Form 8-K THOR INDUSTRIES INC For: Sep 28

September 28, 2021 6:31 AM EDT

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Exhibit 99.1

THOR Industries Reports Record Fiscal 2021 Results as Net Sales Top $12.3 Billion with Earnings Per Share of $11.85



Fourth Quarter Net Sales Up 54.6% and Earnings Per Share up 92.5%

- Net sales for the fourth quarter were $3.59 billion, an increase of 54.6% as compared to the fourth quarter of the prior fiscal year.

- Consolidated gross profit margin for the fourth quarter was 16.6%, a 170 basis-point improvement over the comparable prior-year period.

- Earnings per share for the fourth quarter were $4.12 per diluted share, an increase of 92.5% as compared to $2.14 per diluted share in the same period of the prior year.

- As planned, THOR fully repaid the Asset-based Credit Facility ("ABL") borrowings incurred during the second quarter of fiscal 2021 in connection with the Tiffin Group acquisition.

- Consolidated RV backlog as of July 31, 2021 was $16.86 billion, an increase of over 190% as compared to RV backlog as of July 31, 2020.

ELKHART, Ind., Sept. 28, 2021 /PRNewswire/ -- THOR Industries, Inc. (NYSE: THO) today announced record results for the fourth fiscal quarter and fiscal year ended July 31, 2021.

"We are pleased to report that in a year of unprecedented challenges, THOR posted record net sales and net income for the fourth fiscal quarter and the full fiscal year, making it the most profitable year in THOR's history. For the fiscal year, we sold over 300,000 units, eclipsed $12 billion in net sales and generated net income attributable to THOR of $11.85 per diluted share, which far exceeds the former record for diluted earnings per share of $8.14 set in fiscal year 2018. These outstanding results are a testament to our team's ability to successfully accelerate production over the course of the fiscal year to meet surging market demand while continuing to maintain quality, navigating continuing supply chain challenges, managing labor constraints and ensuring the safety of our workforce," said Bob Martin, President and CEO of THOR Industries.

"Demand for our RV products remains very robust, continuing to exceed production output. This sustained level of strong demand has led to a continuation of historically low dealer inventory levels and resulted in a new record-high backlog value of $16.86 billion as of July 31, 2021," said Martin.

Fourth-Quarter Financial Results

Net sales were $3.59 billion in the fourth quarter of fiscal 2021, compared to $2.32 billion in the fourth quarter of fiscal 2020. This year's fourth quarter net sales include $1.73 billion for the North American Towable RV segment, $823.1 million for the North American Motorized RV segment and $969.9 million for the European RV segment. Consolidated gross profit margin increased 170 basis points to 16.6% for the fourth quarter of fiscal 2021, compared to 14.9% in the corresponding period a year ago. The increase in the consolidated gross profit percentage was primarily due to the increase in sales and a reduction in sales discounts compared to the prior-year period.

Net income attributable to THOR Industries and diluted earnings per share for the fourth quarter of fiscal 2021 were $230.3 million and $4.12, respectively, compared to $119.2 million and $2.14, respectively, in the prior-year period.

Fiscal Year 2021 Financial Results

Net sales for fiscal year 2021 were $12.32 billion compared to $8.17 billion for fiscal year 2020. The increase in consolidated net sales is due to both the increase in consumer demand and the negative impact of the onset of the COVID-19 pandemic in the prior year, which resulted in six to eight weeks of production shutdowns at most of our facilities. The addition of the Tiffin Group, acquired on December 18, 2020, accounted for $421.4 million of the $4.15 billion increase in net sales, or 5.2% of the 50.8% increase.

Net income attributable to THOR in fiscal year 2021 was $659.9 million, or $11.85 per diluted share, compared to net income attributable to THOR of $223.0 million, or $4.02 per diluted share, in fiscal year 2020.

The Company's annual effective income tax rate for fiscal 2021 was 21.8% compared with 18.9% for fiscal 2020. The primary reason for the increase relates to the jurisdictional mix of foreign and domestic pretax income between the comparable periods. Based on existing tax regulations, the Company estimates its overall effective income tax rate for fiscal 2022 will be between 22% and 24% before consideration of any discrete tax items. The actual effective income tax rate will be dependent upon tax regulations and the Company's mix of foreign and domestic pretax earnings.

Net cash provided by operating activities for fiscal 2021 was $526.5 million compared to $540.9 million in fiscal 2020. Net cash provided by operating activities for fiscal 2021 was impacted by higher working capital levels, primarily increased inventory levels for production needs to meet the increased consumer demand.

Segment Results

North American Towable RVs


Three Months Ended July 31,


%

 Change


Fiscal Years Ended July 31,


%

 Change

($ in thousands)

2021


2020



2021


2020


Net Sales

$

1,730,601



$

1,182,296



46.4



$

6,221,928



$

4,140,482



50.3


Gross Profit

$

308,928



$

196,420



57.3



$

1,020,908



$

619,892



64.7


Gross Profit Margin %

17.9



16.6





16.4



15.0




Income Before Income Taxes

$

202,212



$

129,198



56.5



$

658,964



$

336,207



96.0


North American Towable RV backlog was $9.28 billion at July 31, 2021, as compared to $2.76 billion as of July 31, 2020.

North American Motorized RVs


Three Months Ended July 31,


%

 Change


Fiscal Years Ended July 31,


%

 Change

($ in thousands)

2021


2020



2021


2020


Net Sales

$

823,148



$

366,492



124.6



$

2,669,391



$

1,390,098



92.0


Gross Profit

$

106,247



$

44,348



139.6



$

345,755



$

149,995



130.5


Gross Profit Margin %

12.9



12.1





13.0



10.8




Income Before Income Taxes

$

62,289



$

24,337



155.9



$

202,057



$

71,943



180.9


The addition of the Tiffin Group, acquired on December 18, 2020, accounted for $373.0 million of the $1.28 billion increase in net sales, or 26.8% of the 92.0% increase for fiscal 2021.

North American Motorized RV backlog was $4.01 billion at July 31, 2021, compared to $1.45 billion as of July 31, 2020.

European RVs


Three Months Ended July 31,


%

 Change


Fiscal Years Ended July 31,


%

 Change

($ in thousands)

2021


2020



2021


2020


Net Sales

$

969,888



$

739,926



31.1



$

3,200,079



$

2,485,391



28.8


Gross Profit

$

153,678



$

97,756



57.2



$

440,855



$

304,388



44.8


Gross Profit Margin %

15.8



13.2





13.8



12.2




Income Before Income Taxes

$

67,873



$

28,426



138.8



$

116,576



$

9,850



1,083.5


European RV backlog was $3.56 billion as of July 31, 2021, compared to $1.53 billion as of July 31, 2020.

