THOR Industries, Inc. (NYSE: THO) today announced financial results
for its third fiscal quarter ended April 30, 2023.
“Market conditions continue to be challenging as
dealers and consumers face increasing pressures from the macro
environment. In this difficult setting, we remain focused on
executing our business model that enables us to quickly adapt to
market conditions. Consequently, our performance during the fiscal
third quarter was solid relative to broader market conditions.
Despite dynamics currently affecting the operating environment
along with the difficult comparison to record results in the
prior-year period, each of our segments largely met or exceeded
internal expectations during the quarter. In our European segment,
pricing and operational initiatives combined with moderate
improvements in chassis availability and resilient demand
contributed to strong sequential and year-over-year growth as we
continue to realize the value of our European operations. In North
America, moderately higher production volumes compared to our
second quarter along with greater activity on dealer lots than we
saw last quarter resulted in operating results that well exceeded
our fiscal 2023 second quarter results,” said Bob Martin, President
and CEO of THOR Industries.
Third-Quarter Financial
Results
Consolidated net sales were $2.93 billion in the
third quarter of fiscal 2023, compared to $4.66 billion in the
third quarter of fiscal 2022 and $3.46 billion in the third
quarter of fiscal 2021.
Consolidated gross profit margin for the third
quarter was 14.8%, a decrease of 250 basis points when compared to
the third quarter of fiscal year 2022 and a 20-basis point increase
when compared to the third quarter of fiscal year 2021.
Net income attributable to THOR Industries and
diluted earnings per share for the third quarter of fiscal 2023
were $120.7 million and $2.24, respectively, compared to $348.1
million and $6.32, respectively, for the prior-year period and
$183.3 million and $3.29, respectively, for the third quarter of
fiscal 2021.
Our consolidated results were driven by the
results of our individual segments as noted below.
Segment Results
North American Towable RVs
| ($ in thousands) |
Three Months Ended April 30, |
|
%Change |
|
Nine Months Ended April 30, |
|
%Change |
| |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Net Sales |
$ |
1,124,410 |
|
$ |
2,640,137 |
|
(57.4 |
) |
|
$ |
3,271,967 |
|
$ |
6,866,059 |
|
(52.3 |
) |
| Gross Profit |
$ |
143,988 |
|
$ |
453,907 |
|
(68.3 |
) |
|
$ |
392,717 |
|
$ |
1,239,162 |
|
(68.3 |
) |
|
Gross Profit Margin % |
|
12.8 |
|
|
17.2 |
|
|
|
|
12.0 |
|
|
18.0 |
|
|
| Income Before Income
Taxes |
$ |
77,583 |
|
$ |
326,697 |
|
(76.3 |
) |
|
$ |
181,471 |
|
$ |
868,874 |
|
(79.1 |
) |
| |
As of April 30, |
|
%Change |
| ($ in thousands) |
|
2023 |
|
|
2022 |
|
|
Order Backlog |
$ |
757,127 |
|
$ |
6,899,675 |
|
(89.0 |
) |
- North American
Towable RV net sales were down 57.4% for the third quarter of
fiscal 2023 compared to the prior-year period, driven primarily by
a 57.3% decrease in unit shipments. The decrease in unit shipments
is primarily due to a softening in current dealer and consumer
demand in comparison with the unusually strong third quarter demand
in the prior-year quarter, which included independent dealers
restocking their lot inventory levels.
- North American
Towable RV gross profit margin was 12.8% for the third quarter of
fiscal 2023, compared to 17.2% in the prior-year period. The
decrease in gross profit margin for the third quarter was primarily
driven by higher manufacturing overhead, warranty and direct labor
percentages, partially offset by a decrease in the material cost
percentage due to the combined favorable impacts of product mix
changes, net selling price increases and cost savings initiatives
exceeding the impact of increased sales discounts.
- North American
Towable RV income before income tax for the third quarter of fiscal
2023 was $77.6 million, compared to income before income tax
of $326.7 million in the third quarter last year, with the
decrease driven by the decrease in net sales and the decline in the
gross margin percentage.
