• Winnebago Industries Reports Third Quarter Fiscal 2024 Results

    Source: Nasdaq GlobeNewswire / 20 Jun 2024 07:00:01   America/New_York

    -- Resilient Profitability, Supported by Solid Sequential Improvement in Towable RV and Marine Segments --
    -- Barletta Accelerates its Share Momentum in the U.S. Aluminum Pontoon Market Achieving Double Digit Market Share in the Most Recent Three- and Six-Month Periods(1) --
    -- Company Returns $87.8 Million to Shareholders Through Share Repurchases and Dividends Through the First Nine Months of Fiscal 2024 --

    EDEN PRAIRIE, Minn., June 20, 2024 (GLOBE NEWSWIRE) -- Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle product manufacturer, today reported financial results for the Company's fiscal 2024 third quarter ended May 25, 2024.

    Third Quarter Fiscal 2024 Financial Summary

    • Revenues of $786.0 million
    • Gross profit of $118.2 million, representing 15.0% gross margin
    • Diluted earnings per share of $0.96; adjusted diluted earnings per share of $1.13
    • Adjusted EBITDA of $58.0 million, representing 7.4% adjusted EBITDA margin
    • Cash and cash equivalents of $318.1 million at quarter-end, up 2.6% from year-end fiscal 2023

    CEO Commentary
    “While outdoor industry market conditions remain challenged given inconsistent retail patterns and sustained dealer discipline relative to field inventory levels, we are generally pleased with the resiliency of our portfolio, as our teams balance the pursuit of long-term share, profitability and customer satisfaction across our premium brands,” said Michael Happe, President and Chief Executive Officer. “Driven by our Towable RV and Marine segments, we delivered sequential consolidated margin growth in the third quarter. Notwithstanding difficult retail headwinds in the Motorhome segment, our Towable RV business generated higher revenue versus the same period a year ago and our Barletta pontoon retail share grew to double digits for the trailing three- and six-month periods through April. We are also pleased to have returned more than $29 million to investors this quarter through share repurchases and dividends, while maintaining investments in future growth initiatives and managing a healthy balance sheet.”

    “The combination of affordability and innovation remains a focal point of product development at Winnebago Industries – valued differentiation on respected brands our consumers can trust,” Happe said. “Recent introductions of economical travel trailers from our Grand Design and Winnebago brands, plus continued market penetration with the opening price Aria line within our Barletta business are evidence of this focus. We are also particularly excited about the upcoming market release in our fourth quarter of the Grand Design Lineage motorhome product as well as the Winnebago Connect intelligent control system being introduced on the Winnebago Navion line. Both strategies open new growth opportunities for our organization.”

    Third Quarter Fiscal 2024 Results
    Revenues were $786.0 million, a decrease of 12.7% compared to $900.8 million in the third quarter of last year, driven by product mix and lower volume related to market conditions.

    Gross profit was $118.2 million, a decrease of 22.0% compared to $151.4 million in the third quarter of last year. Gross profit margin decreased 180 basis points in the quarter to 15.0% as a result of deleverage, operational efficiency challenges, and higher warranty expense due to a favorable prior year trend, partially offset by cost containment efforts.

    Selling, general and administrative expenses were $69.1 million, an increase of 3.7% compared to $66.5 million in the third quarter of last year, driven by strategic investments in engineering, digital asset development and increased data and information technology capabilities.

    Operating income was $43.5 million, a decrease of 46.0% compared to $80.5 million in the third quarter of last year.

    Net income was $29.0 million, compared to net income of $59.1 million in the third quarter of last year. Reported earnings per diluted share was $0.96, compared to reported earnings per diluted share of $1.71 in the same period last year. Adjusted earnings per diluted share was $1.13, a decrease of 46.9% compared to adjusted earnings per diluted share of $2.13 in the third quarter of last year.

    Consolidated Adjusted EBITDA was $58.0 million, a decrease of 39.8%, compared to $96.4 million last year.

    “We have made strong progress during the fiscal year to reduce aging RV field inventory in a fiscally responsible manner; our teams continue to work closely with our dealer partners to monitor the complexion of their inventory and match production and shipments with retail demand,” Happe said. “This discipline extends to our Marine segment as well, where we have particularly emphasized dealer inventory health and aggressively positioned ourselves well for the upcoming model year 2025 rollout. Overall, while the challenges of today require constant diligence to navigate, our Company and brands are stronger than ever before and with ongoing investments in product, people, systems, and capabilities like digital connectivity we are well situated to grow profitably as the cycle turns more positive in the future.”