Management Commentary

"Our fiscal 2021 financial performance reflects the strong demand for RV products and demonstrates our ability to manage through a challenging operating environment. Our team did an exceptional job of proactively managing ongoing supply chain constraints, logistical bottlenecks and labor shortages throughout the year to meet this strong market demand and drive strong year-over-year margin improvement and record annual income before income taxes across each of our business segments," said Colleen Zuhl, THOR Industries' Senior Vice President and Chief Financial Officer.

"Despite higher working capital levels, which are primarily due to increases in inventory and accounts receivable, our strong operating results generated cash flow from operations of $526.5 million in fiscal 2021. As planned, in the fiscal fourth quarter, we fully repaid the ABL borrowings incurred during the second quarter of fiscal 2021 in connection with the Tiffin Group acquisition. As of July 31, 2021, we had cash and cash equivalents totaling $445.9 million and approximately $720 million available for borrowing under the then-existing $750 million ABL.

"Subsequent to fiscal 2021 and effective September 1, 2021, THOR acquired AirX Intermediate, Inc. ("Airxcel"), a leading supplier of OEM and aftermarket RV parts and accessories, for $750 million, funded through a combination of available cash and $625 million from THOR's expanded ABL facility. Concurrent with the Airxcel acquisition, we increased our ABL agreement to $1 billion which provides us with excellent liquidity and significant financial flexibility moving forward.

"Looking ahead, our cash utilization priorities remain consistent with our stated capital allocation priorities, namely, investing in our businesses, reducing our debt obligations, paying and, over time, growing our dividends,funding strategic opportunities, repurchasing shares on a strategic and opportunistic basis and paying special dividends as determined by our Board of Directors," concluded Zuhl.

Outlook for Fiscal Year 2022

"THOR is carrying great momentum into fiscal year 2022, supported by a number of positive factors. Interest from new RV buyers and order activity continues to be robust across each of our business segments. We have record backlogs supported by North American dealer inventory levels that are 9% lower than the already historically low levels from a year ago and 44% lower than they were two years ago. Dealers remain confident in the long-term outlook for the RV industry and continue to invest in growing their businesses as the industry sees continued buying interest from both the first-time and repeat RV buyers," said Martin.

"Also, within the last several months, we have had two businesses, the Tiffin Group and Airxcel, join the THOR team, and we expect them to contribute meaningfully to our operating results in fiscal 2022 and going forward. Airxcel, which is an additional investment in the supplier space, complements our existing Postle Aluminum subsidiary and is intended to preserve and grow the RV supply chain for the betterment of THOR and the RV industry alike.

"Entering our 2022 fiscal year, we continue to operate in an uncertain time. The rise, fall and rise again of reported COVID-19 cases around the world, supply chain shortages which change almost weekly and a very tight labor market across the country, especially in northern Indiana where most of our production facilities are located, all demand that we continue to focus on managing through these challenges to produce and deliver the innovative and high-quality RVs for which we are known. Our team has performed exceedingly well through these challenges, and we remain confident in their ability to continue to do so.

"While we expect these factors will continue to present challenges in fiscal 2022, our positive long-term outlook for the RV industry and THOR Industries remains unchanged. We believe the recent RVIA most-likely estimate of approximately 577,200 unit wholesale shipments in calendar 2021 and its forecast of a 4.0% increase in calendar 2022 wholesale shipments over calendar 2021 shipments are reasonable," concluded Martin.

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 subsidiaries that, 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 extent and impact from the continuation of the COVID-19 pandemic, along with the responses to contain the spread of the virus, or its variants, by various governmental entities or other actors, which may have negative effects on retail customer demand, our independent dealers, our supply chain, our labor force, our production or other aspects of our business; the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply constraints; the dependence on a small group of suppliers for certain components used in production; 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 dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; 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; interest rate fluctuations and their potential impact on the general economy and, specifically, on our dealers and consumers; 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 to attract production personnel in times of high demand; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; competition; the impact of potential losses under repurchase agreements; the potential 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 Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2021.

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 MONTHS AND FISCAL YEARS ENDED JULY 31, 2021 AND 2020

($000's except share and per share data)
















Three Months Ended July 31, (Unaudited)


Fiscal Years Ended July 31,



2021

 % Net
Sales (1)


2020

 % Net
Sales (1)


2021

 % Net
Sales (1)


2020

 % Net
Sales (1)














Net sales


$

3,592,968




$

2,324,280




$

12,317,380




$

8,167,933
















Gross profit


$

595,964


16.6%


$

347,357


14.9%


$

1,894,973


15.4%


$

1,118,207


13.7%














Selling, general and administrative expenses


250,130


7.0%


155,151


6.7%


869,916


7.1%


634,119


7.8%














Amortization of intangible assets


30,073


0.8%


24,589


1.1%


117,183


1.0%


97,234


1.2%














Impairment charges



—%



—%



—%


10,057


0.1%














Interest expense, net


18,959


0.5%


24,875


1.1%


93,545


0.8%


104,206


1.3%














Other income, net


4,822


0.1%


5,428


0.2%


30,252


0.2%


305


—%














Income before income taxes


301,624


8.4%


148,170


6.4%


844,581


6.9%


272,896


3.3%














Income taxes


70,302


2.0%


28,441


1.2%


183,711


1.5%


51,512


0.6%














Net income


231,322


6.4%


119,729


5.2%


660,870


5.4%


221,384


2.7%














Less: net income (loss) attributable to non-controlling interests


1,042


—%


561


—%


998


—%


(1,590)


—%














Net income attributable to THOR Industries, Inc.


$

230,280


6.4%


$

119,168


5.1%


$

659,872


5.4%


$

222,974


2.7%














Earnings per common share













 Basic


$

4.16




$

2.16




$

11.93




$

4.04



 Diluted


$

4.12




$

2.14




$

11.85




$

4.02
















Weighted-avg. common shares outstanding – basic


55,366,241




55,198,756




55,333,959




55,172,694



Weighted-avg. common shares outstanding – diluted


55,903,339




55,576,318




55,687,253




55,397,376
















(1) Percentages may not add due to rounding differences

SUMMARY CONDENSED CONSOLIDATED BALANCE SHEETS ($000's)














July 31, 2021


July 31, 2020




July 31, 2021


July 31, 2020

Cash and equivalents


$

448,706



$

541,363



Current liabilities


$

1,794,785



$

1,515,281


Accounts receivable, net


949,932



814,227



Long-term debt


1,594,821



1,652,831


Inventories, net


1,369,384



716,305



Other long-term liabilities


316,376



257,779


Prepaid income taxes, expenses and other


35,501



30,382



Stockholders' equity


2,948,106



2,345,569


Total current assets


2,803,523



2,102,277








Property, plant & equipment, net


1,185,131



1,107,649








Goodwill


1,563,255



1,476,541








Amortizable intangible assets, net


937,171



914,724








Deferred income taxes and other, net


165,008



170,269








Total


$

6,654,088



$

5,771,460





$

6,654,088



$

5,771,460


Contact
Mark Trinske, Vice President of Investor Relations
mtrinske@thorindustries.com
(574) 970-7912