North American Motorized
RVs
| ($ in thousands) |
Three Months Ended April 30, |
|
% Change |
|
Nine Months Ended April 30, |
|
% Change |
| |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Net Sales |
$ |
795,940 |
|
$ |
1,053,045 |
|
(24.4 |
) |
|
$ |
2,658,042 |
|
$ |
2,954,879 |
|
(10.0 |
) |
| Gross Profit |
$ |
93,307 |
|
$ |
173,904 |
|
(46.3 |
) |
|
$ |
386,254 |
|
$ |
469,906 |
|
(17.8 |
) |
|
Gross Profit Margin % |
|
11.7 |
|
|
16.5 |
|
|
|
|
14.5 |
|
|
15.9 |
|
|
| Income Before Income
Taxes |
$ |
48,186 |
|
$ |
116,293 |
|
(58.6 |
) |
|
$ |
234,163 |
|
$ |
309,228 |
|
(24.3 |
) |
| |
As of April 30, |
|
% Change |
| ($ in thousands) |
|
2023 |
|
|
2022 |
|
|
Order Backlog |
$ |
1,263,071 |
|
$ |
4,100,040 |
|
(69.2 |
) |
- North American
Motorized RV net sales decreased 24.4% for the third quarter of
fiscal 2023 compared to the prior-year period. The decrease was
driven primarily by a 21.2% decrease in unit shipments and a 3.2%
decrease in the overall net price per unit primarily due to changes
in product mix.
- North American
Motorized RV gross profit margin was 11.7% for the third quarter of
fiscal 2023, compared to 16.5% in the prior-year period. The
decrease in the gross profit margin percentage for the third
quarter was primarily driven by an increase in sales discounts,
higher warranty costs and an increase in manufacturing overhead
costs as a percentage of sales due to the reduction in sales.
- North American
Motorized RV income before income tax for the third quarter of
fiscal 2023 decreased to $48.2 million compared to
$116.3 million a year ago, driven by the decline in the gross
margin percentage and the decrease in net sales.
European RVs
| ($ in thousands) |
Three Months Ended April 30, |
|
% Change |
|
Nine Months Ended April 30, |
|
% Change |
| |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Net Sales |
$ |
866,751 |
|
$ |
724,002 |
|
19.7 |
|
$ |
2,017,991 |
|
$ |
2,080,729 |
|
(3.0 |
) |
| Gross Profit |
$ |
151,780 |
|
$ |
99,845 |
|
52.0 |
|
$ |
312,075 |
|
$ |
257,418 |
|
21.2 |
|
|
Gross Profit Margin % |
|
17.5 |
|
|
13.8 |
|
|
|
|
15.5 |
|
|
12.4 |
|
|
| Income Before Income
Taxes |
$ |
72,401 |
|
$ |
20,559 |
|
252.2 |
|
$ |
77,948 |
|
$ |
12,248 |
|
536.4 |
|
| |
As of April 30, |
|
% Change |
| ($ in thousands) |
|
2023 |
|
|
2022 |
|
|
Order Backlog |
$ |
3,474,324 |
|
$ |
2,878,052 |
|
20.7 |
- European RV net
sales increased 19.7% for the third quarter of fiscal 2023 compared
to the prior-year period, driven by a 22.2% increase in the overall
net price per unit due to the total combined impact of changes in
foreign currency, product mix and price, partially offset by a 2.5%
decrease in unit shipments. The decrease due to the foreign
exchange rate decline of 2.7% was more than offset by net selling
price increases and product mix changes.
- European RV
gross profit margin was 17.5% of net sales for the third quarter
compared to 13.8% in the prior-year period. This improvement in the
gross profit margin percentage for the quarter was primarily driven
by net selling price increases, product mix changes and a reduction
in the labor cost percentage.
- European RV
income before income tax for the third quarter of fiscal 2023 was
$72.4 million, compared to net income before income tax of
$20.6 million during the third quarter of fiscal 2022. The
improvement in income before income taxes was primarily driven by
the improvement in the gross margin percentage and the increase in
net sales.
Management Commentary
“Solid operational execution enabled THOR to
effectively navigate a dynamic industry environment and generate
$2.93 billion of consolidated net sales and $120.7 million of net
income attributable to THOR in the third quarter of fiscal 2023. As
expected, our consolidated gross profit margin improved
sequentially versus the fiscal second quarter driven by higher
production volumes, disciplined execution, and ongoing employment
of our variable cost model,” said Colleen Zuhl, Senior Vice
President and Chief Financial Officer.
“In North America, we continue to prudently
manage wholesale production levels given cautious ordering patterns
by our independent dealers amid an uncertain market environment.
