Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle
product manufacturer, today reported financial results for the
Company's Fiscal 2021 first quarter.
First Quarter Fiscal 2021 ResultsRevenues for the Fiscal 2021
first quarter ended November 28, 2020, were $793.1 million, an
increase of 34.8% compared to $588.5 million for the Fiscal 2020
period, which included three weeks of Newmar performance. Fiscal
2021 first quarter revenues excluding Newmar were $674.4 million,
reflecting an increase of 22.0% when excluding revenues from Newmar
in the same period of Fiscal 2020, driven by strong end consumer
demand. Gross profit was $137.0 million, an increase of 74.3%
compared to $78.6 million for the Fiscal 2020 period. Gross profit
margin increased 390 basis points in the quarter to 17.3%, driven
by operating leverage, motorhome segment productivity initiatives
and lower discounts and allowances, partially offset by the
dilutive impact of mix related to the Newmar acquisition. Operating
income was $85.0 million for the quarter, an increase of 255.8%
compared to $23.9 million for the first quarter of last year.
Fiscal 2021 first quarter net income was $57.4 million, an increase
of 308.2% compared to $14.1 million in the prior year quarter.
Reported earnings per diluted share was $1.70, compared to reported
earnings per diluted share of $0.44 in the same period last year.
Adjusted earnings per diluted share was $1.69, an increase of
131.5% compared to adjusted earnings per diluted share of $0.73 in
the same period last year. Consolidated Adjusted EBITDA was $89.3
million for the quarter, compared to $42.0 million last year, an
increase of 112.4%.
President and Chief Executive Officer Michael Happe commented,
“Winnebago Industries’ first quarter results underscore the
strength of our unmatched portfolio of leading brands and continued
demand from the end consumer for our high quality, innovative
outdoor products. The momentum we are seeing across our segments
allowed us to capture the full value of our products in the
marketplace, while continuing to gain market share. Our strong
profit performance – including significant margin expansion –
reflects the hard work and focus of our world-class Winnebago
Industries team, which has maintained a commitment to operational
excellence and safely manufacturing our products with a steadfast
dedication to quality. We especially remain focused on continuing
to deliver for our dealer partners, working hard to replenish their
inventories, while ensuring strong financial performance and
flexibility for both parties during these dynamic times. Interest
in the outdoors is not waning and in fact, appears to be
strengthening heading into calendar year 2021, and Winnebago
Industries is positioned well to maximize value for our employees,
end customers, dealers, and shareholders.”
TowableRevenues for the Towable segment were $454.9 million for
the first quarter, up 33.3% over the prior year, primarily driven
by strong continued end consumer demand for our Grand Design and
Winnebago product lines. Segment Adjusted EBITDA was $63.1 million,
up 76.5% over the prior year period. Adjusted EBITDA margin of
13.9% increased 340 basis points, primarily due to lower discounts
and allowances and operating leverage during the quarter. Backlog
increased to 29,659 units, an increase of 313.4% over the prior
year period, as dealer inventories have experienced a significant
reduction amidst heightened levels of consumer retail demand since
the summer of 2020.
MotorhomeRevenues for the Motorhome segment were $322.4 million
for the first quarter, up 42.7% from the prior year, driven by the
addition of Newmar and strong Winnebago Class B products. Excluding
Newmar, segment revenues were $203.6 million, an increase of 7.0%
over the prior year period. Segment Adjusted EBITDA was $30.3
million, up 225.2% from the prior year. Adjusted EBITDA margin of
9.4% increased 530 basis points driven by pricing actions,
including lower discounts and allowances, productivity initiatives
and operating leverage. Backlog increased to 13,217 units, an
increase of 402.4% over the prior year period, as dealer
inventories have experienced a significant reduction amidst
heightened levels of consumer retail demand in the last six
months.
Balance Sheet and Cash FlowAs of November 28, 2020, the Company
had total outstanding debt of $516.5 million ($600.0 million of
debt, net of convertible note discount of $70.9 million, and net of
debt issuance costs of $12.5 million) and working capital of $475.0
million. Cash flow from operations was an outflow of $2.7 million
in the first quarter of Fiscal 2021, as inventory levels have
increased in response to very strong dealer orders and heightened
backlog position.
