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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended October 31, 2013.

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from              to             .

COMMISSION FILE NUMBER 1-9235

THOR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

  

Delaware

     

93-0768752

  

(State or other jurisdiction of

incorporation or organization)

     

(I.R.S. Employer

Identification No.)

  

601 E. Beardsley Ave., Elkhart, IN        

     

46514-3305

   (Address of principal executive offices)       (Zip Code)

 

  

(574) 970-7460

  
   (Registrant’s telephone number, including area code)   

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

                                            Yes       þ                                                                   No      ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

                                            Yes       þ                                                                   No      ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

  

þ

   Accelerated filer       

¨

Non-accelerated filer

   ¨  (Do not  check if a smaller reporting company)   

Smaller reporting company

  

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

                                            Yes       ¨                                                                   No      þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at 10/31/2013

Common stock, par value

 

$    .10 per share

  53,298,179 shares


PART I -   FINANCIAL INFORMATION

Unless otherwise indicated, amounts in thousands except share and per share data.

ITEM 1.     FINANCIAL STATEMENTS

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

ASSETS        October 31, 2013              July 31, 2013      
Current assets:      

Cash and cash equivalents

     $ 294,982          $ 236,601    

Accounts receivable:

     

Trade, less allowance for doubtful accounts of $235 at 10/31/13 and $157 at 7/31/13

     210,790          230,852    

Other

     28,901          15,527    

Inventories

     197,227          153,036    

Notes receivable

     3,726          6,426    

Prepaid income taxes, expenses and other

     7,148          5,238    

Deferred income taxes

     47,649          46,518    

Assets of discontinued operations

     –          136,506    

Total current assets

     790,423          830,704    
  

 

 

    

 

 

 

Property, plant and equipment:

     

Land

     21,080          20,885    

Buildings and improvements

     152,455          150,628    

Machinery and equipment

     76,658          73,478    
  

 

 

    

 

 

 

Total cost

     250,193          244,991    

Less accumulated depreciation

     103,501          101,182    
  

 

 

    

 

 

 

Net property, plant and equipment

     146,692          143,809    
  

 

 

    

 

 

 

Other assets:

     

Goodwill

     253,276          238,103    

Amortizable intangible assets

     110,895          97,753    

Long-term notes receivable

     9,766          9,766    

Other

     7,673          8,133    
  

 

 

    

 

 

 

Total other assets

     381,610          353,755    
  

 

 

    

 

 

 

TOTAL ASSETS

     $ 1,318,725          $ 1,328,268    
  

 

 

    

 

 

 

See Notes to the Condensed Consolidated Financial Statements.

 

2


THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

 

LIABILITIES AND STOCKHOLDERS’ EQUITY        October 31, 2013               July 31, 2013         

Current liabilities:

     

Accounts payable

     $ 144,721          $ 135,040    

Accrued liabilities:

     

Compensation and related items

     36,832          47,496    

Product warranties

     86,530          84,250    

Income and other taxes

     8,824          21,350    

Promotions and rebates

     17,886          12,580    

Product/property liability and related liabilities

     13,179          10,642    

Dividends payable

     53,290          –    

Other

     13,036          15,207    

Liabilities of discontinued operations

     –          35,107    

Total current liabilities

     374,298          361,672    

Unrecognized income tax benefits

     37,875          41,219    

Deferred income taxes, net

     19,083          18,560    

Other long-term liabilities

     15,385          14,203    

Total long-term liabilities

     72,343          73,982    

Contingent liabilities and commitments

     –          –    

Stockholders’ equity:

     

Preferred stock – authorized 1,000,000 shares; none outstanding

     –          –    

Common stock – par value of $.10 per share; authorized 250,000,000 shares; issued 62,178,116 shares at 10/31/13 and 62,045,264 at 7/31/13

     6,218          6,205    

Additional paid-in capital

     203,959          198,838    

Retained earnings

     929,305          953,740    

Accumulated other comprehensive loss – unrealized loss on available-for-sale investments

     –          (22)    

Less treasury shares of 8,879,937 at 10/31/13 and 8,858,280 at 7/31/13, at cost

     (267,398)          (266,147)    

Total stockholders’ equity

     872,084          892,614    

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $      1,318,725         $      1,328,268    
  

 

 

    

 

 

 

See Notes to the Condensed Consolidated Financial Statements.

 

3


THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED OCTOBER 31, 2013 AND 2012 (UNAUDITED)

 

     Three Months Ended October 31,  
     2013      2012  

Net sales

    $ 799,963        $ 761,424   

Cost of products sold

     694,780         669,121   
  

 

 

    

 

 

 

Gross profit

     105,183         92,303   

Selling, general and administrative expenses

     48,341         46,702   

Amortization of intangible assets

     2,838         2,634   

Impairment charges

     710         –    

Interest income

     510         776   

Interest expense

     5         3   

Other income, net

     642         428   
  

 

 

    

 

 

 

Income from continuing operations before income taxes

     54,441         44,168   

Income taxes

     18,047         15,419   
  

 

 

    

 

 

 

Net income from continuing operations

     36,394         28,749   

Income from discontinued operations, net of income taxes

     4,714         2,239   
  

 

 

    

 

 

 

Net Income

    $ 41,108        $ 30,988   
  

 

 

    

 

 

 

Weighted average common shares outstanding:

     

Basic

     53,205,004         52,928,467   

Diluted

     53,299,476         53,035,582   

Earnings per common share from continuing operations:

     

Basic

    $ 0.68        $ 0.54   

Diluted

    $ 0.68        $ 0.54   

Earnings per common share from discontinued operations:

     

Basic

    $ 0.09        $ 0.05   

Diluted

    $ 0.09        $ 0.04   

Earnings per common share:

     

Basic

    $ 0.77        $ 0.59   

Diluted

    $ 0.77        $ 0.58   

Regular dividend declared and paid per common share

    $ 0.23        $ 0.18   

Special dividend declared per common share

    $ 1.00        $ –    

Net income

    $ 41,108        $ 30,988   

Unrealized appreciation on investments, net of tax of $12 and $1

     22         1   
  

 

 

    

 

 

 

Comprehensive income

    $ 41,130        $ 30,989   
  

 

 

    

 

 

 

See Notes to the Condensed Consolidated Financial Statements.

 

4


THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2013 AND 2012 (UNAUDITED)

 

     Three Months Ended October 31,  
     2013      2012  

Cash flows from operating activities:

     

Net income

   $ 41,108        $ 30,988    

Adjustments to reconcile net income to net cash provided by operating activities:

     

Depreciation

     3,414          3,444    

Amortization of intangibles

     2,902          2,768    

Impairment charges

     710          –    

Deferred income tax provision (benefit)

     1,266          (2,185)    

Gain on disposal of bus business

     (7,825)          –    

Loss on disposition of property, plant and equipment

     34          –    

Stock-based compensation

     1,376          669    

Excess tax benefits from stock-based awards

     (737)          (60)    

Changes in assets and liabilities (excluding acquisitions and disposition):

     

Accounts receivable

     21,110          16,317    

Inventories

     (43,288)          (38,822)    

Prepaid income taxes, expenses and other

     (1,860 )         (1,690)    

Accounts payable

     3,916          1,346    

Accrued liabilities

     (14,264)          (102)    

Other liabilities

     (2,009)          1,766    
  

 

 

    

 

 

 

Net cash provided by operating activities

     5,853          14,439    
  

 

 

    

 

 

 

Cash flows from investing activities:

     

Purchases of property, plant and equipment

     (5,131)          (5,893)    

Proceeds from dispositions of property, plant and equipment

     65          –    

Proceeds from dispositions of investments

     700          –    

Proceeds from notes receivable

     2,700          –    

Proceeds from sale of bus business, net of bus cash on hand

     97,677          –    

Acquisitions, net of cash acquired

     (33,774)          (3,914)    

Other

     219          –    
  

 

 

    

 

 

 

Net cash provided by (used in) investing activities

     62,456          (9,807)    
  

 

 

    

 

 

 

Cash flows from financing activities:

     

Regular cash dividends paid

     (12,253)          (9,527)    

Excess tax benefits from stock-based awards

     737          60    

Proceeds from issuance of common stock

     2,293          691    

Payments related to vesting of stock-based awards

     (705)          –    
  

 

 

    

 

 

 

Net cash used in financing activities

     (9,928)          (8,776)    
  

 

 

    

 

 

 

Net increase (decrease) in cash and cash equivalents

     58,381          (4,144)    

Cash and cash equivalents, beginning of period

     236,601          218,642    
  

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ 294,982        $ 214,498    
  

 

 

    

 

 

 

Supplemental cash flow information:

     

Income taxes paid

   $ 34,970        $ 25,250    

Interest paid

   $ 132        $ 80    

Non-cash transactions:

     

Capital expenditures in accounts payable

   $ 1,518        $ 325    

Other accounts receivable from bus business sale

   $ 8,329        $ –    

Special dividend payable

   $ 53,290        $ –    

See Notes to the Condensed Consolidated Financial Statements.