Given the seasonal step-up in retail demand we experienced as we
progressed through the fiscal third quarter, our teams were able to
assist independent dealers in destocking approximately 8,300 units
from channel inventory and reducing a substantial number of
prior-model-year units. In addition, our operating teams continue
to employ our proven variable cost model by further temporarily
rightsizing the manufacturing footprint and implementing cost
reduction initiatives targeted at keeping our operating costs in
line with market conditions. These actions, and the progress we
achieved during our third fiscal quarter, enhance our position as
we execute through the balance of the fiscal year,” said Todd
Woelfer, Senior Vice President and Chief Operating Officer.
“In Europe, we delivered strong fiscal third
quarter results reflecting the benefits of pricing actions
previously taken to offset material and other input costs,
operational efficiencies and moderate improvements in chassis
supply. We continue to experience favorable market dynamics in
Europe as consumer demand remains resilient in many of the
geographic areas we serve, while the restocking cycle for motorized
products is set to extend into early fiscal 2024. Additionally, our
Nowa Sól, Poland manufacturing facility started its commercial
operations late in the fiscal third quarter and will enable us to
expand the reach of our product offerings in Europe as production
is scaled up over the next 24 to 36 months,” continued Woelfer.
“Net cash provided by operating activities for
the nine months ended April 30, 2023, totaled $474.1 million,
including $288.8 million provided in the third fiscal quarter, as a
result of our strong, strategic operating performance. This solid
cash generation during the quarter allowed the Company to pay down
$90.0 million on our U.S. Term Loan B and $35.0 million on our ABL
as well as repurchase 210,799 shares of our common stock at a
weighted-average price of $78.75 for an aggregate purchase price of
approximately $16.6 million. Subsequent to the end of the fiscal
third quarter, we paid down an additional $85.0 million on our U.S.
Term Loan B and made principal payments totaling $50.0 million to
fully pay off the outstanding balance on our ABL, further
solidifying an already strong balance sheet amid a soft
macroeconomic environment. Looking ahead, we remain committed to
maintaining a strong balance sheet and leveraging our cash flow to
drive enhanced shareholder value,” added Zuhl.
Outlook
“Our team made significant progress during the
fiscal third quarter to position us for improved long-term
performance. During the quarter we worked with our independent
dealers to reduce channel inventory, rightsized our product
offerings based on current demand trends and continued to leverage
our variable cost model in an effort to preserve margins. While we
are encouraged by our fiscal third quarter results, we anticipate
certain macroeconomic challenges to persist in the near-term. As we
continue to navigate through and adapt to evolving economic
conditions, our operational discipline and flexible business model
continue to position us to deliver solid results. Our production
will continue to align to retail pull-through, and we will maintain
this discipline as we move to model year 2024 products towards the
end of our fiscal fourth quarter. Combined, our efforts to move
model year 2022 units through the retail cycle and our disciplined
production of model year 2023 units to lower overall channel
inventory levels position us well for the model year 2024 rollout.
While we anticipate these efforts will result in sequentially lower
fiscal fourth quarter financial results, we believe these
strategies will bolster our relative performance next fiscal year.
As the current macro environment remains fluid, our fiscal third
quarter results demonstrate our commitment to positioning the
business to excel across the business cycle, and our teams remain
focused on delivering a strong finish to fiscal 2023,” concluded
Martin.
Fiscal 2023 Guidance
The Company is updating its most recent
full-year fiscal 2023 guidance ranges to reflect the strong third
quarter performance partially offset by an expected reduction in
our fiscal fourth quarter production volumes of North American
towable products in anticipation of the model year 2024 changeover.
The revised ranges continue to reflect heightened macroeconomic
uncertainty as well as the impact of fiscal fourth quarter
strategies to position our independent dealers for improved future
performance.
For fiscal 2023, the Company’s updated full-year
guidance includes:
- Consolidated net sales in the range of $10.5 billion to $11.0
billion (previously $10.5 billion to $11.5 billion)
- Consolidated gross profit margin in the range of 13.8% to 14.2%
(previously 13.4% to 14.2%)
- Diluted earnings per share in the
range of $5.80 to $6.50 (previously $5.50 to $6.50)
Supplemental Earnings Release
Materials
THOR Industries has provided a comprehensive
question and answer document, as well as a PowerPoint presentation,
relating to its quarterly results and other topics.
To view these materials, go to
http://ir.thorindustries.com.
About THOR Industries, Inc.
THOR Industries is the sole owner of operating
companies which, combined, represent the world’s largest
manufacturer of recreational vehicles.
For more information on the Company and its
products, please go to www.thorindustries.com.
Forward-Looking Statements
This release includes certain statements that
are “forward-looking” statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are made based on management’s current expectations and
beliefs regarding future and anticipated developments and their
effects upon THOR, and inherently involve uncertainties and risks.