Quarterly Cash DividendOn December 16, 2020, the Company’s board
of directors approved a quarterly cash dividend of $0.12 per share
payable on January 27, 2021, to common stockholders of record at
the close of business on January 13, 2021.
Mr. Happe continued, “During the first quarter we unveiled a
refreshed Winnebago Industries enterprise brand, that reflects our
status as a fast-growing company with a portfolio of premium
outdoor brands. While proud of our iconic flagship Winnebago-brand
RVs, the parent organization, Winnebago Industries, also reflects
our pride in having the Grand Design, Newmar, and Chris-Craft
businesses as part of our family and the aspiration that all our
employees and end customers share together to “Be Great, Outdoors”.
Our recently published 2020 Corporate Responsibility report
reinforces our six core cultural values and outlines the actions we
have taken to enhance sustainability and support the communities in
which our stakeholders live, work, and play. I am exceptionally
proud of our team’s efforts in not only delivering fantastic
results, but also driving positive change within our organization
and neighborhoods. Throughout the remainder of Fiscal Year 2021,
Winnebago Industries will be focused on building upon our market
momentum, and doing good in the social arena as well. We are
confident that the favorable industry dynamics in the RV and marine
markets and the unique appeal of our innovative products will
continue to drive market share gains and strong financial
results."
Conference CallWinnebago Industries, Inc. will discuss Fiscal
2021 first quarter earnings results during a conference call
scheduled for 9:00 a.m. Central Time today. Members of the news
media, investors and the general public are invited to access a
live broadcast of the conference call via the Investor Relations
page of the Company's website at http://investor.wgo.net. The event
will be archived and available for replay for the next 90 days.
About Winnebago IndustriesWinnebago Industries, Inc. is a
leading North American manufacturer of outdoor lifestyle products
under the Winnebago, Grand Design, Chris-Craft, and Newmar
brands, which are used primarily in leisure travel and outdoor
recreation activities. The Company builds quality motorhomes,
travel trailers, fifth wheel products and boats. Winnebago
Industries has multiple facilities in Iowa, Indiana, Minnesota and
Florida. The Company's common stock is listed on the New York Stock
Exchange and traded under the symbol WGO. For access to
Winnebago Industries' investor relations material or to add your
name to an automatic email list for Company news releases, visit
http://investor.wgo.net.
Forward Looking StatementsThis press release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that forward-looking statements are inherently uncertain. A number
of factors could cause actual results to differ materially from
these statements, including, but not limited to increases in
interest rates, availability of credit, low consumer confidence,
availability of labor, significant increase in repurchase
obligations, inadequate liquidity or capital resources,
availability and price of fuel, a slowdown in the economy,
increased material and component costs, availability of chassis and
other key component parts, sales order cancellations, slower than
anticipated sales of new or existing products, new product
introductions by competitors, the effect of global tensions,
integration of operations relating to mergers and acquisitions
activities, business interruptions, any unexpected expenses related
to ERP, risks related to compliance with debt covenants and
leverage ratios, and other factors. Additional information
concerning certain risks and uncertainties that could cause actual
results to differ materially from that projected or suggested is
contained in the Company's filings with the Securities and Exchange
Commission (SEC) over the last 12 months, copies of which are
available from the SEC or from the Company upon request. The
Company disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward looking statements contained in
this release or to reflect any changes in the Company's
expectations after the date of this release or any change in
events, conditions or circumstances on which any statement is
based, except as required by law.