Slide 1

FISCAL YEAR & FOURTH QUARTER 2021 FINANCIAL RESULTS Exhibit 99.2

Slide 2

FORWARD-LOOKING STATEMENTS This presentation 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 extent and impact from the continuation of the COVID-19 pandemic, along with the responses to contain the spread of the virus, or its variants, by various governmental entities or other actors, which may have negative effects on retail customer demand, our independent dealers, our supply chain, our labor force, our production or other aspects of our business; the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply constraints; the dependence on a small group of suppliers for certain components used in production; 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 dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; 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; interest rate fluctuations and their potential impact on the general economy and, specifically, on our dealers and consumers; 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 to attract production personnel in times of high demand; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; competition; the impact of potential losses under repurchase agreements; the potential 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 Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2021. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation 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.

Slide 3

These outstanding results are a testament to our team’s ability to successfully accelerate production over the course of the fiscal year to meet surging market demand while continuing to maintain quality, navigate supply chain challenges, manage labor constraints and ensure the safety of our workforce. — Bob Martin, President and CEO of THOR Industries CONSOLIDATED NET SALES $12.32 BILLION BACKLOG $16.86 BILLION DILUTED EPS $11.85 CONSOLIDATED NET SALES ($ billions) BACKLOG ($ billions) DILUTED EPS *Company record RECORD RESULTS FOR FISCAL 2021

Slide 4

European $3.20 bn 26.0% NA Motorized $2.67 bn 21.7% NA Towables $6.22 bn 50.5% Other $0.23 bn 1.8% Gross Margin 15.4% +170 bps Diluted EPS $11.85 +194.8% NORTH AMERICAN INDEPENDENT DEALER INVENTORY OF THOR PRODUCTS AT HISTORIC LOW ALL-TIME RECORD RV BACKLOG OF $16.86 BILLION +193.6% Net Sales $12.32 BILLION ** +50.8% YoY Growth * * Includes 500 units of Tiffin products *** *** Includes Tiffin backlog of $767.0 million at July 31, 2021 Net Cash from Operations $526.5 MILLION **Includes $421.4 million of net sales from the Tiffin Group FISCAL YEAR 2021

Slide 5

FOURTH QUARTER OF FISCAL YEAR 2021 European $0.97 bn 27.0% NA Motorized $0.82 bn 22.9% NA Towables $1.73 bn 48.2% Other $0.07 bn 1.9% Gross Margin 16.6% +170 bps Diluted EPS $4.12 +93% Net Sales $3.59 billion +55% As of July 31, 2021, THOR has fully repaid the ABL borrowings incurred during the second quarter of fiscal 2021 in connection with the Tiffin Group acquisition.

Slide 6

NET SALES ñ Increased 46.4%* driven primarily by an increase in unit shipments GROSS PROFIT MARGIN ñ Increased 130 basis points* driven by the impact of the increase in net towable RV sales, reduced sales discounts and selective price increases, partially offset by recently increasing material costs BACKLOG ñ Increased approximately 236%* to $9.28 billion NORTH AMERICAN TOWABLE SEGMENT Fourth Quarter of Fiscal 2021 *in the fourth quarter of fiscal 2021 compared to the prior-year period

Slide 7

NET SALES ñ Increased 124.6%* driven primarily by an increase in unit shipments and the addition of $146.8 million of net sales from the Tiffin Group GROSS PROFIT MARGIN ñ Increased 80 basis points* driven primarily by the increase in net sales and a reduction in sales discounts, partially offset by the impact of a full quarter of Tiffin's gross margin, which is currently lower than organic THOR's North American Motorized margin BACKLOG ñ Increased approximately 177%* to approximately $4.01 billion including $702.9 million of additional motorized backlog from the Tiffin Group NORTH AMERICAN MOTORIZED SEGMENT Fourth Quarter of Fiscal 2021 *in the fourth quarter of fiscal 2021 compared to the prior-year period

Slide 8

NET SALES ñ Increased 31.1%* driven primarily by an increase in unit shipments GROSS PROFIT MARGIN ñ Increased by 260 basis points* primarily due to the increase in net sales, lower discounting, selective price increases and better material pricing due to the significant increase in volume BACKLOG ñ THOR’s European RV backlog increased 133%* to $3.56 billion EUROPEAN SEGMENT Fourth Quarter of Fiscal 2021 *in the fourth quarter of fiscal 2021 compared to the prior-year period

Slide 9

CAPITAL MANAGEMENT CASH PRIORITIES Invest in THOR's business Pay THOR's dividend Reduce the Company's debt obligations Support opportunistic strategic investments, to enhance long-term shareholder value Repurchase of shares on a strategic and opportunistic basis NET CASH FROM OPERATIONS AND CAPITAL EXPENDITURES ($ millions) Committed to Debt Reduction Proven commitment to deleveraging; repaid ~$580 million of the Term Loans since the closing of the Erwin Hymer Group acquisition Repaid Tiffin acquisition financing in less than 8 months Strong Liquidity Profile Significant liquidity maintained through $1.0 billion* ABL revolver Strong cash flow generation ability Capital Allocation Strategy Following reinvestment in the business and debt paydown, excess cash flow will support growth in our dividend and strategic opportunities MAINTAINING CONSERVATIVE FINANCIAL POLICIES * as of September 1, 2021

Slide 10

SUBSEQUENT EVENTS

Slide 11

ON SEPTEMBER 1, 2021 THOR INDUSTRIES ACQUIRED AIRXCEL, A LEADING SUPPLIER OF OEM AND AFTERMARKET RV PARTS AND ACCESSORIES In conjunction with the transaction, THOR increased its Asset-Based Credit Facility ("ABL") from $750 million to $1.0 billion Leading supplier of functionally critical RV parts and accessories with highly recognized portfolio of brands OEM and aftermarket supplier with ~80% OEM and ~20% aftermarket revenue North American footprint includes manufacturing facilities in five states and a distribution center in Indiana European footprint includes a manufacturing facility in Italy Strong and experienced management team with many years of industry experience MAJOR PRODUCT CATEGORIES Air Conditioning Water Heaters Furnaces Hydronic Heating Cooking Appliances Windows Window Coverings Roofing Membranes REVENUE BREAKDOWN by Channel Sales to THOR (30% of OEM Sales) by Product Category AIRXCEL OVERVIEW