    Third Quarter Fiscal 2024 Segments Summary

    Towable RV

     Three Months Ended
    ($, in millions)May 25, 2024 May 27, 2023 Change(1)
    Net revenues$386.3  $384.1  0.6%
    Adjusted EBITDA$41.9  $53.8  (22.0)%
    Adjusted EBITDA Margin 10.9%  14.0% (310) bps


    ($, in millions)May 25, 2024 May 27, 2023 Change(1) 
    Backlog$153.1  $236.0  (35.1)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.


    • Revenues for the Towable RV segment were up compared to the prior year, primarily driven by an increase in unit volume, partially offset by a reduction in average selling price per unit related to product mix.
    • Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to operational efficiency challenges, partially offset by lower discounts and allowances. In addition, results for the third quarter of fiscal 2023 benefited from a favorable warranty expense trend, which did not recur in the third quarter of fiscal 2024.
    • Backlog decreased due to current market conditions and a cautious dealer network.

    Motorhome RV

     Three Months Ended 
    ($, in millions)May 25, 2024 May 27, 2023 Change(1) 
    Net revenues$299.0  $374.4  (20.1)%
    Adjusted EBITDA$13.4  $26.8  (50.2)%
    Adjusted EBITDA Margin 4.5%  7.2% (270) bps 


    ($, in millions)May 25, 2024 May 27, 2023 Change(1) 
    Backlog$354.9  $800.4  (55.7)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.


    • Revenues for the Motorhome RV segment were down from the prior year, due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis costs.
    • Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage and operational efficiency challenges, partially offset by cost containment efforts.
    • Backlog decreased due to current market conditions and a cautious dealer network.

    Marine

     Three Months Ended 
    ($, in millions)May 25, 2024 May 27, 2023 Change(1) 
    Net revenues$87.9  $129.0  (31.8)%
    Adjusted EBITDA$8.5  $17.3  (50.9)%
    Adjusted EBITDA Margin 9.7%  13.4% (370) bps 


    ($, in millions)May 25, 2024 May 27, 2023 Change(1) 
    Backlog$62.0  $146.3  (57.6)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.

     

    • Revenues for the Marine segment were down from the prior year, primarily driven by a decline in unit volume related to market conditions and product mix.
    • Segment Adjusted EBITDA decreased compared to the prior year, due to deleverage, partially offset by cost containment efforts.
    • Backlog decreased primarily driven by a cautious dealer network.

    Balance Sheet and Cash Flow
    As of May 25, 2024, cash and cash equivalents totaled $318.1 million. The Company had total outstanding debt of $695.4 million ($709.3 million of debt, net of debt issuance costs of $13.9 million) and working capital of $581.9 million. Cash flow provided by operations was $99.4 million in the fiscal 2024 third quarter.

    Quarterly Cash Dividend and Share Repurchase
    On May 15, 2024, the Company’s Board of Directors approved a quarterly cash dividend of $0.31 per share payable on June 26, 2024, to common stockholders of record at the close of business on June 12, 2024. Winnebago Industries executed share repurchases of $20 million during the third quarter.

    Q3 FY 2024 Conference Call
    Winnebago Industries, Inc. will discuss third quarter fiscal 2024 earnings results during a conference call scheduled for 9:00 a.m. Central Time today. Members of the news media, investors and the general public are invited to access a live broadcast of the conference call and view the accompanying presentation slides via the Investor Relations page of the Company's website at http://investor.wgo.net. The event will be archived and available for replay for the next 90 days.

    About Winnebago Industries
    Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta brands, which are used primarily in leisure travel and outdoor recreation activities. The Company builds high-quality motorhomes, travel trailers, fifth-wheel products, outboard and sterndrive powerboats, pontoons, and commercial community outreach vehicles. Committed to advancing sustainable innovation and leveraging vertical integration in key component areas, Winnebago Industries has multiple facilities in Iowa, Indiana, Minnesota and Florida. The Company’s common stock is listed on the New York Stock Exchange and traded under the symbol WGO. For access to Winnebago Industries' investor relations material or to add your name to an automatic email list for Company news releases, visit http://investor.wgo.net.