Winnebago Industries,
Inc.Condensed Consolidated Statements of Income
(Unaudited)(in thousands, except per share
data)
|
Three Months Ended |
|
November 28, 2020 |
|
November 30, 2019 |
Net revenues |
$ |
793,131 |
|
|
100.0 |
% |
|
$ |
588,458 |
|
|
100.0 |
% |
Cost of goods sold |
656,127 |
|
|
82.7 |
% |
|
509,845 |
|
|
86.6 |
% |
Gross profit |
137,004 |
|
|
17.3 |
% |
|
78,613 |
|
|
13.4 |
% |
Selling, general, and
administrative expenses |
48,399 |
|
|
6.1 |
% |
|
51,105 |
|
|
8.7 |
% |
Amortization of intangible
assets |
3,590 |
|
|
0.5 |
% |
|
3,614 |
|
|
0.6 |
% |
Total operating expenses |
51,989 |
|
|
6.6 |
% |
|
54,719 |
|
|
9.3 |
% |
Operating income |
85,015 |
|
|
10.7 |
% |
|
23,894 |
|
|
4.1 |
% |
Interest expense |
9,941 |
|
|
1.3 |
% |
|
6,049 |
|
|
1.0 |
% |
Non-operating expense
(income) |
94 |
|
|
— |
% |
|
(116 |
) |
|
— |
% |
Income before income
taxes |
74,980 |
|
|
9.5 |
% |
|
17,961 |
|
|
3.1 |
% |
Provision for income
taxes |
17,557 |
|
|
2.2 |
% |
|
3,893 |
|
|
0.7 |
% |
Net income |
$ |
57,423 |
|
|
7.2 |
% |
|
$ |
14,068 |
|
|
2.4 |
% |
Income per common share: |
|
|
|
|
|
|
|
Basic |
$ |
1.71 |
|
|
|
|
$ |
0.44 |
|
|
|
Diluted |
$ |
1.70 |
|
|
|
|
$ |
0.44 |
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
33,609 |
|
|
|
|
32,067 |
|
|
|
Diluted |
33,839 |
|
|
|
|
32,267 |
|
|
|
|
|
|
|
|
|
|
|
Percentages may not add due to rounding differences.
Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)(in thousands)
|
November 28,2020 |
|
August 29,2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
272,939 |
|
|
$ |
292,575 |
|
Receivables, net |
231,182 |
|
|
220,798 |
|
Inventories, net |
263,137 |
|
|
182,941 |
|
Prepaid expenses and other assets |
21,162 |
|
|
17,296 |
|
Total current assets |
788,420 |
|
|
713,610 |
|
Total property, plant, and
equipment, net |
171,210 |
|
|
174,945 |
|
Other assets: |
|
|
|
Goodwill |
348,058 |
|
|
348,058 |
|
Other intangible assets, net |
401,178 |
|
|
404,768 |
|
Investment in life insurance |
27,904 |
|
|
27,838 |
|
Operating lease assets |
28,838 |
|
|
29,463 |
|
Other assets |
15,382 |
|
|
15,018 |
|
Total assets |
$ |
1,780,990 |
|
|
$ |
1,713,700 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
123,328 |
|
|
$ |
132,490 |
|
Income taxes payable |
25,565 |
|
|
8,840 |
|
Accrued expenses |
164,508 |
|
|
159,060 |
|
Total current liabilities |
313,401 |
|
|
300,390 |
|
Non-current liabilities: |
|
|
|
Long-term debt, less current maturities |
516,527 |
|
|
512,630 |
|
Deferred income taxes |
16,483 |
|
|
15,608 |
|
Unrecognized tax benefits |
6,692 |
|
|
6,511 |
|
Operating lease liabilities |
26,492 |
|
|
27,048 |
|
Deferred compensation benefits, net of current portion |
10,884 |
|
|
11,130 |
|
Other |
18,953 |
|
|
12,917 |
|
Total non-current liabilities |
596,031 |
|
|
585,844 |
|
Stockholders' equity |
871,558 |
|
|
827,466 |
|
Total liabilities and
stockholders' equity |
$ |
1,780,990 |
|
|
$ |
1,713,700 |
|
Winnebago Industries,
Inc.Condensed Consolidated Statements of Cash
Flows (Unaudited)(in thousands)
|
Three Months Ended |
(in thousands) |
November 28,2020 |
|
November 30,2019 |
Operating activities: |
|
|
|
Net income |
$ |
57,423 |
|
|
|
$ |
14,068 |
|
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
4,160 |
|
|
|
3,586 |
|
|
Amortization of intangibles |
3,590 |
|
|
|
3,614 |
|
|
Non-cash interest expense, net |
3,351 |
|
|
|
1,023 |
|
|
Amortization of debt issuance costs |
606 |
|
|
|
760 |
|
|
Last in, first-out expense |
276 |
|
|
|
332 |
|
|
Stock-based compensation |
2,354 |
|
|
|
1,583 |
|
|
Deferred income taxes |
872 |
|
|
|
731 |
|
|
Other, net |
(3,329 |
) |
|
|
65 |
|
|
Change in assets and
liabilities: |
|
|
|
Receivables |
(10,380 |
) |
|
|
27,906 |
|
|
