UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended January 31, ~~2020.~~2021.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____ to ____.

COMMISSION FILE NUMBER 001-09235

THOR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

93-0768752

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

601 E. Beardsley Ave., Elkhart, IN

46514-3305

(Address of principal executive offices)

(Zip Code)

(574) 970-7460

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Name of each exchange

Title of each class

Trading Symbol(s)

on which registered

Common stock (Par value $.10 Per Share)

THO

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of February 28, ~~2020, 55,198,756~~2021, 55,366,241 shares of the registrant’s common stock, par value $0.10 per share, were outstanding.

PART I – FINANCIAL INFORMATION (Unless otherwise indicated, amounts in thousands except share and per share data.)

ITEM 1. FINANCIAL STATEMENTS

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

January 31, 2020 July 31, 2019
ASSETS
Current assets:
Cash and cash equivalents $ 242,134 $ 425,615
Restricted cash 3,537 25,647
Accounts receivable, trade, net 581,809 478,531
Factored accounts receivable 190,111 173,405
Accounts receivable, other, net 80,507 64,291
Inventories, net 926,914 827,988
Prepaid income taxes, expenses and other 31,811 41,880
Assets held for sale 10,680 —
Total current assets 2,067,503 2,037,357
Property, plant and equipment, net 1,089,156 1,092,471
Other assets:
Goodwill 1,353,120 1,358,032
Amortizable intangible assets, net 913,611 970,811
Deferred income tax assets, net 68,827 73,176
Equity investment in joint ventures 41,434 46,181
Other 94,826 82,418
Total other assets 2,471,818 2,530,618
TOTAL ASSETS $ 5,628,477 $ 5,660,446
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 614,464 $ 551,831
Current portion of long-term debt 18,159 17,370
Short-term financial obligations 53,549 44,094
Accrued liabilities:
Compensation and related items 110,174 135,560
Product warranties 282,065 289,679
Income and other taxes 57,280 61,483
Promotions and rebates 89,347 95,052
Product, property and related liabilities 16,927 17,595
Liabilities related to factored receivables 190,111 173,405
Other 62,857 62,256
Total current liabilities 1,494,933 1,448,325
Long-term debt 1,746,607 1,885,253
Deferred income tax liabilities, net 133,994 135,703
Unrecognized tax benefits 12,927 10,799
Other liabilities 117,682 85,138
Total long-term liabilities 2,011,210 2,116,893
Contingent liabilities and commitments
Stockholders’ equity:
Preferred stock – authorized 1,000,000 shares; none outstanding — —
Common stock – par value of $.10 per share; authorized 250,000,000 shares; issued 65,396,531 and 65,189,907 shares, respectively 6,540 6,519
Additional paid-in capital 427,373 416,382
Retained earnings 2,102,253 2,066,674
Accumulated other comprehensive loss, net of tax (71,415) (57,004)
Less treasury shares of 10,197,775 and 10,126,434, respectively, at cost (351,909) (348,146)
Stockholders' equity attributable to Thor Industries, Inc. 2,112,842 2,084,425
Non-controlling interests 9,492 10,803
Total stockholders’ equity 2,122,334 2,095,228
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 5,628,477 $ 5,660,446


	January 31, 2021		July 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	183,634	$	538,519
Restricted cash	2,913		2,844
Accounts receivable, trade, net	724,026		588,069
Factored accounts receivable	128,672		143,278
Accounts receivable, other, net	91,268		82,880
Inventories, net	1,300,185		716,305
Prepaid income taxes, expenses and other	64,851		30,382

Total current assets	2,495,549		2,102,277
Property, plant and equipment, net	1,132,722		1,107,649
Other assets:
Goodwill	1,581,990		1,476,541
Amortizable intangible assets, net	1,009,431		914,724
Deferred income tax assets, net	46,460		78,738

Other	103,394		91,531
Total other assets	2,741,275		2,561,534
TOTAL ASSETS	$	6,369,546	$	5,771,460

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	803,496	$	636,506
Current portion of long-term debt	12,802		13,817
Short-term financial obligations	36,672		35,939
Accrued liabilities:
Compensation and related items	203,379		160,083
Product warranties	251,009		252,869
Income and other taxes	49,868		83,893
Promotions and rebates	95,973		97,378
Product, property and related liabilities	18,939		15,440

Liabilities related to factored receivables	128,672		143,278
Other	71,597		76,078

Total current liabilities	1,672,407		1,515,281
Long-term debt	1,821,522		1,652,831
Deferred income tax liabilities, net	123,486		123,802
Unrecognized tax benefits	18,748		12,765
Other liabilities	136,672		121,212
Total long-term liabilities	2,100,428		1,910,610
Contingent liabilities and commitments	0		0
Stockholders’ equity:
Preferred stock – authorized 1,000,000 shares; NaN outstanding	0		0
Common stock – par value of $.10 per share; authorized 250,000,000 shares; issued 65,651,570 and 65,396,531 shares, respectively	6,565		6,540
Additional paid-in capital	448,010		436,828
Retained earnings	2,402,211		2,201,330
Accumulated other comprehensive income, net of tax	73,676		26,993
Less treasury shares of 10,285,329 and 10,197,775, respectively, at cost	(360,226)		(351,909)
Stockholders' equity attributable to THOR Industries, Inc.	2,570,236		2,319,782
Non-controlling interests	26,475		25,787
Total stockholders’ equity	2,596,711		2,345,569
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,369,546	$	5,771,460

See Notes to the Condensed Consolidated Financial Statements.

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

~~FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2020 AND 2019~~ (UNAUDITED)


		Three Months Ended January 31,						Six Months Ended January 31,							Three Months Ended January 31,				Six Months Ended January 31,
		2020		2019		2020		2019			2021		2020		2021		2020
Net sales	Net sales	$	2,003,133	$	1,290,576	$	4,161,918	$	3,046,552	Net sales	$	2,727,788	$	2,003,133	$	5,265,148	$	4,161,918
Cost of products sold	Cost of products sold	1,746,727		1,148,980		3,596,701		2,697,700		Cost of products sold	2,312,911		1,746,727		4,471,419		3,596,701
Gross profit	Gross profit	256,406		141,596		565,217		348,852		Gross profit	414,877		256,406		793,729		565,217
Selling, general and administrative expenses	Selling, general and administrative expenses	162,357		85,069		350,821		187,762		Selling, general and administrative expenses	206,189		162,357		387,952		350,821
Amortization of intangible assets	Amortization of intangible assets	24,273		12,526		48,566		25,117		Amortization of intangible assets	29,203		24,273		56,630		48,566
Impairment charges	Impairment charges	10,057		—		10,057		—		Impairment charges	0		10,057		0		10,057
Acquisition-related costs		—		42,059		—		99,148

Interest income	Interest income	974		1,675		1,949		2,897		Interest income	202		974		520		1,949
Interest expense	Interest expense	27,234		859		55,259		1,735		Interest expense	24,164		27,234		48,440		55,259
Other income (expense), net		1,404		(885)		1,034		(4,597)
Other income, net										Other income, net	8,436		1,404		9,051		1,034
Income before income taxes	Income before income taxes	34,863		1,873		103,497		33,390		Income before income taxes	163,959		34,863		310,278		103,497
Income taxes		7,837		7,290		24,626		24,854
Net income (loss)		27,026		(5,417)		78,871		8,536
Less: Net loss attributable to non-controlling interest		(1,647)		—		(867)		—
Net income (loss) attributable to Thor Industries, Inc.		$	28,673	$	(5,417)	$	79,738	$	8,536
Income tax provision										Income tax provision	32,769		7,837		63,449		24,626
Net income										Net income	131,190		27,026		246,829		78,871
Less: Net income (loss) attributable to non-controlling interests										Less: Net income (loss) attributable to non-controlling interests	(1,334)		(1,647)		548		(867)
Net income attributable to THOR Industries, Inc.										Net income attributable to THOR Industries, Inc.	$	132,524	$	28,673	$	246,281	$	79,738

Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic	Basic	55,198,756		52,806,981		55,146,915		52,766,739		Basic	55,366,241		55,198,756		55,302,203		55,146,915
Diluted	Diluted	55,396,116		52,867,687		55,310,385		52,883,645		Diluted	55,568,667		55,396,116		55,561,675		55,310,385

Earnings (loss) per common share:
Earnings per common share:										Earnings per common share:
Basic	Basic	$	0.52	$	(0.10)	$	1.45	$	0.16	Basic	$	2.39	$	0.52	$	4.45	$	1.45
Diluted	Diluted	$	0.52	$	(0.10)	$	1.44	$	0.16	Diluted	$	2.38	$	0.52	$	4.43	$	1.44

Comprehensive income:	Comprehensive income:									Comprehensive income:
Net income (loss)		$	27,026	$	(5,417)	$	78,871	$	8,536
Other comprehensive loss, net of tax
Net income										Net income	$	131,190	$	27,026	$	246,829	$	78,871
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	Foreign currency translation adjustment	(11,902)		—		(10,909)		—		Foreign currency translation adjustment	60,133		(11,902)		41,140		(10,909)
Unrealized loss on derivatives, net of tax		(224)		—		(3,946)		—
Unrealized gain (loss) on derivatives, net of tax										Unrealized gain (loss) on derivatives, net of tax	2,351		(224)		5,683		(3,946)

Total other comprehensive loss, net of tax		(12,126)		—		(14,855)		—
Total Comprehensive income (loss)		14,900		(5,417)		64,016		8,536
Less: Comprehensive loss attributable to non-controlling interest		(1,949)		—		(1,311)		—
Comprehensive income (loss) attributable to Thor Industries, Inc.		$	16,849	$	(5,417)	$	65,327	$	8,536
Total other comprehensive income (loss), net of tax										Total other comprehensive income (loss), net of tax	62,484		(12,126)		46,823		(14,855)
Total Comprehensive income										Total Comprehensive income	193,674		14,900		293,652		64,016
Less: Comprehensive income (loss) attributable to non-controlling interests										Less: Comprehensive income (loss) attributable to non-controlling interests	(1,307)		(1,949)		688		(1,311)
Comprehensive income attributable to THOR Industries, Inc.										Comprehensive income attributable to THOR Industries, Inc.	$	194,981	$	16,849	$	292,964	$	65,327

See Notes to the Condensed Consolidated Financial Statements.

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~FOR THE SIX MONTHS ENDED JANUARY 31, 2020 AND 2019~~ (UNAUDITED)


		Six Months Ended January 31,							Six Months Ended January 31,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	78,871	$	8,536	Net income	$	246,829	$	78,871
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:						Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	Depreciation	50,586		21,463		Depreciation	54,324		50,586
Amortization of intangibles		48,566		25,117
Amortization of intangible assets						Amortization of intangible assets	56,630		48,566
Amortization of debt issuance costs	Amortization of debt issuance costs	5,371		785		Amortization of debt issuance costs	5,460		5,371
Impairment charges	Impairment charges	10,057		—		Impairment charges	0		10,057
Foreign currency forward contract loss		—		73,707
Deferred income tax provision (benefit)		1,661		(84)

Deferred income tax (benefit) provision						Deferred income tax (benefit) provision	(98)		1,661
(Gain) loss on disposition of property, plant and equipment	(Gain) loss on disposition of property, plant and equipment	1,241		(29)		(Gain) loss on disposition of property, plant and equipment	(196)		1,241
Stock-based compensation expense	Stock-based compensation expense	10,075		9,486		Stock-based compensation expense	13,058		10,075
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable	Accounts receivable	(121,725)		142,453		Accounts receivable	(99,282)		(121,725)
Inventories		(109,999)		(23,933)
Inventories, net						Inventories, net	(425,026)		(109,999)
Prepaid income taxes, expenses and other	Prepaid income taxes, expenses and other	5,280		(31,693)		Prepaid income taxes, expenses and other	(39,226)		5,280
Accounts payable	Accounts payable	67,036		(62,208)		Accounts payable	112,131		67,036

Accrued liabilities	Accrued liabilities	(47,216)		(30,213)		Accrued liabilities	(25,114)		(47,216)
Long-term liabilities and other	Long-term liabilities and other	5,494		1,243		Long-term liabilities and other	11,944		5,494
Net cash provided by operating activities		5,298		134,630
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	(88,566)		5,298
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(52,858)		(54,802)		Purchases of property, plant and equipment	(48,097)		(52,858)
Proceeds from dispositions of property, plant and equipment	Proceeds from dispositions of property, plant and equipment	20,350		66		Proceeds from dispositions of property, plant and equipment	1,084		20,350
Business acquisitions, net of cash acquired						Business acquisitions, net of cash acquired	(310,576)		0

Equity investment in joint venture		—		(3,500)
Other	Other	(4,527)		—		Other	—		(4,527)
Net cash used in investing activities	Net cash used in investing activities	(37,035)		(58,236)		Net cash used in investing activities	(357,589)		(37,035)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Borrowings on revolving asset-based credit facilities	Borrowings on revolving asset-based credit facilities	75,007		—		Borrowings on revolving asset-based credit facilities	213,632		75,007
Principal payments on term-loan credit facilities		(155,388)		—
Principal payments on revolving asset-based credit facilities		(47,609)		—
Payments on term-loan credit facilities						Payments on term-loan credit facilities	(59,700)		(155,388)
Payments on revolving asset-based credit facilities						Payments on revolving asset-based credit facilities	0		(47,609)

Principal payments on other debt		(7,058)		—
Payments on other debt						Payments on other debt	(7,522)		(7,058)

Regular cash dividends paid	Regular cash dividends paid	(44,159)		(41,189)		Regular cash dividends paid	(45,400)		(44,159)
Principal payments on finance lease obligations		(214)		(203)
Payments on finance lease obligations						Payments on finance lease obligations	(244)		(214)
Payments related to vesting of stock-based awards	Payments related to vesting of stock-based awards	(3,763)		(4,418)		Payments related to vesting of stock-based awards	(8,317)		(3,763)
Short-term financial obligations and other, net	Short-term financial obligations and other, net	9,896		—		Short-term financial obligations and other, net	(5,488)		9,896
Net cash used in financing activities		(173,288)		(45,810)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	86,961		(173,288)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	Effect of exchange rate changes on cash and cash equivalents and restricted cash	(566)		—		Effect of exchange rate changes on cash and cash equivalents and restricted cash	4,378		(566)
Net increase (decrease) in cash and cash equivalents and restricted cash		(205,591)		30,584
Net decrease in cash and cash equivalents and restricted cash						Net decrease in cash and cash equivalents and restricted cash	(354,816)		(205,591)
Cash and cash equivalents and restricted cash, beginning of period	Cash and cash equivalents and restricted cash, beginning of period	451,262		275,249		Cash and cash equivalents and restricted cash, beginning of period	541,363		451,262
Cash and cash equivalents and restricted cash, end of period	Cash and cash equivalents and restricted cash, end of period	245,671		305,833		Cash and cash equivalents and restricted cash, end of period	186,547		245,671
Less: restricted cash	Less: restricted cash	3,537		—		Less: restricted cash	2,913		3,537
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	242,134	$	305,833	Cash and cash equivalents, end of period	$	183,634	$	242,134
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Income taxes paid	Income taxes paid	$	46,653	$	57,728	Income taxes paid	$	112,425	$	46,653
Interest paid	Interest paid	$	53,546	$	1,055	Interest paid	$	39,705	$	53,546
Non-cash investing and financing transactions:	Non-cash investing and financing transactions:					Non-cash investing and financing transactions:
Capital expenditures in accounts payable	Capital expenditures in accounts payable	$	2,631	$	490	Capital expenditures in accounts payable	$	3,422	$	2,631

See Notes to the Condensed Consolidated Financial Statements.

THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2020 AND 2019 (UNAUDITED)
Three Months Ended January 31, 2020
Accumulated Stockholders'
Additional Other Equity Non- Total
Common Stock Paid-In Retained Comprehensive Treasury Stock Attributable controlling Stockholders'
Shares Amount Capital Earnings Income (Loss) Shares Amount to Thor Interests Equity
Balance at November 1, 2019 65,396,531 $ 6,540 $ 422,831 $ 2,095,659 $ (59,591) 10,197,775 $ (351,909) $ 2,113,530 $ 11,441 $ 2,124,971
Net income (loss) — — — 28,673 — — — 28,673 (1,647) 27,026
Restricted stock unit activity — — (520) — — — — (520) — (520)
Cash dividends $.40 per common share — — — (22,079) — — — (22,079) — (22,079)
Stock compensation expense — — 5,062 — — — — 5,062 — 5,062
Other comprehensive loss — — — — (11,824) — — (11,824) (302) (12,126)
Balance at January 31, 2020 65,396,531 $ 6,540 $ 427,373 $ 2,102,253 $ (71,415) 10,197,775 $ (351,909) $ 2,112,842 $ 9,492 $ 2,122,334
Six Months Ended January 31, 2020
Accumulated Stockholders'
Additional Other Equity Non- Total
Common Stock Paid-In Retained Comprehensive Treasury Stock Attributable controlling Stockholders'
Shares Amount Capital Earnings Income (Loss) Shares Amount to Thor Interests Equity
Balance at August 1, 2019 65,189,907 $ 6,519 $ 416,382 $ 2,066,674 $ (57,004) 10,126,434 $ (348,146) $ 2,084,425 $ 10,803 $ 2,095,228
Net income (loss) — — — 79,738 — — — 79,738 (867) 78,871
Restricted stock unit activity 206,624 21 916 — — 71,341 (3,763) (2,826) — (2,826)
Cash dividends $.80 per common share — — — (44,159) — — — (44,159) — (44,159)
Stock compensation expense — — 10,075 — — — — 10,075 — 10,075
Other comprehensive loss — — — — (14,411) — — (14,411) (444) (14,855)
Balance at January 31, 2020 65,396,531 $ 6,540 $ 427,373 $ 2,102,253 $ (71,415) 10,197,775 $ (351,909) $ 2,112,842 $ 9,492 $ 2,122,334


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2021 AND 2020 (UNAUDITED)

	Three Months Ended January 31, 2021
								Accumulated					Stockholders'
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders'
	Shares	Amount		Capital		Earnings		Income		Shares	Amount		to THOR		Interests		Equity
Balance at November 1, 2020	65,651,570	$	6,565	$	442,794	$	2,292,387	$	11,219	10,285,329	$	(360,226)	$	2,392,739	$	27,782	$	2,420,521
Net income (loss)	—	—		—		132,524		—		—	—		132,524		(1,334)		131,190
Restricted stock unit activity	—	—		(2,074)		—		—		—	—		(2,074)		—		(2,074)
Dividends $0.41 per common share	—	—		—		(22,700)		—		—	—		(22,700)		—		(22,700)
Stock-based compensation expense	—	—		7,290		—		—		—	—		7,290		—		7,290
Other comprehensive income	—	—		—		—		62,457		—	—		62,457		27		62,484


Balance at January 31, 2021	65,651,570	$	6,565	$	448,010	$	2,402,211	$	73,676	10,285,329	$	(360,226)	$	2,570,236	$	26,475	$	2,596,711

	Six Months Ended January 31, 2021
								Accumulated					Stockholders'
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders'
	Shares	Amount		Capital		Earnings		Income		Shares	Amount		to THOR		Interests		Equity
Balance at August 1, 2020	65,396,531	$	6,540	$	436,828	$	2,201,330	$	26,993	10,197,775	$	(351,909)	$	2,319,782	$	25,787	$	2,345,569
Net income	—	—		—		246,281		—		—	—		246,281		548		246,829
Restricted stock unit activity	255,039	25		(1,876)		—		—		87,554	(8,317)		(10,168)		—		(10,168)
Dividends $0.82 per common share	—	—		—		(45,400)		—		—	—		(45,400)		—		(45,400)
Stock-based compensation expense	—	—		13,058		—		—		—	—		13,058		—		13,058
Other comprehensive income	—	—		—		—		46,683		—	—		46,683		140		46,823


Balance at January 31, 2021	65,651,570	$	6,565	$	448,010	$	2,402,211	$	73,676	10,285,329	$	(360,226)	$	2,570,236	$	26,475	$	2,596,711

See Notes to the Condensed Consolidated Financial Statements.

THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2020 AND 2019 (UNAUDITED)
Three Months Ended January 31, 2019
Accumulated Stockholders'
Additional Other Equity Non- Total
Common Stock Paid-In Retained Comprehensive Treasury Stock Attributable controlling Stockholders'
Shares Amount Capital Earnings Income (Loss) Shares Amount to Thor Interests Equity
Balance at November 1, 2018 62,933,415 $ 6,293 $ 259,303 $ 2,010,896 $ — 10,126,434 $ (348,146) $ 1,928,346 $ — $ 1,928,346
Net (loss) — — — (5,417) — — — (5,417) — (5,417)
Restricted stock unit activity — — (360) — — — — (360) — (360)
Cash dividends $.39 per common share — — — (20,594) — — — (20,594) — (20,594)
Stock compensation expense — — 4,956 — — — — 4,956 — 4,956
Cumulative effect of adoption of
ASU no. 2014-09, net of tax — — — — — — — — — —
Balance at January 31, 2019 62,933,415 $ 6,293 $ 263,899 $ 1,984,885 $ — 10,126,434 $ (348,146) $ 1,906,931 $ — $ 1,906,931
Six Months Ended January 31, 2019
Accumulated Stockholders'
Additional Other Equity Non- Total
Common Stock Paid-In Retained Comprehensive Treasury Stock Attributable controlling Stockholders'
Shares Amount Capital Earnings Income (Loss) Shares Amount to Thor Interests Equity
Balance at August 1, 2018 62,765,824 $ 6,277 $ 252,204 $ 2,022,988 $ — 10,070,459 $ (343,728) $ 1,937,741 $ — $ 1,937,741
Net income — — — 8,536 — — — 8,536 — 8,536
Restricted stock unit activity 167,591 16 2,209 — — 55,975 (4,418) (2,193) — (2,193)
Cash dividends $.78 per common share — — — (41,189) — — — (41,189) — (41,189)
Stock compensation expense — — 9,486 — — — — 9,486 — 9,486
Cumulative effect of adoption of
ASU no. 2014-09, net of tax — — — (5,450) — — (5,450) — (5,450)
Balance at January 31, 2019 62,933,415 $ 6,293 $ 263,899 $ 1,984,885 $ — 10,126,434 $ (348,146) $ 1,906,931 $ — $ 1,906,931


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2021 AND 2020 (UNAUDITED)

	Three Months Ended January 31, 2020
								Accumulated					Stockholders'
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders'
	Shares	Amount		Capital		Earnings		(Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at November 1, 2019	65,396,531	$	6,540	$	422,831	$	2,095,659	$	(59,591)	10,197,775	$	(351,909)	$	2,113,530	$	11,441	$	2,124,971
Net income (loss)	—	—		—		28,673		—		—	—		28,673		(1,647)		27,026
Restricted stock unit activity	—	—		(520)		—		—		—	—		(520)		—		(520)
Dividends $0.40 per common share	—	—		—		(22,079)		—		—	—		(22,079)		—		(22,079)
Stock-based compensation expense	—	—		5,062		—		—		—	—		5,062		—		5,062
Other comprehensive loss	—	—		—		—		(11,824)		—	—		(11,824)		(302)		(12,126)



Balance at January 31, 2020	65,396,531	$	6,540	$	427,373	$	2,102,253	$	(71,415)	10,197,775	$	(351,909)	$	2,112,842	$	9,492	$	2,122,334

	Six Months Ended January 31, 2020
								Accumulated					Stockholders'
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders'
	Shares	Amount		Capital		Earnings		(Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at August 1, 2019	65,189,907	$	6,519	$	416,382	$	2,066,674	$	(57,004)	10,126,434	$	(348,146)	$	2,084,425	$	10,803	$	2,095,228
Net income (loss)	—	—		—		79,738		—		—	—		79,738		(867)		78,871
Restricted stock unit activity	206,624	21		916		—		—		71,341	(3,763)		(2,826)		—		(2,826)
Dividends $0.80 per common share	—	—		—		(44,159)		—		—	—		(44,159)		—		(44,159)
Stock-based compensation expense	—	—		10,075		—		—		—	—		10,075		—		10,075
Other comprehensive loss	—	—		—		—		(14,411)		—	—		(14,411)		(444)		(14,855)



Balance at January 31, 2020	65,396,531	$	6,540	$	427,373	$	2,102,253	$	(71,415)	10,197,775	$	(351,909)	$	2,112,842	$	9,492	$	2,122,334

See Notes to the Condensed Consolidated Financial Statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(All U.S. Dollar, Euro and ~~GBP~~British Pound Sterling amounts presented in thousands except share and per share data or except as otherwise specified)

1. Nature of Operations and Accounting Policies

Nature of Operations

~~Thor~~THOR Industries, Inc. was founded in 1980 and is the sole owner of operating subsidiaries (collectively, the “Company” or ~~"Thor"~~"THOR"), that, combined, represent the world's largest manufacturer of recreational vehicles (“RVs”). The Company manufactures a wide variety of RVs in the United States and Europe and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe. Unless the context requires or indicates otherwise, all references to ~~“Thor,~~“THOR,” the “Company,” “we,” “our” and “us” refer to ~~Thor~~THOR Industries, Inc. and its subsidiaries.

The July 31, ~~2019~~2020 amounts are derived from the annual audited financial statements of ~~Thor.~~THOR. The interim financial statements are unaudited. In the opinion of management, all adjustments (which consist of normal, recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented have been made. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, ~~2019.~~2020. Due to seasonality within the recreational vehicle industry, and the current COVID-19 pandemic, among other factors, annualizing the results of operations for the six months ended January 31, ~~2020~~2021 would not necessarily be indicative of the results expected for the full fiscal year.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” and has subsequently issued ASU's 2018-10, "Codification Improvements (Topic 842)," and 2018-11, "Targeted Improvements (Topic 842)" (collectively the "New Leasing Standard"), which provide guidance on the recognition, measurement, presentation, and disclosure of leases. The New Leasing Standard requires the recognition of lease assets and lease liabilities by lessees for all leases with terms greater than 12 months. The principal difference from prior guidance is that the lease assets and lease liabilities arising from operating leases are now recognized on the Condensed Consolidated Balance Sheet. The New Leasing Standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company adopted the New Leasing Standard on August 1, 2019. The Company elected the optional transition method as well as the available package of practical expedients. As a result, the Company recognized right-of-use assets and the associated lease obligations, both totaling approximately $33 million, on the Condensed Consolidated Balance Sheet as of August 1, 2019. Historical periods were not restated. The adoption did not have a material impact to the Condensed Consolidated Statements of Income and Comprehensive Income. See Note 16 for further disclosures about the Company's leases.

~~Other Accounting Standards Not Yet Adopted~~

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (referred to as Step 2 in the goodwill impairment test). Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment charge equal to that excess shall be recognized, not to exceed the amount of goodwill allocated to the reporting unit. This ASU is effective for annual and any interim impairment tests for periods beginning after December 15, ~~2019, with early adoption permitted after January 1, 2017. This~~2019. The Company adopted ASU is2017-04, effective ~~for the Company in its fiscal year 2021 beginning on~~ August 1, 2020. The ~~Company is currently evaluating the impact~~adoption of this ASU did not have a material impact on ~~its~~the Company's consolidated financial ~~statements, which will depend on the outcomes of future goodwill impairment tests.~~

statements.

2. Acquisitions

Tiffin Group

On December 18, 2020, the Company closed on a Stock Purchase Agreement (“Tiffin Group SPA”) for the acquisition of all of the issued and outstanding capital stock of luxury motorized recreational vehicle manufacturer Tiffin Motorhomes, Inc., including fifth wheel towable recreational vehicle manufacturer Vanleigh RV, and certain other associated operating and supply companies, which primarily supply component parts and services to Tiffin Motorhomes, Inc. and Vanleigh RV, (collectively, the “Tiffin Group”). Tiffin Group, LLC, a wholly-owned subsidiary of the Company, will own the Tiffin Group. In accordance with the Tiffin Group SPA, the closing was deemed effective as of December 18, 2020. Tiffin Motorhomes, Inc. operates in various locations in Alabama while Vanleigh RV operates in Mississippi.

The initial cash consideration for the acquisition of the Tiffin Group was approximately $300,000, subject to adjustment, and was funded through existing cash-on-hand as well as $165,000 in borrowings from the Company’s existing asset-based credit facility. The total cash consideration to be paid is subject to the final determination of the actual acquired net working capital, as defined in the Tiffin Group SPA, as of the close of business on December 18, 2020, which determination is expected to be finalized later in fiscal 2021. The Tiffin Group will operate as an independent operation in the same manner as the Company’s other recreational vehicle subsidiaries, and its motorized operations are aggregated within the Company’s motorized recreational vehicle reportable segment and its towable operations are aggregated within the Company’s towable recreational vehicle reportable segment. The Company purchased the Tiffin Group to complement its existing motorized and towable RV product offerings and North American independent dealer base.

~~2. Acquisition – Erwin Hymer Group~~

~~On February 1, 2019, the Company acquired Erwin Hymer Group SE ("EHG"). EHG is headquartered in Bad Waldsee, Germany, and is one~~The results of the ~~largest RV manufacturers in Europe. EHG is managed as a stand-alone operating entity and is~~Tiffin Group are included in the ~~European recreational vehicle segment.~~

In the six months ended January 31, 2020, the Company made measurement period adjustments primarily related to the estimated fair value of certain fixed assets and deferred tax assets to better reflect the facts and circumstances that existed at the acquisition date. These adjustments resulted in a decrease in fixed assets, decreases in deferred tax assets and deferred tax liabilities, and a net increase of goodwill of $5,087. The impact to ourCompany’s Condensed Consolidated ~~Statement~~Statements of Income and Comprehensive Income ~~as a result~~since the December 18, 2020 acquisition date. During this period, the Tiffin Group recorded net sales of ~~these measurement period adjustments was immaterial.~~$82,432 and the results of operations were not material.

The following table summarizes the preliminary estimated fair values of the ~~EHG~~Tiffin Group net assets acquired ~~and liabilities assumed at~~on the acquisition date. The Company is in the process of ~~finalizing internal and third-party valuations of certain fixed~~completing a fair value analysis, but this analysis has not been fully completed. While all amounts remain subject to adjustment, the areas subject to the most significant potential adjustment are intangible assets, ~~and certain liabilities, therefore, the provisional estimates of fixed assets, goodwill,~~ deferred income tax liabilities ~~income taxes payable~~ and certain accrued ~~liabilities are subject to change.~~expenses. The Company expects to finalize these values inas soon as practical and no later than one year from the ~~Company's fiscal quarter ending April 30, 2020.~~acquisition date.

Cash

~~97,887~~12,985

Inventory

~~593,053~~116,691

Other assets

~~426,096~~53,860

~~Property, plant and equipment - rental vehicles~~

~~80,132~~

Property, plant and equipment

~~444,772~~48,511

Amortizable intangible assets:

Dealer network

~~355,601~~92,100

Trademarks

32,100

Non-compete agreements

~~126,181~~1,400

~~Technology assets~~

~~183,536~~

Backlog

~~11,471~~4,800

Goodwill

~~1,013,559~~62,336

~~Guarantee liabilities related to former EHG North American subsidiaries~~

~~(115,668)~~

~~Other current~~Current liabilities

~~(850,623)~~(81,859)

~~Debt – Unsecured notes~~

~~(114,710)~~

~~Debt – Other~~

~~(166,196)~~

Deferred income tax liabilities

~~(155,047)~~(34,860)

Other ~~long-term~~ liabilities

~~(17,205)~~(7,203)

~~Non-controlling interests~~

~~(12,207)~~

Total fair value of net assets acquired

~~1,900,632~~300,861

~~Less:~~Less cash acquired

~~(97,887)~~(12,985)

Total ~~fair value of net assets acquired,~~cash consideration for acquisition, less cash acquired

~~1,802,745~~287,876

On the acquisition date, amortizable intangible assets had a weighted-average useful life of 1718.8 years. The dealer network was valued based on the Discounted Cash Flow ~~method~~Method and iswill be amortized on an accelerated basis over 18 to 20 years. The trademarks ~~and technology assets~~ were valued on the Relief offrom Royalty ~~method~~Method and ~~are~~will be amortized on a straight-line basis over 20 ~~years and 10 years, respectively. The backlog~~years. Backlog was valued based on the Discounted Cash Flow ~~method~~Method and ~~was~~will be amortized on a straight-line basis over a ~~five-month period. We have~~5 to 7 months. Generally, the goodwill recognized ~~$1,013,559 of goodwill~~ as a result of this transaction ~~of which approximately $242,000~~ will be not deductible for tax purposes.

Togo Group

In February 2018, the Company formed a 50/50 joint venture, originally called TH2connect, LLC, with Tourism Holdings Limited ("thl"). In July 2019, this joint venture was rebranded as "Togo Group." Togo Group was formed to own, improve and sell innovative and comprehensive digital applications through a platform designed for the global RV industry.

Effective March 23, 2020, the Company and thl reached an agreement (the “2020 Agreement”) whereby the Company obtained additional ownership interest in Togo Group. THOR obtained a 73.5% controlling interest in Togo Group and the power to direct the activities of Togo Group. Since the effective date of the 2020 Agreement, the operating results, balance sheet accounts and cash flow activity of Togo Group have been consolidated within the Company's Condensed Consolidated Financial Statements.

The operations of Togo Group are focused on digital solutions primarily for the North American market related to travel and RV use, with expansion into other regions anticipated in future periods. The Togo Group is managed as a stand-alone operating entity and represents a non-reportable segment and a separate reporting unit for goodwill assessment purposes.

The table below summarizes the final estimated fair value of the Togo Group assets acquired and liabilities assumed as of the 2020 Agreement effective date.


Cash	$	326
Accounts receivable	466
Other assets	749
Property, plant and equipment	362
Amortizable intangible assets
Trade names and trademarks	1,130
Developed technology	5,700
Other	1,350
Goodwill	61,955
Liabilities	(2,595)
Non-controlling interest	(16,835)
Total fair value of net assets acquired	$	52,608

Amortizable intangible assets have a weighted-average useful life of approximately eight years and are amortized on a straight-line basis. The developed technology was valued using the Multi-Period Excess Earnings method, which is a form of the income approach. Trade names and trademarks were valued using the Relief from Royalty method. The majority of the goodwill is expected to be deductible for tax purposes.

Prior to the March 23, 2020 effective date of the 2020 Agreement, the Company accounted for the investment in Togo Group under the equity method of accounting, and the Company's share of the losses of this investment were included in Other income (expense), net in the Condensed Consolidated Statements of Income and Comprehensive Income. The Company's share of the losses from this investment recognized in the three and six-month periods ended January 31, 2020 were $2,652 and $4,747, respectively.

The following unaudited pro forma information represents the Company’s results of operations as if the fiscal ~~2019~~2021 acquisition of ~~EHG~~the Tiffin Group had occurred at the beginning of fiscal ~~2018.~~2020 and the fiscal 2020 acquisition of the Togo Group had occurred at the beginning of fiscal 2019. These performance results may not be indicative of the actual results that would have occurred under the ownership and management of the Company.

Three Months Ended January 31, Six Months Ended January 31,
2019 2019
Net sales $ 1,932,693 $ 4,259,961
Net (loss) $ (27,195) $ (4,734)
Basic (loss) per common share $ (0.49) $ (0.08)
Diluted (loss) per common share $ (0.49) $ (0.08)


	Three Months Ended		Six Months Ended
	January 31, 2021		January 31, 2021
Net sales	$	2,829,652	$	5,529,050
Net income attributable to THOR Industries, Inc.	$	139,345	$	254,461
Basic earnings per common share	$	2.52	$	4.60
Diluted earnings per common share	$	2.51	$	4.58

The supplemental pro forma earnings for the three and six-month periods ended January 31, 2019 were adjusted to exclude $42,059 and $99,148 of acquisition-related costs, respectively, as discussed below.

Costs incurred during the three and six months ended January 31, 2019 related specifically to this acquisition totaling $42,059 and $99,148, respectively, are included in Acquisition-related costs in the Condensed Consolidated Statements of Income and Comprehensive Income. These costs included changes in the fair value of the foreign currency forward contract for the three and six-month periods ended January 31, 2019 of $31,152 and $73,707, respectively, discussed in Note 5 below, and $10,907 and $25,441, respectively, of other expenses, consisting primarily of legal, professional and advisory fees related to financial due diligence and preliminary implementation costs, rating agency fees related to obtaining financing commitments and regulatory review costs.


	Three Months Ended		Six Months Ended
	January 31, 2020		January 31, 2020
Net sales	$	2,204,841	$	4,577,026
Net income attributable to THOR Industries, Inc.	$	32,043	$	82,657
Basic earnings per common share	$	0.58	$	1.50
Diluted earnings per common share	$	0.58	$	1.49

3. Business Segments

The Company has 3 reportable segments, all related to recreational vehicles: (1) North American ~~towables,~~Towables, (2) North American ~~motorized~~Motorized and (3) European. The operations of the Company's Postle and Togo Group subsidiaries are included in Other, which is a non-reportable segment.

The following tables reflect certain financial information by reportable segment:


		Three Months Ended January 31,						Six Months Ended January 31,							Three Months Ended January 31,				Six Months Ended January 31,
NET SALES:	NET SALES:	2020		2019		2020		2019		NET SALES:	2021		2020		2021		2020
Recreational vehicles	Recreational vehicles									Recreational vehicles
North American Towables	North American Towables	$	983,907	$	881,564	$	2,184,795	$	2,160,662	North American Towables	$	1,373,181	$	983,907	$	2,765,225	$	2,184,795
North American Motorized	North American Motorized	343,680		371,495		759,569		802,693		North American Motorized	576,995		343,680		1,070,850		759,569
Total North America	Total North America	1,327,587		1,253,059		2,944,364		2,963,355		Total North America	1,950,176		1,327,587		3,836,075		2,944,364
European	European	637,115		—		1,130,122		—		European	733,463		637,115		1,335,951		1,130,122
Total recreational vehicles	Total recreational vehicles	1,964,702		1,253,059		4,074,486		2,963,355		Total recreational vehicles	2,683,639		1,964,702		5,172,026		4,074,486
Other	Other	57,745		55,114		131,311		128,962		Other	74,714		57,745		155,421		131,311
Intercompany eliminations	Intercompany eliminations	(19,314)		(17,597)		(43,879)		(45,765)		Intercompany eliminations	(30,565)		(19,314)		(62,299)		(43,879)
Total	Total	$	2,003,133	$	1,290,576	$	4,161,918	$	3,046,552	Total	$	2,727,788	$	2,003,133	$	5,265,148	$	4,161,918


	Three Months Ended January 31,				Six Months Ended January 31,
INCOME (LOSS) BEFORE INCOME TAXES:	2021		2020		2021		2020

Recreational vehicles
North American Towables	$	147,880	$	53,426	$	289,059	$	157,748
North American Motorized	43,421		14,916		84,988		36,691
Total North America	191,301		68,342		374,047		194,439
European	10,216		4,690		4,710		(18,334)
Total recreational vehicles	201,517		73,032		378,757		176,105
Other, net	9,644		8,609		21,134		20,360
Corporate	(47,202)		(46,778)		(89,613)		(92,968)
Total	$	163,959	$	34,863	$	310,278	$	103,497


TOTAL ASSETS:	January 31, 2021		July 31, 2020
Recreational vehicles
North American Towables	$	1,721,615	$	1,529,913
North American Motorized	1,066,507		480,225
Total North America	2,788,122		2,010,138
European	3,031,529		3,102,071
Total recreational vehicles	5,819,651		5,112,209
Other, net	245,299		212,378
Corporate	304,596		446,873
Total	$	6,369,546	$	5,771,460

Three Months Ended January 31, Six Months Ended January 31,
INCOME (LOSS) BEFORE INCOME TAXES: 2020 2019 2020 2019
Recreational vehicles
North American Towables $ 53,426 $ 34,060 $ 157,748 $ 108,610
North American Motorized 14,916 17,205 36,691 38,917
Total North America 68,342 51,265 194,439 147,527
European 4,690 — (18,334) —
Total recreational vehicles 73,032 51,265 176,105 147,527
Other, net 8,609 5,950 20,360 11,860
Corporate (46,778) (55,342) (92,968) (125,997)
Total $ 34,863 $ 1,873 $ 103,497 $ 33,390

TOTAL ASSETS: January 31, 2020 July 31, 2019
Recreational vehicles
North American Towables $ 1,565,409 $ 1,516,519
North American Motorized 478,140 446,626
Total North America 2,043,549 1,963,145
European 3,106,854 3,077,804
Total recreational vehicles 5,150,403 5,040,949
Other, net 162,326 163,897
Corporate 315,748 455,600
Total $ 5,628,477 $ 5,660,446

Three Months Ended January 31, Six Months Ended January 31,
DEPRECIATION AND INTANGIBLE AMORTIZATION EXPENSE: 2020 2019 2020 2019
Recreational vehicles
North American Towables $ 16,431 $ 16,971 $ 32,702 $ 33,602
North American Motorized 3,514 3,443 7,008 6,879
Total North America 19,945 20,414 39,710 40,481
European 26,020 — 53,503 —
Total recreational vehicles 45,965 20,414 93,213 40,481
Other 2,523 2,693 5,034 5,267
Corporate 457 415 905 832
Total $ 48,945 $ 23,522 $ 99,152 $ 46,580

Three Months Ended January 31, Six Months Ended January 31,
CAPITAL ACQUISITIONS: 2020 2019 2020 2019
Recreational vehicles
North American Towables $ 7,421 $ 14,255 $ 18,696 $ 36,497
North American Motorized 5,860 2,809 8,428 10,228
Total North America 13,281 17,064 27,124 46,725
European 7,150 — 22,177 —
Total recreational vehicles 20,431 17,064 49,301 46,725
Other 273 287 928 2,731
Corporate 430 425 928 461
Total $ 21,134 $ 17,776 $ 51,157 $ 49,917


	Three Months Ended January 31,				Six Months Ended January 31,
DEPRECIATION AND INTANGIBLE AMORTIZATION EXPENSE:	2021		2020		2021		2020
Recreational vehicles
North American Towables	$	16,318	$	16,431	$	32,125	$	32,702
North American Motorized	5,334		3,514		9,104		7,008
Total North America	21,652		19,945		41,229		39,710
European	31,608		26,020		62,931		53,503
Total recreational vehicles	53,260		45,965		104,160		93,213
Other	3,039		2,523		5,950		5,034
Corporate	416		457		844		905
Total	$	56,715	$	48,945	$	110,954	$	99,152




CAPITAL ACQUISITIONS:	Three Months Ended January 31,				Six Months Ended January 31,
Recreational vehicles	2021		2020		2021		2020
North American Towables	$	6,913	$	7,421	$	16,321	$	18,696
North American Motorized	3,730		5,860		5,475		8,428
Total North America	10,643		13,281		21,796		27,124
European	13,322		7,150		23,216		22,177
Total recreational vehicles	23,965		20,431		45,012		49,301
Other	1,216		273		2,660		928
Corporate	28		430		389		928
Total	$	25,209	$	21,134	$	48,061	$	51,157

4. Earnings Per Common Share

The following table reflects the weighted-average common shares used to compute basic and diluted earnings per common share as included on the Condensed Consolidated Statements of Income and Comprehensive Income:

Three Months Ended January 31, Six Months Ended January 31,
2020 2019 2020 2019
Weighted-average shares outstanding for basic earnings per share 55,198,756 52,806,981 55,146,915 52,766,739
Unvested restricted stock units 197,360 60,706 163,470 116,906
Weighted-average shares outstanding assuming dilution 55,396,116 52,867,687 55,310,385 52,883,645


	Three Months Ended January 31,		Six Months Ended January 31,
	2021	2020	2021	2020
Weighted-average common shares outstanding for basic earnings per share	55,366,241	55,198,756	55,302,203	55,146,915
Unvested restricted stock units	202,426	197,360	259,472	163,470
Weighted-average common shares outstanding assuming dilution	55,568,667	55,396,116	55,561,675	55,310,385

For the three months ended January 31, ~~2020~~2021 and ~~2019,~~2020, the Company had ~~160,091~~60,916 and ~~317,234~~160,091 unvested restricted stock units outstanding, respectively, which were excluded from this calculation as their effect would be antidilutive. For the six months ended January 31, ~~2020~~2021 and ~~2019,~~2020, the Company had ~~213,395~~78,862 and ~~234,756~~213,395 unvested restricted stock units outstanding, respectively, which ~~were~~we excluded from this calculation as their effect would behave been antidilutive.