 

5


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(All dollar amounts presented in thousands except per share data.)

 

1.

Nature of Operations and Accounting Policies

Nature of Operations - Thor Industries, Inc. was founded in 1980 and, through its subsidiaries (the “Company”), manufactures a wide range of recreational vehicles (“RVs”) at various manufacturing facilities located primarily in Indiana and Ohio. These products are sold to independent dealers primarily throughout the United States and Canada. Unless the context otherwise requires or indicates, all references to “Thor”, the “Company”, “we”, “our” and “us” refer to Thor Industries, Inc. and its subsidiaries.

The Company’s core business activities are comprised of two distinct operations, which include the design, manufacture and sale of towable recreational vehicles and motorized recreational vehicles. Accordingly, the Company has presented segment financial information for these two segments in Note 4 to the Condensed Consolidated Financial Statements. See Note 3, “Discontinued Operations,” in the Notes to the Condensed Consolidated Financial Statements for a description of the Company’s bus operations which were sold during the three months ended October 31, 2013. Accordingly, the accompanying financial statements (including footnote disclosures unless otherwise indicated) reflect these operations as discontinued operations apart from the Company’s continuing recreational vehicle operations.

The July 31, 2013 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 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, 2013. Due to seasonality within the recreational vehicle industry, the extrapolated results of operations for the three months ended October 31, 2013 are not necessarily indicative of the results for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Key estimates include reserves for inventory, incurred but not reported medical claims, warranty claims, recalls, workers’ compensation claims, vehicle repurchases, uncertain tax positions, product and non-product litigation and fair value determinations made for intangible assets acquired and in asset impairment assessments. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. The Company believes that such estimates are made using consistent and appropriate methods. Actual results could differ from these estimates.

 

2.

Acquisitions

On October 31, 2013, the Company closed on an Asset Purchase Agreement with Bison Coach, LLC for the acquisition of its net operating assets for cash consideration of $16,718, subject to adjustments, which was funded entirely from the Company’s cash on hand. As a result of the purchase, the Company formed a new entity, Bison Coach (“Bison”), which will operate as an independent operation in the same manner as the Company’s other existing recreational vehicle subsidiaries. The Company purchased the net assets of Bison to supplement its existing product offerings with Bison’s equestrian products with living quarters.

We have included the purchased assets and assumed liabilities of Bison in the Condensed Consolidated Balance Sheet based on our preliminary approximation of fair values as of the acquisition date. The determination of the fair values of the assets acquired and liabilities assumed, particularly the fair value of the individual intangible assets acquired, requires significant judgment. This fair value analysis and valuation has not been fully completed. The fair values of the intangible assets and residual goodwill are among the most significant areas to be finalized and therefore are subject to change. We anticipate completing the fair value determinations during the second quarter of fiscal 2014. Our final fair value determinations may be different than those reflected in our Condensed Consolidated Balance Sheet at October 31, 2013 as noted in the table below.

 

6


The following table summarizes the preliminary fair values assigned to the Bison net assets acquired on October 31, 2013:

 

Current assets

      $      3,995   

Property, plant and equipment

     625   

Dealer network

     7,800   

Trademarks

     2,000   

Backlog

     140   

Goodwill

     6,060   

Current liabilities

     (3,902)   
  

 

 

 

Total fair value of net assets acquired

      $    16,718   
  

 

 

 

The preliminary fair values assigned to the intangible assets listed above were based on actual fair value determinations made for similar assets in similar recent acquisitions, adjusted as necessary, for specific factors applicable to Bison. The estimated weighted average useful life of the identified intangible assets is expected to be between 10 and 12 years. Goodwill is deductible for tax purposes.

On August 30, 2013, the Company closed on an Asset Purchase Agreement with Livin’ Lite Corp. for the acquisition of its net operating assets for aggregate cash consideration of $16,769, net of cash acquired. As of October 31, 2013, the net cash consideration of $16,769 consisted of cash paid of $17,056, funded entirely from the Company’s cash on hand, less $287 of cash due from the settlement of certain closing adjustments. As a result of the purchase, the Company formed a new entity, Livin’ Lite RV, Inc. (“Livin’ Lite”), which will continue to operate as an independent operation in the same manner as the Company’s existing recreational vehicle subsidiaries. The Company purchased the Livin’ Lite operating assets to expand its recreational vehicle market share and complement its existing brands with Livin’ Lite’s advanced lightweight product offerings.

The following table summarizes the preliminary fair value of the Livin’ Lite net assets acquired, which are based on internal and independent external valuations. The valuation of acquired intangible assets has not yet been finalized, but is expected to be completed during the second quarter of fiscal 2014.

 

Cash

      $         247   

Other current assets

     3,626   

Property, plant and equipment

     137   

Dealer network

     3,200   

Trademarks

     1,500   

Design technology assets

     1,100   

Non-compete agreements

     130   

Backlog

     110   

Goodwill

     9,113   

Current liabilities

     (2,147)   
  

 

 

 

Total fair value of net assets acquired

     17,016   

Less cash acquired

     (247)   
  

 

 

 

Total cash paid for acquisition, less cash acquired

      $    16,769   
  

 

 

 

On the acquisition date, amortizable intangible assets had a weighted average useful life of 10.2 years. The dealer network was valued based on the Discounted Cash Flow Method and will be amortized on an accelerated cash flow basis over 8 years. The trademarks were valued on the Relief from Royalty Method and will be amortized on a straight line basis over 20 years. The design technology assets were valued on the Relief from Royalty Method and will be amortized on a straight line basis over 5 years. The non-compete agreements and backlog were both valued based on the Discounted Cash Flow Method and will be amortized on a straight line basis over 2 years and 6 weeks, respectively. Goodwill is deductible for tax purposes.

On October 3, 2012, the Company closed on an Asset Purchase Agreement with Krystal Infinity, LLC dba Krystal Enterprises (“Krystal”) for the acquisition of Krystal’s bus operation assets for cash consideration of $3,914. The fair value of the net assets acquired included inventory of $915, property and equipment of $331, goodwill of $768 and amortizable intangible assets consisting of trademarks of $1,000 and dealer network of $900. The Krystal bus operation assets were utilized at the ElDorado Kansas facility to produce buses under the Krystal name. The related assets and liabilities were sold as of October 20, 2013 and the results of operations since acquisition are included in discontinued operations as discussed in Note 3 to the Condensed Consolidated Financial Statements.

 

7


On December 20, 2012, the Company acquired the Federal Coach (“Federal Coach”) bus operation assets from Forest River, Inc. for cash consideration of $6,804. The fair value of the net assets acquired included inventory of $804, property and equipment of $630, certain liabilities of $225, goodwill of $4,495, and amortizable intangible assets consisting of trademarks of $670, dealer network of $410 and backlog of $20. The Federal Coach bus operation assets were utilized at the Champion Bus facility to produce buses under the Federal Coach name. The related assets and liabilities were sold as of October 20, 2013 and the results of operations since acquisition are included in discontinued operations as discussed in Note 3 to the Condensed Consolidated Financial Statements.

 

3.

