FOREST CITY, Iowa — Winnebago Industries today reported financial results for the company’s fourth quarter and full year 2015 fiscal year.
Fourth quarter fiscal results
Revenues for the fiscal fourth quarter, which ended Aug. 29, were $251 million, an increase of 2.1 percent, versus $245.9 million for the fiscal 2014 period. Operating income was $16.9 million for the current quarter compared to $18.3 million in the fourth quarter of last year. Fiscal 2015 fourth quarter net income was $11.7 million, or $0.43 per diluted share, versus $12.9 million, or $0.48 per diluted share, in the same period last year.
Fourth quarter gross margin improved sequentially from the third quarter due in part to improved manufacturing efficiencies within the motorized group, the release noted. However, year-over-year fourth quarter gross margin declined due to unfavorable trends in warranty expense, the establishment of a warranty recall reserve and costs related to motorized manufacturing inefficiencies.
These costs were partly offset by the reinstatement of tariff rebates on certain imported materials, lower commodity related expense, greater absorption of fixed costs and the realization of cost-saving benefits related to the company’s strategic sourcing initiative, Winnebago explained.
Operating expenses increased in the fiscal 2015 fourth quarter compared to last year due mainly to incremental general and administrative expenses associated with two previously disclosed strategic initiatives related to ERP implementation and strategic sourcing, as well as costs related to a retirement agreement with the company’s former CEO.
Fourth quarter fiscal 2015 revenue growth year over year was driven by improved towable revenues of 36.7 percent, as a result of a 26.3 percent average selling price increase and unit growth of 7.5 percent. Compared to last year, fourth quarter fiscal 2015 motorized unit shipment volumes were essentially flat.
Year over year, motorhome retail registrations increased 28 percent in the fiscal 2015 fourth quarter and 16 percent on a rolling 12-month basis, while towable retail registrations increased 21 percent in the fiscal 2015 fourth quarter and 14 percent on a rolling 12-month basis, based on internally reported retail information.
Full-year fiscal 2015 results
Fiscal 2015 revenues were $976.5 million, an increase of 3.3 percent from $945.2 million for fiscal 2014. The sales growth was primarily comprised of motorhome unit growth of 3.9 percent and towable average selling price and unit growth of 15.9 percent and 6.4 percent, respectively.
Net income for fiscal 2015 was $41.2 million, or $1.52 per diluted share, versus $45.1 million, or $1.64 per diluted share, last year. During fiscal 2015, investments related to the new ERP system and strategic sourcing initiatives aggregated $7.0 million, of which $3.8 million was expensed.
Quarterly cash dividend
The company’s board of directors approved Oct. 14 an 11 percent increase to the quarterly cash dividend to 10 cents per share, payable Nov. 25 to common stockholders of record at the close of business Nov. 11.
“Fiscal 2015 results were driven by strong performance in our Class B and Class C motorized products as well as significantly improved results from the towables group, where both revenue and operating income grew,” said Sarah Nielsen, chief financial officer. “During the year we made considerable progress on both of our strategic initiatives and saw early benefits from our strategic sourcing project, which we anticipate will enhance gross margin by up to 50 basis points in fiscal 2016.
“Additionally, we continued our efforts to improve labor capacity within motorized through the purchase of a facility in Waverly, Iowa,” she explained. “In fiscal 2016, we will be exiting our bus and aluminum extrusion operations, which we believe will improve profitability and should add production capacity for our higher margin motorhome business.
“Our operating cash flow doubled during the fourth quarter and is up by 95 percent for the full year of fiscal 2015,” she added. “We are pleased with this performance particularly during a period where we have made significant long-term investments aimed at benefiting the company in the future.”
“We maintain a positive long-term outlook for the business and are encouraged with the continued consumer demand for our products, as well as with RVIA’s expectation for continued industry growth of approximately 3 percent in calendar 2016,” said Nielsen. “With industry leading products, a solid balance sheet and several strategic actions underway, we are well positioned to generate long-term shareholder value.”
SOURCE: Winnebago Industries press release