5. Derivatives and Hedging

The fair value of our derivative instruments and the associated notional amounts, presented on a pre-tax basis, were as follows:


		January 31, 2020						July 31, 2019						January 31, 2021					July 31, 2020
				Fair Value in					Fair Value in						Fair Value in					Fair Value in
				Other Current					Other Current						Other Current					Other Current
Cash Flow Hedges	Cash Flow Hedges	Notional		Liabilities		Notional			Liabilities		Cash Flow Hedges	Notional			Liabilities		Notional			Liabilities
Foreign currency forward contracts	Foreign currency forward contracts	$	32,824	$	1,421	$	—		$	—	Foreign currency forward contracts	$	13,731		$	92	$	0		$	0
Interest rate swap agreements	Interest rate swap agreements	756,600		16,294		849,550			12,463		Interest rate swap agreements	581,913			17,387		673,400			24,840
Total derivative financial instruments	Total derivative financial instruments	$	789,424	$	17,715	$	849,550		$	12,463	Total derivative financial instruments	$	595,644		$	17,479	$	673,400		$	24,840

Foreign currency forward contracts accounted for as cash flow hedges and outstanding at January 31, ~~2020~~2021 mature over the next ~~five~~two months.

~~The Company did not have any designated hedge instruments prior to February 1, 2019~~.

Net Investment Hedges

The foreign currency transaction gains and losses on the Euro-denominated portion of the term loan, which is designated and effective as a hedge of the Company’s net investment in its Euro-denominated functional currency subsidiaries, are included as a component of the foreign currency translation adjustment. ~~Gains~~Losses for the three and ~~six-month periods~~six months ended January 31, 2021, net of tax, were $16,436 and $10,954, respectively, and gains for the three and six months ended January 31, 2020, net of tax, were $3,802 and $2,843, respectively.

There were 0 amounts reclassified out of accumulated other comprehensive income ("AOCI") pertaining to the net investment hedge during the three and six-month periods ended January 31, ~~2020.~~2021 and January 31, 2020, respectively.

Derivatives Not Designated as Hedging Instruments

The Company entered into a deal-contingent, foreign currency forward contract on the September 18, 2018 related to its acquisition of EHG. Hedge accounting was not applied to this instrument, and therefore all changes in fair value were recorded in earnings.

This contract was settled in connection with the close of the EHG acquisition on February 1, 2019 in the amount of $70,777, resulting in a loss of the same amount. Of this $70,777 total loss, $31,152 and $73,707 in losses were recognized in the three and six-month periods ended January 31, 2019, respectively, and are included in Acquisition-related costs in the Condensed Consolidated Statements of Income and Comprehensive Income.

~~The Company also~~ has certain other derivative instruments which have not been designated as hedges. These other derivative instruments had a notional amount totaling approximately ~~$34,093~~$34,431 and a fair value of ~~$1,446~~$1,932, which is included in Other current liabilities in the Condensed Consolidated Balance Sheet as of January 31, ~~2020.~~2021. These other derivative instruments had a notional amount totaling approximately ~~$35,700~~$34,862 and a fair value of ~~$1,226,~~$1,824, as of July 31, ~~2019.~~2020. For these derivative instruments, changes in fair value are recognized in earnings.

The total amounts presented in the Condensed Consolidated Statements of Income and Comprehensive Income due to changes in the fair value of the following derivative instruments are as follows:


		Three Months Ended		Six Months Ended			Three Months Ended January 31,
		January 31, 2020		January 31, 2020			2021		2020
Gain (Loss) on Derivatives Designated as Cash Flow Hedges	Gain (Loss) on Derivatives Designated as Cash Flow Hedges					Gain (Loss) on Derivatives Designated as Cash Flow Hedges

Gain (Loss) recognized in Other Comprehensive Income, net of tax	Gain (Loss) recognized in Other Comprehensive Income, net of tax					Gain (Loss) recognized in Other Comprehensive Income, net of tax
Foreign currency forward contracts	Foreign currency forward contracts	$	(490)	$	(1,015)	Foreign currency forward contracts	$	(66)	$	(490)
Interest rate swap agreements	Interest rate swap agreements	266		(2,931)		Interest rate swap agreements	2,417		266
Total gain (loss)	Total gain (loss)	$	(224)	$	(3,946)	Total gain (loss)	$	2,351	$	(224)

Three Months Ended Six Months Ended
January 31, 2020 January 31, 2020
Interest Interest
Sales Expense Sales Expense
(Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts $ (434) $ — $ (434) $ —
Interest rate swap agreements — (1,019) — (1,514)
(Loss) on Derivatives Not Designated as Hedging Instruments
Amount of gain (loss) recognized in income, net of tax
Interest rate swap agreements — (93) — (168)
Total (loss) $ (434) $ (1,112) $ (434) $ (1,682)


	Six Months Ended January 31,
	2021		2020
Gain (Loss) on Derivatives Designated as Cash Flow Hedges

Gain (Loss) recognized in Other Comprehensive Income, net of tax
Foreign currency forward contracts	$	(66)	$	(1,015)
Interest rate swap agreements	5,749		(2,931)
Total gain (loss)	$	5,683	$	(3,946)

~~Other than the deal-contingent foreign currency forward contract discussed above, there were no derivatives in place during the three and six-month periods ended January 31, 2019.~~


	Three Months Ended January 31,
	2021				2020
			Interest					Interest
	Sales		Expense			Sales		Expense
Gain (Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts	$	7	$	0		$	(434)	$	0
Interest rate swap agreements	0		(2,623)			0		(1,019)
(Loss) on Derivatives Not Designated as Hedging Instruments
Amount of loss recognized in income, net of tax

Interest rate swap agreements	0		(8)			0		(93)
Total gain (loss)	$	7	$	(2,631)		$	(434)	$	(1,112)


	Six Months Ended January 31,
	2021				2020
			Interest					Interest
	Sales		Expense			Sales		Expense
Gain (Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts	$	7	$	0		$	(434)	$	0
Interest rate swap agreements	0		(5,397)			0		(1,514)
(Loss) on Derivatives Not Designated as Hedging Instruments
Amount of loss recognized in income, net of tax

Interest rate swap agreements	0		(46)			0		(168)
Total gain (loss)	$	7	$	(5,443)		$	(434)	$	(1,682)

6. Inventories

Major classifications of inventories are as follows:


		January 31, 2020		July 31, 2019			January 31, 2021		July 31, 2020
Finished goods – RV	Finished goods – RV	$	268,191	$	230,483	Finished goods – RV	$	141,961	$	152,297
Finished goods – other	Finished goods – other	65,348		60,593		Finished goods – other	54,424		44,779
Work in process	Work in process	127,910		126,636		Work in process	285,544		128,181
Raw materials	Raw materials	290,170		300,721		Raw materials	462,044		302,813
Chassis	Chassis	221,339		155,099		Chassis	406,371		135,194
Subtotal	Subtotal	972,958		873,532		Subtotal	1,350,344		763,264
Excess of FIFO costs over LIFO costs	Excess of FIFO costs over LIFO costs	(46,044)		(45,544)		Excess of FIFO costs over LIFO costs	(50,159)		(46,959)
Total inventories, net	Total inventories, net	$	926,914	$	827,988	Total inventories, net	$	1,300,185	$	716,305

Of the ~~$972,958~~$1,350,344 and ~~$873,532~~$763,264 of inventories at January 31, ~~2020~~2021 and July 31, ~~2019, $278,519~~2020, $468,153 and ~~$240,983,~~$251,099, respectively, were valued on the last-in, first-out (LIFO) ~~basis,~~method, and ~~$694,439~~$882,191 and ~~$632,549,~~$512,165, respectively, were valued on the first-in, first-out (FIFO) method.

7. Property, Plant and Equipment

Property, plant and equipment consists of the following:


		January 31, 2020		July 31, 2019			January 31, 2021		July 31, 2020
Land	Land	$	131,317	$	142,475	Land	$	141,459	$	136,200
Buildings and improvements	Buildings and improvements	734,148		742,736		Buildings and improvements	805,276		760,986
Machinery and equipment	Machinery and equipment	409,616		389,666		Machinery and equipment	490,604		438,985
Rental vehicles	Rental vehicles	78,585		87,243		Rental vehicles	44,914		83,534
Lease right-of-use assets - operating		31,870		—
Lease right-of-use assets - finance		3,944		—
Lease right-of-use assets – operating						Lease right-of-use assets – operating	37,615		33,609
Lease right-of-use assets – finance						Lease right-of-use assets – finance	7,361		3,672
Total cost	Total cost	1,389,480		1,362,120		Total cost	1,527,229		1,456,986
Less accumulated depreciation	Less accumulated depreciation	(300,324)		(269,649)		Less accumulated depreciation	(394,507)		(349,337)
Property, plant and equipment, net	Property, plant and equipment, net	$	1,089,156	$	1,092,471	Property, plant and equipment, net	$	1,132,722	$	1,107,649

See Note 1615 to the Condensed Consolidated Financial Statements for further information regarding the lease right-of-use assets.

8. Intangible Assets and Goodwill

The components of amortizable intangible assets are as follows:

Weighted-Average
Remaining January 31, 2020 July 31, 2019
Life in Years at Accumulated Accumulated
January 31, 2020 Cost Amortization Cost Amortization
Dealer networks/customer relationships 18 $ 740,172 $ 217,913 $ 750,641 $ 191,017
Trademarks 17 265,889 40,511 268,778 34,518
Design technology and other intangibles 9 195,032 29,058 196,616 19,689
Total amortizable intangible assets $ 1,201,093 $ 287,482 $ 1,216,035 $ 245,224



	January 31, 2021				July 31, 2020
			Accumulated				Accumulated
	Cost		Amortization		Cost		Amortization
Dealer networks/customer relationships	$	869,055	$	290,948	$	766,198	$	252,320
Trademarks	313,903		55,195		275,775		47,743
Design technology and other intangibles	219,876		52,245		213,468		40,654
Backlog	4,800		1,157		0		0
Non-compete agreements	1,400		58		0		0
Total amortizable intangible assets	$	1,409,034	$	399,603	$	1,255,441	$	340,717

Estimated future amortization expense is as follows:


~~For the remainder of the fiscal year ending July 31, 2020~~	$	~~48,067~~
~~For the fiscal year ending July 31, 2021~~	~~102,893~~
~~For the fiscal year ending July 31, 2022~~	~~106,460~~
~~For the fiscal year ending July 31, 2023~~	~~87,155~~
~~For the fiscal year ending July 31, 2024~~	~~78,786~~
~~For the fiscal year ending July 31, 2025 and thereafter~~	~~490,250~~
	$	~~913,611~~


For the remainder of the fiscal year ending July 31, 2021	$	60,929
For the fiscal year ending July 31, 2022	125,677
For the fiscal year ending July 31, 2023	107,038
For the fiscal year ending July 31, 2024	97,122
For the fiscal year ending July 31, 2025	88,894
For the fiscal year ending July 31, 2026 and thereafter	529,771
	$	1,009,431

Changes in the carrying amount of goodwill by reportable segment for the six months ended January 31, ~~2020~~2021 are summarized as follows:

North American Towables North American Motorized European Other Total
Net balance as of August 1, 2019 $ 334,822 $ — $ 980,339 $ 42,871 $ 1,358,032
Fiscal 2020 activity:
Measurement period adjustments — — 5,087 — 5,087
Foreign currency translation — — (8,890) — (8,890)
Impairment charge (1,109) — — — (1,109)
Net balance as of January 31, 2020 $ 333,712 $ — $ 976,536 $ 42,871 $ 1,353,120


	North American Towables		North American Motorized		European		Other		Total
Net balance as of August 1, 2020	$	333,786	$	0	$	1,037,929	$	104,826	$	1,476,541
Fiscal 2021 activity:
Goodwill acquired	18,845		43,491		0		17,882		80,218

Foreign currency translation	0		0		25,231		0		25,231

Net balance as of January 31, 2021	$	352,631	$	43,491	$	1,063,160	$	122,708	$	1,581,990

Changes in the carrying amount of goodwill by reportable segment for the six months ended January 31, ~~2019~~2020 are summarized as follows:

North American Towables North American Motorized European Other Total
Net balance as of August 1, 2018 $ 334,822 $ — $ — $ 42,871 $ 377,693
Fiscal 2019 activity:
No activity — — — — —
Net balance as of January 31, 2019 $ 334,822 $ — $ — $ 42,871 $ 377,693


	North American Towables		North American Motorized		European		Other		Total
Net balance as of August 1, 2019	$	334,822	$	0	$	980,339	$	42,871	$	1,358,032
Fiscal 2020 activity:

Measurement period adjustments	0		0		5,087		0		5,087
Foreign currency translation	0		0		(8,890)		0		(8,890)
Impairment charge	(1,109)		0		0		0		(1,109)
Net balance as of January 31, 2020	$	333,712	$	0	$	976,536	$	42,871	$	1,353,120

During the fiscal quarter ended January 31, 2020, there was an interim impairment assessment performed related to two groups of tangible and intangible assets within the North American Towables reportable segment using Level 3 inputs as defined by ASC 820. The Company recognized an aggregate impairment charge of $10,057 related to these assets during the fiscal quarter ended January 31, 2020, which included a goodwill impairment charge of $1,109.

9. ~~Equity Investment~~

~~In February 2018, the Company formed a joint venture with Tourism Holdings Limited ("thl") called TH2connect, LLC ("TH2"). In July 2019, TH2 was rebranded as "Togo Group."~~

The Company’s share of the losses of this investment recognized in the three-month periods ended January 31, 2020 and January 31, 2019 were $2,652 and $2,216, respectively. The losses recognized in the six-month periods ended January 31, 2020 and January 31, 2019 were $4,747 and $3,699, respectively.

~~In accordance with the operating agreements between the parties, both~~ ~~thl~~ and the Company will fund TH2's future working capital needs proportionately, and each loaned TH2 $4,527 during the six months ended January 31, 2020. The Company had total loans outstanding with TH2 of $6,684 and $2,157 at January 31, 2020 and July 31, 2019, respectively, and those amounts are included in Other assets on the Condensed Consolidated Balance Sheets.

~~10.~~ Concentration of Risk

One dealer, FreedomRoads, LLC, accounted for 13% ~~and 21%~~ of the Company's consolidated net sales for both the three-month periods ended January 31, ~~2020~~2021 and January 31, ~~2019,~~2020, and 14% for ~~14% and 22% of the Company's consolidated net sales for~~both the six-month periods ended January 31, ~~2020~~2021 and January 31, ~~2019,~~2020, respectively. Sales to this dealer are reported within both the North American ~~towables~~Towables and North American ~~motorized~~Motorized segments. This dealer also accounted for ~~19%~~17% and 18% of the Company’s consolidated trade accounts receivable at ~~both~~ January 31, ~~2020~~2021 and July 31, ~~2019.~~2020, respectively. The loss of this dealer could have a material effect on the Company’s business.

~~11.~~

10. Fair Value Measurements

The financial assets and liabilities that are accounted for at fair value on a recurring basis at January 31, ~~2020~~2021 and July 31, ~~2019~~2020 are as follows:


		Input Level	January 31, 2020		July 31, 2019			Input Level	January 31, 2021		July 31, 2020
Cash equivalents	Cash equivalents	Level 1	$	34,325	$	130,100	Cash equivalents	Level 1	$	217	$	227,154

Deferred compensation plan assets and liabilities		Level 1	$	59,370	$	53,828
Deferred compensation plan mutual fund assets							Deferred compensation plan mutual fund assets	Level 1	$	50,770	$	47,327
Deferred compensation plan liabilities							Deferred compensation plan liabilities	Level 1	$	72,192	$	61,290
Foreign currency forward contract liability	Foreign currency forward contract liability	Level 2	$	1,421	$	—	Foreign currency forward contract liability	Level 2	$	92	$	0
Interest rate swap liability		Level 2	$	16,294	$	12,463
Interest rate swap liabilities							Interest rate swap liabilities	Level 2	$	19,319	$	26,664

Cash equivalents represent investments in government and other money market funds traded in an active market and are reported as a component of Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Deferred compensation plan assets accounted for at fair value are investments in securities traded in an active market held for the benefit of certain employees of the Company as part of a deferred compensation plan. Additional plan investments in corporate-owned life insurance are recorded at their cash surrender value, not fair value, and therefore are not included above.

Foreign currency forward contracts outstanding at January 31, ~~2020~~2021 are used to exchange British Pounds Sterling ("GBP") for Euro. The total notional value of these contracts, including designated hedges and other contracts not designated, at January 31, ~~2020~~2021 is ~~25,000~~10,000 GBP ($~~32,824)~~13,731), and these contracts have various maturity dates through ~~June 2020.~~March 31, 2021.

The Company entered into interest rate swaps to convert a portion of the Company's long-term debt from floating rate to fixed rate debt. As of January 31, ~~2020,~~2021, the outstanding swaps had notional contract values of ~~$756,600,~~$581,913, partially hedging the interest rate risk related to the Company's U.S. dollar term loan tranche that matures in February 2026.

The Company's other interest rate swaps not designated as hedging instruments had a notional contract value of $34,431 at January 31, 2021.

~~12.~~The fair value of foreign currency forward contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates. The fair value of interest rate swaps is determined by discounting the estimated future cash flows based on the applicable observable yield curves.

11. Product Warranties

The Company generally provides retail customers of its products with a ~~one-year~~one-year or ~~two-year~~two-year warranty covering defects in material or workmanship, with longer warranties on certain structural components.