Discontinued Operations

On July 31, 2013, the Company entered into a Stock Purchase Agreement (“SPA”) to sell its bus business to Allied Specialty Vehicles, Inc. (“ASV”) for cash of $100,000, subject to closing adjustments for changes in the net assets to be sold from April 30, 2013 to the closing date. The Company’s bus business, which manufactures and sells transit and shuttle buses, included the operations of Champion Bus Inc., General Coach America, Inc., Goshen Coach, Inc., ElDorado National Kansas, Inc. and ElDorado National California, Inc. This divestiture will allow the Company to focus on the strategic development and growth of its core recreational vehicle business.

The sale was completed as of October 20, 2013 and the Company received $100,000 on October 21, 2013, which after considering bus cash on hand at the subsidiaries of $2,323 as of October 20, 2013, resulted in initial net cash consideration of $97,677. Under the terms of the SPA, the total cash consideration to be received is subject to adjustment based on changes in the carrying value of the net assets of the bus business between April 30, 2013 and October 20, 2013 plus the amount of bus cash on hand as of the date of the sale. The amount of the net asset adjustment will ultimately be determined through the completion of a post-close audit, which is expected to occur during the second quarter of fiscal 2014. Based on preliminary calculations of the carrying value of the bus business net assets sold as of October 20, 2013, an additional $6,006 will be due from ASV, representing the increase in bus net assets since April 30, 2013. The total amount remaining due from ASV of $8,329, which includes the net asset increase of $6,006 and the bus cash on hand of $2,323, is reflected in other accounts receivable in the Condensed Consolidated Balance Sheet.

The Company recorded a pre-tax gain of $7,825, subject to adjustment, as a result of the sale. The results of operations for the bus business, including the gain on the sale of the bus business, have been reported as discontinued operations in the Condensed Consolidated Statements of Income and Comprehensive Income for all periods presented.

On April 30, 2013, the Company sold the assets held and used in the conduct of its ambulance product line (excluding the plant utilized in ambulance production and certain other excluded assets) for a final price of $12,051. There was no gain or loss recognized on the sale. Discontinued operations for fiscal 2013 include the results of the ambulance product line.

The following table summarizes the results of discontinued operations:

 

     Three Months Ended
October  31,
 
Discontinued Operations:    2013      2012  

Net sales

       $     83,903           $     114,188   
  

 

 

    

 

 

 

Operating income (loss) of discontinued operations

       $ (3,433)           $ 3,443   

Pre-tax gain on disposal of discontinued business

     7,825           
  

 

 

    

 

 

 

Income before income taxes

     4,392         3,443   

Income tax expense (benefit)

     (322)         1,204   
  

 

 

    

 

 

 

Income from discontinued operations, net of taxes

       $ 4,714           $ 2,239   
  

 

 

    

 

 

 

As a result of the sale of the bus business, and in accordance with the SPA, the Company is no longer the primary obligor to the taxing authorities for bus operations in certain states. As a result of the Company no longer being the primary obligor to the taxing authorities, the Company eliminated the reserves associated with certain uncertain tax positions resulting in a net tax benefit of $1,883 which is reflected within discontinued operations. Under the terms of the sale, the Company has agreed to indemnify ASV for any claims made by the taxing authorities after the date of sale for these uncertain tax positions but does not expect future losses under this guarantee to be material.

 

8


The following is a summary of the assets and liabilities of discontinued operations, excluding cash, which were held for sale as of July 31, 2013:

 

Accounts and other receivable, net

     $ 29,894   

Inventories, net of LIFO reserve of $9,683

     61,800   

Property, plant and equipment, cost

     50,985   

Accumulated depreciation, property, plant and equipment

     (21,422)   

Goodwill

     5,559   

Other intangibles, net

     3,743   

Deferred income taxes and other assets

     2,540   

Deferred compensation plan assets

     3,407   
  

 

 

 

Assets of discontinued operations

     $     136,506   
  

 

 

 

Accounts payable

     $ 23,427   

Accrued compensation and related items

     3,130   

Product warranties

     3,891   

Deferred income taxes and other liabilities

     1,252   

Deferred compensation plan liabilities

     3,407   
  

 

 

 

Liabilities of discontinued operations

     $ 35,107   
  

 

 

 

In accordance with the SPA, the Company will retain the costs and liabilities associated with the bus business product liability and worker’s compensation claims for any occurrence prior to the closing date of the sale. Therefore, these reserves are not included in the liabilities of discontinued operations on the Condensed Consolidated Balance Sheet as of July 31, 2013.

 

4.

Business Segments

The Company has two continuing reportable segments: (1) towable recreational vehicles and (2) motorized recreational vehicles. The towable recreational vehicle reportable segment consists of product lines from the following operating segments that have been aggregated: Airstream, CrossRoads, Dutchmen, Keystone, Heartland, Livin’ Lite and Bison. The motorized recreational vehicle reportable segment consists of product lines from the following operating segments that have been aggregated: Airstream and Thor Motor Coach.

All manufacturing is conducted in the United States. Identifiable assets are those assets used in the operation of each reportable segment. Corporate assets primarily consist of cash and cash equivalents and deferred income tax assets.

 

                                                         
     Three Months Ended
October 31,
 
     2013      2012  

Net sales:

     

Recreational vehicles:

     

Towables

       $     622,853           $     639,182   

Motorized

     177,110         122,242   
  

 

 

    

 

 

 

Total

       $     799,963           $ 761,424   
  

 

 

    

 

 

 
     Three Months Ended
October 31,
 
     2013      2012  

Income (loss) from continuing operations before income taxes:

     

Recreational vehicles:

     

Towables

       $ 45,624           $ 42,710   

Motorized

     13,443         8,438   
  

 

 

    

 

 

 

Total recreational vehicles

     59,067         51,148   

Corporate

     (4,626)         (6,980)   
  

 

 

    

 

 

 

Total

       $ 54,441           $ 44,168   
  

 

 

    

 

 

 

 

9


                                                         
    October 31, 2013      July 31, 2013  

Identifiable assets:

    

Recreational vehicles:

    

Towables

      $ 794,938           $ 759,658   

Motorized

    134,397         126,123   
 

 

 

    

 

 

 

Total recreational vehicles

    929,335         885,781   

Corporate

    389,390         305,981   

Assets of discontinued operations

            136,506   
 

 

 

    

 

 

 

Total

      $ 1,318,725           $ 1,328,268   
 

 

 

    

 

 

 

 

5.

Earnings Per Common Share

 

     Three Months Ended
October 31,
 
     2013      2012  

Weighted average common shares outstanding for basic earnings per share

     53,205,004         52,928,467   

Stock options and unvested restricted stock and restricted stock units

     94,472         107,115   
  

 

 

    

 

 

 

Weighted average common shares outstanding for diluted earnings per share

     53,299,476         53,035,582   
  

 

 

    

 

 

 

The Company excludes stock options and unvested restricted stock and restricted stock units that have an antidilutive effect from its calculation of weighted average shares outstanding assuming dilution. At October 31, 2013 and 2012, the Company had 106,959 and 280,681, respectively, of antidilutive stock options and unvested restricted stock and restricted stock units outstanding which were excluded from this calculation.

 

6.

Inventories

Major classifications of inventories are:

 

       October 31, 2013          July 31, 2013    

Raw materials

     $ 106,416         $ 99,154   

Chassis

     34,192         34,108   

Work in process

     41,046         36,188   

Finished goods

     41,875         9,888   
  

 

 

    

 

 

 

Total

     223,529         179,338   

Excess of FIFO costs over LIFO costs

     (26,302)         (26,302)   
  

 

 

    

 

 

 

Total inventories

     $ 197,227         $ 153,036   
  

 

 

    

 

 

 

Of the $223,529 and $179,338 of inventory at October 31, 2013 and July 31, 2013, all but $26,471 and $15,335, respectively, at certain subsidiaries were valued on a last-in, first-out basis. The $26,471 and $15,335 of inventory were valued on a first-in, first-out method.

 

7.