Inventories |
(80,472 |
) |
|
|
20,082 |
|
|
Prepaid expenses and other assets |
583 |
|
|
|
(84 |
) |
|
Accounts payable |
(8,371 |
) |
|
|
(4,214 |
) |
|
Income taxes and unrecognized tax benefits |
16,556 |
|
|
|
3,217 |
|
|
Accrued expenses and other liabilities |
10,111 |
|
|
|
6,364 |
|
|
Net cash (used in) provided by
operating activities |
(2,670 |
) |
|
|
79,033 |
|
|
|
|
|
|
Investing
activities: |
|
|
|
Purchases of property and equipment |
(8,689 |
) |
|
|
(6,624 |
) |
|
Acquisition of business, net of cash acquired |
— |
|
|
|
(264,280 |
) |
|
Proceeds from sale of property |
7,775 |
|
|
|
— |
|
|
Other, net |
(234 |
) |
|
|
243 |
|
|
Net cash used in investing
activities |
(1,148 |
) |
|
|
(270,661 |
) |
|
|
|
|
|
Financing
activities: |
|
|
|
Borrowings on long-term debt |
798,359 |
|
|
|
903,292 |
|
|
Repayments on long-term debt |
(798,359 |
) |
|
|
(603,292 |
) |
|
Purchase of convertible bond hedge |
— |
|
|
|
(70,800 |
) |
|
Proceeds from issuance of warrants |
— |
|
|
|
42,210 |
|
|
Payments of cash dividends |
(4,046 |
) |
|
|
(3,469 |
) |
|
Payments for repurchases of common stock |
(11,606 |
) |
|
|
(1,663 |
) |
|
Payments of debt issuance costs |
— |
|
|
|
(10,707 |
) |
|
Other, net |
(166 |
) |
|
|
(46 |
) |
|
Net cash (used in) provided by
financing activities |
(15,818 |
) |
|
|
255,525 |
|
|
|
|
|
|
Net (decrease) increase in
cash and cash equivalents |
(19,636 |
) |
|
|
63,897 |
|
|
Cash and cash equivalents at
beginning of year |
292,575 |
|
|
|
37,431 |
|
|
Cash and cash equivalents at
end of year |
$ |
272,939 |
|
|
|
$ |
101,328 |
|
|
|
|
|
|
|
|
|
|
Supplement cash flow
disclosure: |
|
|
|
Income taxes received, net |
$ |
(195 |
) |
|
|
$ |
(311 |
) |
|
Interest paid |
$ |
2,377 |
|
|
|
$ |
5,193 |
|
|
|
|
|
|
Non-cash
transactions: |
|
|
|
Issuance of Winnebago common stock for acquisition of business |
$ |
— |
|
|
|
$ |
92,572 |
|
|
Capital expenditures in accounts payable |
$ |
613 |
|
|
|
$ |
2,063 |
|
|
Winnebago Industries,
Inc.Supplemental Information by Reportable Segment
(Unaudited) - Towable(in thousands, except unit
data)
|
Three Months Ended |
(in thousands) |
November 28,2020 |
|
% ofRevenues |
|
November 30,2019 |
|
% ofRevenues |
|
$ Change |
|
% Change |
Net revenues |
$ |
454,901 |
|
|
|
|
|
$ |
341,250 |
|
|
|
|
|
$ |
113,651 |
|
|
|
33.3 |
|
% |
Adjusted EBITDA |
63,143 |
|
|
13.9 |
% |
|
35,785 |
|
|
10.5 |
% |
|
27,358 |
|
|
|
76.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Unit deliveries |
November 28,2020 |
|
ProductMix(1) |
|
November 30,2019 |
|
ProductMix(1) |
|
UnitChange |
|
% Change |
Travel trailer |
9,160 |
|
|
64.4 |
% |
|
6,336 |
|
|
59.8 |
% |
|
2,824 |
|
|
|
44.6 |
|
% |
Fifth wheel |
5,054 |
|
|
35.6 |
% |
|
4,263 |
|
|
40.2 |
% |
|
791 |
|
|
|
18.6 |
|
% |
Total towables |
14,214 |
|
|
100.0 |
% |
|
10,599 |
|
|
100.0 |
% |
|
3,615 |
|
|
|
34.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
November 28,2020 |
|
|
|
|
November 30,2019 |
|
|
|
|
Change |
|
% Change |
Backlog(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
29,659 |
|
|
|
|
|
7,174 |
|
|
|
|
|
22,485 |
|
|
|
313.4 |
|
% |
Dollars |
$ |
865,420 |
|
|
|
|
|
$ |
242,853 |
|
|
|
|
|
$ |
622,567 |
|
|
|
256.4 |
|
% |
Dealer
Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
12,637 |
|
|
|
|
|
17,843 |
|
|
|
|
|
(5,206 |
) |
|
|
(29.2 |
) |
% |
(1) Percentages may not add due to rounding
differences.(2) We include in our backlog all accepted
orders from dealers which generally have been requested to be
shipped within the next six months. Orders in backlog can be
cancelled or postponed at the option of the dealer at any time
without penalty and, therefore, backlog may not necessarily be an
accurate measure of future sales.
