In the News: Winnebago’s Happe: ‘These Are Dynamic and Exciting Times’

Mike Happe
Source: Winnebago Industries

[March 2017] Winnebago Industries Inc. President and CEO Michael Happe and Vice President and CFO Sarah Nielsen talked with investors about the significant results the company saw during its 2017 fiscal second quarter.

As reported in its earnings release, Winnebago’s revenues for the company’s second quarter were $370.5 million, up 64.2% from the same period of 2016, while gross profit rose 95.1% to $49.3 million and operating income was up 110.1% to $28.4 million. Net income was $15.3 million, or 48 cents per diluted share, representing an increase of 63.3% compared to $9.4 million, or 35 cents per diluted share, in the same period last year.

“These are dynamic and exciting times for Winnebago,” Happe said. The company, he noted, now has a much more balanced RV portfolio, thanks in large part to the $500 million acquisition of Middlebury, Ind.-based Grand Design RV Co. last November.

“The second quarter marked the first full period with Grand Design RV as part of the Winnebago family,” he said. “Our overall towables segment in the second quarter accounted for 46% of our roughly $370 million in overall revenue.” That compares, he said, to 90% of revenue in the same quarter of 2016 coming from motorized RVs.

The acquisition — and continued growth — of Grand Design, coupled with the gains in the separate Middlebury-based Winnebago Towables brand have diversified Winnebago’s product lines significantly, according to Happe. Winnebago now claims about 5% of the towable market, up from 1% a year ago, and the company plans to get into double-digit towable market share.

On the legacy motorized side of Winnebago’s business, Nielsen said overall shipments were up about 3%, adding that the average selling price was down 5.6% thanks to a shift from Class A motorhomes to more Class C and Class B units resulting in a 3% decline in motorized revenue.

In addition to diversifying its product offerings, Winnebago is diversifying itself geographically. Historically run in Forest City, Iowa, Winnebago opened its new Eden Prairie headquarters in February. On the manufacturing side, Winnebago’s Junction City, Ore., plant is expanding diesel production, and an additional line has been added in Lake Mills, Iowa.

The company’s executives and board are also working on developing a long-term plan. “We may not ultimately be the biggest RV manufacturer in North America, but we will work towards being the most trusted supplier in the space and one that is materially larger and more profitable,” Happe said. “We have acknowledged that when the timing is right, we will seek to identify strategic and profitable diversification opportunities within the outdoor lifestyle sector. Those could reside inside or outside the recreational vehicle market.”

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