Intangible Assets, Goodwill and Long-Lived Assets

The components of amortizable intangible assets are as follows:

 

     Weighted Average
Remaining Life
     October 31, 2013      July 31, 2013  
     in Years at
October 31, 2013
     Cost      Accumulated
Amortization
     Cost      Accumulated
Amortization
 

Dealer networks

     9           $ 78,000           $ 20,844           $ 67,000           $ 19,121   

Non-compete agreements

     2         4,260         2,592         4,130         2,375   

Trademarks

     21         38,542         4,214         35,042         3,843   

Design technology and other
intangibles

     11         22,650         4,907         21,300         4,380   
     

 

 

    

 

 

    

 

 

    

 

 

 

Total amortizable intangible assets

          $ 143,452           $ 32,557           $ 127,472           $ 29,719   
     

 

 

    

 

 

    

 

 

    

 

 

 

 

10


Dealer networks are being amortized on an accelerated cash flow basis. Non-compete agreements, trademarks, and design technology and other intangibles are amortized on a straight-line basis. The increase in amortizable intangible assets since July 31, 2013 is related to the acquisitions of Livin’ Lite and Bison, as more fully described in Note 2 to the Condensed Consolidated Financial Statements. The full fair value analysis of the Livin’ Lite and Bison intangible assets, including goodwill, has not been completed at this time, and therefore, the current values assigned to these intangible assets are subject to change.

Estimated annual amortization expense, based on current values for Livin’ Lite and Bison intangible assets, is as follows:

 

For the fiscal year ending July 31, 2014

   $    11,799   

For the fiscal year ending July 31, 2015

     11,484   

For the fiscal year ending July 31, 2016

     10,382   

For the fiscal year ending July 31, 2017

     10,170   

For the fiscal year ending July 31, 2018

     9,732   

For the fiscal year ending July 31, 2019 and thereafter

     60,166   
  

 

 

 
   $   113,733   
  

 

 

 

The change in carrying value in goodwill from July 31, 2013 to October 31, 2013 is as follows:

 

     Goodwill  

Balance at July 31, 2013

   $   238,103   

Acquisitions of towables businesses

     15,173   
  

 

 

 

Balance at October 31, 2013

   $   253,276   
  

 

 

 

All of the goodwill resides in the towables recreational vehicle segment.

Goodwill is not subject to amortization, but instead is reviewed for impairment by applying a fair-value based test to the Company’s reporting units on an annual basis as of April 30, or more frequently if events or circumstances indicate a potential impairment. The Company’s reporting units are the same as its operating segments, which are identified in Note 4 to the Condensed Consolidated Financial Statements. Fair values are determined by a discounted cash flow model and a market approach, when appropriate. These estimates are subject to significant management judgment including the determination of many factors such as sales growth rates, gross margin patterns, cost growth rates, comparable companies, terminal value assumptions and discount rates and therefore largely represent Level 3 inputs as defined by ASC 820. Changes in these estimates can have a significant impact on the determination of cash flows and fair value and could potentially result in future material impairments.

During the first quarter of fiscal 2014, the Company determined it was more likely than not that certain long-lived assets, consisting of certain RV facilities, will be sold or altered before the end of their previously estimated useful life and therefore, the Company performed impairment assessments over these facilities using Level 3 inputs as defined by ASC 820 to determine whether an impairment exists. As a result of this assessment, a non-cash impairment charge of $710 was recognized in the quarter ended October 31, 2013.

 

8.

Concentration of Risk

One dealer, FreedomRoads, LLC (“FreedomRoads”), accounted for 18% and 16% of the Company’s continuing consolidated net sales for the three months ended October 31, 2013 and October 31, 2012, respectively. This dealer also accounted for 17% of the Company’s consolidated trade accounts receivable at October 31, 2013 and 24% at July 31, 2013. The loss of this dealer could have a significant effect on the Company’s business.

 

9.

Loan Transactions and Related Notes Receivable

In January 2009, we entered into two credit agreements, for $10,000 each, 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 “January 2009 Loan Borrowers”), pursuant to which $1,300 of original principal on the first agreement is outstanding as of October 31, 2013 and due on January 15, 2014. The final principal and interest payments on the second agreement were received in fiscal 2012.

In December 2009, we entered into a $10,000 credit agreement with Marcus Lemonis, Stephen Adams, in his individual capacity, and Stephen Adams and his successors, as trustee under the Trust (collectively, the “December 2009 Loan Borrowers”), and later modified in December 2012, pursuant to which $8,500 of original principal is outstanding as of October 31, 2013 with the final payment due on August 30, 2015.

 

11


The January 2009 and December 2009 Loan Borrowers own, directly or indirectly, a controlling interest in FreedomRoads Holding Company, LLC, the parent company of FreedomRoads, LLC, the Company’s largest dealer.

 

10.

Investments and 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:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

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.

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.

The only Company assets or liabilities carried at fair value in the financial statements are its investments in auction rate securities (“ARS”) - measured with Level 3 inputs, and in other securities (primarily in mutual funds) held for the benefit of certain employees of the Company as part of a deferred compensation plan - measured with Level 1 inputs. ARS balances of $0 and $666 and deferred compensation plan asset balances of $7,521 and $7,000 (excluding $3,570 and $3,407, respectively, related to discontinued operations) were recorded as of October 31, 2013 and July 31, 2013, respectively, as components of other assets in the Condensed Consolidated Balance Sheets. An equal and offsetting accrued liability was also recorded in regards to the deferred compensation plan as a component of other accrued liabilities in the Condensed Consolidated Balance Sheets. Changes in the fair value of the plan assets and the related deferred liability are both reflected in income.

The following table provides a reconciliation of the beginning and ending balance for the assets measured at fair value using significant unobservable inputs (Level 3 financial assets):

 

     Fair Value Measurements at
Reporting Date Using
Significant Unobservable
Inputs

(Level 3)
 

Balance at July 31, 2013

   $ 666   

Net change in other comprehensive income

     34   

Sales

     (700)   
  

 

 

 

Balance at October 31, 2013

   $   
  

 

 

 

 

11.

Product Warranties

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. Management believes that the warranty reserves are adequate. However, actual claims incurred could differ from estimates, requiring adjustments to the reserves. Warranty reserves are reviewed and adjusted as necessary on at least a quarterly basis.

 

12


Changes in our product warranty reserves for continuing operations are as follows:

 

     Three Months Ended
October  31,
 
     2013      2012  

Beginning balance

       $       84,250            $       69,604    

Provision

     22,492          23,357    

Payments

     (20,821)          (18,770)    

Acquisitions

     609          –    
  

 

 

    

 

 

 

Ending balance

       $ 86,530            $ 74,191    
  

 

 

    

 

 

 

 

12.

Provision for Income Taxes

The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current period 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 our financial statements or tax returns. Fluctuations in the actual outcome of these tax consequences could materially impact our financial position or results of operations.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the probability of various possible outcomes must be determined. These uncertain tax positions are re-evaluated on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.

It is the Company’s policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense. For the three months ended October 31, 2013, the Company released $1,642 of gross uncertain tax positions and related interest and penalties recorded at July 31, 2013 related to the effective settlement of uncertain tax positions, which resulted in a net income tax benefit of $1,008. The Company accrued $295 in interest and penalties related to the remaining uncertain tax positions recorded at July 31, 2013.

The overall effective income tax rate for the three months ended October 31, 2013 was 33.1% compared with 34.9% for the three months ended October 31, 2012. The primary reason for the decrease in the overall effective income tax rate was due to the settlement of certain uncertain tax benefits.

The Company anticipates a decrease of approximately $3,920 in unrecognized tax benefits, and $1,050 in accrued interest and penalties related to these unrecognized tax benefits, within the next 12 months from expected settlements or payments of uncertain tax positions and lapses of the applicable statutes of limitations. In addition, the Company is currently in the process of pursuing a variety of settlement alternatives with taxing authorities. It is reasonably possible that some of these settlements could be finalized in the next 12 months. If these settlements are finalized within the next 12 months, the gross unrecognized tax benefits may decrease between $3,400 and $7,200 and related accrued interest and penalties may decrease between $800 and $2,300. It is reasonably possible that some of these settlements will result in cash payments by the Company. Actual results may differ from these estimates.

Generally, fiscal years 2010, 2011 and 2012 remain open for federal, state and foreign income tax purposes. The Company and its subsidiaries file a consolidated U.S. federal income tax return and multiple state income tax returns. The federal returns are subject to examination by taxing authorities for all years after fiscal 2009. The Company is currently under IRS audit for fiscal year 2011. The Company is also being audited by the state of California for tax years ended July 31, 2007 and July 31, 2008 and by the state of Indiana for tax years ended July 31, 2008, 2009 and 2010. The Company believes it has adequately reserved for its exposure to additional payments for uncertain tax positions related to its federal, California and Indiana income tax returns in its liability for unrecognized tax benefits.