Slide 12

Strengthens THOR's and the RV industry's supply chain Allows THOR the ability to strengthen its supply chain in a challenging environment Enhances RV industry supply of functionally critical components Diversifies and grows THOR’s revenue streams With revenue from both OEM and aftermarket sales, Airxcel’s businesses diversify THOR’s existing revenue streams Broadens THOR’s product offerings to the RV aftermarket, a growing and recurring revenue stream Creates future organic growth opportunities Potential to expand business in North America and Europe over time to meet increased OEM and aftermarket demand Expands THOR’s innovation focus Airxcel has a proven track record of developing high quality products that are innovative and reliable Over 100 new Airxcel products launched in the last five years Upsized ABL provides greater financial flexibility ABL upsized from $750M to $1.0B with favorable pricing and terms Maturity extended to 2026 THOR remains focused on paying down outstanding debt balances from future net cash generated from operations AIRXCEL TRANSACTION BENEFITS

Slide 13

APPENDIX

Slide 14

THOR AT-A-GLANCE COUNTRIES 25 5 COUNTRIES + MANUFACTURING OPERATIONS IN DISTRIBUTION IN (1) As of July 31, 2021 GEOGRAPHIC NET SALES THOR Industries (NYSE: THO) was founded in 1980 and is headquartered in Elkhart, Indiana. THOR is the sole owner of operating subsidiaries that, combined, represent the world’s largest manufacturer of RVs United States 68.7% Germany 16.1% Other Europe 9.7% Canada 5.2% Other 0.3% ANNUAL WHOLESALE UNIT SHIPMENTS FRANCE GERMANY ITALY UNITED KINGDOM UNITED STATES 23,351,000 SQUARE FEET (1) 397 FACILITIES (1) ~3,500 INDEPENDENT DEALERSHIP LOCATIONS (1) TOWABLE EUROPEAN MOTORIZED OTHER NORTH AMERICAN

Slide 15

RV INDUSTRY OVERVIEW North America (1) Source: Statistical Surveys, Inc., U.S. and Canada; CYTD through June 30, 2021 and 2020 (2) Source: Recreation Vehicle Industry Association, CYTD through July 2021 (3) Source: The Conference Board, Consumer Confidence Survey®, through June 2021 (4) Note: Tiffin Group registrations are included in THOR RV market share data for the 2021 period 2021 INDUSTRY WHOLESALE UNIT SHIPMENTS BY TYPE (2) CONSUMER CONFIDENCE VS. RV RETAIL REGISTRATIONS CALENDAR YEAR-TO-DATE RV RETAIL MARKET SHARE (1)(4) THOR Forest River Winnebago Grand Design REV Group Gulfstream All Others 2021 Towable 294,843 units 2021 Motorized 29,140 units 2020 Motorized 22,910 units 2020 Towable 211,905 units 47.5% 40.9% 38.6% 42.4% 38.1% 20.1% 9.9% 1.4% 7.9% 1.8% 18.0% 7.1% 7.3% 7.6% 8.4% 39.2% 1.2% 1.2% 13.9% 19.6% 20.9% 7.0% Note: 2021 represented above includes the trailing twelve months of registrations ended June

Slide 16

TOWABLE RV WHOLESALE MARKET TRENDS (UNITS 000's) YTD Shipments (Units) June 2021 June 2020 Unit Change % Change 300,267 176,067 124,200 +70.5% YTD Shipments (Units) June 2021 June 2020 Unit Change % Change 271,119 159,059 112,060 +70.5% YTD Shipments (Units) June 2021 June 2020 Unit Change % Change 29,148 17,008 12,140 +71.4% Historical Data: Recreation Vehicle Industry Association (RVIA) (e) Calendar year 2021 and 2022 represent the most recent RVIA "most likely" estimate from their August 2021, Fall 2021 issue of Roadsigns 5-year CAGR: 2.8% 5-year CAGR: 3.6% 5-year CAGR: (2.9)% RV INDUSTRY OVERVIEW North America RV WHOLESALE MARKET TRENDS (UNITS 000's) MOTORIZED RV WHOLESALE MARKET TRENDS (UNITS 000's)

Slide 17

(1) Source: European Caravan Federation; CYTD through June 30, 2021 and 2020; European retail registration data available at www.CIVD.de (2) Source: Statistical Surveys (www.statisticalsurveys.com) Country Caravans Motorcaravans Total CYTD June 30, % CYTD June 30, % CYTD June 30, % 2021 2020 Change 2021 2020 Change 2021 2020 Change Germany 14,111 14,812 (4.7 )% 48,728 39,627 23.0 % 62,839 54,439 15.4 % France 3,960 3,185 24.3 % 18,961 12,961 46.3 % 22,921 16,146 42.0 % U.K. 9,449 5,926 59.4 % 7,654 3,659 109.2 % 17,103 9,585 78.4 % Netherlands 5,417 3,998 35.5 % 2,093 1,446 44.7 % 7,510 5,444 38.0 % Switzerland 995 916 8.6 % 4,527 3,657 23.8 % 5,522 4,573 20.8 % Sweden 2,648 2,090 26.7 % 3,128 1,982 57.8 % 5,776 4,072 41.8 % Italy 314 267 17.6 % 4,737 3,390 39.7 % 5,051 3,657 38.1 % Belgium 882 668 32.0 % 4,563 2,771 64.7 % 5,445 3,439 58.3 % Spain 1,125 782 43.9 % 3,690 2,653 39.1 % 4,815 3,435 40.2 % All Others 6,646 5,273 26.0 % 9,472 6,490 45.9 % 16,118 11,763 37.0 % Total 45,547 37,917 20.1 % 107,553 78,636 36.8 % 153,100 116,553 31.4 % EUROPEAN INDUSTRY UNIT REGISTRATIONS BY COUNTRY (1) The Company monitors retail trends in the European RV market as reported by the European Caravan Federation, whose industry data is reported to the public quarterly, typically issued on a one-to-two month lag, continually updated and often impacted by delays in reporting by various countries Industry wholesale shipment data for the European RV market is not available FULL-YEAR COMPARISON OF NEW VEHICLE REGISTRATIONS BY CONTINENT (UNITS 000's) (1) (2) RV INDUSTRY OVERVIEW Europe

Slide 18

INVESTOR RELATIONS CONTACT Mark Trinske Vice President of Investor Relations mtrinske@thorindustries.com (574) 970-7912

Exhibit 99.3

 

 

 

FOURTH QUARTER AND FISCAL 2021

INVESTOR QUESTIONS & ANSWERS

September 28, 2021

 

Forward-Looking Statements

 

Reference is made to the forward-looking statements disclosure provided at the end of this document.

 

Executive Overview

 

 

For fiscal 2021, THOR Industries net sales topped $12.3 billion with diluted earnings per share of $11.85

 

Net sales for the fourth quarter were $3.59 billion, an increase of 54.6% as compared to the fourth quarter of the prior fiscal year.

