Winnebago Industries has provided the following business update on actions the company is taking in response to the COVID-19 pandemic.
As previously announced, Winnebago Industries resumed production at certain of its locations (Chris-Craft and specialty vehicles), beginning the week of April 13. Additionally, the company confirmed planned manufacturing resumption activities for the remainder of its portfolio during the month of May:
- Newmar – week of May 4
- Grand Design RV – week of May 4
- Winnebago motorhomes – week of May 4
- Winnebago towables – week of May 11
Each business will be restarting operations in a graduated manner aligned with a confirmed base of existing orders. Future production rates and plans will vary by brand and are subject to change, as the company will continue to evaluate the demand conditions present in its end markets and guidance from the Centers for Disease Control and Prevention, the World Health Organization, and state and federal governments.
As Winnebago resumes operations in select areas, all employees are required to adhere to applicable safety protocols whether working physically on-campus or offsite including but not limited to appropriate social distancing measures, strict sanitization practices, the use of personal protection equipment, and daily employee health checks.
“We remain focused on ensuring the health and safety of our employees as we continue to gradually restart manufacturing operations around the company in a disciplined approach, supported by committed demand from our valued channel partners,” said Winnebago Industries President and CEO Michael Happe. “While the last many weeks have been challenging for all of our stakeholders in terms of business disruption, we are cautiously optimistic about several indicators within the outdoor industry, including an uptick in campground reservations and marina traffic in select areas, continued low gas prices and interest rates, easing of stay-at-home restrictions in some states leading to increased commerce conditions, and improved access to some state and national parks. Retail trends in mid to late April appear to be progressing in a healthier direction than earlier in the month.”
Since the beginning of the COVID-19 crisis, Winnebago Industries has implemented significant cost containment and financial management measures and will continue to do so as conditions require. For any employees that remain furloughed due to either employee safety or demand factors, the company will maintain their medical and dental insurance benefits during any unpaid leave.
Winnebago Industries is operating from a strong liquidity and financial position, with $123 million of cash on hand as of the end of February (the most recent fiscal quarter end) which has continued to materially increase during March and April. The company also has access to a $193 million ABL credit facility, and considering its solid cash position, at this time has elected to forego drawing on this facility.
The company will continue to evaluate its liquidity across several economic and RV industry scenarios and will work with its strategic banking partners to consider the appropriate alternatives to pursue in the capital markets for each of these scenarios.
“While we closely monitor community conditions related to the pandemic and track consumer appetite for our products and outdoor activity, our organization will continue to make necessary and critical decisions around expense management, capital deployment, and strategic product development that will ensure our long-term financial stability and position our incredible team to compete successfully in the future,” said Happe.
In recognition of these challenging conditions, the company has launched the WGO Together Fund, a COVID-19 emergency assistance resource for Winnebago Industries employees with particularly high cases of financial hardship due to the pandemic. The Winnebago Industries Foundation has provided a multiple six-figure financial grant to the fund, and also is encouraging additional opportunities with a dollar-for-dollar match, up to a certain cap, to employees, families and friends who wish to provide tax-deductible contributions to the fund. The program is currently active and accepting applications.