 

13


13.

Contingent Liabilities and Commitments

The Company is contingently liable under terms of repurchase agreements with 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 on the agreement to pay the financial institution. The repurchase price is generally determined by the original sales price of the product and pre-defined curtailment arrangements. 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, we may also be required to repurchase inventory relative to dealer terminations in certain states in accordance with state laws or regulatory requirements. The repurchase exposure under these circumstances is minor in relation to our repurchase obligation with financial institutions.

The Company’s total commercial commitment under standby repurchase obligations on dealer inventory financing at October 31, 2013 is $1,066,044. The commitment term is primarily up to eighteen months.

The Company accounts for the guarantee under repurchase agreements of dealers’ financing by deferring a portion of the related product sale that represents the estimated fair value of the guarantee. The estimated fair value takes into account an estimate of the losses that will be incurred upon resale of any repurchases. This estimate is based on recent historical experience supplemented by the Company’s assessment of current economic and other conditions affecting our dealers. This deferred amount is included in the repurchase and guarantee reserve balances of $3,855 and $3,778 as of October 31, 2013 and July 31, 2013, respectively, which are included in other current liabilities on the Condensed Consolidated Balance Sheets.

The table below reflects losses incurred under repurchase agreements in the periods noted. The Company believes that any future losses under these agreements will not have a significant effect on the Company’s consolidated financial position, results of operations or cash flows.

 

     Three Months Ended
October  31,
 
     2013      2012  

Cost of units repurchased

       $       123           $       602   

Realization of units resold

     101         505   
  

 

 

    

 

 

 

Losses due to repurchase

       $ 22           $ 97   
  

 

 

    

 

 

 

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 are not converted within 90 days of delivery to the Company, the Company generally purchases the chassis and records the inventory. At October 31, 2013, there were no vendor supplied chassis on hand, however, $206 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.

Legal Matters

The Company is involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws”, warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows, except that an adverse outcome in a significant litigation matter could have a material effect on the operating results of a particular reporting period.

 

14


14.

Stockholders’ Equity

Stock-Based Compensation

During fiscal 2013, the Compensation and Development Committee of the Board (“the Committee”) approved a program to award restricted stock units to certain employees at the operating subsidiary and corporate levels. The first awards under this program were granted in the first quarter of fiscal 2013 related to fiscal 2012 performance. The Committee approved additional awards that were granted in fiscal 2014 related to fiscal year 2013 performance. The employee restricted stock units vest, and shares of common stock will be issued, in equal installments on the first, second and third anniversaries of the date of grant. In fiscal 2013 and again in fiscal 2014, the Nominating and Governance Committee of the Board awarded restricted stock units to Board members that will vest, and shares of common stock will be issued, on the first anniversary of the date of the grant. Total expense recognized in the three months ended October 31, 2013 and October 31, 2012 for restricted stock unit awards and other stock based compensation was $1,376 and $669, respectively, which included $480 and $52, respectively, related to discontinued operations.

Retained Earnings

The components of the change in retained earnings are as follows:

 

Balance as of July 31, 2013

   $     953,740   

Net income

     41,108   

Dividends declared and paid

     (12,253

Dividends declared but not paid

     (53,290
  

 

 

 

Balance as of October 31, 2013

   $ 929,305   
  

 

 

 

The dividends declared and paid of $12,253 represents the regular quarterly dividend of $0.23 per share.

During the first quarter of fiscal 2014, the Company’s Board of Directors approved and declared the payment of a special dividend of $1.00 per common share. This special dividend totaling $53,290 was paid on November 19, 2013 to shareholders of record at the close of business on November 5, 2013.

 

15


ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated, all dollar amounts are presented in thousands except per share data.

The following discussion of our business relates primarily to ongoing operations.

Forward Looking Statements

This report includes certain statements that are “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward looking statements involve uncertainties and risks. There can be no assurance that actual results will not differ from our expectations. Factors which could cause materially different results include, among others, price fluctuations, material or chassis supply restrictions, legislative and regulatory developments, the costs of compliance with increased governmental regulation, legal issues, the potential impact of increased tax burdens on our dealers and retail consumers, lower consumer confidence and the level of discretionary consumer spending, interest rate fluctuations, restrictive lending practices, recent management changes, the success of new product introductions, the pace of acquisitions, the impact of the divestiture of the Company’s bus business, asset impairment charges, cost structure improvements, competition and general economic, market and political conditions and the other risks and uncertainties discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2013. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this report or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

Executive Overview

We were founded in 1980 and through our operating subsidiaries have grown to be one of the largest manufacturers of Recreational Vehicles (“RVs”) in North America based on retail statistics published by Statistical Surveys, Inc. and other reported data. Our U.S. RV industry market share in the travel trailer and fifth wheel portion of the towable segment is approximately 37% for the calendar quarter ended September 30, 2013. In the motorized segment of the RV industry, we have a U.S. market share of approximately 22% for the calendar quarter ended September 30, 2013.

Our business model includes decentralized operating units and we compensate operating management primarily with a combination of cash and restricted stock units, based upon the profitability of the business unit which they manage. Our corporate staff provides financial management, insurance, legal, human resource, risk management and internal audit functions. Senior corporate management interacts regularly with operating management to assure that corporate objectives are understood and are monitored appropriately.

Our RV products are sold to dealers who, in turn, retail those products. We generally do not finance dealers directly, but do provide repurchase agreements to certain of the dealers’ floor plan lenders.

Our growth has been internal and by acquisition. Our strategy has been to increase our profitability in North America in the RV industry through product innovation, service to our customers, manufacturing quality products, improving efficiencies of our facilities and acquisitions. We have not entered unrelated businesses and have no plans to do so in the future.

We have relied on internally generated cash flows from operations to finance substantially all our growth although we may borrow to make an acquisition if we believe the incremental cash flows will provide for rapid payback. Capital expenditures of $5,131 for the three months ended October 31, 2013 were made primarily for building additions and improvements and to replace machinery and equipment used in the ordinary course of business.

Recent Events

On October 31, 2013, the Company closed on an Asset Purchase Agreement with Bison Coach, LLC for the acquisition of its net operating assets for cash consideration of $16,718, subject to adjustments. The Company purchased these net assets to expand its recreational vehicle market share and supplement its existing brands with equestrian product offerings with living quarters.

On August 30, 2013, the Company closed on an Asset Purchase Agreement with Livin’ Lite Corp. for the acquisition of its net operating assets for cash consideration of $16,769, net of cash acquired. The Company purchased these net assets to expand its recreational vehicle market share and complement its existing brands with advanced lightweight product offerings.

 

16


On July 31, 2013, the Company entered into a Stock Purchase Agreement (“SPA”) to sell its bus business to Allied Specialty Vehicles, Inc. (“ASV”) for cash of $100,000, subject to closing adjustments for changes in the net assets to be sold from April 30, 2013 to the closing date. The sale was completed as of October 20, 2013 and the Company received $100,000 on October 21, 2013, which after considering bus cash on hand at the subsidiaries of $2,323 as of October 20, 2013, resulted in initial net cash consideration of $97,677. Under the terms of the SPA, the total cash consideration to be received is subject to adjustment based on changes in the carrying value of the net assets of the bus business between April 30, 2013 and October 20, 2013 plus the amount of bus cash on hand as of the date of the sale. The amount of the net asset adjustment will ultimately be determined through the completion of a post-close audit, which is expected to occur during the second quarter of fiscal 2014. Based on preliminary calculations of the carrying value of the bus business net assets sold as of October 20, 2013, an additional $6,006 will be due from ASV, representing the increase in bus net assets since April 30, 2013. The total amount remaining due from ASV of $8,329, which includes the net asset increase of $6,006 and the bus cash on hand of $2,323, is reflected in other accounts receivable in the Condensed Consolidated Balance Sheet.

On April 30, 2013, the Company sold the assets held and used in the conduct of its ambulance product line (excluding the plant utilized in ambulance production and certain excluded assets) for a final price of $12,051. There was no gain or loss recognized on the sale.