 

Consolidated gross profit margin for the fourth quarter was 16.6%, a 170 basis-point improvement over the comparable prior-year period.

 

Earnings per share for the fourth quarter were $4.12 per diluted share, an increase of 92.5% as compared to $2.14 per diluted share in the same period of the prior year.

 

As planned, THOR fully repaid the Asset-based Credit Facility (ABL) borrowings incurred during the second quarter of fiscal 2021 in connection with the Tiffin Group acquisition.

 

Consolidated RV backlog as of July 31, 2021 was $16.86 billion, an increase of over 190% as compared to the RV backlog as of July 31, 2020.

 

Quick Reference to Contents

Current Market Conditions and Outlook Assumptions

2

 

 

 

 

Q&A

 

 

 

Drivers of Demand

3

 

 

Operations Update

5

 

 

Financial Operating Results

7

 

 

 

 

Segment Data

 

 

 

Summary of Key Quarterly Segment Data – North American Towable RVs

9

 

 

Summary of Key Quarterly Segment Data – North American Motorized RVs

10

 

 

Summary of Key Quarterly Segment Data – European RVs

11

 

 

 

 

Forward-Looking Statements

12

 

 

 


 

Current Market Conditions and Outlook Assumptions

 

 

Market demand conditions in North America.

Demand in the North American RV market remains very high. Our recent deliveries to independent dealers are being retail sold very quickly and are not substantively increasing dealer inventory levels. Currently, independent RV dealer inventories are at historically low levels in North America, and we believe the restocking cycle continues to push out and will take a number of quarters to complete. In the longer-term, which we define as calendar 2023 and beyond, we expect dealers will get back to a more historical ordering cycle where dealers order to replenish sold stock. We anticipate that consumer demand will continue to exceed historical norms even after dealer inventories are restocked.

The Recreational Vehicle Industry Association (RVIA) recently issued its updated wholesale unit shipments forecast for calendar years 2021 and 2022. The RVIA now estimates total North American wholesale shipments in calendar year 2021 to be approximately 577,200 units. Towable RV shipments are anticipated to reach 522,400 units, while motorized shipments are projected to reach 54,800 units in calendar year 2021. Towable and motorized wholesale unit shipments are projected to reach a combined total of 600,200 units in calendar 2022, an increase of 4.0% over anticipated calendar year 2021 shipments. We believe these recent RVIA most-likely estimates for wholesale shipments in calendar 2021 and calendar 2022 are reasonable.

 

Market demand conditions in Europe.

Demand in the European RV market also remains strong. According to the European Caravan Foundation (“ECF”), total retail registrations in Europe for the first half of calendar year 2021 increased 31% compared to the same time period in 2020. Caravan registrations in Europe for the first half of calendar year 2021 increased 20% compared to the same time period in 2020. Motorcaravan retail registrations in Europe for the first half of calendar 2021 increased 37% compared to the same time period in 2020. The increase in retail registrations was realized despite the impact of COVID-19 restrictions which, at various times in various regions, created significant impediments to dealers and retail customers.

Independent RV dealer inventory levels of our European RV products are generally below prior-year levels in the various countries in which we serve. Within Germany, which accounts for approximately 60% of our European product sales, dealer inventories are significantly below normal stocking levels.

 

Order backlogs for both North America and Europe are at all-time record levels.

North American RV backlog was $13.30 billion as of July 31, 2021, an increase of 215.5% compared to $4.22 billion as of July 31, 2020. European RV backlog was $3.56 billion as of July 31, 2021, an increase of 133.2% compared to $1.53 billion as of July 31, 2020

 

Supply chain constraints in North America and Europe.

Throughout fiscal 2021, we faced a number of supply constraints. Despite the constraints, our management and procurement teams successfully managed the various challenges to support our record results for the year. The current supply chain constraints continue to be a limiting factor on our ability to further ramp up production in the near term. We will, however, continue to actively and aggressively manage through the supply chain issues, and minimize their impact to us, by working closely with our suppliers, expanding our supply base where possible and employing other supply chain strategies.

 

Positive long-term RV industry outlook in both North America and Europe.

Our confident outlook is supported by favorable demographics, strong RV retail sales, adequate current availability of RV dealer and consumer credit at historically low rates in both North America and Europe and favorable perception of RVing as promoting a safe, socially distanced and healthy lifestyle. In addition, many independent dealers, particularly larger dealers in North America, continue to invest heavily in their businesses through acquisitions, new or expanded locations, added service facilities and other amenities to serve RV consumers while local, state and federal governments invest in improving and expanding outdoor recreation spaces. We believe these actions will enhance the experience of current RVers and encourage new buyers to enter the lifestyle.

2


 

Q&A

 

DRIVERS OF DEMAND

 

 

1.

The Hershey show just finished. Can you give us an update on how the show went?

 

 

a.

This year's Hershey show attracted 61,320 individuals, representing the second best attendance on record, second only to 2017. This high consumer turnout, combined with strong retail sales reported across each of our brands and product segments at the show, validates our positive long-term industry outlook in a post-COVID-19 world. In addition, the first-time and repeat RV buyer were both cited as contributors to the strong retail sales recorded at the 2021 Hershey show, despite dealer inventories being at historically low levels. Many dealers also reported having consumers place orders for units that will be delivered in the future.

 

 

2.

Retail demand has been robust in calendar 2021. Do you expect this level of demand to continue?

 

 

a.

We continue to see strong demand in both the North American and European markets as both first-time and repeat buyers pursue the RV lifestyle, and there are a number of favorable trends that support the continued near- and long-term growth of the RV industry. Recent North American data supports this outlook, including:

 

Work from Anywhere

 

We have seen the pandemic work-at-home trend turning into a lifestyle choice as people choose RVs as their mobile office

 

Twenty-three percent (23%) of all campers surveyed say that they work remotely. (Source: Harvest Hosts 2021 Travel Results from 10,000 RVers)

 

Thirty-four percent (34%) of all campers surveyed say that having the ability to work or attend school remotely allowed them to spend more time camping in 2020 (Source: The 2021 North American Camping Report sponsored by Kampgrounds of America, Inc.)

 

Interest in Camping

 

Campers have shown a progression from tent camping to RV ownership over time. Historically, an interest in camping leads to increased RV demand and ownership. According to the 2021 North American Camping Report sponsored by Kampgrounds of America, Inc.:

 

The proportion of first-time campers exploded in 2020 to 21% (10.1 million first-time campers), a rate five times that observed in 2019.

 

The first-time camper in 2020 is diverse and young. Nearly 60% are under the age of 40 and 6-in-10 are from non-white groups.

 

More than one-third (35%) of campers surveyed who are not RV owners indicate that they would like to purchase an RV in 2021, up substantially from the prior year's report (23%). Notably, nearly half (47%) of new non-RVing, first-time campers say that they plan to purchase an RV.