Winnebago Industries,
Inc.Supplemental Information by Reportable Segment
(Unaudited) - Motorhome (in thousands, except unit
data)
|
Three Months Ended |
(in thousands) |
November 28,2020 |
|
% ofRevenues |
|
November 30,2019 |
|
% ofRevenues |
|
$ Change |
|
% Change |
Net revenues |
$ |
322,389 |
|
|
|
|
|
$ |
225,891 |
|
|
|
|
|
$ |
96,498 |
|
|
|
42.7 |
|
% |
Adjusted EBITDA |
30,343 |
|
|
9.4 |
% |
|
9,331 |
|
|
4.1 |
% |
|
21,012 |
|
|
|
225.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Unit deliveries |
November 28,2020 |
|
ProductMix(1) |
|
November 30,2019 |
|
ProductMix(1) |
|
UnitChange |
|
% Change |
Class A |
598 |
|
|
25.7 |
% |
|
399 |
|
|
21.2 |
% |
|
199 |
|
|
|
49.9 |
|
% |
Class B |
1,098 |
|
|
47.1 |
% |
|
809 |
|
|
43.0 |
% |
|
289 |
|
|
|
35.7 |
|
% |
Class C |
634 |
|
|
27.2 |
% |
|
674 |
|
|
35.8 |
% |
|
(40 |
) |
|
|
(5.9 |
) |
% |
Total motorhomes |
2,330 |
|
|
100.0 |
% |
|
1,882 |
|
|
100.0 |
% |
|
448 |
|
|
|
23.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
November 28,2020 |
|
|
|
|
November 30,2019 |
|
|
|
|
Change |
|
% Change |
Backlog(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
13,217 |
|
|
|
|
|
2,631 |
|
|
|
|
|
10,586 |
|
|
|
402.4 |
|
% |
Dollars |
$ |
1,709,154 |
|
|
|
|
|
$ |
384,201 |
|
|
|
|
|
$ |
1,324,953 |
|
|
|
344.9 |
|
% |
Dealer
Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
2,123 |
|
|
|
|
|
5,169 |
|
|
|
|
|
(3,046 |
) |
|
|
(58.9 |
) |
% |
(1) Percentages may not add due to rounding
differences.(2) November 30, 2019 three months ended data includes
approximately one month of Newmar results from the time of
acquisition (11/08/19).(3) We include in our backlog all
accepted orders from dealers which generally have been requested to
be shipped within the next six months. Orders in backlog can be
cancelled or postponed at the option of the dealer at any time
without penalty and, therefore, backlog may not necessarily be an
accurate measure of future sales.
Winnebago Industries,
Inc.Non-GAAP Reconciliation
(Unaudited)(in thousands, except per share
data)
Non-GAAP financial measures, which are not calculated or
presented in accordance with accounting principles generally
accepted in the United States (“GAAP”), have been provided as
information supplemental and in addition to the financial measures
presented in the accompanying news release that are calculated and
presented in accordance with GAAP. Such non-GAAP financial measures
should not be considered superior to, as a substitute for, or as an
alternative to, and should be considered in conjunction with, the
GAAP financial measures presented in the news release. The non-GAAP
financial measures presented may differ from similar measures used
by other companies.