Changes in our product warranty liability during the indicated periods are as follows:

Three Months Ended January 31, Six Months Ended January 31,
2020 2019 2020 2019
Beginning balance $ 285,600 $ 271,749 $ 289,679 $ 264,928
Provision 61,463 45,080 121,673 114,847
Payments (64,148) (58,960) (128,742) (121,906)
Foreign currency translation (294) — 11 —
Liabilities held for sale reclassification (556) — (556) —
Ending balance $ 282,065 $ 257,869 $ 282,065 $ 257,869


	Three Months Ended January 31,				Six Months Ended January 31,
	2021		2020		2021		2020
Beginning balance	$	245,554	$	285,600	$	252,869	$	289,679
Provision	52,870		61,463		103,741		121,673
Payments	(60,365)		(64,148)		(117,939)		(128,742)
Acquisition	11,032		0		11,032		0
Foreign currency translation	1,918		(294)		1,306		11
Liabilities held for sale reclassification	0		(556)		0		(556)
Ending balance	$	251,009	$	282,065	$	251,009	$	282,065

~~13.~~12. Long-Term Debt

The components of long-term debt are as follows:


		January 31, 2020		July 31, 2019			January 31, 2021		July 31, 2020
Term loan	Term loan	$	1,670,877	$	1,832,341	Term loan	$	1,552,337	$	1,597,091
Asset-based credit facility	Asset-based credit facility	27,630		—		Asset-based credit facility	213,544		0
Unsecured notes	Unsecured notes	27,630		27,878		Unsecured notes	30,340		29,620
Other debt	Other debt	86,246		94,124		Other debt	78,916		84,500
Gross long-term debt	Gross long-term debt	1,812,383		1,954,343		Gross long-term debt	1,875,137		1,711,211
Debt issuance costs, net of amortization	Debt issuance costs, net of amortization	(47,617)		(51,720)		Debt issuance costs, net of amortization	(40,813)		(44,563)
Total long-term debt, net of debt issuance costs	Total long-term debt, net of debt issuance costs	1,764,766		1,902,623		Total long-term debt, net of debt issuance costs	1,834,324		1,666,648
Less: current portion of long-term debt	Less: current portion of long-term debt	(18,159)		(17,370)		Less: current portion of long-term debt	(12,802)		(13,817)
Total long-term debt, net, less current portion	Total long-term debt, net, less current portion	$	1,746,607	$	1,885,253	Total long-term debt, net, less current portion	$	1,821,522	$	1,652,831

On February 1, 2019, the Company entered into a ~~seven-year~~seven-year term loan (“term loan”) agreement, which consists of both a United States Dollar-denominated term loan tranche and a Euro-denominated term loan tranche, and a $750,000 revolving asset-based credit facility (“ABL”). Subject to earlier termination, the term loan matures on February 1, 2026 and the ABL matures on February 1, 2024.

As of January 31, ~~2020,~~2021, the entire outstanding U.S. term loan tranche balance of ~~$995,002~~$941,900 was subject to a LIBOR-based rate totaling ~~5.4375%~~3.938%, but the interest rate on ~~$756,600~~$581,913 of that balance was fixed at ~~6.2160%~~6.216% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of ~~2.4660%~~2.466%. As of July 31, ~~2019,~~2020, the entire outstanding U.S. term loan tranche balance of ~~$1,146,968~~$941,900 was subject to a LIBOR-base rate of ~~6.1875%~~3.938%, but the interest rate on ~~$849,550~~$673,400 of that balance was fixed at ~~6.2160%~~6.216% through an interest rate swap, dated March 18, 2019, by swapping the underlying 1-month LIBOR rate for a fixed rate of ~~2.4660%~~2.466%. The total interest rate on both the January 31, ~~2020~~2021 and July 31, ~~2019~~2020 outstanding Euro term loan tranche balance of ~~$675,875~~$610,437 and ~~$685,373,~~$655,191, respectively, was 4.00%. ~~In addition, the~~

The Company must make mandatory prepayments of principal under the term loan agreement upon the occurrence of certain specified events, including certain asset sales, debt issuances and receipt of annual cash flows in excess of certain amounts. No such specified events occurred during the three or six months ended January 31, ~~2020~~2021 or ~~2019.~~2020.

Availability under the ABL agreement is subject to a borrowing base based on a percentage of ~~January 31, 2020,~~applicable eligible receivables and eligible inventory. The ABL carries interest at an annual base rate plus 0.25% to 0.75%, or LIBOR plus 1.25% to 1.75%, based on adjusted excess availability as defined in the ~~total interest rate on the outstanding~~ ABL ~~borrowings of $27,630 was 1.25%. The ABL~~agreement. This agreement also includes a 0.25% unused facility fee. The Company may, generally at its option, pay any borrowings under the ABL, in whole or in part, at any time and from time to time, without premium or penalty.

The unused availability under the ABL is generally available to the Company for general operating purposes and, based on January 31, ~~2020~~2021 eligible accounts receivable and inventory balances, net of amounts drawn, totaled approximately ~~$667,000.~~$507,000.

The unsecured notes of 25,000 Euro ($~~27,630)~~30,340) relate to long-term debt ~~assumed at the closing~~ of ~~the acquisition of EHG.~~our European segment. There are two series, 20,000 Euro ($~~22,104)~~24,272) with an interest rate of 1.945% maturing in March 2025, and 5,000 Euro ($~~5,526)~~6,068) with an interest rate of 2.534% maturing ~~February~~March 2028. Other debt relates primarily to real estate loans with varying maturity dates through September 2032 and interest rates ranging from 1.40% to 3.43%.

Total contractual gross debt maturities are as follows:


~~For the remainder of the fiscal year ending July 31, 2020~~	$	~~8,479~~
~~For the fiscal year ending July 31, 2021~~	~~19,350~~
~~For the fiscal year ending July 31, 2022~~	~~18,078~~
~~For the fiscal year ending July 31, 2023~~	~~18,196~~
~~For the fiscal year ending July 31, 2024~~	~~45,906~~
~~For the fiscal year ending July 31, 2025 and thereafter~~	~~1,702,374~~
	$	~~1,812,383~~


For the remainder of the fiscal year ending July 31, 2021	$	6,282
For the fiscal year ending July 31, 2022	12,319
For the fiscal year ending July 31, 2023	12,445
For the fiscal year ending July 31, 2024	226,119
For the fiscal year ending July 31, 2025	36,720
For the fiscal year ending July 31, 2026 and thereafter	1,581,252
	$	1,875,137

For the three and ~~six-month periods~~six months ended January 31, 2021, interest expense on the term loan, ABL and other debt facilities was $20,663 and $41,251, respectively. For the three and six months ended January 31, 2020, interest expense on the term loan, ABL and other debt facilities was $23,863 and $48,212, respectively. The Company incurred fees to secure the term loan and ABL, and those amounts are being amortized ratably over the respective seven and ~~five-year~~five-year terms of those agreements. In addition, the Company recorded total charges related to the amortization of these term loan and ABL fees, which are included in interest expense, of $2,737 and $5,460 for the three and six months ended January 31, 2021, respectively. The Company also recorded total charges related to the amortization of these term loan and ABL fees, which are included in interest expense, of $2,686 and $5,371 for the three and ~~six-month periods~~six months ended January 31, 2020, respectively. The unamortized balance of the ABL facility fees was ~~$11,208~~$8,406 at January 31, ~~2020~~2021 and ~~$12,609~~$9,807 as of July 31, ~~2019,~~2020 and is included in Other long-term assets in the Condensed Consolidated Balance Sheets.

~~For~~The fair value of the ~~three and six-month periods ended~~Company’s term-loan debt at January 31, ~~2019, interest expense on bank debt~~2021 and July 31, 2020 was ~~$715~~$1,555,088 and ~~$1,444, and included $392 and $785 of amortized debt costs on the Company's previous asset-based credit agreement,~~$1,565,866, respectively.

The carrying value of the Company’s ~~long-term~~term-loan debt, excluding debt issuance costs, ~~approximates fair value~~was $1,552,337 and $1,597,091 at January 31, 2021 and July 31, 2020, ~~as the balance is subject to variable market interest rates that the Company believes are market rates for a similarly situated Company.~~respectively. The fair value of the Company's debt is ~~largely~~primarily estimated using Level 2 inputs as defined by ASC ~~820.~~820, primarily based on quoted market prices for the term loan debt. The fair value of other debt held by the Company approximates fair value.

~~14.~~13. Provision for Income Taxes

The overall effective income tax rate for the three months ended January 31, 2021 was 20.0%, and the effective income tax rate for the six months ended January 31, 2021 was 20.4%. These rates were both favorably impacted by certain foreign rate differences which include certain interest income not subject to corporate income tax and also by certain foreign return-to-provision adjustments. The overall effective income tax rate for the three months ended January 31, 2020 was 22.5%, and the effective income tax rate for the six months ended January 31, 2020 was 23.8%. These rates were both favorably impacted by certain foreign rate differences which include certain interest income not subject to corporate income tax. This benefit for the six months ended January 31, 2020 was partially offset by additional ~~income~~ tax expense ~~resulting~~ from the vesting of share-based compensation awards. The overall effective income tax rate for the three months ended January 31, 2019 was 389.1%, and the effective income tax rate for the six months ended January 31, 2019 was 74.4%. Included in these rates were non-deductible foreign currency forward contract losses of $31,152 and $73,707, respectively, as discussed in Note 5 to the Condensed Consolidated Financial Statements. Under federal income tax law, the loss recognized for financial statement purposes was not deductible for federal income tax purposes.

Within the next 12 months, the Company anticipates a decrease of approximately ~~$4,500~~$7,900 in unrecognized tax benefits, and ~~$900~~$2,000 in accrued interest related to unrecognized tax benefits recorded as of January 31, ~~2020,~~2021, from expected settlements or payments of uncertain tax positions and lapses of the applicable statutes of limitations. Actual results may differ from these estimates.

The Company files income tax returns in the U.S. federal jurisdiction and in many U.S. state and foreign jurisdictions. For U.S. federal income tax purposes, fiscal years ~~2016~~2017 through ~~2018~~2019 remain open and could be subject to examination. In major state and major foreign jurisdictions, fiscal years ~~2016~~2017 through ~~2018~~2019 generally remain open and could be subject to examination. The Company is currently under exam by certain U.S. state tax authorities for the fiscal years ended July 31, 2015 through 2017. The Company believes it has adequately reserved for its exposure to additional payments for uncertain tax positions in its liability for unrecognized tax benefits.

~~15.~~14. Contingent Liabilities, Commitments and Legal Matters

The Company’s total commercial commitments under standby repurchase obligations on global dealer inventory financing were ~~$3,143,088~~$2,367,122 and ~~$2,961,019~~$1,876,922 as of January 31, ~~2020~~2021 and July 31, ~~2019.~~2020, respectively. The commitment term is generally up to ~~eighteen~~18 months.

The Company accounts for the guarantee under repurchase agreements of dealers’ financing by deferring a portion of the related product sale that represents the estimated fair value of the guarantee at inception. This deferred amount is included in the repurchase and guarantee reserve balances of ~~$9,466~~$8,054 and ~~$9,575~~$7,747 as of January 31, ~~2020~~2021 and July 31, ~~2019,~~2020, respectively, which ~~are~~is included in Other current liabilities in the Condensed Consolidated Balance Sheets.

Losses incurred related to repurchase agreements that were settled during the three and ~~six-month periods~~six months ended January 31, ~~2020~~2021 and January 31, ~~2019~~2020 were not material. Based on current market conditions, the Company believes that any future losses under these agreements will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

The Company is also involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. Based on current conditions, and in management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

~~16.~~

15. Leases

On August 1, 2019, the Company adopted new accounting guidance under Accounting Standards Codification Topic 842 ("ASC 842") Leases. ASC 842 established new criteria for recognizing right-of-use assets and lease liabilities for operating lease arrangements. The Company elected to adopt this guidance utilizing the optional transition method that allowed the Company to implement this new guidance prospectively, and to only include the disclosures required under ASC 842 for the periods subsequent to adoption.

The Company has operating leases principally for land, buildings and equipment and has various finance leases for certain land and buildings expiring between calendar 2020 and 2028. Leases with an initial term of 12 months or fewer and which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the term of the lease.through 2035.

Certain of the Company's leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease costs. Lease costs are recorded in Cost of products sold, Selling, general, and administrative expenses and Interest expense in the Condensed Consolidated Statements of Income and Comprehensive Income.

~~The Company~~ does not include significant restrictions or covenants in our lease agreements, and residual value guarantees are not generally included within our operating leases.

The components of lease costs for the three and six-month periods ended January 31, 2021 and January 31, 2020 were as follows:

Three Months Ended Six Months Ended
January 31, 2020 January 31, 2020
Operating lease cost $ 3,112 $ 6,143
Finance lease cost
Amortization of right-of-use assets 136 272
Interest on lease liabilities 134 271
Total lease cost $ 3,382 $ 6,686

~~Other information related to leases was as follows:~~


	~~Six Months Ended~~
~~Supplemental Cash Flows Information~~	~~January 31, 2020~~
~~Cash paid for amounts included in the measurement of lease liabilities:~~
~~Operating cash flows from operating leases~~	$	~~6,094~~
~~Right-of-use assets obtained in exchange for lease obligations:~~
~~Operating leases~~	$	~~1,561~~


~~Supplemental Balance Sheet Information~~	~~January 31, 2020~~
~~Operating leases:~~
~~Operating lease right-of-use assets~~	$	~~31,870~~

~~Operating lease liabilities~~
~~Other current liabilities~~	$	~~4,570~~
~~Other long-term liabilities~~	~~27,446~~
~~Total operating lease liabilities~~	$	~~32,016~~

~~Finance leases:~~
~~Finance lease right-of-use assets~~	$	~~3,944~~

~~Finance lease liabilities~~
~~Other current liabilities~~	$	~~473~~
~~Other long-term liabilities~~	~~5,003~~
~~Total finance lease liabilities~~	$	~~5,476~~


	~~January 31, 2020~~
~~Weighted-average remaining lease term~~
~~Operating leases~~	~~14.2 years~~
~~Finance leases~~	~~7.3 years~~
~~Weighted-average discount rate~~
~~Operating leases~~	~~3.4~~	%
~~Finance leases~~	~~9.7~~	%


	Three Months Ended January 31,				Six Months Ended January 31,
	2021		2020		2021		2020
Operating lease cost	$	3,881	$	3,112	$	7,758	$	6,143
Finance lease cost
Amortization of right-of-use assets	175		136		311		272
Interest on lease liabilities	131		134		257		271
Total lease cost	$	4,187	$	3,382	$	8,326	$	6,686

~~Future minimum rental payments required under operating and finance~~Other information related to leases ~~as of January 31, 2020 were~~was as follows:

Operating Leases Financing Leases
For the remainder of the fiscal year ending July 31, 2020 $ 5,176 $ 487
For the fiscal year ending July 31, 2021 8,113 991
For the fiscal year ending July 31, 2022 6,510 1,013
For the fiscal year ending July 31, 2023 4,583 1,036
For the fiscal year ending July 31, 2024 3,877 1,059
For the fiscal year ending July 31, 2025 and thereafter 20,976 3,093
Total future lease payments $ 49,235 $ 7,679
Less: amount representing interest (17,219) (2,203)
Total reported lease liability $ 32,016 $ 5,476


	Six Months Ended January 31,
Supplemental Cash Flows Information	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,710	$	6,094
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7,204	$	1,561
Finance leases	$	4,000	$	0


Supplemental Balance Sheet Information	January 31, 2021		July 31, 2020
Operating leases:
Operating lease right-of-use assets	$	37,615	$	33,609

Operating lease liabilities:
Other current liabilities	$	6,872	$	5,343
Other long-term liabilities	30,979		28,456
Total operating lease liabilities	$	37,851	$	33,799

Finance leases:
Finance lease right-of-use assets	$	7,361	$	3,672

Finance lease liabilities
Other current liabilities	$	996	$	505
Other long-term liabilities	5,284		4,743
Total finance lease liabilities	$	6,280	$	5,248


	January 31, 2021		July 31, 2020
Weighted-average remaining lease term:
Operating leases	12.3 years		13.6 years
Finance leases	5.5 years		6.8 years
Weighted-average discount rate:
Operating leases	3.3	%	3.4	%
Finance leases	8.8	%	9.7	%

Future minimum rental payments required under operating and finance leases as of ~~July~~January 31, ~~2019~~2021 were as follows:

Operating Leases Finance Leases
For the fiscal year ending July 31, 2020 $ 8,785 $ 974
For the fiscal year ending July 31, 2021 6,809 993
For the fiscal year ending July 31, 2022 5,437 1,015
For the fiscal year ending July 31, 2023 3,980 1,037
For the fiscal year ending July 31, 2024 3,424 1,061
For the fiscal year ending July 31, 2025 and thereafter 20,745 3,037
Total future lease payments $ 49,180 8,117
Less: amount representing interest (2,427)
Total lease liability 5,690
Less: current portion (444)
Long-term finance lease obligations $ 5,246

~~17. Stockholders’ Equity~~

~~Stock-Based Compensation~~

Under the Company’s restricted stock unit (“RSU”) program, RSU awards are approved, typically in October, related to the financial performance of the most recently completed fiscal year. The awarded RSU's vest, and shares of common stock are issued, in equal installments on the first, second and third anniversaries of the date of grant. In addition, concurrent with the timing of the employee awards, the Nominating and Governance Committee of the Board of Directors (“Board”) has awarded RSU's to Board members that will vest, and shares of common stock will be issued, on the first anniversary of the date of the grant.

In September 2019, the Board approved changes to the equity compensation program for certain members of the Company’s executive management. Under the revised program, a portion of their equity compensation will be determined based on performance related to targets set for both the Company’s return on invested capital and free cash flow during a multi-year measurement period (North American operations only and a two-year measurement period for fiscal year 2020 grants). These performance stock unit (“PSU”) awards are based on a sliding scale of actual performance against relevant goals within a range of fifty percent (50%) to one hundred fifty percent (150%) of the target compensation. Performance below the fifty percent (50%) threshold will result in no earned shares, while performance above the one hundred fifty percent (150%) level will result in an award of shares equal in value to two times the amount of target compensation. In deriving the number of shares earned, if any, both performance metrics will be weighted equally. Following the measurement period, in accordance with actual achievement and certification of performance metrics, fully vested shares of common stock will be issued to the award recipients. The fair value of the PSU awards is determined using the Company’s stock price on the grant date. These awards are equity classified and will be expensed over the applicable measurement period based on the extent to which achievement of the performance metrics is probable.


	Operating Leases		Financing Leases
For the remainder of the fiscal year ending July 31, 2021	$	6,238	$	769
For the fiscal year ending July 31, 2022	10,599		1,555
For the fiscal year ending July 31, 2023	7,989		1,578
For the fiscal year ending July 31, 2024	5,721		1,059
For the fiscal year ending July 31, 2025	4,216		1,083
For the fiscal year ending July 31, 2026 and thereafter	19,569		2,061
Total future lease payments	54,332		8,105
Less: amount representing interest	(16,481)		(1,825)
Total reported lease liability	$	37,851	$	6,280

16. Stockholders’ Equity

Stock-Based Compensation

Total stock-based compensation expense recognized in the three-month periods ended January 31, ~~2020~~2021 and January 31, ~~2019~~2020 for ~~these RSU and PSU~~stock-based awards totaled ~~$5,062~~$7,290 and ~~$4,956,~~$5,062, respectively. Total stock-based compensation expense recognized in the six-month periods ended January 31, ~~2020~~2021 and January 31, ~~2019~~2020 for ~~these RSU and PSU~~stock-based awards totaled ~~$10,075~~$13,058 and ~~$9,486,~~$10,075, respectively.

~~Share Repurchase Program~~

The Company's Board of Directors has authorized Company management to utilize up to $250,000 to purchase shares of the Company's common stock through June 19, 2020. There were 0 repurchases under this program during the three and six-month periods ended January 31, 2020 or 2019.

~~18.~~17. Revenue ~~Recognition~~

The table below disaggregates revenue to the level that the Company believes best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors. Other RV-related revenues shown below in the European segment include sales related to accessories and services, used vehicle sales at owned dealerships and RV rentals. All material revenue streams are considered point in time.