    Forward-Looking Statements
    This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ materially from these statements, including, but not limited to general economic uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; competition and new product introductions by competitors; ability to innovate and commercialize new products; ability to manage our inventory to meet demand; risk related to cyclicality and seasonality of our business; risk related to independent dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations; ability to retain relationships with our suppliers and obtain components; business or production disruptions; inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure to warranty claims; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related exposure to product liability claims; governmental regulation, including for climate change; increased attention to environmental, social, and governance ("ESG") matters, and our ability to meet our commitments; impairment of goodwill and trade names; and risks related to our 2025 Convertible Notes, 2030 Convertible Notes and Senior Secured Notes, including our ability to satisfy our obligations under these notes. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to reflect any changes in the Company's expectations after the date of this release or any change in events, conditions or circumstances on which any statement is based, except as required by law.

    Contacts
    Investors: Ray Posadas
    ir@winnebagoind.com

    Media: Dan Sullivan
    media@winnebagoind.com

    Winnebago Industries, Inc.
    Footnotes to News Release

    Footnotes:

    (1)Data reported by Statistical Surveys, Inc., representing trailing three- and six-month U.S. aluminum pontoon market share through April 2024. This data is continuously updated and often impacted by delays in reporting by various states.


    Winnebago Industries, Inc.
    Condensed Consolidated Statements of Income
    (Unaudited and subject to reclassification)
     Three Months Ended
    (in millions, except percent and per share data)May 25, 2024 May 27, 2023
    Net revenues$786.0 100.0% $900.8 100.0%
    Cost of goods sold 667.8 85.0%  749.4 83.2%
    Gross profit 118.2 15.0%  151.4 16.8%
    Selling, general, and administrative expenses 69.1 8.8%  66.5 7.4%
    Amortization 5.6 0.7%  4.4 0.5%
    Total operating expenses 74.7 9.5%  70.9 7.9%
    Operating income 43.5 5.5%  80.5 8.9%
    Interest expense, net 5.8 0.7%  5.2 0.6%
    Non-operating loss 2.2 0.3%  0.2 —%
    Income before income taxes 35.5 4.5%  75.1 8.3%
    Provision for income taxes 6.5 0.8%  16.0 1.8%
    Net income$29.0 3.7% $59.1 6.6%
            
    Earnings per common share:       
    Basic$0.99   $1.95  
    Diluted$0.96   $1.71  
    Weighted average common shares outstanding:       
    Basic 29.2    30.4  
    Diluted 30.4    35.4  
            
     Nine Months Ended
    (in millions, except percent and per share data)May 25, 2024 May 27, 2023
    Net revenues$2,252.6 100.0% $2,719.7 100.0%
    Cost of goods sold 1,913.3 84.9%  2,261.1 83.1%
    Gross profit 339.3 15.1%  458.6 16.9%
    Selling, general, and administrative expenses 204.4 9.1%  203.4 7.5%
    Amortization 16.9 0.7%  12.0 0.4%
    Total operating expenses 221.3 9.8%  215.4 7.9%
    Operating income 118.0 5.2%  243.2 8.9%
    Interest expense, net 15.2 0.7%  16.4 0.6%
    Loss on note repurchase 32.7 1.5%  — —%
    Non-operating loss 5.8 0.3%  2.3 0.1%
    Income before income taxes 64.3 2.9%  224.5 8.3%
    Provision for income taxes 22.2 1.0%  52.4 1.9%
    Net income$42.1 1.9% $172.1 6.3%
            
    Earnings per common share:       
    Basic$1.43   $5.66  
    Diluted$1.40   $4.95  
    Weighted average common shares outstanding:       
    Basic 29.3    30.4  
    Diluted 30.6    35.5  


    Amounts in tables are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
    In addition, percentages may not add in total due to rounding.