The following table reconciles Diluted income per share to
Adjusted diluted income per share:
|
Three Months Ended |
(in thousands)(1) |
November 28,2020 |
|
November 30,2019 |
Diluted income per share |
$ |
1.70 |
|
|
|
$ |
0.44 |
|
|
Pretax acquisition-related
costs(2) |
— |
|
|
|
0.31 |
|
|
Pretax acquisition-related
fair-value inventory step-up |
— |
|
|
|
0.03 |
|
|
Pretax non-cash interest
expense(3) |
0.10 |
|
|
|
0.03 |
|
|
Gain on sale of property and
equipment |
(0.11 |
) |
|
|
— |
|
|
Tax impact of
adjustments(4) |
— |
|
|
|
(0.08 |
) |
|
Adjusted diluted income per
share |
$ |
1.69 |
|
|
|
$ |
0.73 |
|
|
(1) Per share numbers may not foot due to
rounding(2) Represents transaction-closing
costs.(3) Non-cash interest expense associated with the
Convertible Notes issued related to our acquisition of
Newmar.(4) Income tax charge calculated using the
statutory tax rate for the U.S. of 21.0% for both periods
presented.
The following table reconciles net income to consolidated EBITDA
and Adjusted EBITDA.
|
Three Months Ended |
(in thousands) |
November 28,2020 |
|
November 30,2019 |
Net (loss) income |
$ |
57,423 |
|
|
|
$ |
14,068 |
|
|
Interest expense |
9,941 |
|
|
|
6,049 |
|
|
Provision for income
taxes |
17,557 |
|
|
|
3,893 |
|
|
Depreciation |
4,160 |
|
|
|
3,586 |
|
|
Amortization of intangible
assets |
3,590 |
|
|
|
3,614 |
|
|
EBITDA |
92,671 |
|
|
|
31,210 |
|
|
Acquisition-related fair-value
inventory step-up |
— |
|
|
|
1,176 |
|
|
Acquisition-related costs |
— |
|
|
|
9,950 |
|
|
Restructuring expenses |
93 |
|
|
|
(172 |
) |
|
Gain on sale of property and
equipment |
(3,565 |
) |
|
|
— |
|
|
Non-operating income |
94 |
|
|
|
(116 |
) |
|
Adjusted EBITDA |
$ |
89,293 |
|
|
|
$ |
42,048 |
|
|
We have provided non-GAAP performance measures of Adjusted
diluted income per share, EBITDA, and Adjusted EBITDA as comparable
measures to illustrate the effect of non-recurring transactions
occurring during the reported periods and improve comparability of
our results from period to period. Adjusted diluted income per
share is defined as income per share adjusted for items that impact
the comparability of our results from period to period. EBITDA is
defined as net income before interest expense, provision for income
taxes, and depreciation and amortization expense. Adjusted EBITDA
is defined as net income before interest expense, provision for
income taxes, depreciation and amortization expense, and other
adjustments made in order to present comparable results from period
to period. We believe Adjusted diluted income per share and
Adjusted EBITDA provide meaningful supplemental information about
our operating performance because these measures exclude amounts
that we do not consider part of our core operating results when
assessing our performance. Examples of items excluded from Adjusted
income per share include acquisition-related costs,
acquisition-related fair-value inventory step-up, non-cash interest
expense, and the tax impact of the adjustments. Examples of items
excluded from Adjusted EBITDA include acquisition-related
fair-value inventory step-up, acquisition-related costs,
restructuring expenses, gain or loss on the sale of property and
equipment, and non-operating income.
Management uses these non-GAAP financial measures (a) to
evaluate our historical and prospective financial performance and
trends as well as our performance relative to competitors and
peers; (b) to measure operational profitability on a
consistent basis; (c) in presentations to the members of our board
of directors to enable our board of directors to have the same
measurement basis of operating performance as is used by management
in its assessments of performance and in forecasting and budgeting
for our company; (d) to evaluate potential acquisitions; and (e) to
ensure compliance with restricted activities under the terms of our
ABL credit facility and outstanding notes. We believe these
non-GAAP financial measures are frequently used by securities
analysts, investors, and other interested parties to evaluate
companies in our industry.
Contact: Steve Stuber - Investor Relations - 952-828-8461 -
srstuber@wgo.net
Media Contact: Sam Jefson - Public Relations Specialist -
641-585-6803 - sjefson@wgo.net
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