Industry Outlook

The Company monitors the industry conditions in the RV market through the use of monthly wholesale shipment data as reported by the Recreation Vehicle Industry Association (“RVIA”) which is typically issued on a one month lag and represents manufacturers’ RV production and delivery to dealers. In addition, we also monitor monthly retail sales trends as reported by Statistical Surveys, Inc. (“Stat Surveys”). Stat Surveys data is typically issued on a month and a half lag. The Company believes that monthly RV retail sales data is important as consumer purchases impact future dealer orders and ultimately our production.

We believe our dealer inventory levels are lean to balanced for seasonal consumer demand, with dealers optimistic regarding calendar 2014 yet cautious about restocking inventory over the winter months. RV dealer inventory of Thor products as of October 31, 2013 increased 4.9% to 53,716 units from 51,206 units as of October 31, 2012. Thor’s RV backlog as of October 31, 2013 increased 41.9% to $733,236 from $516,657 as of October 31, 2012.

Industry Wholesale Statistics – Calendar YTD

Key wholesale statistics for the RV industry, as reported by RVIA, are as follows:

 

     U.S. and Canada Wholesale Unit Shipments  
     Calendar Year through
September 30,
            %  
           2013                  2012                  Increase                  Change        

Towables Units

     219,682          200,027          19,655          9.8    

Motorized Units

     28,941          21,254          7,687          36.2    
  

 

 

    

 

 

    

 

 

    

Total

     248,623          221,281          27,342                  12.4    
  

 

 

    

 

 

    

 

 

    

According to the RVIA, calendar year 2013 wholesale shipments for all RV categories are forecast to total 319,300 units, an 11.7% increase over calendar year 2012, with most of the 2013 unit growth expected in travel trailers and fifth wheels. Calendar year 2013 motorized unit shipments are forecasted to increase 31.6% over calendar year 2012. Travel trailers and fifth wheels are expected to account for 84% of all RV shipments in 2013. The outlook for calendar 2013 growth in RV sales is based on rising consumer confidence, rising home and stock values, improved credit availability and continued slow gains in job and income prospects. RVIA has also forecast that 2014 calendar year shipments will total 334,300 units, a 4.7% increase from the expected 2013 wholesale shipments.

Industry Retail Statistics – Calendar YTD

We believe that retail demand is the key to continued improvement in the RV industry. With appropriate levels of dealer inventory currently, we believe that RV industry wholesale shipments will generally be on a one-to-one replenishment ratio with retail sales going forward.

 

17


Key retail statistics for the RV industry, as reported by Stat Surveys, are as follows:

 

     U.S. and Canada Retail Unit Registrations  
     Calendar Year through
September 30,
            %  
           2013                  2012                  Increase                  Change        

Towables Units

     228,029          202,962          25,067          12.4    

Motorized Units

     26,867          20,828          6,039          29.0    
  

 

 

    

 

 

    

 

 

    

Total

     254,896          223,790          31,106                  13.9    
  

 

 

    

 

 

    

 

 

    

Note: Data reported by Stat Surveys is based on official state records. This information is subject to adjustment and is continuously updated.

Company Wholesale Statistics – Calendar YTD

The Company’s wholesale RV shipments were as follows:

 

     U.S. and Canada Wholesale Unit Shipments  
     Calendar Year through
September 30,
            %  
           2013                  2012                  Increase                  Change        

Towables Units

     77,766          73,926          3,840          5.2    

Motorized Units

     6,535          4,453          2,082          46.8    
  

 

 

    

 

 

    

 

 

    

Total

     84,301          78,379          5,922                  7.6    
  

 

 

    

 

 

    

 

 

    
           

Company Retail Statistics – Calendar YTD

Retail statistics of the Company’s RV products, as reported by Stat Surveys, were as follows:

 

     U.S. and Canada Retail Unit Registrations  
     Calendar Year through
September 30,
            %  
           2013                  2012                  Increase                  Change        

Towables Units

     81,539          73,707          7,832          10.6    

Motorized Units

     6,307          4,206          2,101          50.0    
  

 

 

    

 

 

    

 

 

    

Total

     87,846          77,913          9,933                  12.7    
  

 

 

    

 

 

    

 

 

    

Our outlook for future growth in retail sales is dependent upon various economic conditions faced by consumers such as the rate of unemployment, the level of consumer confidence, the growth in disposable income of consumers, changes in interest rates, credit availability, the pace of recovery in the housing market, the impact of rising taxes and fuel prices. With continued improvement in consumer confidence, availability of retail and wholesale credit, low interest rates and the absence of negative economic factors, we would expect to see incremental improvements in RV sales and expect to benefit from our ability to increase production to meet increasing demand. In recent years, the industry has benefited from growing retail sales to younger consumers with new product offerings targeted to younger, more active families. In addition, a positive longer-term outlook for the RV business is supported by favorable demographics as more people reach the age brackets that historically have accounted for the bulk of retail RV sales. The number of consumers between the ages of 55 and 70 will total 56 million by 2020, 27% higher than in 2010 according to the RVIA.

Economic or industry-wide factors affecting our RV business include the costs of commodities used in the manufacture of our products. Material cost is the primary factor determining our cost of products sold. We have recently incurred modest increased costs in certain raw materials and components (wood and lumber products) and any future increases in raw material costs would impact our profit margins negatively if we were unable to raise prices for our products by corresponding amounts. Historically, we have been able to pass along those cost increases to customers.

 

18


To date, we have not experienced any unusual cost increases from our chassis suppliers. The recreational vehicle industry has, from time to time, experienced shortages of chassis due to various causes such as component shortages, production delays or work stoppages at the chassis manufacturers which has impacted our sales and earnings. Current limitations in the availability of certain motorized RV chassis has hindered our ability to increase production levels and are anticipated to continue at least through early calendar 2014.

Three Months Ended October 31, 2013 vs. Three Months Ended October 31, 2012

 

     Three Months
Ended

  October  31, 2013  
            Three Months
Ended

  October  31, 2012  
            Change
Amount
     %
Change
 

NET SALES:

                 

Recreational Vehicles

                 

Towables

Motorized

    $ 622,853             $ 639,182             $ (16,329)          (2.6)    
     177,110              122,242              54,868           44.9     
  

 

 

       

 

 

       

 

 

    

Total

    $     799,963             $     761,424             $     38,539           5.1     
  

 

 

       

 

 

       

 

 

    

# OF UNITS:

                 

Recreational Vehicles

                 

Towables

     22,980              24,226              (1,246)          (5.1)    

Motorized

     2,179              1,433              746           52.1     
  

 

 

       

 

 

       

 

 

    

Total

     25,159              25,659              (500)          (1.9)    
  

 

 

       

 

 

       

 

 

    
GROSS PROFIT:           % of
Segment
Net Sales
            % of
Segment
Net Sales
     Change
Amount
     %
Change
 

Recreational Vehicles

                 

Towables

    $ 82,830           13.3          $ 77,095           12.1          $ 5,735           7.4     

Motorized

     22,353           12.6           15,208           12.4           7,145           47.0     
  

 

 

       

 

 

       

 

 

    

Total

    $ 105,183           13.1          $ 92,303           12.1          $ 12,880           14.0     
  

 

 

       

 

 

       

 

 

    

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

  

     

Recreational Vehicles

                 

Towables

    $ 33,647           5.4          $ 31,817           5.0          $ 1,830           5.8     

Motorized

     8,941           5.0           6,770           5.5           2,171           32.1     
  

 

 

       

 

 

       

 

 

    

Total Recreational Vehicles

     42,588           5.3           38,587           5.1           4,001           10.4     

Corporate

     5,753           –           8,115           –           (2,362)          (29.1)    
  

 

 

       

 

 

       

 

 

    

Total

    $ 48,341           6.0          $ 46,702           6.1          $ 1,639           3.5     
  

 

 

       

 

 

       

 

 

    

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES:

  

     

Recreational Vehicles

                 

Towables

    $ 45,624           7.3          $ 42,710           6.7          $ 2,914           6.8     

Motorized

     13,443           7.6           8,438           6.9           5,005           59.3     
  

 

 

       

 

 

       

 

 

    