    Winnebago Industries, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited and subject to reclassification)
    (in millions)May 25, 2024 August 26, 2023
    Assets   
    Current assets   
    Cash and cash equivalents$318.1 $309.9 
    Receivables, net 199.3  178.5 
    Inventories, net 441.5  470.6 
    Prepaid expenses and other current assets 24.8  37.7 
    Total current assets 983.7  996.7 
    Property, plant, and equipment, net 335.5  327.3 
    Goodwill 514.5  514.5 
    Other intangible assets, net 485.1  502.0 
    Investment in life insurance 30.2  29.3 
    Operating lease assets 48.1  42.6 
    Deferred income tax assets, net 8.9  — 
    Other long-term assets 19.0  20.0 
    Total assets$2,425.0 $2,432.4 
        
    Liabilities and Shareholders' Equity   
    Current liabilities   
    Accounts payable$134.0 $146.9 
    Income taxes payable 3.1  — 
    Current maturities of long-term debt, net 59.0  — 
    Accrued expenses 205.7  249.1 
    Total current liabilities 401.8  396.0 
    Long-term debt, net 636.4  592.4 
    Deferred income tax liabilities, net —  11.7 
    Unrecognized tax benefits 6.0  6.1 
    Long-term operating lease liabilities 47.3  42.0 
    Deferred compensation benefits, net of current portion 6.9  7.9 
    Other long-term liabilities 8.2  8.2 
    Total liabilities 1,106.6  1,064.3 
    Shareholders' equity 1,318.4  1,368.1 
    Total liabilities and shareholders' equity$2,425.0 $2,432.4 


    Winnebago Industries, Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited and subject to reclassification)
     Nine Months Ended
    (in millions)May 25, 2024 May 27, 2023
    Operating activities   
    Net income$42.1  $172.1 
    Adjustments to reconcile net income to net cash provided by operating activities   
    Depreciation 25.5   20.9 
    Amortization 16.9   12.0 
    Amortization of debt issuance costs 2.4   2.3 
    Last in, first-out expense (0.1)  2.0 
    Stock-based compensation 11.5   8.2 
    Deferred income taxes (3.8)  (3.6)
    Loss on note repurchase 32.7   — 
    Contingent consideration fair value adjustment 1.1   2.0 
    Payments of earnout liability above acquisition-date fair value (14.7)  (13.3)
    Other, net 3.1   0.3 
    Change in operating assets and liabilities, net of assets and liabilities acquired   
    Receivables, net (20.8)  49.8 
    Inventories, net 28.7   15.8 
    Prepaid expenses and other assets 6.8   12.6 
    Accounts payable (12.1)  (81.3)
    Income taxes and unrecognized tax benefits 14.3   3.2 
    Accrued expenses and other liabilities (30.4)  (46.6)
    Net cash provided by operating activities 103.2   156.4 
        
    Investing activities   
    Purchases of property, plant, and equipment (33.8)  (68.0)
    Acquisition of business, net of cash acquired —   (87.5)
    Proceeds from the sale of property, plant, and equipment 0.3   0.3 
    Other, net (2.9)  0.8 
    Net cash used in investing activities (36.4)  (154.4)
        
    Financing activities   
    Borrowings on long-term debt 2,652.2   2,840.2 
    Repayments on long-term debt (2,596.0)  (2,840.2)
    Payments for convertible note bond hedge (68.7)  — 
    Proceeds from issuance of convertible note warrant 31.3   — 
    Proceeds from partial unwind of convertible note bond hedge 55.8   — 
    Payments for partial unwind of convertible note warrant (25.3)  — 
    Payments of cash dividends (27.8)  (25.1)
    Payments for repurchases of common stock (64.3)  (24.9)
    Payments of debt issuance costs (10.4)  — 
    Payments of earnout liability up to acquisition-date fair value (5.8)  (8.7)
    Other, net 0.4   0.4 
    Net cash used in financing activities (58.6)  (58.3)
        
    Net increase (decrease) in cash and cash equivalents 8.2   (56.3)
    Cash and cash equivalents at beginning of period 309.9   282.2 
    Cash and cash equivalents at end of period$318.1  $225.9 
        
        
        
        
    Supplemental Disclosures   
    Income taxes paid, net$12.6  $54.9 
    Interest paid 13.9   14.6 
        
    Non-cash investing and financing activities   
    Capital expenditures in accounts payable$2.2  $2.8 
    Dividends declared not yet paid 10.0   8.9 
    Increase in lease assets in exchange for lease liabilities:   
    Operating leases 9.8   3.9 
    Finance leases 1.2   0.9 


    Winnebago Industries, Inc.
    Supplemental Information by Reportable Segment - Towable RV
    (in millions, except unit data)
    (Unaudited and subject to reclassification)
     Three Months Ended
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1)
    Net revenues$386.3    $384.1    $2.2   0.6%
    Adjusted EBITDA 41.9  10.9%  53.8  14.0%  (11.8)  (22.0)%
                