 

 

3


 

Rise of Alternative RVing and Camping Resources

 

In addition to the increased interest in traditional camping, there has also been a sharp rise in interest among campers for alternative experiences from glamping to boondocking, with several new platforms (e.g. RVillage, Campendium, Autocamp, Harvest Hosts, Hipcamp, etc.) providing RVers easier access to new experiences.

 

Ninety-six percent (96%) of respondents surveyed said they would or currently do boondock while RVing (Source: Harvest Hosts 2021 Travel Results from 10,000 RVers)

 

For example, organic traffic for Hipcamp, an online RV camping experience website, grew from 1.2M worldwide monthly visits in August 2019 to 2.5M worldwide monthly visits in July 2021—a 108% increase (Source: SEMrush).

 

Campground Investments

 

The National Park System records over 325 million visitations per year, which include RVers on overnight stays.

 

The Great American Outdoors Act provides up to $1.9 billion over five years to provide needed maintenance for critical facilities and infrastructure in our national parks, forests, and wildlife refuges, recreation areas, and American Indian schools. (Source: The National Park Service, Last Updated February 2021)

 

Reaching a Younger Buyer

 

Millennials have surpassed Baby Boomers as the nation’s largest living adult generation and represent a key demographic for future RV buying cycles.

 

RV buyers (ages 18-44) accounted for 34% of total registrations through July 31, 2021, up from 29% in calendar years 2019 and 2018, and up from 27% in 2017. (Source: Statistical Surveys, Inc.)

 

56% of Millennials plan to increase camping trips in the next year. (Source: The 2021 North American Camping Report sponsored by Kampgrounds of America, Inc.)

 

77% of non-RV owner Millennials are open to renting an RV from a peer-to-peer service. (Source: The 2021 North American Camping Report sponsored by Kampgrounds of America, Inc.)

 

 

3.

Backlog value is now at an all-time high of over $16 billion. How firm is the backlog?

 

 

a.

We are very confident that our backlog represents future sales, taking us well into 2022 and possibly beyond. The backlog is a reflection of the strong consumer demand environment supported by the fact that although we accelerated production over the course of fiscal 2021 to meet surging market demand, dealer inventory levels remain at historically low levels. Within the existing backlog are a significant number of retail sold units which, once produced and shipped, will not increase dealer lot inventory.

 

Once current consumer demand reaches equilibrium with wholesale shipments, dealers will begin to replenish their lot stock inventory to more normalized levels, which should decrease our backlog. We expect this restocking will take a number of quarters to fully achieve and may extend into calendar 2023.

 

 

4


 

 

4.

How do used RV sales impact RV wholesale sales? Are you concerned that new RV consumer buyers from 2020 and 2021 might exit the RV lifestyle and sell their coaches post-COVID-19 increasing used unit availability and potentially impacting new RV unit sales?

 

 

a.

History has shown that used RV sales are highly complementary to the new RV market. Generally, much of a dealer’s used RV inventory is a result of a trade-in for a new unit. In addition, the used-RV buyer potentially follows the same historical trade-in, trade-up 3-to-5 year cycle, adding to potential new RV sales in the long-term. We do anticipate, and history has shown, that many used RV buyers will purchase a new unit at some point in the future.

 

Due to the high interest in the RV lifestyle, which was growing even before the pandemic and has accelerated since then, we do not believe the new units being sold today will result in an overabundance of used units in the near future. We believe the interest in the RV lifestyle will continue to draw new buyers and having a robust used RV inventory allows dealers the ability to offer a wider variety of options for the first-time RV buyer.

 

Lastly, used inventory is currently very limited, and we believe any change in used inventory in the marketspace would not materially impact our sales, as dealers are in need of inventory - both new and used.

 

OPERATIONS UPDATE

 

 

1.

Can you comment on the recent Airxcel acquisition?

 

 

a.

In September 2021, THOR acquired Airxcel, a leading supplier of functionally critical OEM and aftermarket RV components. The purchase price was $750 million and was funded through available cash and $625 million from THOR's asset-based credit facility. The acquisition is consistent with THOR's long-term strategic growth plan to grow sales and enhance consolidated gross margins and is expected to be accretive to THOR's fiscal 2022 earnings.

 

There were a number of factors that made this acquisition a compelling and timely fit for THOR, including the strength of their management team and dedicated workforce, the quality of their products and reputation for innovation, and Airxcel's long-standing relationships with both OEM and aftermarket customers. Also, in the face of so many supply chain challenges over the past year, it gives THOR the ability to secure, and invest in the growth of a key supplier for THOR and the RV industry.

 

We expect the Airxcel acquisition to contribute meaningfully to our operating results in fiscal 2022.

 

 

2.

Can you comment on THOR Industries’ approach to North American retail market share?

 

 

a.

THOR Industries will continue to focus on a balanced approach between growth in market share and profitability as we continue to make progress on our strategic plan. In the current operating environment, we are pursuing these objectives through increased production capacity and throughput, product offerings focused on the needs and desires of end consumers and continued operational excellence.

 

One key piece of our strategic plan is to grow within the Class B segment, which is the fastest growing segment of the RV market. During the year, we significantly expanded our Class B product offerings and added production capacity, which has resulted in significant year-over-year retail market share gains. As a result of our actions, our Class B market share grew to 25.9% in the first half of calendar year ended June 30, 2021 from 12.4% in the first half of calendar year 2020.

 

5


 

 

3.

Can you comment on the results of THOR Industries’ European segment?

 

 

a.

We delivered a record quarter for European net sales, production volumes and income before income taxes in the fourth quarter of fiscal 2021. Even as we shipped record product in the quarter, demand continues to outpace supply as evidenced by a record backlog for our our European segment of $3.56 billion as of July 31, 2021.

 

Also, the European RV retail market continues to experience year-over-year double-digit growth. The latest European Caravan Federation (“ECF”) registration data (through June 30, 2021) shows:

 

 

In Europe, year-to-date through June, retail registrations have increased 31.4% in the calendar year 2021 versus 2020.

 

Germany, our largest European market, continues to perform strongly. According to statistics published by the ECF, almost 63,000 motor caravans and caravans were registered in Germany in the first half of calendar 2021, representing the best half-year of registrations on record, despite pandemic-related restrictions in place and the elimination of certain tax incentives. Year-to-date through June, retail registrations have increased 15.4% in the calendar year 2021 versus 2020.

 

In France, our second largest European market, the ECF reported that retail registrations increased by 42.0% in the first half of calendar 2021 versus 2020, driven by the recovery from the COVID-19 pandemic and the loosening of pandemic-related restrictions.

 

In the UK, despite being more heavily impacted by the combination of COVID-19 and Brexit, retail registrations increased by 78.4% in the first half of calendar 2021 versus 2020.

 

 

4.