Three Months Ended January 31, Six Months Ended January 31,
NET SALES: 2020 2019 2020 2019
Recreational vehicles
North American Towables
      Travel Trailers and Other $ 583,121 $ 535,779 $ 1,292,786 $ 1,297,263
      Fifth Wheels 400,786 345,785 892,009 863,399
Total North American Towables 983,907 881,564 2,184,795 2,160,662
North American Motorized
      Class A 125,474 173,488 287,206 400,762
      Class C 186,761 182,502 416,598 366,886
      Class B 31,445 15,505 55,765 35,045
Total North American Motorized 343,680 371,495 759,569 802,693
Total North America 1,327,587 1,253,059 2,944,364 2,963,355
European
Motorcaravan 382,422 — 664,155 —
Campervan 97,923 — 175,520 —
Caravan 69,909 — 130,941 —
Other RV-related 86,861 — 159,506 —
Total European 637,115 — 1,130,122 —
Total recreational vehicles 1,964,702 1,253,059 4,074,486 2,963,355
Other, primarily aluminum extruded components 57,745 55,114 131,311 128,962
Intercompany eliminations (19,314) (17,597) (43,879) (45,765)
Total $ 2,003,133 $ 1,290,576 $ 4,161,918 $ 3,046,552


	Three Months Ended January 31,				Six Months Ended January 31,
NET SALES:	2021		2020		2021		2020
Recreational vehicles
North American Towables
Travel Trailers	$	831,359	$	583,121	$	1,669,259	$	1,292,786
Fifth Wheels	541,822		400,786		1,095,966		892,009
Total North American Towables	1,373,181		983,907		2,765,225		2,184,795
North American Motorized
Class A	222,128		125,474		380,683		287,206
Class C	294,300		186,761		569,699		416,598
Class B	60,567		31,445		120,468		55,765
Total North American Motorized	576,995		343,680		1,070,850		759,569
Total North America	1,950,176		1,327,587		3,836,075		2,944,364
European
Motorcaravan	419,137		382,422		737,480		664,155
Campervan	149,112		97,923		292,512		175,520
Caravan	71,654		69,909		126,849		130,941
Other RV-related	93,560		86,861		179,110		159,506
Total European	733,463		637,115		1,335,951		1,130,122
Total recreational vehicles	2,683,639		1,964,702		5,172,026		4,074,486
Other, primarily aluminum extruded components	74,714		57,745		155,421		131,311
Intercompany eliminations	(30,565)		(19,314)		(62,299)		(43,879)
Total	$	2,727,788	$	2,003,133	$	5,265,148	$	4,161,918

~~19.~~18. Accumulated Other Comprehensive ~~Loss~~Income (Loss)

The components of other comprehensive income (loss) ("OCI") and the changes in the Company's accumulated ~~OCI~~other comprehensive income (loss) ("AOCI") by component were as follows:


		Three Months Ended															Three Months Ended January 31,
		January 31, 2020															2021								2020
		Foreign Currency		Unrealized							Foreign Currency		Unrealized						Foreign Currency		Unrealized
		Translation		Gain (Loss) on							Translation		Gain (Loss) on						Translation		Gain (Loss) on
		Adjustment		Derivative		Other		Total			Adjustment		Derivative		Other		Total		Adjustment		Derivative		Other		Total
Balance at beginning of period	Balance at beginning of period	$	(46,085)	$	(13,194)	$	(1,048)	$	(60,327)	Balance at beginning of period	$	26,664	$	(15,491)	$	(696)	$	10,477	$	(46,085)	$	(13,194)	$	(1,048)	$	(60,327)
OCI before reclassifications	OCI before reclassifications	(11,902)		(2,272)		—		(14,174)		OCI before reclassifications	60,133		(352)		0		59,781		(11,902)		(2,272)		0		(14,174)
Income taxes associated with OCI before reclassifications	Income taxes associated with OCI before reclassifications	—		595		—		595		Income taxes associated with OCI before reclassifications	0		87		0		87		0		595		0		595
Amounts reclassified from AOCI	Amounts reclassified from AOCI	—		1,935		—		1,935		Amounts reclassified from AOCI	0		3,410		0		3,410		0		1,935		0		1,935
Income taxes associated with amounts reclassified from AOCI	Income taxes associated with amounts reclassified from AOCI	—		(482)		—		(482)		Income taxes associated with amounts reclassified from AOCI	0		(794)		0		(794)		0		(482)		0		(482)
AOCI, net of tax	AOCI, net of tax	(57,987)		(13,418)		(1,048)		(72,453)		AOCI, net of tax	86,797		(13,140)		(696)		72,961		(57,987)		(13,418)		(1,048)		(72,453)
Less: AOCI attributable to noncontrolling interest	Less: AOCI attributable to noncontrolling interest	(1,038)		—		—		(1,038)		Less: AOCI attributable to noncontrolling interest	(715)		0		0		(715)		(1,038)		0		0		(1,038)
AOCI, net of tax attributable to Thor Industries Inc.		$	(56,949)	$	(13,418)	$	(1,048)	$	(71,415)

		Six Months Ended
		January 31, 2020
		Foreign Currency		Unrealized
		Translation		Gain (Loss) on
		Adjustment		Derivative		Other		Total
Balance at beginning of period		$	(47,078)	$	(9,472)	$	(1,048)	$	(57,598)
OCI before reclassifications		(10,909)		(7,826)		—		(18,735)
Income taxes associated with OCI before reclassifications		—		1,932		—		1,932
Amounts reclassified from AOCI		—		2,582		—		2,582
Income taxes associated with amounts reclassified from AOCI		—		(634)		—		(634)
AOCI, net of tax		(57,987)		(13,418)		(1,048)		(72,453)
Less: AOCI attributable to noncontrolling interest		(1,038)		—		—		(1,038)
AOCI, net of tax attributable to Thor Industries Inc.		$	(56,949)	$	(13,418)	$	(1,048)	$	(71,415)
AOCI, net of tax, attributable to THOR Industries, Inc.										AOCI, net of tax, attributable to THOR Industries, Inc.	$	87,512	$	(13,140)	$	(696)	$	73,676	$	(56,949)	$	(13,418)	$	(1,048)	$	(71,415)


	Six Months Ended January 31,
	2021								2020
	Foreign Currency		Unrealized						Foreign Currency		Unrealized
	Translation		Gain (Loss) on						Translation		Gain (Loss) on
	Adjustment		Derivative		Other		Total		Adjustment		Derivative		Other		Total
Balance at beginning of period	$	45,657	$	(18,823)	$	(696)	$	26,138	$	(47,078)	$	(9,472)	$	(1,048)	$	(57,598)
OCI before reclassifications	41,140		380		0		41,520		(10,909)		(7,826)		0		(18,735)
Income taxes associated with OCI before reclassifications	0		(87)		0		(87)		0		1,932		0		1,932
Amounts reclassified from AOCI	0		7,049		0		7,049		0		2,582		0		2,582
Income taxes associated with amounts reclassified from AOCI	0		(1,659)		0		(1,659)		0		(634)		0		(634)
AOCI, net of tax	86,797		(13,140)		(696)		72,961		(57,987)		(13,418)		(1,048)		(72,453)
Less: AOCI attributable to noncontrolling interest	(715)		0		0		(715)		(1,038)		0		0		(1,038)
AOCI, net of tax, attributable to THOR Industries Inc.	$	87,512	$	(13,140)	$	(696)	$	73,676	$	(56,949)	$	(13,418)	$	(1,048)	$	(71,415)

The Company does not recognize deferred taxes for a majority of the foreign currency translation gains and losses because the Company does not anticipate reversal in the foreseeable future.

~~20. Impairment Charges~~

During the three months ended January 31, 2020, the Company determined it was more likely than not that certain assets, including certain trademarks, dealer network and production facilities utilized to manufacture and sell horse trailers with living quarters, would be sold before the end of their previously estimated useful lives and within the next twelve months. The Company also determined it was more likely than not that the assets associated with a production facility (one campus composed of multiple buildings totaling approximately 400,000 square feet) utilized to manufacture certain towable RVs would be sold before the end of the previously estimated useful lives and within the next twelve months. The RV models previously produced at this facility continue to be produced at other, existing Company facilities. Both groups of assets were concluded to have met the criteria to be classified as held for sale as of January 31, 2020.

During the quarter ended January 31, 2020, the Company performed impairment assessments over each group of assets, including the goodwill allocated to the asset groups, using Level 3 inputs defined by ASC 820 for those assets within each group measured at fair value and determined an impairment existed for certain assets within each group. The Company recognized an aggregate non-cash impairment charge of $10,057 related to these assets, including allocated goodwill, in the three months ended January 31, 2020. The amount of this aggregate impairment charge was based, in part, on estimated proceeds from the sales of these asset groups, which may differ from actual proceeds received when the respective sales transactions are finalized, which are expected to occur prior to July 31, 2020. The associated assets and liabilities expected to be sold are presented as held for sale on the January 31, 2020 Condensed Consolidated Balance Sheet.

~~The major classes of these held-for-sale assets and liabilities, which are part of the North American Towables reportable segment, are as follows:~~


	~~January 31, 2020~~
~~ASSETS~~
~~Accounts receivable~~	$	~~915~~
~~Inventory~~	~~2,959~~
~~Property, plant and equipment~~	~~6,772~~
~~Other assets~~	34
~~Total assets held for sale~~	$	~~10,680~~


	~~January 31, 2020~~
~~LIABILITIES~~
~~Accrued product warranties~~	$	~~556~~
~~Other accrued liabilities~~	~~131~~
~~Total liabilities held for sale~~	$	~~687~~

~~The total liabilities held for sale of $687 are included in Other current liabilities on the Condensed Consolidated Balance Sheet.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated, all U.S. Dollar, Euro and ~~Euro~~British Pound Sterling amounts are presented in thousands except share and per share data.

Forward-Looking Statements

This report 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,~~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,~~others:

•the extent and impact from the continuation of the COVID-19 pandemic, along with the responses to contain the spread of the virus 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 and which may have a negative impact on our consolidated results of operations, financial position, cash flows and liquidity;

•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;~~fluctuations, and/or raw material, commodity or chassis supply ~~restrictions; component supply disruption related to the coronavirus outbreak;~~ constraints;

•the impact of tariffs on material or other input costs;

•the level and magnitude of warranty claims incurred;

•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;

•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; the potential impact of~~

•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;~~ practices which could negatively impact our independent dealers and/or retail consumers;

•management changes;

•the success of new and existing products ~~services~~ and ~~production facilities; consumer preferences;~~ services;

•the ability to efficiently utilize existing production facilities;

•changes in consumer preferences;

•the risks associated with acquisitions, including: the pace ~~of acquisitions~~ and ~~the~~ successful closing of an acquisition, the integration and financial impact ~~thereof;~~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;~~acquisitions and our ability to retain key management personnel of acquired companies;

•a shortage of necessary personnel for ~~production;~~ 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; ~~equity investment impairment charges;~~

•cost structure changes;

•competition;

•the impact of potential losses under repurchase or financed receivable 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 regulatory standards in the various jurisdictions in which our products are produced, used and/or sold; ~~and~~

•changes to our investment and capital allocation strategies or other facets of our strategic ~~plan. Additional risks~~plan; and ~~uncertainties surrounding the acquisition of Erwin Hymer Group SE ("EHG") include risks regarding the potential benefits of the acquisition~~

•changes in market liquidity conditions, credit ratings and other factors that may impact our access to future funding and the ~~anticipated operating synergies, the integration~~cost of ~~the business, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and EHG's business.~~ 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, ~~2019.~~2020.

We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this report 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.

Executive Overview

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles ("RVs") in the world. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Statistical Surveys, Inc. (“Stat Surveys”), for the calendar year ended December 31, ~~2019, Thor’s~~2020, THOR’s combined U.S. and Canadian market share was approximately ~~46.2%~~42.6% for travel trailers and fifth wheels combined and approximately ~~37.1%~~38.6% for motorhomes. In Europe, according to the European Caravan Federation and based on unit registrations for Europe's ~~OEM-reporting~~original equipment manufacturer ("OEM") reporting countries, ~~EHG's~~our European market share for the calendar year ended December 31, ~~2019~~2020 was approximately ~~25.8%~~25.7% for motorcaravans and campervans combined and approximately ~~20.5%~~20.0% for caravans.

Our business model includes decentralized operating units, and our RV products are primarily sold to independent, non-franchise dealers who, in turn, retail those products. Our growth has been achieved both organically and through acquisition, and our strategy is designed to increase our profitability by driving innovation, servicing our customers, manufacturing quality products, improving the efficiencies of our facilities and making strategic growth acquisitions.

The COVID-19 pandemic, including its wide-reaching impact on nearly all facets of our operations, as well as related governmental actions, continue to impact our business and our financial results and financial position. Additional impacts could be incurred in future periods, including negative impacts to our results of operations, liquidity and financial position, as a direct or indirect result of the pandemic. Should the rate of COVID-19 infections escalate, or the virus mutate into new, uncontrolled strains, those developments and the resulting impacts could exacerbate risks to our business, financial results and financial position. Refer also to the COVID-19 related risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2020.

Recent Events

The initial cash consideration for the acquisition of the Tiffin Group was approximately $300,000, subject to adjustment, and was funded through existing cash-on-hand as well as $165,000 in borrowings from the Company’s existing asset-based lending facility. The total cash consideration to be paid is subject to the final determination of the actual acquired net working capital, as defined in the Tiffin Group SPA, as of the close of business on December 28, 2020, which determination is expected to be finalized later in fiscal 2021. The Tiffin Group will operate as an independent operation in the same manner as the Company’s other recreational vehicle subsidiaries. The Company purchased the Tiffin Group to complement its existing towable and motorized RV product offerings and North American independent dealer base.

Industry Outlook — North America

The Company monitors industry conditions in the North American RV market using a number of resources including its own performance tracking and modeling. The Company also considers monthly wholesale shipment data as reported by the Recreation Vehicle Industry Association (“RVIA”), which is typically issued on a one-month lag and represents manufacturers’ RV production and delivery to dealers. In addition, we monitor monthly retail sales trends as reported by Stat Surveys, whose data is typically issued on a month-and-a-half lag. The Company believes that monthly RV retail sales data is important as consumer purchases impact future dealer orders and ultimately our production.

North American RV independent dealer inventory of ~~Thor~~our North American products as of January 31, ~~2020~~2021 decreased ~~16.5%~~32.2% to approximately ~~115,200~~78,100 units, compared to approximately ~~137,900~~115,200 units as of January 31, ~~2019. Barring a significant macroeconomic impact, we expect to see a flat to modest decline in~~2020. The acquisition of Tiffin Group accounted for approximately 700 of the ~~North American retail markets in calendar 2020.~~78,100 units as of January 31, 2021.

~~Thor’s~~THOR’s North American RV backlog as of January 31, ~~2020~~2021 increased ~~$280,514,~~$6,437,587, or ~~19.3%~~371.6%, to ~~$1,732,410~~$8,169,997 compared to ~~$1,451,896~~$1,732,410 as of January 31, ~~2019.~~2020, with Tiffin Group's backlog included in the January 31, 2021 totals accounting for $553,027, or 8.6%, of the $6,437,587 increase. Dealer inventory levels have decreased materially based on strong retail demand for RVs given the perceived safety of RV travel during the COVID-19 pandemic, a strong desire to socially distance and the reduction in commercial air travel and cruises. As of January 31, 2021, North American dealer inventory levels were well below optimal stocking levels, which has increased dealer orders and our backlog.

North American Industry Wholesale Statistics

Key wholesale statistics for the North American RV industry, as reported by RVIA for the periods indicated, are as follows:

U.S. and Canada Wholesale Unit Shipments
Calendar Year Increase %
2019 2018 (Decrease) Change
North American Towable Units 359,441 426,087 (66,646) (15.6)
North American Motorized Units 46,629 57,585 (10,956) (19.0)
Total 406,070 483,672 (77,602) (16.0)


	U.S. and Canada Wholesale Unit Shipments
	Calendar Year		Increase	%
	2020	2019	(Decrease)	Change
North American Towable Units	389,613	359,441	30,172	8.4
North American Motorized Units	40,799	46,629	(5,830)	(12.5)
Total	430,412	406,070	24,342	6.0

~~According to their most recent forecast published~~The changes in ~~February 2020, RVIA has forecasted that 2020 calendar year~~wholesale shipments ofnoted above in the towable and motorized units ~~will~~were both impacted by the COVID-19 pandemic on North American shipments during the March to December 2020 timeframe. Shipments fell significantly for both towables and motorized products during the period from March to June 2020, as most RV manufacturers were shut down for a number of weeks during that time period. Since then, demand for both towable and motorized products has increased significantly, but more so in the more affordably-priced towable product lines.

In March 2021, RVIA issued a revised forecast for calendar year 2021 wholesale unit shipments. In the most-likely scenario, towable and motorized unit shipments are projected to increase to approximately ~~366,900~~479,800 and ~~43,200~~53,600 units, respectively, for aan annual total of ~~410,100~~533,400 units, ~~an improvement of 1.0% from 2019~~or 23.9% higher than calendar year 2020 shipments. This calendar year 2021 most-likely forecast could range from a lower estimate of 523,100 total units to an upper estimate of approximately 543,600 units.

North American Industry Retail Statistics

We believe that retail demand is the key to ~~continued~~ growth in the North American RV industry, and that annual North American RV industry wholesale shipments ~~will generally approximate a one-to-one replenishment ratio with retail sales~~in calendar year 2021 may not follow typical seasonal patterns as ~~dealer~~dealers respond to ongoing high current consumer demand and then rebuild their inventory ~~levels have largely adjusted~~ to ~~generally normalized~~optimal stocking levels.

Key retail statistics for the North American RV industry, as reported by Stat Surveys for the periods indicated, are as follows:

U.S. and Canada Retail Unit Registrations
Calendar Year Increase %
2019 2018 (Decrease) Change
North American Towable Units 405,308 434,843 (29,535) (6.8)
North American Motorized Units 51,632 58,155 (6,523) (11.2)
Total 456,940 492,998 (36,058) (7.3)


	U.S. and Canada Retail Unit Registrations
	Calendar Year		Increase	%
	2020	2019	(Decrease)	Change
North American Towable Units	461,495	408,965	52,530	12.8
North American Motorized Units	52,641	52,053	588	1.1
Total	514,136	461,018	53,118	11.5

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 year 2020 results, and may also be impacting the completeness of such information.

North American retail consumer demand has grown since late April 2020 as many consumers recognize the perceived benefits offered by the RV lifestyle, which provides people with a personal space to maintain social distance in a safe manner, the ability to connect with loved ones and the potential to get away for short, frequent breaks or longer adventures.

Company North American Wholesale Statistics

The Company's North American wholesale RV shipments, for the calendar years ended December 31, ~~2019~~2020 and ~~2018~~2019 to correspond to the North American industry wholesale periods noted above, were as ~~follows:~~follows (given the proximity of the December 18, 2020 acquisition date of the Tiffin Group to the end of the 2020 calendar year data presented below, the results of the Tiffin Group are excluded from the Company's totals):


		U.S. and Canada Wholesale Unit Shipments									U.S. and Canada Wholesale Unit Shipments
		Calendar Year			Increase			%	Calendar Year		Increase	%
		2019	2018	(Decrease)	Change		2020		2019	(Decrease)	Change
North American Towable Units	North American Towable Units	162,083	211,164	(49,081)	(23.2)	North American Towable Units	165,387		162,083	3,304	2.0
North American Motorized Units	North American Motorized Units	17,854	21,290	(3,436)	(16.1)	North American Motorized Units	16,634		17,854	(1,220)	(6.8)
Total	Total	179,937	232,454	(52,517)	(22.6)	Total	182,021		179,937	2,084	1.2

Company North American Retail Statistics

Retail statistics of the Company's North American RV products, as reported by Stat Surveys, for the calendar years ended December 31, ~~2019~~2020 and ~~2018~~2019 to correspond to the North American industry retail periods noted above, were as ~~follows:~~follows (given the proximity of the December 18, 2020 acquisition date of the Tiffin Group to the end of the 2020 calendar year data presented below, the results of the Tiffin Group are excluded from the Company's totals):


		U.S. and Canada Retail Unit Registrations									U.S. and Canada Retail Unit Registrations
		Calendar Year			Increase			%	Calendar Year		Increase	%
		2019	2018	(Decrease)	Change		2020		2019	(Decrease)	Change
North American Towable Units	North American Towable Units	182,917	211,693	(28,776)	(13.6)	North American Towable Units	191,516		183,421	8,095	4.4
North American Motorized Units	North American Motorized Units	19,178	22,861	(3,683)	(16.1)	North American Motorized Units	20,333		19,273	1,060	5.5
Total	Total	202,095	234,554	(32,459)	(13.8)	Total	211,849		202,694	9,155	4.5

~~Our~~The extent to which the COVID-19 pandemic may impact our business in future periods remains uncertain and unpredictable. Nonetheless, our outlook for future growth in North American retail sales in both the short term and the long term remains optimistic as there are many factors driving the current demand that we believe will continue even after the pandemic officially ends. In the near-term, we believe consumers are likely to continue altering their future vacation and travel plans, opting for fewer vacations via air travel, cruise ships and hotels, and preferring vacations that RVs are uniquely positioned to provide, where they can continue practicing social distancing while also allowing them the ability to explore or unwind, often close to home. Minimal-contact vacation options like road trips and camping may prove ideal for people who want to limit pandemic-related risks involved with close personal interactions. We will, however, need to manage through temporary supply chain issues noted below, which may limit the level to which we can increase output in the near term.

Longer-term, a positive outlook for the North American RV segment is supported by surveys conducted by THOR, RVIA and others, which show that Americans love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the increasing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. Longer term, we also believe retail sales will be dependent upon various economic conditions faced by consumers, such as the rate of unemployment, the level of consumer confidence, the ~~growth in~~ disposable income of consumers, changes in interest rates, credit availability, the health of the housing market, ~~and~~ changes in tax rates and fuel availability and prices. Assuming continued stability or improvement in consumer confidence, availability of retail and wholesale credit, low interest rates with modest rate increases and the absence of negative economic factors, we expect to see long-term growth in the North American RV industry.