These forward-looking statements are not a guarantee of future
performance. We cannot assure you that actual results will not
differ materially from our expectations. Factors which could cause
materially different results include, among others: the impact of
inflation on the cost of our products as well as on general
consumer demand; the effect of raw material and commodity price
fluctuations, and/or raw material, commodity or chassis supply
constraints; the impact of war, military conflict, terrorism and/or
cyber-attacks, including state-sponsored or ransom attacks; the
impact of sudden or significant adverse changes in the cost and/or
availability of energy or fuel, including those caused by
geopolitical events, on our costs of operation, on raw material
prices, on our suppliers, on our independent dealers or on retail
customers; the dependence on a small group of suppliers for certain
components used in production, including chassis; interest rate
fluctuations and their potential impact on the general economy and,
specifically, on our profitability and on our independent dealers
and consumers; the ability to ramp production up or
down quickly in response to rapid changes in demand while also
managing costs and market share; the level and magnitude of
warranty and recall claims incurred; the ability of our suppliers
to financially support any defects in their products; legislative,
regulatory and tax law and/or policy developments including their
potential impact on our independent dealers, retail customers or on
our suppliers; the costs of compliance with governmental
regulation; the impact of an adverse outcome or conclusion related
to current or future litigation or regulatory investigations;
public perception of and the costs related to environmental, social
and governance matters; legal and compliance issues including those
that may arise in conjunction with recently completed transactions;
lower consumer confidence and the level of discretionary consumer
spending; the impact of exchange rate fluctuations; restrictive
lending practices which could negatively impact our independent
dealers and/or retail consumers; management changes; the success of
new and existing products and services; the ability to maintain
strong brands and develop innovative products that meet consumer
demands; the ability to efficiently utilize existing production
facilities; changes in consumer preferences; the risks associated
with acquisitions, including: the pace and successful closing of an
acquisition, the integration and financial impact thereof, the
level of achievement of anticipated operating synergies from
acquisitions, the potential for unknown or understated liabilities
related to acquisitions, the potential loss of existing customers
of acquisitions and our ability to retain key management personnel
of acquired companies; a shortage of necessary personnel for
production and increasing labor costs and related employee benefits
to attract and retain production personnel in times of high demand;
the loss or reduction of sales to key independent dealers;
disruption of the delivery of units to independent dealers or the
disruption of delivery of raw materials, including chassis, to our
facilities; increasing costs for freight and transportation; the
ability to protect our information technology systems from data
breaches, cyber-attacks and/or network disruptions; asset
impairment charges; competition; the impact of losses under
repurchase agreements; the impact of the strength of the U.S.
dollar on international demand for products priced in U.S. dollars;
general economic, market and political conditions in the various
countries in which our products are produced and/or sold; the
impact of changing emissions and other related climate change
regulations in the various jurisdictions in which our products are
produced, used and/or sold; changes to our investment and capital
allocation strategies or other facets of our strategic plan; and
changes in market liquidity conditions, credit ratings and other
factors that may impact our access to future funding and the cost
of debt.
These and other risks and uncertainties are
discussed more fully in our Quarterly Report on Form 10-Q for the
quarter ended April 30, 2023 and in Item 1A of our Annual Report on
Form 10-K for the year ended July 31, 2022.
We disclaim any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this release 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.