Total Recreational Vehicles

     59,067           7.4           51,148           6.7           7,919           15.5     

Corporate

     (4,626)         –           (6,980)          –           2,354           33.7     
  

 

 

       

 

 

       

 

 

    

Total

    $ 54,441           6.8          $ 44,168           5.8          $ 10,273           23.3     
  

 

 

       

 

 

       

 

 

    

 

ORDER BACKLOG:    As of
    October 31,    
2013
     As of
    October 31,    
2012
     Change
    Amount    
     % Change  

Recreational Vehicles

           

Towables

    $     419,842         $     369,923         $ 49,919          13.5     

Motorized

     313,394          146,734          166,660          113.6     
  

 

 

    

 

 

    

 

 

    

Total

    $ 733,236         $ 516,657         $     216,579          41.9     
  

 

 

    

 

 

    

 

 

    

 

19


CONSOLIDATED

Consolidated net sales for the three months ended October 31, 2013 increased $38,539, or 5.1%, compared to the three months ended October 31, 2012. Consolidated gross profit increased $12,880, or 14.0%, compared to the three months ended October 31, 2012. Consolidated gross profit was 13.1% of consolidated net sales for the three months ended October 31, 2013 and 12.1% for the three months ended October 31, 2012. Selling, general and administrative expenses for the three months ended October 31, 2013 increased 3.5% compared to the three months ended October 31, 2012. Income before income taxes for the three months ended October 31, 2013 was $54,441, as compared to $44,168 for the three months ended October 31, 2012, an increase of $10,273 and 23.3%. The reasons for the changes in net sales, gross profit, selling, general and administrative expenses and income before income taxes are addressed in the segment reporting below.

Corporate costs included in selling, general and administrative expenses decreased $2,362 to $5,753 for the three months ended October 31, 2013 compared to $8,115 for the three months ended October 31, 2012. The decrease is primarily attributable to decreases of $1,968 and $603, respectively, in the portion of our actuarially determined workers’ compensation and product liability reserves recorded at Corporate. The three months ended October 31, 2012 also included a total of $1,106 in one-time employee compensation and stock-based separation costs. These decreases were partially offset by an increase in stock-based compensation of $534 and an increase in bonus expense of $385 due to the increase in consolidated income before income taxes. Deferred compensation plan expense also increased by $286.

Corporate interest income and other income and expense was $1,127 of income for the three months ended October 31, 2013 compared to $1,135 of income for the three months ended October 31, 2012. The $8 decrease is due to a decrease in overall interest income of $266, primarily due to reduced interest income on notes receivable as a result of lower note balances, and a $28 decrease in other income. These decreases were offset by market value appreciation on the Company’s deferred compensation plan assets of $500 in the current year as compared with appreciation of $214 in the prior year, a favorable change of $286.

The overall effective income tax rate for the three months ended October 31, 2013 was 33.1% compared with 34.9% for the three months ended October 31, 2012. The primary reason for the decrease in the overall effective income tax rate was due to the settlement of certain uncertain tax benefits.

 

20


Segment Reporting

TOWABLE RECREATIONAL VEHICLES

Analysis of change in net sales for the three months ended October 31, 2013 vs. the three months ended October 31, 2012:

 

   

Three Months

Ended

October 31, 2013

     % of
Segment
 Net Sales 
     Three Months
Ended
    October 31, 2012    
     % of
Segment
 Net Sales 
   Change
    Amount    
     %
 Change 
 

NET SALES:

                      

Towables

                      

  Travel Trailers

     $ 319,766          51.3               $ 302,380          47.3           $ 17,386           5.7     

  Fifth Wheels

       298,398          47.9             331,327          51.8             (32,929)          (9.9)    

  Other

       4,689          0.8             5,475          0.9             (786)          (14.4)    
    

 

 

    

 

 

       

 

 

    

 

 

       

 

 

    

Total Towables

     $   622,853          100.0               $ 639,182          100.0           $ (16,329)          (2.6)    
    

 

 

    

 

 

       

 

 

    

 

 

       

 

 

    
   

Three Months

Ended

October 31, 2013

     % of
Segment
Shipments
     Three Months
Ended
October 31, 2012
     % of
Segment
Shipments
   Change
Amount
     %
Change
 

# OF UNITS:

                      

Towables

                      

  Travel Trailers

       15,478          67.4             15,556          64.2             (78)          (0.5)    

  Fifth Wheels

       7,293          31.7             8,509          35.1             (1,216)          (14.3)    

  Other

       209          0.9             161          0.7             48           29.8     
    

 

 

    

 

 

       

 

 

    

 

 

       

 

 

    

Total Towables

       22,980          100.0             24,226          100.0             (1,246)          (5.1)    
    

 

 

    

 

 

       

 

 

    

 

 

       

 

 

    

 

Impact of Change in Mix and Price on Net Sales:    %
Increase
(Decrease)
 

Towables

  

Travel Trailers

     6.2     

Fifth Wheels

     4.4     

Other

     (44.2)    

Total Towables

     2.5     

The decrease in total towables net sales of 2.6% compared to the prior year quarter resulted from a 5.1% decrease in unit shipments partially offset by a 2.5% increase in the impact of the change in the overall net price per unit.

The increase in the overall net price per unit within the travel trailer product lines of 6.2% is primarily due to selective net price increases and changes in product mix. The increase in the overall net price per unit within the fifth wheel product lines of 4.4% is due to selective price increases implemented since the comparable prior year period. The “other” category formerly related solely to sales in the park model industry, but now also includes truck, folding and other specialty campers due to the acquisition of Livin’ Lite, which carry a much lower selling price than park models.

The overall industry increase in combined travel trailer and fifth wheel wholesale unit shipments for the three months ended September 30, 2013 was 8.2% compared to the same period last year according to statistics published by RVIA.

Cost of products sold decreased $22,064 to $540,023, or 86.7% of towable net sales, for the three months ended October 31, 2013 compared to $562,087, or 87.9% of towable net sales, for the three months ended October 31, 2012. The change in material, labor, freight-out and warranty comprised $21,039 of the $22,064 decrease in cost of products sold due to decreased sales volume. Material, labor, freight-out and warranty as a combined percentage of towable net sales decreased to 81.3% for the three months ended October 31, 2013 compared to the 82.6% for the three months ended October 31, 2012. This decrease in percentage is primarily due to the favorable impact of selective price increases noted above. Total manufacturing overhead decreased $1,025 with the decrease in sales, but total manufacturing overhead as a percentage of towable net sales remained constant at 5.4% for both periods.

Towable gross profit increased $5,735 to $82,830, or 13.3% of towable net sales, for the three months ended October 31, 2013 compared to $77,095, or 12.1% of towable net sales, for the three months ended October 31, 2012. The $5,735 increase was primarily due to the increased product margin resulting from price increases and product mix as discussed above.

 

21


Selling, general and administrative expenses were $33,647, or 5.4% of towable net sales, for the three months ended October 31, 2013 compared to $31,817, or 5.0% of towable net sales, for the three months ended October 31, 2012. The primary reason for the $1,830 increase was increased towable income before income taxes, which caused related bonuses to increase by $1,937, and an increase of $513 in advertising and promotional costs. These increases were partially offset by a decrease of $501 in legal fees and related settlement costs.

Towable income before income taxes increased to 7.3% of towable net sales for the three months ended October 31, 2013 from 6.7% of towable net sales for the three months ended October 31, 2012. The primary reason for this increase in percentage was the favorable impact of price increases and product mix as noted above.