     Three Months Ended
    Unit deliveriesMay 25, 2024 Product Mix(2) May 27, 2023 Product Mix(2) Unit Change % Change
    Travel trailer 6,120  66.1%  6,376  73.2%  (256)  (4.0)%
    Fifth wheel 3,143  33.9%  2,339  26.8%  804   34.4%
    Total Towable RV 9,263  100.0%  8,715  100.0%  548   6.3%
                
     Nine Months Ended
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1)
    Net revenues$1,001.8    $1,073.9    $(72.1)  (6.7)%
    Adjusted EBITDA 101.8  10.2%  129.4  12.0%  (27.5)  (21.3)%
                
     Nine Months Ended
    Unit deliveriesMay 25, 2024 Product Mix(2) May 27, 2023 Product Mix(2) Unit Change % Change
    Travel trailer 15,987  67.0%  16,049  68.8%  (62)  (0.4)%
    Fifth wheel 7,869  33.0%  7,293  31.2%  576   7.9%
    Total Towable RV 23,856  100.0%  23,342  100.0%  514   2.2%
                
     May 25, 2024   May 27, 2023   Change(1) % Change(1)
    Backlog(3)           
    Units 4,734     5,297     (563)  (10.6)%
    Dollars$153.1    $236.0    $(82.9)  (35.1)%
    Dealer Inventory           
    Units 18,110     20,218     (2,108)  (10.4)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
    (2)Percentages may not add due to rounding differences.
    (3)Our backlog includes all accepted orders from dealers, which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.


    Winnebago Industries, Inc.
    Supplemental Information by Reportable Segment - Motorhome RV
    (in millions, except unit data)
    (Unaudited and subject to reclassification)
     Three Months Ended
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1)
    Net revenues$299.0    $374.4    $(75.3) (20.1)%
    Adjusted EBITDA 13.4  4.5%  26.8  7.2%  (13.5) (50.2)%
                
     Three Months Ended
    Unit deliveriesMay 25, 2024 Product Mix(2) May 27, 2023 Product Mix(2) Unit Change % Change
    Class A 417  24.8%  524  24.6%  (107) (20.4)%
    Class B 476  28.3%  1,018  47.8%  (542) (53.2)%
    Class C 787  46.8%  589  27.6%  198  33.6%
    Total Motorhome RV 1,680  100.0%  2,131  100.0%  (451) (21.2)%
                
     Nine Months Ended
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1)
    Net revenues$971.8    $1,242.4    $(270.6) (21.8)%
    Adjusted EBITDA 60.7  6.2%  119.6  9.6%  (59.0) (49.3)%
                
     Nine Months Ended
    Unit deliveriesMay 25, 2024 Product Mix(2) May 27, 2023 Product Mix(2) Unit Change % Change
    Class A 1,269  24.3%  1,734  25.5%  (465) (26.8)%
    Class B 1,815  34.8%  3,233  47.5%  (1,418) (43.9)%
    Class C 2,128  40.8%  1,837  27.0%  291  15.8%
    Total Motorhome RV 5,212  100.0%  6,804  100.0%  (1,592) (23.4)%
                
     May 25, 2024   May 27, 2023   Change(1) % Change(1)
    Backlog(3)           
    Units 1,596     4,595     (2,999) (65.3)%
    Dollars$354.9    $800.4    $(445.5) (55.7)%
    Dealer Inventory           
    Units 4,386     4,544     (158) (3.5)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
    (2)Percentages may not add due to rounding differences.
    (3)Our backlog includes all accepted orders from dealers, which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.


    Winnebago Industries, Inc.
    Supplemental Information by Reportable Segment - Marine
    (in millions, except unit data)
    (Unaudited and subject to reclassification)    		 
     Three Months Ended 
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1) 
    Net revenues$87.9    $129.0    $(41.1) (31.8)%
    Adjusted EBITDA 8.5  9.7%  17.3  13.4%  (8.8) (50.9)%
                 
     Three Months Ended 
    Unit deliveriesMay 25, 2024   May 27, 2023   Unit Change % Change 
    Boats 1,127     1,586     (459) (28.9)%
                 