~~A positive long-term outlook for the North American RV segment is supported by continued demographic diversification. While consumers between the ages of 55~~Economic and 74 still account for the majority of RV retail sales, there is strong interest and growing retail momentum with the younger "generation X" and "millennials" segments. Not surprisingly, behavioral attributes confirm these groups as being more active, tech savvy, well researched, open to new ideas, seeking new experiences and very family centric, specifically when it comes to cross-generational family activities like RVing, camping and time spent outdoors.

Since 2014, Kampgrounds of America ("KOA") has measured an increase of more than 7 million new camper households and annual growth in camping frequency and has noted continued interest in the RV lifestyle, especially among the younger segments. Younger consumers are also redefining cultural views on “vacation” and opting instead for 50 to 100 mile getaways within driving distance to home or school. Given the importance younger consumers and millennial households place on family, quality experiences, technology and time, we believe we are well-positioned to provide the innovative product offerings which deliver the lifestyle experiences that complement millennial expectations.

In addition to younger age demographics, there are opportunities to expand sales to a more ethnically diverse and global customer base through lifestyle, lifestage and data-driven marketing. We intend to expand upon our recent marketing initiatives that focus on diversity, women, families, millennials and the RV lifestyle across social, digital, web, acquisition, mobile and content marketing. In addition to providing best-in-class marketing and research assets to our dealers, we are committed to providing our end consumers with technology tools and RV lifestyle resources through our joint venture, TH2.

~~Economic or~~ industry-wide factors ~~affecting~~that will continue to affect our RV business include the costs of commodities, the impact of actual or threatened tariffs on commodity costs and ~~the~~ labor ~~used~~costs incurred in the ~~manufacture~~production of our products. Material and labor costs are the primary factors determining our cost of products sold, and any future increases in raw material or labor costs would impact our profit margins negatively if we ~~were~~are unable to offset those cost increases through a combination of product decontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. Historically, we have generally been able to offset net cost increases over time.

~~We have~~At this time, we are not ~~experienced~~experiencing any significant or unusual supply constraints from our North American chassis ~~suppliers recently.~~suppliers. As indicated above, the extent to which the pandemic may impact our operations in the future is uncertain and unpredictable. The North American recreational vehicle industry has, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays and work stoppages at the chassis manufacturers. ~~These~~If these shortages were to recur for any reason, it would have ~~had~~ a negative impact on our sales and earnings in the past. We believe that the current supply of chassis used in our North American motorized RV production is generally adequate for current production levels, and that available inventory would compensate for short-term changes in supply schedules if they occur.earnings.

~~In regard to the supply of other raw materials used in our~~

The North American ~~production processes, while we do not source~~RV industry has, however, recently experienced supply constraints and shortages of various RV component parts from various manufacturers and suppliers as a ~~significant amount~~result of ~~raw materials directly from China,~~current market conditions and the COVID-19 pandemic. Additionally, the recent ~~coronavirus outbreak may~~harsh weather conditions in the southern United States have ~~an impact on~~impacted the availability of certain ~~component products that are purchased by some~~petroleum-based components. If such shortages were to become more significant or longer term in nature, or if industry demand were to increase faster than relevant suppliers can respond, or if other factors were to impact their ability to continue to supply our needs for key components, our costs of such components and our ~~current North American raw material suppliers from China. We believe our near-term raw material supply needs will not~~production output could be materially disrupted given the current supply of our raw materials already on hand, the current availability of raw materials at our major suppliers and the availability of those raw materials from alternate supply sources. If, however,adversely affected. Where possible, to minimize the impact of ~~the coronavirus on the availability~~these supply chain constraints, we continue to identify alternative suppliers. The geographic centrality of ~~material sourced from China is prolonged, this could have an adverse longer-term impact on our~~the North American ~~raw material availability~~RV industry in northern Indiana, where the majority of our facilities and many of our suppliers are located, could exacerbate supply chain and other COVID-19 related risks, should northern Indiana, or any of the ~~cost of such material.~~other areas in which we, our suppliers or our customers operate, become disproportionately impacted by the pandemic or other factors.

Industry Outlook — Europe

The Company monitors retail trends in the European RV market as reported by the European Caravan Federation (“ECF”), whose industry data is reported to the public quarterly and typically issued on a one-to-two-month lag. Additionally, on a monthly basis the Company receives ~~original equipment manufacturer ("OEM") specific~~OEM-specific reports from most of the individual member countries that make up the ECF. As these reports are coming directly from the ECF member countries, timing and content vary, but typically the reports are issued on a one-to-two-month lag as well. While most countries provide OEM-specific information, the United Kingdom, which ~~makes~~made up ~~23.4%~~19.8% and ~~11.6%~~7.6% of the caravan and motorcaravan (including campervans) European market for the calendar year ~~2019,~~ended December 31, 2020, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Within Europe, over 90% of our sales are made to dealers within 13 different European countries. The ~~Company reports its European reportable segment sales~~market conditions, as well as the operating status of our independent dealers within each country, vary based on the ~~following~~various local economic conditions, the current impact of COVID-19 and the local responses and restrictions in place to manage the pandemic. It is inherently difficult to generalize about the operating conditions within the entire European region. However, independent RV dealer inventory levels of our European products are generally below prior-year levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product ~~categories:~~

~~Motorcaravan –~~

~~similar to the Class A and Class C motorized products in the North American market~~

~~Campervan –~~

~~similar to the Class B motorized products in the North American market, but also includes urban campers~~

~~Caravan –~~

~~similar to the travel trailer and other towable units in the North American market. Fifth wheel units are not sold in the European market due to their generally larger size and weight~~

~~Other –~~

~~includes~~ sales, ~~of used recreational vehicle units, parts and camping accessories, repair services, rental sales and other~~

~~We believe our~~ independent dealer inventory levels are currently below historical norms, with dealers submitting higher levels of ~~EHG products in Europe, while elevated in certain locations, are generally appropriate~~orders than typical for ~~seasonal consumer demand in Europe and are progressing towards more normalized levels. The first fiscal quarter is a seasonally slower quarter in Europe~~this time of the season due to ~~the European summer holiday season, but consumer~~continued high end-consumer demand, ~~in Europe for the remainder of the fiscal year typically aligns with the seasonal retail patterns experienced in the North American market.~~as discussed further below.

~~Thor’s~~THOR’s European RV backlog as of January 31, 2021 increased $1,502,200, or 131.5%, to $2,644,181 compared to $1,141,981 as of January 31, 2020, ~~was $1,141,981, reflecting current levels~~with the increase attributable to a number of ~~demand within~~causes, including the ~~European market.~~perceived safety of RV travel during the COVID-19 pandemic, a strong desire to socially distance, the reduction in commercial air travel and cruises and an increase in various marketing campaigns to promote sales.

European Industry Retail Statistics

Key retail statistics for the European RV industry, as reported by the ECF for the periods indicated, are as follows:


		European Unit Registrations													European Unit Registrations
		Motorcaravan and Campervan ⁽²⁾					Caravan							Motorcaravan and Campervan (2)		Caravan
		Calendar Year			%	Calendar Year					%	Calendar Year		%	Calendar Year	%
		2019	2018	Change	2019	2018	Change		2020	2019		Change	2020	2019	Change
OEM Reporting Countries ⁽¹⁾	OEM Reporting Countries ⁽¹⁾	113,903	107,829	5.6	57,975	54,642	6.1	OEM Reporting Countries (1)	143,575	114,124		25.8	58,901	57,810	1.9
Non-OEM Reporting Countries ⁽¹⁾	Non-OEM Reporting Countries ⁽¹⁾	17,855	17,213	3.7	20,226	22,373	(9.6)	Non-OEM Reporting Countries (1)	15,507	18,346		(15.5)	16,860	20,225	(16.6)
Total	Total	131,758	125,042	5.4	78,201	77,015	1.5	Total	159,082	132,470		20.1	75,761	78,035	(2.9)

(1) – Industry retail registration statistics have been compiled from individual countries reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the "OEM Reporting Countries." The "Non-OEM Reporting Countries" are primarily the United Kingdom and others. Note: the decrease in the "Non-OEM Reporting Countries" is primarily related to the United Kingdom, as a result of both extended shutdowns due to the COVID-19 pandemic and BREXIT. Total European unit registrations are reported quarterly by ECF.

(2)

~~(2) –~~ The ECF reports motorcaravans and campervans together.

Note: Data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various ~~countries~~countries. (The ~~Non-OEM~~"Non-OEM Reporting ~~Countries~~Countries" either do not report OEM-specific data to ~~EHG~~the ECF or do not have it available for the entire time period ~~covered).~~covered.)

Company European Retail Statistics ⁽¹⁾


		European Unit Registrations ⁽¹⁾									European Unit Registrations (1)
		Calendar Year			Increase			%	Calendar Year		Increase	%
		2019	2018	(Decrease)	Change		2020		2019	(Decrease)	Change
Motorcaravan and Campervan	Motorcaravan and Campervan	29,385	27,601	1,784	6.5	Motorcaravan and Campervan	36,882		29,357	7,525	25.6
Caravan	Caravan	11,876	11,428	448	3.9	Caravan	11,755		11,881	(126)	(1.1)
Total OEM-Reporting Countries	Total OEM-Reporting Countries	41,261	39,029	2,232	5.7	Total OEM-Reporting Countries	48,637		41,238	7,399	17.9

(1) – Company retail registration statistics have been compiled from individual countries reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the "OEM Reporting ~~Countries".~~

Countries."

Note: For comparison purposes, the totals reflected above include the pre-acquisition results of ~~EHG~~Erwin Hymer Group for January ~~2019 (and for the calendar year ended December 31, 2018).~~2019. In addition, data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various countries.

Our European operations offer a full lineup of leisure vehicles including caravans, urban campers, campervans and small-to-large motorcaravans. Our product offering is not limited to vehicles only but also includes accessories and services, including vehicle rentals. In addition, we address our European end customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions. With the help of data-based and digital marketing, we intend to expand our customer reach, in particular, to new and younger consumer segments.

The ~~European~~extent to which the COVID-19 pandemic may impact our business in future periods remains uncertain and unpredictable. Our outlook for future growth in European RV retail sales depends upon various economic conditions in the respective ~~countries.~~countries in which we sell, and also depends on our ability to manage through temporary supply chain issues in the near term that could limit the level to which we can increase output. End-customer demand for ~~RV vehicles~~RVs depends strongly on consumer confidence. Factors such as the rate of unemployment, private consumption and investments, growth in disposable income of consumers, changes in interest rates, the health of the housing market, ~~and~~ changes in tax rates and, most recently, travel safety considerations all influence retail sales. Assuming continued stability or improvement in consumer confidence, low interest rates with modest rate increases and the absence of negative economic factors, we would expect to see continued long-term growth in the European RV industry.

~~Several social trends support the positive~~We believe our long-term outlook for ~~Europe. First, there is the growing group of “active seniors” (age 55 to 75) who have the time, health~~future growth in retail sales remains positive as more and ~~wealth, combined with the desire, to explore countries and cultures. Secondly, there is the new, but growing, group of younger customers (age 35 to 45) who are discovering~~more people discover RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose ~~vehicles~~vehicle to escape urban life and explore outdoor activities and nature.

Our European operations address the European market with a full line-up of leisure vehicles including travel trailers, urban campers, campervans and small-to-large motorhomes. The product offering is not limited to vehicles only, but also includes accessories and services including rental vehicles.

InHistorically, we and our European dealers have marketed our European recreational vehicles through numerous RV fairs at the country and regional levels which occur throughout the calendar year. These fairs have historically been well-attended events that allow retail consumers the ability to see the newest products, features and designs and to talk with product experts in addition to ~~its product offerings, EHG addresses its consumers~~being able to purchase or order an RV. The protection of the health of our employees, customers and dealer-partners is our top priority. As a result, we have cancelled our participation in all European trade fairs and major events through ~~a sophisticated brand management approach based on customer segmentation according~~our July 31, 2021 fiscal year end.

In place of the trade fairs, we have and will continue to strengthen and expand our digital activities in order to reach high potential target ~~group, core values~~groups, generate leads and ~~emotions.~~steer customers directly to dealerships. With over 1,000 active dealer-partners in Germany and throughout Europe, we believe our European brands have one of the ~~help of data-based~~strongest and ~~digital marketing, EHG intends to expand its customer reach, in particular, to new~~most professionally structured dealer and ~~younger consumer segments.~~service networks.

Economic or industry-wide factors affecting our European RV business include the costs of commodities and the labor used in the manufacture of our products. Material and labor costs are the primary factors determining our cost of products sold and any future increases in ~~raw material or labor~~these costs would impact our profit margins negatively if we were unable to offset those cost increases through a combination of product decontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts.

~~We believe the outlook for future growth~~In Europe, we continue to experience supply constraints of ~~the European economy and private consumption~~certain component parts from our non-chassis raw material vendors. Additionally, primarily due to pandemic-related challenges, we have also experienced delays in general is positive, with differences for each country, but could be negatively impacted by increasing global trade barriers and related tax tariffs, as well as by European political decisions like Brexit, or the introductionreceipt of ~~new emission standards.~~

Inchassis from our European ~~market, EHG has not experienced any significant, unusual supply constraints from~~ chassis ~~suppliers recently. The European recreational vehicle industry has, from time~~suppliers. In the short term, we expect these challenges to ~~time, experienced shortages~~persist and, in particular, anticipate continued delays in receipt of chassis in Europe. Where possible, to minimize the impact of these supply chain constraints, we have identified a second-source supplier base for ~~various reasons, including the introduction of new regulatory standards,~~most component ~~shortages and production delays at~~parts. However, due to engineering requirements, it is generally not possible to quickly change the chassis ~~manufacturers. We believe that~~our various units are built upon. As a result, limitations in the ~~current supply~~availability of chassis ~~used in~~will limit our ability to ramp up production of certain products despite dealer demand for those products. If the ~~European motorized RV~~impact of COVID-19 on our vendors increases or is prolonged, the availability of key components, including chassis, will have a further negative impact on our production ~~is generally adequate for current production levels, and that available inventory would compensate for short-term changes in supply schedules if they occur. However, uncertainties~~output during fiscal 2021. Uncertainties related to changing emission standards, such as the Euro 6d standard which ~~becomes~~became effective ~~from~~as of January 2020 for new models and ~~from~~became effective for certain vehicles starting January 2021 ~~on all new~~and other vehicles starting January 2022, may also impact the availability of chassis used in our production of certain European motorized RVs and could also impact consumer buying patterns.

In ~~regard~~addition to ~~the~~material supply ~~of other raw materials used in~~constraints, labor shortages may also impact our European operations, especially in light of the ongoing COVID-19 pandemic. Currently, a number of the employees of our production ~~processes,~~facilities in Europe reside in one country while ~~EHG does not source a significant amount of raw materials directly from China, the recent coronavirus outbreak~~working in another and therefore travel restrictions imposed by certain countries within Europe may ~~have an~~negatively impact on the availability of ~~certain component products that are purchased by some of EHG's current raw material suppliers from China. We believe~~ our ~~near-term raw material supply needs will not be materially disrupted given the current supply of~~labor force and therefore our raw materials already on hand, the current availability of raw materials at our major suppliers and the availability of those raw materials from alternate supply sources. If, however, the impact of the coronavirus on the availability of material sourced from China is prolonged, this could have an adverse longer-term impact on our European raw material availability or the cost of such material.

production output.

Three Months Ended January 31, ~~2020~~2021 Compared to the Three Months Ended January 31, ~~2019~~2020


NET SALES:	NET SALES:	Three Months Ended January 31, 2020		Three Months Ended January 31, 2019		Change Amount		% Change	NET SALES:	Three Months Ended January 31, 2021		Three Months Ended January 31, 2020		Change Amount		% Change
Recreational vehicles	Recreational vehicles								Recreational vehicles
North American Towables	North American Towables	$	983,907	$	881,564	$	102,343	11.6	North American Towables	$	1,373,181	$	983,907	$	389,274	39.6
North American Motorized	North American Motorized	343,680		371,495		(27,815)		(7.5)	North American Motorized	576,995		343,680		233,315		67.9
Total North America	Total North America	1,327,587		1,253,059		74,528		5.9	Total North America	1,950,176		1,327,587		622,589		46.9
European	European	637,115		—		637,115		n/a	European	733,463		637,115		96,348		15.1
Total recreational vehicles	Total recreational vehicles	1,964,702		1,253,059		711,643		56.8	Total recreational vehicles	2,683,639		1,964,702		718,937		36.6
Other	Other	57,745		55,114		2,631		4.8	Other	74,714		57,745		16,969		29.4
Intercompany eliminations	Intercompany eliminations	(19,314)		(17,597)		(1,717)		9.8	Intercompany eliminations	(30,565)		(19,314)		(11,251)		(58.3)
Total	Total	$	2,003,133	$	1,290,576	$	712,557	55.2	Total	$	2,727,788	$	2,003,133	$	724,655	36.2


# OF UNITS:	# OF UNITS:					# OF UNITS:
Recreational vehicles	Recreational vehicles					Recreational vehicles
North American Towables	North American Towables	35,566	32,758	2,808	8.6	North American Towables	48,403	35,566	12,837	36.1
North American Motorized	North American Motorized	3,803	4,092	(289)	(7.1)	North American Motorized	5,587	3,803	1,784	46.9
Total North America	Total North America	39,369	36,850	2,519	6.8	Total North America	53,990	39,369	14,621	37.1
European	European	14,296	—	14,296	n/a	European	14,581	14,296	285	2.0
Total	Total	53,665	36,850	16,815	45.6	Total	68,571	53,665	14,906	27.8


GROSS PROFIT:	GROSS PROFIT:			% of Segment Net Sales			% of Segment Net Sales	Change Amount		% Change	GROSS PROFIT:			% of Segment Net Sales			% of Segment Net Sales	Change Amount		% Change
Recreational vehicles	Recreational vehicles										Recreational vehicles
North American Towables	North American Towables	$	130,522	13.3	$	96,510	10.9	$	34,012	35.2	North American Towables	$	227,656	16.6	$	130,522	13.3	$	97,134	74.4
North American Motorized	North American Motorized	34,229		10.0	36,282		9.8	(2,053)		(5.7)	North American Motorized	75,118		13.0	34,229		10.0	40,889		119.5
Total North America	Total North America	164,751		12.4	132,792		10.6	31,959		24.1	Total North America	302,774		15.5	164,751		12.4	138,023		83.8
European	European	79,462		12.5	—		—	79,462		n/a	European	94,637		12.9	79,462		12.5	15,175		19.1
Total recreational vehicles	Total recreational vehicles	244,213		12.4	132,792		10.6	111,421		83.9	Total recreational vehicles	397,411		14.8	244,213		12.4	153,198		62.7
Other, net	Other, net	12,193		21.1	8,804		16.0	3,389		38.5	Other, net	17,466		23.4	12,193		21.1	5,273		43.2
Total	Total	$	256,406	12.8	$	141,596	11.0	$	114,810	81.1	Total	$	414,877	15.2	$	256,406	12.8	$	158,471	61.8


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:	SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:														SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Recreational vehicles	Recreational vehicles										Recreational vehicles
North American Towables	North American Towables	$	57,843	5.9	$	52,433	5.9	$	5,410	10.3	North American Towables	$	73,196	5.3		$	57,843	5.9	$	15,353	26.5
North American Motorized	North American Motorized	17,972		5.2	17,808		4.8	164		0.9	North American Motorized	29,641		5.1		17,972		5.2	11,669		64.9
Total North America	Total North America	75,815		5.7	70,241		5.6	5,574		7.9	Total North America	102,837		5.3		75,815		5.7	27,022		35.6
European	European	62,843		9.9	—		—	62,843		n/a	European	66,309		9.0		62,843		9.9	3,466		5.5
Total recreational vehicles	Total recreational vehicles	138,658		7.1	70,241		5.6	68,417		97.4	Total recreational vehicles	169,146		6.3		138,658		7.1	30,488		22.0
Other	Other	2,402		4.2	1,912		3.5	490		25.6	Other	6,249		8.4		2,402		4.2	3,847		160.2
Corporate	Corporate	21,297		—	12,916		—	8,381		64.9	Corporate	30,794		—		21,297		—	9,497		44.6
Total	Total	$	162,357	8.1	$	85,069	6.6	$	77,288	90.9	Total	$	206,189	7.6		$	162,357	8.1	$	43,832	27.0