|
THOR INDUSTRIES, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
FOR THE THREE AND NINE MONTHS ENDED APRIL
30, 2023 AND 2022 |
|
($000’s except share and per share data)
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended April 30, |
|
Nine Months Ended April 30, |
| |
|
|
2023 |
|
% Net Sales(1) |
|
|
2022 |
|
% Net Sales(1) |
|
|
2023 |
|
% Net Sales(1) |
|
|
2022 |
|
% Net Sales(1) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
2,928,820 |
|
|
|
$ |
4,657,517 |
|
|
|
$ |
8,383,539 |
|
|
|
$ |
12,490,759 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
432,637 |
|
14.8 |
% |
|
$ |
807,445 |
|
17.3 |
% |
|
$ |
1,202,048 |
|
14.3 |
% |
|
$ |
2,138,143 |
|
17.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and
administrative expenses |
|
|
210,044 |
|
7.2 |
% |
|
|
281,676 |
|
6.0 |
% |
|
|
660,411 |
|
7.9 |
% |
|
|
845,009 |
|
6.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible
assets |
|
|
35,113 |
|
1.2 |
% |
|
|
40,725 |
|
0.9 |
% |
|
|
105,531 |
|
1.3 |
% |
|
|
117,288 |
|
0.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense, net |
|
|
26,362 |
|
0.9 |
% |
|
|
22,289 |
|
0.5 |
% |
|
|
74,802 |
|
0.9 |
% |
|
|
67,516 |
|
0.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense),
net |
|
|
(5,667 |
) |
(0.2 |
)% |
|
|
(348 |
) |
— |
% |
|
|
6,136 |
|
0.1 |
% |
|
|
13,172 |
|
0.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income before income
taxes |
|
|
155,451 |
|
5.3 |
% |
|
|
462,407 |
|
9.9 |
% |
|
|
367,440 |
|
4.4 |
% |
|
|
1,121,502 |
|
9.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income taxes |
|
|
35,722 |
|
1.2 |
% |
|
|
116,389 |
|
2.5 |
% |
|
|
84,482 |
|
1.0 |
% |
|
|
265,046 |
|
2.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
119,729 |
|
4.1 |
% |
|
|
346,018 |
|
7.4 |
% |
|
|
282,958 |
|
3.4 |
% |
|
|
856,456 |
|
6.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Less: net income attributable
to non-controlling interests |
|
|
(990 |
) |
— |
% |
|
|
(2,033 |
) |
— |
% |
|
|
(1,026 |
) |
— |
% |
|
|
(405 |
) |
— |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income attributable to
THOR Industries, Inc. |
|
$ |
120,719 |
|
4.1 |
% |
|
$ |
348,051 |
|
7.5 |
% |
|
$ |
283,984 |
|
3.4 |
% |
|
$ |
856,861 |
|
6.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.26 |
|
|
|
$ |
6.34 |
|
|
|
$ |
5.30 |
|
|
|
$ |
15.50 |
|
|
|
Diluted |
|
$ |
2.24 |
|
|
|
$ |
6.32 |
|
|
|
$ |
5.27 |
|
|
|
$ |
15.44 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted-avg. common shares
outstanding – basic |
|
|
53,425,379 |
|
|
|
|
54,906,356 |
|
|
|
|
53,534,746 |
|
|
|
|
55,278,320 |
|
|
| Weighted-avg. common shares
outstanding – diluted |
|
|
53,820,400 |
|
|
|
|
55,068,783 |
|
|
|
|
53,854,542 |
|
|
|
|
55,507,023 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Percentages
may not add due to rounding differences |
|
SUMMARY CONDENSED CONSOLIDATED BALANCE SHEETS ($000’s)
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
April 30, 2023 |
|
July 31,2022 |
|
|
|
April 30, 2023 |
|
July 31,2022 |
|
Cash and equivalents |
|
$ |
353,226 |
|
$ |
311,553 |
|
Current liabilities |
|
$ |
1,720,540 |
|
$ |
1,755,916 |
| Accounts receivable, net |
|
|
811,543 |
|
|
944,181 |
|
Long-term debt |
|
|
1,641,076 |
|
|
1,754,239 |
| Inventories, net |
|
|
1,864,755 |
|
|
1,754,773 |
|
Other long-term
liabilities |
|
|
294,067 |
|
|
297,323 |
| Prepaid income taxes, expenses
and other |
|
|
55,249 |
|
|
51,972 |
|
Stockholders’ equity |
|
|
3,898,276 |
|
|
3,600,654 |
|
Total current assets |
|
|
3,084,773 |
|
|
3,062,479 |
|
|
|
|
|
|
| Property, plant &
equipment, net |
|
|
1,360,144 |
|
|
1,258,159 |
|
|
|
|
|
|
| Goodwill |
|
|
1,796,743 |
|
|
1,804,151 |
|
|
|
|
|
|
| Amortizable intangible assets,
net |
|
|
1,030,833 |
|
|
1,117,492 |
|
|
|
|
|
|
| Deferred income taxes and
other, net |
|
|
281,466 |
|
|
165,851 |
|
|
|
|
|
|
| Total |
|
$ |
7,553,959 |
|
$ |
7,408,132 |
|
|
|
$ |
7,553,959 |
|
$ |
7,408,132 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:Michael Cieslak,
CFAmcieslak@thorindustries.com(574) 294-7724
Thor Industries (NYSE:THO)
Historical Stock Chart
From Sep 2023 to Oct 2023
Thor Industries (NYSE:THO)
Historical Stock Chart
From Oct 2022 to Oct 2023