What is the current state of your supply chain?

 

 

a.

The recreational vehicle industry, as a whole, has experienced, and continues to experience, a shortage of various raw materials and components. In addition, due to the ongoing semiconductor shortage that has hampered automobile production around the world, our chassis supply has been constrained. Despite the constraints, our management and procurement teams successfully managed the various challenges to support our record results for the year, and we fully expect the team to be successful in managing through the continuing constraints. Given our longstanding supplier relationships, future production visibility and scale of operations, we are proactively working with our supply chain partners to manage production and delivery of the components we need and, where necessary, seeking alternative supply solutions.

 

 

5.

Are you experiencing increased material and labor costs, and if so, will you be able to offset these costs?

 

 

a.

Yes, we are seeing material cost pressures as a result of higher commodity prices, higher transportation costs and ongoing supply chain constraints as well as higher labor costs due to shortages of labor in the locations in which we produce. We have instituted wholesale price adjustments when necessary to mitigate some of these cost pressures, and we have the ability to implement additional increases in the future. We also seek to offset these cost pressures through other actions, such as instituting operational efficiencies, to avoid relying solely on wholesale price increases. There can be a lag in timing between cost increases and our ability to offset the increases, but we expect to be price-cost neutral over time.

6


 

 

6.

What was your recent level of capital expenditures, and what is your expected level of capital expenditures for fiscal 2022?

 

 

a.

We spent $128.8 million and $106.7 million for capital expenditures during fiscal 2021 and 2020, respectively. During fiscal 2020 and into fiscal 2021, we delayed or paused certain capital expenditures due to the uncertainties related to the COVID-19 pandemic and in an effort to preserve cash. We anticipate that during fiscal 2022 we will incur higher levels of capital spending as we address capital spending needs of our recent acquisitions and certain delayed projects, focus on automation and other projects directly related to enhancing the quality of our products, and implement various capacity enhancement initiatives. Other planned capital expenditure projects will benefit customer services, technology enhancements, energy efficiency initiatives and general equipment replacements. Included within the capacity enhancement initiatives is a recently announced expansion by our Heartland subsidiary in a new regional complex in southern Michigan of approximately $36 million, the majority of which is expected to be completed in fiscal 2022. Our current estimate of committed and internally approved capital spend for fiscal 2022 is $275 million, of which approximately two-thirds will be in North America and one-third in Europe.

 

FINANCIAL OPERATING RESULTS

 

 

1.

Can you comment on the improvement in THOR's consolidated gross profit margin for fiscal 2021?

 

 

a.

Gross profit margin improved 170 basis points to 15.4% in fiscal 2021, compared to gross profit margin of 13.7% in fiscal 2020. The year-over-year improvement in consolidated gross profit margin was due to selective price increases, the impact of the increase in net sales and a reduction in sales discounts and favorable warranty experience trends, partially offset by recently increasing material costs and higher labor costs due primarily to the RV labor market conditions in northern Indiana.

 

Our strong fiscal 2021 gross profit margin demonstrates our ability to successfully ramp up production to meet strong market demand with a focus on quality while proactively managing supply chain constraints, logistical bottlenecks and labor shortages throughout the year.

 

Given the current dynamic operating environment, we expect quarterly gross profit margins to fluctuate as we continue to manage through cost pressures as a result of higher commodity prices, higher transportation costs, labor shortages and ongoing supply chain constraints. We remain committed to our long-term goal of achieving sustainable gross profit margins that equal or exceed 16% by fiscal 2025.

 

 

2.

Can you comment on operating cash flow? Why did working capital increase?

 

 

a.

During fiscal 2021, we generated over $525 million in cash provided by operating activities. The change in net working capital resulted in the use of $403.0 million of operating cash during fiscal 2021, primarily due to an increase in inventory for several reasons, including additional raw materials, and chassis, which are needed to meet the heightened production levels, increased production capacity and higher levels of safety stock on certain components. In addition, work-in-process inventory is higher than normal at July 31, 2021 due to material component shortages on otherwise substantially completed units. Accounts receivable has also increased in correlation to the increase in sales. These increases were partially offset by an increase in accounts payable and an increase in accrued liabilities.

7


 

 

3.

What was THOR Industries’ adjusted EBITDA for the fourth quarter and year-to-date for both fiscal 2021 and 2020?

 

 

a.

Although we do not generally disclose non-GAAP numbers, we recognize that many of the users of our financial statements find a measure of EBITDA adjusted for non-cash or non-routine items to be useful. Below are some items that might be helpful in considering this question:

 

Three Months Ended

July 31, 2021

 

Fiscal Year Ended

July 31, 2021

Income Before Income Taxes (1)

$

301.6 million

 

$

844.6 million

Depreciation & Amortization (2)

60.9 million

 

230.6 million

Net Interest Expense (1)

19.0 million

 

93.5 million

Inventory Step-Up Impact on Gross Profit (5)

 

4.3 million

Stock-Based Compensation Expense (3)

9.1 million

 

30.5 million

Change in LIFO Reserve (4)

19.5 million

 

27.9 million

 

b.

 

Three Months Ended

July 31, 2020

 

Fiscal Year Ended

July 31, 2020

Income Before Income Taxes (1)

$

148.2 million

 

$

272.9 million

Depreciation & Amortization (2)

51.6 million

 

196.2 million

Impairment Charges (1)

 

10.1 million

Net Interest Expense (1)

24.9 million

 

104.2 million

Stock-Based Compensation Expense (3)

5.5 million

 

19.9 million

Change in LIFO Reserve (4)

0.4 million

 

1.4 million

 

c.

 

(1) From the Income Statement

 

(2) From the Business Segments footnote

 

(5) From the Segment Information section of MD&A

 

(3) From the Statement of Cash Flows

 

(4) From the Inventories footnote

 

 

 

4.

What was the European RV segment's adjusted EBITDA for the fourth quarter and year-to-date for both fiscal 2021 and 2020?

 

 

a.