MOTORIZED RECREATIONAL VEHICLES

Analysis of change in net sales for the three months ended October 31, 2013 vs. the three months ended October 31, 2012:

 

     Three Months
Ended
  October 31, 2013  
     % of
Segment
 Net Sales 
     Three Months
Ended
October 31, 2012
     % of
Segment
 Net Sales 
     Change
  Amount  
     %
 Change 
 

NET SALES:

           

Motorized

                 

Class A

     $ 104,534          59.0        $ 83,069          68.0        $ 21,465          25.8    

Class C

     58,624          33.1          27,243          22.3          31,381          115.2    

Class B

     13,952          7.9          11,930          9.7          2,022          16.9    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Motorized

     $ 177,110          100.0        $ 122,242          100.0        $ 54,868          44.9    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
     Three Months
Ended
October 31, 2013
     % of
Segment
Shipments
     Three Months
Ended
October 31, 2012
     % of
Segment
Shipments
     Change
Amount
     %
Change
 

# OF UNITS:

                 

Motorized

                 

Class A

     1,077          49.4          837          58.4          240          28.7    

Class C

     977          44.8          482          33.6          495          102.7    

Class B

     125          5.8          114          8.0          11          9.6    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Motorized

     2,179          100.0          1,433          100.0          746          52.1    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

Impact of Change in Mix and Price on Net Sales:    %
Increase
(Decrease)
 

Motorized

  

Class A

     (2.9)    

Class C

     12.5     

Class B

     7.3     

Total Motorized

     (7.2)    

The increase in total motorized net sales of 44.9% compared to the prior year quarter resulted from a 52.1% increase in unit shipments and a 7.2% decrease in the impact of the change in the overall net price per unit. The overall market increase in wholesale unit shipments of motorhomes was 41.8% for the three months ended September 30, 2013 compared to the same period last year according to statistics published by RVIA.

The decrease in the overall net price per unit within the Class A product line of 2.9% is primarily due to increasing sales of a continuing line of innovative product offerings of smaller, more moderately priced units that still offer many of the same amenities as larger models. The increase in the overall net price per unit within the Class C product line of 12.5% is primarily due to changes in product mix and selective price increases. Within the Class B product line, the increase in the overall net price per unit of 7.3% is due to a greater concentration of sales of higher priced models and selective price increases in the current year.

Cost of products sold increased $47,723 to $154,757, or 87.4% of motorized net sales, for the three months ended October 31, 2013 compared to $107,034, or 87.6% of motorized net sales, for the three months ended October 31, 2012. The change in material, labor, freight-out and warranty comprised $45,545 of the $47,723 increase due to increased sales volume. Material, labor, freight-out and warranty as a combined percentage of motorized net sales decreased slightly to 83.3% compared to 83.5% for the prior year period. Total manufacturing overhead increased $2,178 with the increase in sales volume, but total manufacturing overhead as a percentage of motorized net sales remained the same at 4.1% for both periods.

 

22


Motorized gross profit increased $7,145 to $22,353, or 12.6% of motorized net sales, for the three months ended October 31, 2013 compared to $15,208, or 12.4% of motorized net sales, for the three months ended October 31, 2012. The $7,145 increase in gross profit was due primarily to the impact of the 52.1% increase in unit sales volume noted above.

Selling, general and administrative expenses were $8,941, or 5.0% of motorized net sales, for the three months ended October 31, 2013 compared to $6,770, or 5.5% of motorized net sales, for the three months ended October 31, 2012. The primary reason for the $2,171 increase was increased motorized net sales and motorized income before income taxes, which caused related commissions, bonuses and other compensation to increase by $2,154.

Motorized income before income taxes was 7.6% of motorized net sales for the three months ended October 31, 2013 and 6.9% of motorized net sales for the three months ended October 31, 2012. The primary reason for this increase in percentage was the impact of the increase in net sales noted above.

Financial Condition and Liquidity

As of October 31, 2013, we had $294,982 in cash and cash equivalents compared to $236,601 on July 31, 2013. The components of the $58,381 increase are described in more detail below, but the increase is primarily attributable to net cash consideration of $97,677 received from the sale of the bus business, partially offset by a total of $33,774 of cash consideration paid for the acquisitions of the Livin’ Lite and Bison recreational vehicle businesses and $12,253 paid for dividends.

Working capital at October 31, 2013 was $416,125 compared to $469,032 at July 31, 2013. Capital expenditures of $5,131 for the three months ended October 31, 2013 were made primarily for building additions and improvements and to replace machinery and equipment used in the ordinary course of business.

We believe our on hand cash and cash equivalents and funds generated from operations will be sufficient to fund expected future operational requirements. We have relied on internally generated cash flows from operations to finance substantially all our growth. We may, however, consider debt to make an acquisition.

Our three main priorities for the use of current and future available cash include growing our core RV business, both organically and through acquisitions, maintaining and growing our regular dividends over time, and strategic share repurchases or special dividends as determined by the Company’s Board.

In regard to growing our business, we anticipate additional capital expenditures in fiscal 2014 of approximately $25,600, primarily for expanding our recreational vehicle facilities and replacing and upgrading machinery, equipment and other assets to be used in the ordinary course of business. We may also consider additional strategic growth acquisitions that complement or expand our ongoing RV operations.

The Company’s Board currently intends to continue quarterly cash dividend payments in the future. The declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board, and will be dependent upon future earnings, cash flows and other factors. There are no limitations on the Company’s ability to pay dividends pursuant to any credit facility.

Future purchases of the Company’s common stock or special cash dividends may occur based upon market and business conditions, and excess cash availability, subject to applicable legal limitations.

Operating Activities

Net cash provided by operating activities for the three months ended October 31, 2013 was $5,853 as compared to $14,439 for the three months ended October 31, 2012. The combination of net income and non-cash items (primarily depreciation, amortization of intangibles, impairment charges, deferred income tax provision (benefit), gain on disposal of bus business and stock-based compensation) provided $42,248 of operating cash in fiscal 2014 compared to $35,624 in the prior year period. Both of these amounts were partially offset by seasonal increases in inventories. However, the $42,248 of operating cash provided in the three months ended October 31, 2013 was offset to a greater extent by a larger increase in inventory, which correlates with the increase in backlog compared to the prior year. In addition, income tax payments exceeded income tax provisions by a greater amount for the three months ended October 31, 2013 as compared to the prior year.

 

23


Investing Activities

Net cash provided by investing activities for the three months ended October 31, 2013 was $62,456, primarily due to $97,677 in net cash consideration received from the sale of the bus business, partially offset by $17,056 and $16,718 of net cash consideration paid for the acquisitions of the Livin’ Lite and Bison recreational vehicle businesses, respectively. During the three months ended October 31, 2012, net cash used in investing activities of $9,807 was due to capital expenditures of $5,893 and $3,914 for the acquisition of the Krystal bus business.

Financing Activities

During the three months ended October 31, 2013, net cash used in financing activities of $9,928 was primarily for cash dividend payments of $12,253, partially offset by proceeds from the issuance of common stock of $2,293. Net cash used in financing activities of $8,776 for the three months ended October 31, 2012 was primarily for cash dividend payments of $9,527. The Company increased its previous regular quarterly dividend of $0.18 per share to $0.23 per share in October 2013. In October 2012, the Company increased its previous regular quarterly dividend of $0.15 per share to $0.18 per share.

Accounting Pronouncements

None

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures”, as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and accumulated and communicated to our management as appropriate to allow for timely decisions regarding required disclosures.

During the quarter ended October 31, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

24


PART II - Other Information

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws”, warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows, except that an adverse outcome in a significant litigation matter could have a material effect on the operating results of a particular reporting period.

ITEM 1A.    RISK FACTORS

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2013.

 

25


ITEM 6. EXHIBITS

 

Exhibit

  

Description

10.1    Copy of consultant agreement to be signed by the Company and Mr. Romeo (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K dated September 10, 2013)
31.1    Chief Executive Officer’s Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2    Chief Financial Officer’s Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1    Chief Executive Officer’s Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2    Chief Financial Officer’s Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS    XBRL Instance Document
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Calculation Linkbase Document
101.PRE    XBRL Taxonomy Presentation Linkbase Document
101.LAB    XBRL Taxonomy Label Linkbase Document
101.DEF    XBRL Taxonomy Extension Definition Linkbase Document

Attached as Exhibits 101 to this report are the following financial statements from the Company’s Quarterly report on Form 10-Q for the quarter ended October 31, 2013 formatted in XBRL (“eXtensible Business Reporting Language”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) related notes to these financial statements.

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

THOR INDUSTRIES, INC.

(Registrant)

DATE: December 2, 2013

 

/s/ Robert W. Martin

 

Robert W. Martin

 

President and Chief Executive Officer

DATE: December 2, 2013

 

/s/ Colleen Zuhl

 

Colleen Zuhl

 

Vice President and Chief Financial Officer

 

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