INCOME (LOSS) BEFORE INCOME TAXES:	INCOME (LOSS) BEFORE INCOME TAXES:	Three Months Ended January 31, 2020		% of Segment Net Sales	Three Months Ended January 31, 2019		% of Segment Net Sales	Change Amount		% Change	INCOME (LOSS) BEFORE INCOME TAXES:	Three Months Ended January 31, 2021		% of Segment Net Sales	Three Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
Recreational vehicles	Recreational vehicles										Recreational vehicles
North American Towables	North American Towables	$	53,426	5.4	$	34,060	3.9	$	19,366	56.9	North American Towables	$	147,880	10.8	$	53,426	5.4	$	94,454	176.8
North American Motorized	North American Motorized	14,916		4.3	17,205		4.6	(2,289)		(13.3)	North American Motorized	43,421		7.5	14,916		4.3	28,505		191.1
Total North America	Total North America	68,342		5.1	51,265		4.1	17,077		33.3	Total North America	191,301		9.8	68,342		5.1	122,959		179.9
European	European	4,690		0.7	—		—	4,690		n/a	European	10,216		1.4	4,690		0.7	5,526		117.8
Total recreational vehicles	Total recreational vehicles	73,032		3.7	51,265		4.1	21,767		42.5	Total recreational vehicles	201,517		7.5	73,032		3.7	128,485		175.9
Other, net	Other, net	8,609		14.9	5,950		10.8	2,659		44.7	Other, net	9,644		12.9	8,609		14.9	1,035		12.0
Corporate	Corporate	(46,778)		—	(55,342)		—	8,564		(15.5)	Corporate	(47,202)		—	(46,778)		—	(424)		(0.9)
Total	Total	$	34,863	1.7	$	1,873	0.1	$	32,990	1,761.3	Total	$	163,959	6.0	$	34,863	1.7	$	129,096	370.3


ORDER BACKLOG:	ORDER BACKLOG:	Three Months Ended January 31, 2020		Three Months Ended January 31, 2019		Change Amount		% Change	ORDER BACKLOG:	As of January 31, 2021		As of January 31, 2020		Change Amount		% Change
Recreational vehicles	Recreational vehicles								Recreational vehicles
North American Towables	North American Towables	$	948,055	$	812,020	$	136,035	16.8	North American Towables	$	5,253,564	$	948,055	$	4,305,509	454.1
North American Motorized	North American Motorized	784,355		639,876		144,479		22.6	North American Motorized	2,916,433		784,355		2,132,078		271.8
Total North America	Total North America	1,732,410		1,451,896		280,514		19.3	Total North America	8,169,997		1,732,410		6,437,587		371.6
European	European	1,141,981		—		1,141,981		n/a	European	2,644,181		1,141,981		1,502,200		131.5
Total	Total	$	2,874,391	$	1,451,896	$	1,422,495	98.0	Total	$	10,814,178	$	2,874,391	$	7,939,787	276.2

CONSOLIDATED

Consolidated net sales for the three months ended January 31, ~~2020~~2021 increased ~~$712,557,~~$724,655, or ~~55.2%~~36.2%, compared to the three months ended January 31, ~~2019. This increase is attributable to EHG's net sales~~2020. The recent acquisition of ~~$637,115, and an~~Tiffin Group, which was acquired on December 18, 2020, accounted for $82,432 of the $724,655 increase in net sales ~~from North America recreational vehicles~~ and ~~Other,~~4.1% of the 36.2% increase. Approximately 26.9% of the Company's net ~~of $75,442, or 5.8%, compared to~~sales for the ~~three months~~quarter ended January 31, ~~2019.~~ 2021 were transacted in a currency other than the U.S. dollar. The Company's most material exchange rate exposure is sales in Euros. Of the $724,655, or 36.2%, increase in consolidated net sales, $57,977, or 2.9% of the 36.2% increase, reflects the impact of the change in currency exchange rates between the two periods. To determine this information, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period.

Consolidated gross profit for the three months ended January 31, ~~2020~~2021 increased ~~$114,810,~~$158,471, or ~~81.1%~~61.8%, compared to the three months ended January 31, 2019. The increase in gross profit included EHG's gross profit for the period of $79,462, in addition to the increase of $35,348, or 25.0%, in total North American and Other, net gross profit compared to the prior-year quarter.2020. Consolidated gross profit was ~~12.8%~~15.2% of consolidated net sales for the three months ended January 31, ~~2020~~2021 and ~~11.0%~~12.8% for the three months ended January 31, ~~2019, with~~2020. The increases in consolidated gross profit and the consolidated gross profit percentage were both primarily due to the impact of the increase in net sales in the current-year period compared to the prior-year period and gross margin cost percentage ~~primarily impacted~~improvements noted below, partially offset by the ~~North American recreational vehicles improvement~~negative impact of $4,272 related to ~~12.4% from 10.6% and~~ the ~~addition~~step-up in assigned value of ~~EHG's gross profit percentage~~recently acquired Tiffin Group inventory included in cost of ~~12.5%.~~products sold during the current-year period.

Selling, general and administrative expenses for the three months ended January 31, ~~2020~~2021 increased ~~$77,288,~~$43,832, or ~~90.9%~~27.0%, compared to the three months ended January 31, ~~2019, with EHG accounting for $62,843 of the $77,288 increase.~~2020.

Amortization of intangible assets expense for the three months ended January 31, ~~2020~~2021 increased ~~$11,747~~$4,930 compared to the three months ended January 31, ~~2019,~~2020, primarily due to ~~incremental amortization expense of $12,714 from EHG, partially offset by lower~~higher dealer network amortization in the European segment as compared to the prior-year ~~period.~~period and additional amortization of $1,416 as a result of the Tiffin Group as discussed in Note 2 to the Condensed Consolidated Financial Statements.

The ~~non-cash~~ impairment charges for the three months ended January 31, 2020 of $10,057 ~~relate~~related to the North American Towables reportable segment as discussed in Note 208 to the Condensed Consolidated Financial Statements.

Income before income taxes for the three months ended January 31, 2021 was $163,959, as compared to $34,863 for the three months ended January 31, 2020, an increase of $129,096 or 370.3%, primarily driven by the increase in net sales and the increase in the consolidated gross profit percentage noted above.

Additional information concerning the changes in net sales, gross profit, selling, general and administrative expenses and income before income taxes are addressed below and in the segment reporting that follows.

Corporate costs included in selling, general and administrative expenses increased $9,497 to $30,794 for the three months ended January 31, 2021 compared to $21,297 for the three months ended January 31, 2020, an increase of 44.6%. This increase is primarily related to increased compensation costs, including an increase in deferred compensation expense of $4,313, which was effectively offset by the increase in other income related to the deferred compensation plan assets as noted below. In addition, incentive compensation increased $3,403 due to the increase in income before income taxes compared to the prior-year period, and stock-based compensation also increased $2,228.

Corporate interest and other income and expense was $16,408 of net expense for the three months ended January 31, 2021 compared to $25,481 of net expense for the three months ended January 31, 2020. This decrease in net expense of $9,073 included the change in the fair value of the Company’s deferred compensation plan assets due to market fluctuations and investment income, which resulted in a net increase in other income of $4,205 compared to the prior-year period. In addition, interest expense and fees on the debt facilities related to the EHG acquisition decreased $2,864 due to the reduction in the outstanding debt balances and reduced interest rates compared to the prior-year period. The prior year total also included losses of $2,652 related to the Company's former equity investment as discussed in Note 2 to the Condensed Consolidated Financial Statements.

The overall effective income tax rate for the three months ended January 31, 2021 was 20.0% compared with 22.5% for the three months ended January 31, 2020. The primary reason for the decrease in the overall effective income tax rate between the comparable periods were certain favorable foreign return-to-provision adjustments recorded in the three months ended January 31, 2021.

Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended January 31, 2021 compared to the three months ended January 31, 2020:


	Three Months Ended January 31, 2021		% of Segment Net Sales	Three Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
NET SALES:
North American Towables
Travel Trailers	$	831,359	60.5	$	583,121	59.3	$	248,238	42.6
Fifth Wheels	541,822		39.5	400,786		40.7	141,036		35.2
Total North American Towables	$	1,373,181	100.0	$	983,907	100.0	$	389,274	39.6

	Three Months Ended January 31, 2021		% of Segment Shipments	Three Months Ended January 31, 2020		% of Segment Shipments	Change Amount		% Change
# OF UNITS:
North American Towables
Travel Trailers	37,346		77.2	27,126		76.3	10,220		37.7
Fifth Wheels	11,057		22.8	8,440		23.7	2,617		31.0
Total North American Towables	48,403		100.0	35,566		100.0	12,837		36.1

IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:									% Change
North American Towables
Travel Trailers									4.9
Fifth Wheels									4.2
Total North American Towables									3.5

The increase in total North American towables net sales of 39.6% compared to the prior-year quarter resulted from a 36.1% increase in unit shipments and a 3.5% increase in the overall net price per unit due to the impact of changes in product mix and price. Of the $389,274 increase in total towables net sales, $7,812 was due to the acquisition of the Tiffin Group on December 18, 2020. According to statistics published by RVIA, for the three months ended January 31, 2021, combined North American travel trailer and fifth wheel wholesale unit shipments increased 45.4% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2020 and 2019, our North American market share for travel trailers and fifth wheels combined was 39.8% and 41.9%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increase in the overall net price per unit within the travel trailer product line of 4.9% and in the overall net price per unit within the fifth wheel product lines of 4.2% was primarily due to selective net selling price increases, reduced sales discounts and product mix changes compared to the prior-year quarter.

North American towables cost of products sold increased $292,140 to $1,145,525, or 83.4% of North American towables net sales, for the three months ended January 31, 2021 compared to $853,385, or 86.7% of North American towables net sales, for the three months ended January 31, 2020. The changes in material, labor, freight-out and warranty costs comprised $277,962 of the $292,140 increase in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American towables net sales decreased to 76.9% for the three months ended January 31, 2021 compared to 79.1% for the three months ended January 31, 2020, primarily as a result of improvements in the material and warranty cost percentages, partially offset by an increase in the labor cost percentage. The improvement in the material cost percentage is primarily due to a reduction in sales discounts since the prior-year period, which effectively increases net selling prices and correspondingly decreases the material cost percentage. The warranty cost percentage is lower due to favorable experience trends, while the labor cost percentage increase is due to the current competitive RV labor market conditions in Northern Indiana compared to the prior-year period. Total manufacturing overhead increased $14,178 with the increase in sales, but decreased as a percentage of North American towables net sales from 7.6% to 6.5% as the increased net sales levels resulted in lower overhead costs per unit sold.

North American towables gross profit increased $97,134 to $227,656, or 16.6% of North American towables net sales, for the three months ended January 31, 2021 compared to $130,522, or 13.3% of North American towables net sales, for the three months ended January 31, 2020. The increase in gross profit was driven by the increase in net sales and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

North American towables selling, general and administrative expenses were $73,196, or 5.3% of North American towables net sales, for the three months ended January 31, 2021 compared to $57,843, or 5.9% of North American towables net sales, for the three months ended January 31, 2020. This $15,353 increase is primarily due to the impact of the increase in North American towables net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $19,785. This increase was partially offset by the decrease in sales-related travel, advertising and promotional costs of $2,649, primarily due to the cancellation of the major North American RV shows, along with travel restrictions, in the current-year period due to the ongoing COVID-19 pandemic. Legal, professional and related settlement costs also decreased $1,614. The decrease in the overall selling, general and administrative expense as a percentage of North American towable net sales is primarily due to the impact of the reduction in sales-related travel, advertising and promotional costs in tandem with the increase in net sales.

North American towables income before income taxes was $147,880, or 10.8% of North American towables net sales, for the three months ended January 31, 2021 compared to $53,426 or 5.4% of North American towables net sales, for the three months ended January 31, 2020. The primary reason for the increase in North American towables income before income taxes was the increase in North American towables net sales, and the primary reasons for the increase in percentage were the decreases in the cost of products sold and selling, general and administrative expense percentages noted above, and a 1.0% increase due to the impairment charges in the prior-year period as discussed in Note 8 to the Condensed Consolidated Financial Statements.

NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended January 31, 2021 compared to the three months ended January 31, 2020:


	Three Months Ended January 31, 2021		% of Segment Net Sales	Three Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
NET SALES:
North American Motorized
Class A	$	222,128	38.5	$	125,474	36.5	$	96,654	77.0
Class C	294,300		51.0	186,761		54.3	107,539		57.6
Class B	60,567		10.5	31,445		9.2	29,122		92.6
Total North American Motorized	$	576,995	100.0	$	343,680	100.0	$	233,315	67.9

	Three Months Ended January 31, 2021		% of Segment Shipments	Three Months Ended January 31, 2020		% of Segment Shipments	Change Amount		% Change
# OF UNITS:
North American Motorized
Class A	1,500		26.8	1,066		28.0	434		40.7
Class C	3,481		62.3	2,483		65.3	998		40.2
Class B	606		10.9	254		6.7	352		138.6
Total North American Motorized	5,587		100.0	3,803		100.0	1,784		46.9

IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:									% Change
North American Motorized
Class A									36.3
Class C									17.4
Class B									(46.0)
Total North American Motorized									21.0

The increase in total North American motorized net sales of 67.9% compared to the prior-year quarter resulted from a 46.9% increase in unit shipments and a 21.0% increase in the overall net price per unit due to the impact of changes in product mix and price. The recently acquired Tiffin Group accounted for $74,620 of the $233,315 increase and for 21.7% of the 67.9% increase. According to statistics published by RVIA, for the three months ended January 31, 2021, combined North American motorhome wholesale unit shipments increased 27.0% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2020 and 2019, our North American market share for motorhomes was 39.1% and 35.3%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increases in the overall net price per unit within the Class A product line of 36.3% and the Class C product line of 17.4% were primarily due to the net impact of the addition of the higher-priced Tiffin Group product lines and selective net price increases. The decrease in the overall net price per unit within the Class B product line of 46.0% is primarily due to product mix changes as a result of a much higher concentration of sales of lower-priced Class B models as compared to the prior-year quarter.

North American motorized cost of products sold increased $192,426 to $501,877, or 87.0% of North American motorized net sales, for the three months ended January 31, 2021 compared to $309,451, or 90.0% of North American motorized net sales, for the three months ended January 31, 2020. The changes in material, labor, freight-out and warranty costs comprised $181,954 of the $192,426 increase primarily due to the increased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American motorized net sales decreased to 81.8% for the three months ended January 31, 2021 compared to 84.3% for the three months ended January 31, 2020, with the decrease primarily due to decreases in both the material and warranty cost percentages, partially offset by an increase in the labor cost percentage. The improvement in the material cost percentage is primarily due to a reduction in sales discounts since the prior-year period, which effectively increases net selling prices and correspondingly decreases the material cost percentage, and product mix changes, which were partially offset by the negative impact of $3,852 related to the step-up in assigned value of recently acquired Tiffin Motorhomes inventory that was included in cost of products sold during the current-year period. The warranty cost percentage is lower due to favorable experience trends, while the labor cost percentage increase is due to the current competitive RV labor market conditions in northern Indiana compared to the prior-year period. Total manufacturing overhead increased $10,472 due to the net sales increase, but decreased slightly as a percentage of North American motorized net sales from 5.7% to 5.2% as the increased net sales resulted in lower overhead costs per unit sold.

North American motorized gross profit increased $40,889 to $75,118, or 13.0% of North American motorized net sales, for the three months ended January 31, 2021 compared to $34,229, or 10.0% of North American motorized net sales, for the three months ended January 31, 2020. The increase in gross profit was driven by the increase in net sales and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

North American motorized selling, general and administrative expenses were $29,641, or 5.1% of North American motorized net sales, for the three months ended January 31, 2021 compared to $17,972, or 5.2% of North American motorized net sales, for the three months ended January 31, 2020. The primary reason for the $11,669 increase was the increase in North American motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $9,934. Legal, professional and related settlement costs also increased $840. These increases were partially offset by a decrease in sales-related travel, advertising and promotional costs of $560, primarily due to the cancellation of the major North American RV shows, along with travel restrictions, in the current-year period due to the ongoing COVID-19 pandemic. The slight decrease in overall selling, general and administrative expense as a percentage of North American motorized net sales was primarily due to the increased net sales volumes.

North American motorized income before income taxes was $43,421, or 7.5% of North American motorized net sales, for the three months ended January 31, 2021 compared to $14,916, or 4.3% of motorized net sales, for the three months ended January 31, 2020. The primary reason for the increase in North American motorized income before income taxes was the increase in North American motorized net sales. The primary reason for this increase in percentage was the decrease in the cost of products sold percentage noted above.

EUROPEAN RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended January 31, 2021 compared to the three months ended January 31, 2020:


	Three Months Ended January 31, 2021		% of Segment Net Sales	Three Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
NET SALES:
European
Motorcaravan	$	419,137	57.1	$	382,422	60.0	$	36,715	9.6
Campervan	149,112		20.3	97,923		15.4	51,189		52.3
Caravan	71,654		9.8	69,909		11.0	1,745		2.5
Other	93,560		12.8	86,861		13.6	6,699		7.7
Total European	$	733,463	100.0	$	637,115	100.0	$	96,348	15.1

	Three Months Ended January 31, 2021		% of Segment Shipments	Three Months Ended January 31, 2020		% of Segment Shipments	Change Amount		% Change
# OF UNITS:
European
Motorcaravan	7,026		48.2	7,372		51.6	(346)		(4.7)
Campervan	4,121		28.3	3,304		23.1	817		24.7
Caravan	3,434		23.5	3,620		25.3	(186)		(5.1)
Total European	14,581		100.0	14,296		100.0	285		2.0

IMPACT OF CHANGE IN PRODUCT MIX, FOREIGN CURRENCY CHANGES AND PRICE ON NET SALES:									% Change
European
Motorcaravan									14.3
Campervan									27.6
Caravan									7.6
Total European									13.1

The increase in total European recreational vehicle net sales of 15.1% compared to the prior-year quarter resulted from an 2.0% increase in unit shipments and a 13.1% increase in the overall net price per unit due to the impact of changes in product mix and price. This increase includes the current heightened European market demand for the Campervan product line, partially offset by the impact of current chassis supply constraints on the Motorcaravan product line and COVID-19 related impact on production and delivery of Caravan units in the United Kingdom. The sales increase of $96,348 includes an increase of $57,977, or 9.1% of the 15.1% increase, due to the increase in foreign exchange rates since the prior-year period.

The overall net price per unit increase of 13.1% includes the impact of foreign currency exchange rate changes, which accounts for 9.1% of the 13.1% increase on a constant-currency basis.

The increase in the overall net price per unit within the Motorcaravan product line of 14.3% was primarily due to the 9.1% increase in foreign exchange rates from the prior-year period, product mix changes and selective net selling price increases since the prior year. The increase in the overall net price per unit within the Campervan product line of 27.6% was primarily due to the net impact of product mix changes, including more sales of units with higher chassis content than the prior year, in addition to selective net price increases and the 9.1% increase in exchange rates. The increase in the overall net price per unit within the Caravan product line of 7.6% is primarily due to the 9.1% increase in foreign exchange rates from the prior-year period, partially offset by product mix.

European recreational vehicle cost of products sold increased $81,173 to $638,826, or 87.1% of European recreational vehicle net sales, for the three months ended January 31, 2021 compared to $557,653, or 87.5% of European recreational vehicle net sales, for the three months ended January 31, 2020. The changes in material, labor, freight-out and warranty costs comprised $72,112 of the $81,173 increase primarily due to the increased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of European recreational vehicle net sales decreased to 77.6% for the three months ended January 31, 2021 compared to 78.0% for the three months ended January 31, 2020, with the decrease primarily due to slight reductions in both the labor and warranty cost percentages. Total manufacturing overhead increased $9,061 with the volume increase but was consistent as a percentage of motorized net sales at 9.5% for both periods.

European recreational vehicle gross profit increased $15,175 to $94,637, or 12.9% of European recreational vehicle net sales, for the three months ended January 31, 2021 compared to $79,462, or 12.5% of European recreational vehicle net sales, for the three months ended January 31, 2020. The increase in gross profit was driven by the increase in net sales and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

European recreational vehicle selling, general and administrative expenses were $66,309, or 9.0% of European recreational vehicle net sales, for the three months ended January 31, 2021 compared to $62,843, or 9.9% of European recreational vehicle net sales, for the three months ended January 31, 2020. The $3,466 increase includes the impact of the increase in European recreational vehicle net sales and income before income taxes, which caused commissions, incentive and other compensation and benefits to increase by $4,808. Professional fees also increased $4,627. These increases were partially offset by the decrease in sales-related travel, advertising and promotional costs of $5,457, primarily due to not participating in European trade shows, along with travel restrictions, in the current-year period due to the ongoing COVID-19 pandemic. The decrease in the overall selling, general and administrative expense as a percentage of European recreational vehicle net sales is primarily due to the decrease in sales-related travel, advertising and promotional costs and the increase in net sales.

European recreational vehicle net income before income taxes was $10,216, or approximately 1.4% of European recreational vehicle net sales, for the three months ended January 31, 2021 compared to $4,690, or 0.7% of European recreational vehicle net sales, for the three months ended January 31, 2020. The primary reason for the increase in income before income taxes was the increase in European recreational vehicle net sales. The increase in percentage was primarily due to the decrease in the selling, general and administrative expense percentage noted above.

