Winnebago 2Q Revenues Soar on Added Newmar Income

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Winnebago’s second quarter revenues jumped by nearly 45 percent, to $626.8 million, compared to the year prior period, thanks to added income from its new Newmar subsidiary, the company reported Wednesday.

Revenues for Newmar – which was acquired in the first quarter of fiscal 2020 – were $138.4 million. Revenues excluding Newmar increased 12.9 percent, to $488.4 million, up from $432.7 million.

Meanwhile, gross profit increased 20 percent, to $79.8 million, compared to $66.4 million for the fiscal 2019 period. Gross profit margin decreased 270 basis points in the quarter, primarily driven by a change in mix due to the inclusion of a full quarter of Newmar, the impact of inventory step-up purchase accounting related to the Newmar acquisition and start-up costs associated with the company’s towable segment new production facilities. 

Operating income was $29.6 million for the quarter, compared to $28.9 million in the second quarter of last year. Fiscal 2020 second quarter net income decreased 20 percent, to $17.3 million, compared to $21.6 million in the same period last year. 

Consolidated Adjusted EBITDA increased 31.7 percent, to $45.4 million for the quarter, compared to $34.5 million last year.

President and Chief Executive Officer Michael Happe commented, “Our outdoor brands continue to resonate with consumers as reflected in our impressive consolidated results for the second quarter. Topline growth continues to outperform the industry, driven by robust Class B sales within our Winnebago Motorhome business, and another exceptional quarter from Grand Design RV.” 

He added, “Newmar-branded Class A diesel retail momentum is resulting in increased market share results in that category, and our overall wholesale performance of Newmar in our second quarter was in line with our acquisition plan. Our more diversified, full-line of products continues to drive higher margins within the motorhome segment and accelerate our market share gains. 

“Winnebago Industries’ North American RV retail market share is 13.2 percent on a trailing three-month basis through January 2020, up 2.6 share points (up 1.8 share points on an organic basis) over the same period last year,” Happe said. 

In the towables segment, revenues increased 13 percent, to $283.5 million for the second quarter, primarily driven by the overall strength of the Grand Design RV product line and the popularity of several recently redesigned flagship products, including the Reflection and Imagine models. 

In the motorhome segment, revenues increased nearly 98 percent, mostly driven by a full quarter of Newmar contribution and strength in the Class B line-up. Segment revenues excluding Newmar grew 13.6 percent over the prior year period. 

Happe said that Winnebago is carefully monitoring the COVID-19 pandemic, but remains optimistic in its outlook.

“We entered the second half of our fiscal year with significant cash on hand of $122.9 million, access to a credit line of $192.5 million, and the ability to leverage a highly variable cost structure, that when combined will assist tremendously in maximizing our liquidity and managing through the challenging period ahead. While the industry continues to look for its footing in these uncertain times as a result of the coronavirus pandemic, we are confident that the outdoor recreation industry will rebound in the future, and as such, our focus remains on activating our premium brands and products to accelerate our market share building when a new normal state presents itself.”

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