Although we do not generally disclose non-GAAP numbers, we recognize that many of the users of our financial statements find a measure of EBITDA adjusted for non-cash or non-routine items to be useful. Below are some items that might be helpful in considering this question:

 

 

Three Months Ended

July 31, 2021

 

Fiscal Year Ended

July 31, 2021

Income Before Income Taxes (1)

$

67.9 million

 

$

116.6 million

Depreciation & Amortization (1)

33.3 million

 

127.4 million

Net Interest Expense

0.5 million

 

5.1 million

 

 

Three Months Ended

July 31, 2020

 

Fiscal Year Ended

July 31, 2020

Income Before Income Taxes (1)

$

28.4 million

 

$

9.9 million

Depreciation & Amortization (1)

28.1 million

 

103.7 million

 

(1) From the Business Segments footnote

 

 

8


 

Summary of Key Quarterly Segment Data – North American Towable RVs

Dollars are in thousands

 

 

 

 

 

 

NET SALES:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

North American Towables

 

 

 

 

 

Travel Trailers and Other

$

1,061,918 

 

 

$

701,019 

 

 

51.5 

%

Fifth Wheels

668,683 

 

 

481,277 

 

 

38.9 

%

Total North American Towables

$

1,730,601 

 

 

$

1,182,296 

 

 

46.4 

%

 

 

 

 

 

 

 

 

 

 

 

 

# OF UNITS:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

North American Towables

 

 

 

 

 

Travel Trailers and Other

43,743 

 

 

33,322 

 

 

31.3 

%

Fifth Wheels

11,966 

 

 

10,196 

 

 

17.4 

%

Total North American Towables

55,709 

 

 

43,518 

 

 

28.0 

%

 

 

 

 

 

 

 

 

 

 

 

 

ORDER BACKLOG

As of

July 31, 2021

 

As of

July 31, 2020

 

% Change

North American Towables

$

9,284,229 

 

 

$

2,763,678 

 

 

235.9 

%

 

 

 

 

 

 

 

 

 

 

 

 

TOWABLE RV MARKET SHARE SUMMARY (1)(2)

Calendar Year to Date June 30,

 

 

 

2021

 

2020

 

 

U.S. Market

40.3 

%

 

41.9 

%

 

 

Canadian Market

47.0 

%

 

47.6 

%

 

 

Combined North American Market

40.9 

%

 

42.4 

%

 

 

 

(1) Source: Statistical Surveys, Inc. Calendar year to date June 30, 2021 and 2020.

(2) 2021 period includes Tiffin Group registrations.

 

Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment, is continuously updated, and is often impacted by delays in reporting by various states or provinces. The COVID-19 pandemic has resulted in further delays in the submission of information reported by the various states or provinces beginning with calendar 2020 results, and may also be impacting the completeness of such information.

9


 

Summary of Key Quarterly Segment Data – North American Motorized RVs

Dollars are in thousands

 

 

 

 

 

 

NET SALES:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

North American Motorized

 

 

 

 

 

Class A

$

348,752 

 

 

$

111,465 

 

 

212.9 

%

Class C

354,500 

 

 

214,767 

 

 

65.1 

%

Class B

119,896 

 

 

40,260 

 

 

197.8 

%

Total North American Motorized

$

823,148 

 

 

$

366,492 

 

 

124.6 

%

 

 

 

 

 

 

 

 

 

 

 

 

# OF UNITS:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

North American Motorized

 

 

 

 

 

Class A

1,990 

 

 

835 

 

 

138.3 

%

Class C

3,900 

 

 

2,709 

 

 

44.0 

%

Class B

1,202 

 

 

366 

 

 

228.4 

%

Total North American Motorized

7,092 

 

 

3,910 

 

 

81.4 

%

 

 

 

 

 

 

 

 

 

 

 

 

ORDER BACKLOG

As of

July 31, 2021

 

As of

July 31, 2020

 

% Change

North American Motorized

$

4,014,738 

 

 

$

1,451,641 

 

 

176.6 

%

 

 

 

 

 

 

 

 

 

 

 

 

MOTORIZED RV MARKET SHARE SUMMARY (1)(2)

Calendar Year to Date June 30,

 

 

 

2021

 

2020

 

 

U.S. Market

47.7 

%

 

38.3 

%

 

 

Canadian Market

45.8 

%

 

44.1 

%

 

 

Combined North American Market

47.5 

%

 

38.6 

%

 

 

 

(1) Source: Statistical Surveys, Inc. Calendar year to date June 30, 2021 and 2020.

(2) 2021 period includes Tiffin Group registrations.

 

Our North American market share includes 5.8% attributable to Tiffin Group (primarily Class A's) for the six months ended June 30, 2021.

 

Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various states or provinces. The COVID-19 pandemic has resulted in further delays in the submission of information reported by the various states or provinces beginning with calendar 2020 results, and may also be impacting the completeness of such information.

 

 

 

10


 

Summary of Key Quarterly Segment Data – European RVs

Dollars are in thousands

 

 

 

 

 

 

NET SALES:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

European

 

 

 

 

 

Motorcaravan

$

552,724 

 

 

$

461,175 

 

 

19.9 

%

Campervan

250,255 

 

 

153,392 

 

 

63.1 

%

Caravan

81,785 

 

 

76,744 

 

 

6.6 

%

Other

85,124 

 

 

48,615 

 

 

75.1 

%

Total European

$

969,888 

 

 

$

739,926 

 

 

31.1 

%

 

 

 

 

 

 

 

 

 

 

 

 

# OF UNITS:

Three Months Ended

July 31, 2021

 

Three Months Ended

July 31, 2020

 

% Change

European

 

 

 

 

 

Motorcaravan

9,313 

 

 

7,457 

 

 

24.9 

%

Campervan

6,667 

 

 

4,042 

 

 

64.9 

%

Caravan

3,800 

 

 

3,756 

 

 

1.2 

%

Total European

19,780 

 

 

15,255 

 

 

29.7 

%

 

 

 

 

 

 

 

 

 

 

 

 

ORDER BACKLOG

As of

July 31, 2021

 

As of

July 31, 2020

 

% Change

European

$

3,559,097 

 

 

$

1,525,973 

 

 

133.2 

%

 

 

 

 

 

 

 

 

 

 

 

 

EUROPEAN RV MARKET SHARE SUMMARY (1)

Calendar Year to Date June 30,

 

 

 

2021

 

2020

 

 

Motorcaravan and Campervan (2)

24.5 

%

 

26.5 

%

 

 

Caravan

17.5 

%

 

20.6 

%

 

 

 

(1) Sources: Caravaning Industry Association e.V. (“CIVD”) and European Caravan Federation (“ECF), Calendar year to date June 30, 2021 and 2020. Data from the ECF is subject to adjustment, continuously updated and is often impacted by delays in reporting by various countries (some countries, including the United Kingdom, do not report OEM-specific data and are thus excluded from the market share calculation).

(2) The CIVD and ECF report motorcaravans and campervans together.

 

Note: Industry wholesale shipment data for the European RV market is not available.

 

11


 

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 extent and impact from the continuation of the COVID-19 pandemic, along with the responses to contain the spread of the virus, or its variants, by various governmental entities or other actors, which may have negative effects on retail customer demand, our independent dealers, our supply chain, our labor force, our production or other aspects of our business; the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply constraints; the dependence on a small group of suppliers for certain components used in production; 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 dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; 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; interest rate fluctuations and their potential impact on the general economy and, specifically, on our dealers and consumers; 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 to attract production personnel in times of high demand; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; competition; the impact of potential losses under repurchase agreements; the potential 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 Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2021.

 

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.

 

 

12



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