
Diluted
29,094

 
 
 
29,199

 
 


 
Year Ended
 
August 25, 2012
 
August 27, 2011
Net revenues
$
581,679

 
100.0
 %
 
$
496,418

 
100.0
 %
Cost of goods sold
537,999

 
92.5
 %
 
456,664

 
92.0
 %
Gross profit
43,680

 
7.5
 %
 
39,754

 
8.0
 %
Operating expenses:
 
 
 
 
 
 
 
Selling
16,837

 
2.9
 %
 
14,251

 
2.9
 %
General and administrative
17,267

 
3.0
 %
 
14,263

 
2.9
 %
Assets held for sale impairment and (gain), net
50

 
—
 %
 
(39
)
 
—
 %
Total operating expenses
34,154

 
5.9
 %
 
28,475

 
5.7
 %
Operating income
9,526

 
1.6
 %
 
11,279

 
2.3
 %
Non-operating income
581

 
0.1
 %
 
658

 
0.1
 %
Income before income taxes
10,107

 
1.7
 %
 
11,937

 
2.4
 %
(Benefit) provision for taxes
(34,865
)
 
(6.0
)%
 
94

 
—
 %
Net income
$
44,972

 
7.7
 %
 
$
11,843

 
2.4
 %
Income per common share:
 
 
 
 
 
 
 
Basic
$
1.54

 
 
 
$
0.41

 
 
Diluted
$
1.54

 
 
 
$
0.41

 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
29,145

 
 
 
29,121

 
 
Diluted
29,207

 
 
 
29,148

 
 
Percentages may not add due to rounding differences.





Winnebago Industries, Inc.
Unaudited Consolidated Balance Sheets
(In thousands)

 
August 25,
2012
 
August 27,
2011
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
62,683

 
$
69,307

Receivables, net
22,726

 
19,981

Inventories
87,094

 
69,165

Prepaid expenses and other assets
4,509

 
4,227

Income taxes receivable
1,603

 
1,525

Deferred income taxes
8,453

 
649

Total current assets
187,068

 
164,854

Total property and equipment, net
19,978

 
22,589

Assets held for sale
550

 
600

Long-term investments
9,074

 
10,627

Investment in life insurance
23,127

 
23,669

Deferred income taxes
30,520

 
—

Goodwill
1,228

 
1,228

Amortizable intangible assets
641

 
720

Other assets
13,886

 
15,640

Total assets
$
286,072

 
$
239,927

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
24,920

 
$
21,610

Income taxes payable
348

 
104

Accrued expenses
35,750

 
29,604

Total current liabilities
61,018

 
51,318

Long-term liabilities:
 
 
 
Unrecognized tax benefits
5,228

 
5,387

Postretirement health care and deferred compensation benefits, net of current portion
75,135

 
74,492

Total long-term liabilities
80,363

 
79,879

Stockholders' equity
144,691

 
108,730

Total liabilities and stockholders' equity
$
286,072

 
$
239,927





Winnebago Industries, Inc.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 
Year Ended
 
August 25,
2012
August 27,
2011
Operating activities:
 
 
Net income
$
44,972

$
11,843

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
4,872

5,492

LIFO (income) expense
(613
)
2,075

Postretirement benefit income and deferred compensation expenses
570

1,378

Stock-based compensation
1,918

1,315

Asset impairment
50

605

    Provision for doubtful accounts
125

11

Deferred income taxes including valuation allowance
(34,749
)
517

Gain on life insurance
(529
)
(372
)
    Increase in cash surrender value of life insurance policies
(732
)
(969
)
    Loss (gain) on disposal of property
28

(994
)
Other
—

90

Change in assets and liabilities:
 
 
Inventories
(17,316
)
(23,792
)
Receivables, prepaid and other assets
(2,085
)
101

     Income taxes and unrecognized tax benefits
7

(2,127
)
Accounts payable and accrued expenses
7,627

(1,551
)
Postretirement and deferred compensation benefits
(4,030
)
(3,741
)
Net cash provided by (used in) operating activities
115

(10,119
)
 
 
 
Investing activities:
 
 
Proceeds from the sale of investments, at par
1,050

7,150

Proceeds from life insurance
1,652

659

Purchases of property and equipment
(2,213
)
(2,109
)
Proceeds from the sale of property
17

4,143

Cash paid for acquisition, net of cash acquired
—

(4,694
)
Other
(624
)
(914
)
Net cash (used in) provided by investing activities
(118
)
4,235

 
 
 
Financing activities:
 
 
Payments for purchase of common stock
(6,604
)
(89
)
Proceeds from exercise of stock options
—