     Nine Months Ended 
     May 25, 2024 % of Revenues(1) May 27, 2023 % of Revenues(1) $ Change(1) % Change(1) 
    Net revenues$245.0    $373.3    $(128.3) (34.4)%
    Adjusted EBITDA 20.1  8.2%  50.2  13.5%  (30.2) (60.0)%
                 
     Nine Months Ended 
    Unit deliveriesMay 25, 2024   May 27, 2023   Unit Change % Change 
    Boats 3,107     4,552     (1,445) (31.7)%
                 
     May 25, 2024   May 27, 2023   Change(1) % Change(1) 
    Backlog(2)            
    Units 642     1,348     (706) (52.4)%
    Dollars$62.0    $146.3    $(84.3) (57.6)%
    Dealer Inventory(3)            
    Units 3,400     4,109     (709) (17.3)%


    (1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
    (2)Our backlog includes all accepted orders from dealers, which generally have been requested to be shipped within the next six months. Orders in backlog generally can be cancelled or postponed at the option of the dealer at any time without penalty; therefore, backlog may not necessarily be an accurate measure of future sales.
    (3)Due to the nature of the Marine industry, this amount includes a higher proportion of retail sold units than our other segments.


    Winnebago Industries, Inc.
    Non-GAAP Reconciliation
    (Unaudited and subject to reclassification)

    Non-GAAP financial measures, which are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”), have been provided as information supplemental and in addition to the financial measures presented in the accompanying news release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the news release. The non-GAAP financial measures presented may differ from similar measures used by other companies.

    The following table reconciles diluted earnings per share to Adjusted diluted earnings per share:

     Three Months Ended Nine Months Ended
     May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023
    Diluted earnings per share$0.96  $1.71  $1.40  $4.95 
    Acquisition-related costs(1) —   0.11   0.05   0.16 
    Amortization(1) 0.19   0.13   0.55   0.34 
    Change in fair value of note receivable(1) —   —   0.10   — 
    Contingent consideration fair value adjustment(1) —   —   0.03   0.06 
    Tax impact of adjustments(2) (0.04)  (0.06)  (0.17)  (0.13)
    Impact of call spread overlay(3) 0.03   0.25   0.07   0.71 
    Loss on note repurchase —   —   1.07   — 
    Adjusted diluted earnings per share(4)$1.13  $2.13  $3.11  $6.08 


    (1)Represents a pre-tax adjustment.
    (2)Income tax charge calculated using the statutory tax rate for the U.S. of 23.0% and 24.1% for fiscal 2024 and fiscal 2023, respectively.
    (3) Represents the impact of a call spread overlay that was put in place upon issuance of the convertible notes and which economically offsets dilution risk.
    (4)Per share numbers may not foot due to rounding.


    The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA.

     Three Months Ended Nine Months Ended
    (in millions)May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023
    Net income$29.0  $59.1  $42.1  $172.1 
    Interest expense, net 5.8   5.2   15.2   16.4 
    Provision for income taxes 6.5   16.0   22.2   52.4 
    Depreciation 8.9   7.6   25.5   20.9 
    Amortization 5.6   4.4   16.9   12.0 
    EBITDA 55.8   92.3   121.9   273.8 
    Acquisition-related costs —   3.9   1.5   5.6 
    Change in fair value of note receivable —   —   3.0   — 
    Contingent consideration fair value adjustment —   —   1.1   2.0 
    Loss on note repurchase —   —   32.7   — 
    Non-operating loss 2.2   0.2   1.7   0.4 
    Adjusted EBITDA$58.0  $96.4  $161.9  $281.8 


    Non-GAAP performance measures of Adjusted diluted earnings per share, EBITDA and Adjusted EBITDA have been provided as comparable measures to illustrate the effect of non-recurring transactions occurring during the reported periods and to improve comparability of our results from period to period. Adjusted diluted earnings per share is defined as diluted earnings per share adjusted for after-tax items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense and other pretax adjustments made in order to present comparable results from period to period. Management believes Adjusted diluted earnings per share and Adjusted EBITDA provide meaningful supplemental information about our operating performance because these measures exclude amounts that we do not consider part of our core operating results when assessing our performance.

    Management uses these non-GAAP financial measures (a) to evaluate historical and prospective financial performance and trends as well as assess performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our Board of Directors to enable our Board of Directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for the Company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with restricted activities under the terms of our asset-backed revolving credit facility and outstanding notes. Management believes these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry.


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