83

    Other
(17
)
506

Net cash (used in) provided by financing activities
(6,621
)
500

 
 
 
Net decrease in cash and cash equivalents
(6,624
)
(5,384
)
Cash and cash equivalents at beginning of period
69,307

74,691

Cash and cash equivalents at end of period
$
62,683

$
69,307

 
 
 
Supplemental cash flow disclosure:
 
 
Income taxes (refunded) paid, net
$
(134
)
$
1,703






Winnebago Industries, Inc.
Unaudited Deliveries
 
Quarter Ended
 
Change
(In units)
August 25,
2012
Product
Mix % (1)
 
August 27,
2011
Product
Mix % (1)
 
Units
%
Change
Class A gas
485

36.7
%
 
373

34.3
%
 
112

30.0
 %
Class A diesel
230

17.4
%
 
226

20.8
%
 
4

1.8
 %
Total Class A
715

54.1
%
 
599

55.1
%
 
116

19.4
 %
Class B
104

7.9
%
 
101

9.3
%
 
3

3.0
 %
Class C
502

38.0
%
 
388

35.7
%
 
114

29.4
 %
Total motor homes
1,321

100.0
%
 
1,088

100.0
%
 
233

21.4
 %
 
 
 
 
 
 
 
 
 
Travel trailer
444

63.9
%
 
279
77.9
%
 
165
59.1
 %
Fifth wheel
251

36.1
%
 
79
22.1
%
 
172
217.7
 %
    Total towables
695

100.0
%
 
358
100.0
%
 
337
94.1
 %
 
 
 
 
 
 
 
 
 
 
Year Ended
 
Change
(In units)
August 25,
2012
Product
Mix % (1)
 
August 27,
2011
Product
Mix % (1)
 
Units
%
Change
Class A gas
1,648

35.5
%
 
1,518

34.5
%
 
130

8.6
 %
Class A diesel
931

20.1
%
 
918

20.9
%
 
13

1.4
 %
Total Class A
2,579

55.6
%
 
2,436

55.4
%
 
143

5.9
 %
Class B
319

6.9
%
 
103

2.3
%
 
216

209.7
 %
Class C
1,744

37.6
%
 
1,856

42.2
%
 
(112
)
(6.0
)%
Total motor homes
4,642

100.0
%
 
4,395

100.0
%
 
247

5.6
 %
 
 
 
 
 
 
 
 
 
Travel trailer
1,372

58.7
%
 
575

74.8
%
 
797

138.6
 %
Fifth wheel
966

41.3
%
 
194

25.2
%
 
772

397.9
 %
Total towables
2,338

100.0
%
 
769

100.0
%
 
1,569

204.0
 %
(1) Percentages may not add due to rounding differences.

Unaudited Backlog
 
As Of
 
Change
 
August 25, 2012
 
August 27, 2011
 
 
%
 
Units
% (1)

 
Units
% (1)
 
Units
Change
Class A gas
642

43.6
%
 
230

33.8
%
 
412

179.1
 %
Class A diesel
333

22.6
%
 
177

26.0
%
 
156

88.1
 %
Total Class A
975

66.2
%
 
407

59.8
%
 
568

139.6
 %
Class B
118

8.0
%
 
71

10.4
%
 
47

66.2
 %
Class C
380

25.8
%
 
203

29.8
%
 
177

87.2
 %
Total motor home backlog(2)
1,473

100.0
%
 
681

100.0
%
 
792

116.3
 %
 
 
 
 
 
 
 
 
 
Travel trailer
306

74.5
%
 
187

63.8
%
 
119

63.6
 %
Fifth wheel
105

25.5
%
 
106

36.2
%
 
(1
)
(0.9
)%
    Total towable backlog (2)
411

100.0
%
 
293

100.0
%
 
118

40.3
 %
 
 
 
 
 
 
 
 
 
Total approximate backlog revenue dollars (in 000's):
 
 
 
 
 
 
Motor home
$
163,725

 
 
$
74,704

 
 
$
89,021

119.2
 %
Towable
8,776

 
 
6,669

 
 
2,107

31.6
 %
(1) 
Percentages may not add due to rounding differences.
(2) 
Our backlog includes all accepted orders from dealers to be shipped within the next six months. Orders in backlog can be canceled or postponed at the option of the purchaser at any time without penalty and, therefore, backlog may not necessarily be an accurate measure of future sales.
Unaudited Dealer Inventory
 
Units As Of
 
 
 
August 25,
2012
 
August 27,
2011
 
Change
Motor homes
1,927

 
1,958

 
(31
)
(1.6
)%
Towables
1,365

 
966

 
399
41.3
 %


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