Six Months Ended January 31, 2021 Compared to the Six Months Ended January 31, 2020


NET SALES:	Six Months Ended January 31, 2021		Six Months Ended January 31, 2020		Change Amount		% Change
Recreational vehicles
North American Towables	$	2,765,225	$	2,184,795	$	580,430	26.6
North American Motorized	1,070,850		759,569		311,281		41.0
Total North America	3,836,075		2,944,364		891,711		30.3
European	1,335,951		1,130,122		205,829		18.2
Total recreational vehicles	5,172,026		4,074,486		1,097,540		26.9
Other	155,421		131,311		24,110		18.4
Intercompany eliminations	(62,299)		(43,879)		(18,420)		(42.0)
Total	$	5,265,148	$	4,161,918	$	1,103,230	26.5


# OF UNITS:
Recreational vehicles
North American Towables	98,744	78,431	20,313	25.9
North American Motorized	10,754	8,293	2,461	29.7
Total North America	109,498	86,724	22,774	26.3
European	26,807	25,583	1,224	4.8
Total	136,305	112,307	23,998	21.4


GROSS PROFIT:			% of Segment Net Sales			% of Segment Net Sales	Change Amount		% Change
Recreational vehicles
North American Towables	$	447,504	16.2	$	314,715	14.4	$	132,789	42.2
North American Motorized	143,220		13.4	78,976		10.4	64,244		81.3
Total North America	590,724		15.4	393,691		13.4	197,033		50.0
European	167,018		12.5	144,073		12.7	22,945		15.9
Total recreational vehicles	757,742		14.7	537,764		13.2	219,978		40.9
Other, net	35,987		23.2	27,453		20.9	8,534		31.1
Total	$	793,729	15.1	$	565,217	13.6	$	228,512	40.4


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Recreational vehicles
North American Towables	$	143,534	5.2	$	129,148	5.9	$	14,386	11.1
North American Motorized	54,793		5.1	39,603		5.2	15,190		38.4
Total North America	198,327		5.2	168,751		5.7	29,576		17.5
European	126,730		9.5	136,629		12.1	(9,899)		(7.2)
Total recreational vehicles	325,057		6.3	305,380		7.5	19,677		6.4
Other	11,685		7.5	4,777		3.6	6,908		144.6
Corporate	51,210		—	40,664		—	10,546		25.9
Total	$	387,952	7.4	$	350,821	8.4	$	37,131	10.6


INCOME (LOSS) BEFORE INCOME TAXES:	Six Months Ended January 31, 2021		% of Segment Net Sales	Six Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
Recreational vehicles
North American Towables	$	289,059	10.5	$	157,748	7.2	$	131,311	83.2
North American Motorized	84,988		7.9	36,691		4.8	48,297		131.6
Total North America	374,047		9.8	194,439		6.6	179,608		92.4
European	4,710		0.4	(18,334)		(1.6)	23,044		125.7
Total recreational vehicles	378,757		7.3	176,105		4.3	202,652		115.1
Other, net	21,134		13.6	20,360		15.5	774		3.8
Corporate	(89,613)		—	(92,968)		—	3,355		3.6
Total	$	310,278	5.9	$	103,497	2.5	$	206,781	199.8

CONSOLIDATED

Consolidated net sales for the six months ended January 31, 2021 increased $1,103,230, or 26.5%, compared to the six months ended January 31, 2020. The recent acquisition of Tiffin Group, which was acquired on December 18, 2020, accounted for $82,432 of the $1,103,230 increase in net sales and 2.0% of the 26.5% increase. Approximately 25.4% of the Company's net sales for the quarter ended January 31, 2021 were transacted in a currency other than the U.S. dollar. The Company's most material exchange rate exposure is sales in Euros. Of the $1,103,230, or 26.5%, increase in consolidated net sales, $95,886, or 2.3% of the 26.5% increase, reflects the impact of the change in currency exchange rates between the two periods. To determine this information, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period.

Consolidated gross profit for the six months ended January 31, 2021 increased $228,512, or 40.4%, compared to the six months ended January 31, 2020. Consolidated gross profit was 15.1% of consolidated net sales for the six months ended January 31, 2021 and 13.6% for the six months ended January 31, 2020. The increases in consolidated gross profit and the consolidated gross profit percentage were both primarily due to the impact of the increase in net sales in the current-year period compared to the prior-year period.

Selling, general and administrative expenses for the six months ended January 31, 2021 increased $37,131, or 10.6%, compared to the six months ended January 31, 2020.

Amortization of intangible assets expense for the six months ended January 31, 2021 increased $8,064 compared to the six months ended January 31, 2020, primarily due to higher dealer network amortization in the European segment as compared to the prior-year period and additional amortization of $1,416 due to the acquisition of the Tiffin Group as discussed in Note 2 to the Condensed Consolidated Financial Statements.

The impairment charges for the six months ended January 31, 2020 of $10,057 related to the North American Towables reportable segment as discussed in Note 8 to the Condensed Consolidated Financial Statements.

Income before income taxes for the ~~three~~six months ended January 31, 2021 was $310,278, as compared to $103,497 for the six months ended January 31, 2020, ~~was $34,863, as compared to $1,873 for the three months ended January 31, 2019,~~ an increase of ~~$32,990.~~$206,781, or 199.8%, primarily driven by the increase in net sales.

Additional information concerning the changes in net sales, gross profit, selling, general and administrative expenses, impairment charges, acquisition-related costs and income before income taxes are addressed below and in the segment reporting that follows.

Corporate costs included in selling, general and administrative expenses increased ~~$8,381~~$10,546 to ~~$21,297~~$51,210 for the ~~three~~six months ended January 31, 2021 compared to $40,664 for the six months ended January 31, 2020, ~~compared to $12,916 for the three months ended January 31, 2019,~~ an increase of ~~64.9%~~25.9%. This increase ~~includes an~~is primarily related to increased compensation costs, as incentive compensation increased $4,943 due to the increase in income before income taxes compared to the prior-year period, and stock-based compensation also increased $2,983. In addition, deferred compensation expense ~~of $1,696,~~increased $3,710, which ~~relates to the equal and offsetting~~was effectively offset by an increase in other income related to the deferred compensation plan assets as noted ~~below,~~below. Costs related to workers' compensation and ~~an increase in total salaries and incentive compensation of $912. Legal, professional and marketing costs also~~product liability reserves recorded at Corporate increased by ~~$2,829,~~a total of $2,132, primarily due to ~~professional fees related~~favorable adjustments in the prior-year period. These increases were partially offset by a decrease in donations of $2,121, primarily due to a significant contribution to the ~~integration of~~National Forest Foundation in the ~~EHG operations,~~prior-year period, and ~~sales and~~a decrease in marketing costs ~~increased $1,306 due to heightened corporate-wide marketing initiatives.~~of $1,539.

Corporate interest and other income and expense was ~~$25,481~~$38,403 of net expense for the ~~three~~six months ended January 31, ~~2020~~2021 compared to ~~$367~~$52,304 of net expense for the ~~three~~six months ended January 31, ~~2019.~~2020. This ~~increase~~decrease in net expense of ~~$25,114 is primarily due to an increase~~$13,901 included a decrease in interest expense and fees ~~of $24,879 resulting from~~on the debt facilities related to the ~~EHG acquisition. This increase was partially offset by~~Erwin Hymer Group ("EHG") acquisition of $6,514 due to the reduction in the outstanding debt balances and reduced interest rates compared to the prior-year period. In addition, the change in the fair value of the Company’s deferred compensation plan assets due to market fluctuations and investment income ~~resulting~~resulted in ~~income, net of $2,637 in the current-year period as compared to income, net of $941 in the prior-year period,~~ a net increase in other income of ~~$1,696.~~

~~Acquisition-related costs were $42,059 for~~$3,556 compared to the ~~three months ended January 31, 2019. These Corporate costs~~prior-year period. The prior-year total also included ~~a non-cash foreign currency forward contract loss~~losses of ~~$31,152,~~$4,747 related to the Company's former equity investment as discussed in Note 2 to the ~~U.S. dollar strengthened against the Euro. The remaining $10,907 related primarily to ticking fees.~~Condensed Consolidated Financial Statements.

The overall effective income tax rate for the ~~three~~six months ended January 31, ~~2020~~2021 was ~~22.5%~~20.4% compared with ~~389.1%~~23.8% for the ~~three~~six months ended January 31, ~~2019.~~2020. The primary reason for the decrease in the overall effective income tax rate between the comparable periods ~~was the non-deductible~~were certain favorable foreign ~~currency forward contract loss of $31,152 that occurred~~return-to-provision adjustments recorded in the ~~three~~six months ended January 31, ~~2019 as discussed in Note 5 to~~2021. Additionally, the ~~Condensed Consolidated Financial Statements. Under federal~~ income tax ~~law,~~rate for the ~~loss recognized for financial statement purposes~~six months ended January 31, 2020 was ~~not deductible for federal income~~negatively impacted by additional tax ~~purposes.~~expense from the vesting of share-based compensation awards.

Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

Analysis of the change in net sales for the ~~three~~six months ended January 31, ~~2020~~2021 compared to the ~~three~~six months ended January 31, ~~2019:~~2020:


		Three Months Ended January 31, 2020		% of Segment Net Sales	Three Months Ended January 31, 2019		% of Segment Net Sales	Change Amount		% Change		Six Months Ended January 31, 2021		% of Segment Net Sales	Six Months Ended January 31, 2020			% of Segment Net Sales		Change Amount		% Change
NET SALES:	NET SALES:										NET SALES:
North American Towables	North American Towables										North American Towables
Travel Trailers and Other		$	583,121	59.3	$	535,779	60.8	$	47,342	8.8
Travel Trailers											Travel Trailers	$	1,669,259	60.4	$	1,292,786		59.2		$	376,473	29.1
Fifth Wheels	Fifth Wheels	400,786		40.7	345,785		39.2	55,001		15.9	Fifth Wheels	1,095,966		39.6	892,009			40.8		203,957		22.9
Total North American Towables	Total North American Towables	$	983,907	100.0	$	881,564	100.0	$	102,343	11.6	Total North American Towables	$	2,765,225	100.0	$	2,184,795		100.0		$	580,430	26.6

		Three Months Ended January 31, 2020		% of Segment Shipments	Three Months Ended January 31, 2019		% of Segment Shipments	Change Amount		% Change		Six Months Ended January 31, 2021		% of Segment Shipments	Six Months Ended January 31, 2020			% of Segment Shipments		Change Amount		% Change
# OF UNITS:	# OF UNITS:										# OF UNITS:
North American Towables	North American Towables										North American Towables
Travel Trailers and Other		27,126		76.3	25,222		77.0	1,904		7.5
Travel Trailers											Travel Trailers	76,423		77.4	59,646			76.0		16,777		28.1
Fifth Wheels	Fifth Wheels	8,440		23.7	7,536		23.0	904		12.0	Fifth Wheels	22,321		22.6	18,785			24.0		3,536		18.8
Total North American Towables	Total North American Towables	35,566		100.0	32,758		100.0	2,808		8.6	Total North American Towables	98,744		100.0	78,431			100.0		20,313		25.9

IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:	IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:																% Change		IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:				% Change
North American Towables	North American Towables																		North American Towables
Travel Trailers and Other																	1.3
Travel Trailers											Travel Trailers											1.0
Fifth Wheels	Fifth Wheels																3.9		Fifth Wheels				4.1
Total North American Towables	Total North American Towables																3.0		Total North American Towables				0.7

The increase in total North American towables net sales of ~~11.6%~~26.6% compared to the prior-year ~~quarter~~period resulted from a ~~8.6%~~25.9% increase in unit shipments and a ~~3.0%~~0.7% increase in the overall net price per unit due to the impact of changes in product mix and price. According to statistics published by RVIA, for the ~~three~~six months ended January 31, ~~2020,~~2021, combined North American travel trailer and fifth wheel wholesale unit shipments increased ~~6.6%~~35.2% compared to the same period last year. According to ~~the most recently~~statistics published ~~statistics from~~by Stat Surveys, for the ~~three-month~~six-month periods ended December 31, ~~2019~~2020 and ~~2018,~~2019, our North American market share for travel trailers and fifth wheels combined was ~~42.8%~~41.7% and ~~47.9%~~44.5%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The slight increase in the overall net price per unit within the travel trailer product line of 1.0% and the increase in the overall net price per unit within the fifth wheel product lines of 4.1% were primarily due to selective net price increases and product mix changes compared to the prior-year period.

North American towables cost of products sold increased $447,641 to $2,317,721, or 83.8% of North American towables net sales, for the six months ended January 31, 2021 compared to $1,870,080, or 85.6% of North American towables net sales, for the six months ended January 31, 2020. The changes in material, labor, freight-out and warranty costs comprised $424,899 of the $447,641 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American towables net sales decreased to 77.6% for the six months ended January 31, 2021 compared to 78.8% for the six months ended January 31, 2020, primarily as a result of improvements in the material and warranty cost percentages, partially offset by an increase in the labor cost percentage. The improvement in the material cost percentage is primarily due to a reduction in sales discounts since the prior-year period, which effectively increases net selling prices and correspondingly decreases the material cost percentage. The warranty cost percentage is lower due to favorable experience trends, while the labor cost percentage increase is due to the current competitive RV labor market conditions in northern Indiana compared to the prior-year period. Total manufacturing overhead increased $22,742 with the increase in sales, but decreased as a percentage of North American towables net sales from 6.8% to 6.2%, as the increased net sales levels resulted in lower overhead cost per units sold.

North American towables gross profit increased $132,789 to $447,504, or 16.2% of North American towables net sales, for the six months ended January 31, 2021 compared to $314,715, or 14.4% of North American towables net sales, for the six months ended January 31, 2020. The increase in the gross profit was driven by the increase in net sales, and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

North American towables selling, general and administrative expenses were $143,534, or 5.2% of North American towables net sales, for the six months ended January 31, 2021 compared to $129,148, or 5.9% of North American towables net sales, for the six months ended January 31, 2020. The primary reason for the $14,386 increase was the impact of the increase in North American towables net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $29,263. This increase was partially offset by the decrease in sales-related travel, advertising and promotional costs of $9,309, primarily due to the cancellation of the major North American RV shows, along with travel restrictions, in the current-year period due to the ongoing COVID-19 pandemic. Legal, professional and related settlement costs also decreased $4,454. The decrease in the overall selling, general and administrative expense as a percentage of North American towable net sales is primarily due to the reduction in sales-related travel, advertising and promotion costs in tandem with the increase in net sales.

North American towables income before income taxes was $289,059, or 10.5% of North American towables net sales, for the six months ended January 31, 2021 compared to $157,748 or 7.2% of North American towables net sales, for the six months ended January 31, 2020. The primary reason for the increase in North American towables income before income taxes was the increase in North American towables net sales, and the primary reasons for the increase in percentage were the decreases in the cost of products sold and selling, general and administrative expense percentages noted above, and a 0.5% increase due to the impairment charges in the prior-year period as discussed in Note 8 to the Condensed Consolidated Financial Statements.

NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

Analysis of the change in net sales for the six months ended January 31, 2021 compared to the six months ended January 31, 2020:


	Six Months Ended January 31, 2021		% of Segment Net Sales	Six Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
NET SALES:
North American Motorized
Class A	$	380,683	35.5	$	287,206	37.8	$	93,477	32.5
Class C	569,699		53.2	416,598		54.8	153,101		36.8
Class B	120,468		11.3	55,765		7.4	64,703		116.0
Total North American Motorized	$	1,070,850	100.0	$	759,569	100.0	$	311,281	41.0

	Six Months Ended January 31, 2021		% of Segment Shipments	Six Months Ended January 31, 2020		% of Segment Shipments	Change Amount		% Change
# OF UNITS:
North American Motorized
Class A	2,668		24.8	2,316		27.9	352		15.2
Class C	6,945		64.6	5,524		66.6	1,421		25.7
Class B	1,141		10.6	453		5.5	688		151.9
Total North American Motorized	10,754		100.0	8,293		100.0	2,461		29.7

IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:									% Change
North American Motorized
Class A									17.3
Class C									11.1
Class B									(35.9)
Total North American Motorized									11.3

The increase in total North American motorized net sales of 41.0% compared to the prior-year period resulted from a 29.7% increase in unit shipments and a 11.3% increase in the overall net price per unit due to the impact of changes in product mix and price. The recently acquired Tiffin Group accounted for $74,620 of the $311,281 increase and for 9.8% of the 41.0% increase. According to statistics published by RVIA, for the six months ended January 31, 2021, combined North American motorhome wholesale unit shipments increased 12.8% compared to the same period last year. According to statistics published by Stat Surveys, for the six-month periods ended December 31, 2020 and 2019, our North American market share for motorhomes was 38.7% and 37.6%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increases in the overall net price per unit within the travel trailer and other product lines of 1.3% and the fifth wheel product lines of 3.9% were both primarily due to changes in product mix and selective net price increases since the prior-year quarter.

Cost of products sold increased $68,331 to $853,385, or 86.7% of North American towables net sales, for the three months ended January 31, 2020 compared to $785,054 or 89.1% of North American towables net sales, for the three months ended January 31, 2019. The changes in material, labor, freight-out and warranty costs comprised $62,520 of the $68,331 increase in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American towables net sales decreased to 79.1% for the three months ended January 31, 2020 compared to 81.2% for the three months ended January 31, 2019, primarily as a result of improvements in the material and labor cost percentages. The improvement in the material cost percentage is primarily due to favorable product mix, selective net price increases and stable material costs since the prior-year period. Total manufacturing overhead increased $5,811 with the increase in sales and decreased slightly as a percentage of North American towables net sales from 7.9% to 7.6%.

North American towables gross profit increased $34,012 to $130,522, or 13.3% of North American towables net sales, for the three months ended January 31, 2020 compared to $96,510, or 10.9% of North American towables net sales, for the three months ended January 31, 2019. The increase in gross profit and the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

Selling, general and administrative expenses were $57,843, or 5.9% of North American towables net sales, for the three months ended January 31, 2020 compared to $52,433, or 5.9% of North American towables net sales, for the three months ended January 31, 2019. The primary reason for the $5,410 increase was the increase in North American towables net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $6,446. This increase was partially offset by a decrease of $816 in legal, professional and related settlement costs.

North American towables income before income taxes was $53,426, or 5.4% of North American towables net sales, for the three months ended January 31, 2020 compared to $34,060 or 3.9% of North American towables net sales, for the three months ended January 31, 2019. The primary reason for the increase in percentage was the decrease in the cost of products sold percentage, partially offset by a 1.0% decrease due to the non-cash impairment charges discussed in Note 20 to the Condensed Consolidated Financial Statements.

~~NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES~~

~~Analysis of the change in net sales for the three months ended January 31, 2020 compared to the three months ended January 31, 2019:~~

Three Months Ended
January 31, 2020 % of
Segment
Net Sales Three Months Ended
January 31, 2019 % of
Segment
Net Sales Change
Amount
%
Change
NET SALES:
North American Motorized
Class A $ 125,474 36.5 $ 173,488 46.7 $ (48,014) (27.7)
Class C 186,761 54.3 182,502 49.1 4,259 2.3
Class B 31,445 9.2 15,505 4.2 15,940 102.8
Total North American Motorized $ 343,680 100.0 $ 371,495 100.0 $ (27,815) (7.5)
Three Months Ended
January 31, 2020 % of
Segment
Shipments Three Months Ended
January 31, 2019 % of
Segment
Shipments Change
Amount
%
Change
# OF UNITS:
North American Motorized
Class A 1,066 28.0 1,392 34.0 (326) (23.4)
Class C 2,483 65.3 2,589 63.3 (106) (4.1)
Class B 254 6.7 111 2.7 143 128.8
Total North American Motorized 3,803 100.0 4,092 100.0 (289) (7.1)
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:
%
Change
North American Motorized
Class A (4.3)
Class C 6.4
Class B (26.0)
Total North American Motorized (0.4)

The decrease in total North American motorized net sales of 7.5% compared to the prior-year quarter resulted from a 7.1% decrease in unit shipments and a 0.4% decrease in the overall net price per unit due to the impact of changes in product mix and price. According to statistics published by RVIA, for the three months ended January 31, 2020, combined North American motorhome wholesale unit shipments decreased 12.9% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three-month periods ended December 31, 2019 and 2018, our North American market share for motorhomes was 36.0% and 35.9%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

~~The decrease in the overall net price per unit within the~~ Class A product line of ~~4.3% was primarily due to a lower concentration of the generally larger~~17.3% and ~~more expensive diesel units versus the more modestly-priced gas units in the current period as compared to the prior-year quarter. The increase in the overall net price per unit within~~ the Class C product line of ~~6.4% was~~11.1% were primarily due to the net impact of the addition of the higher-priced Tiffin Group product ~~mix changes~~lines and selective net price increases. The decrease in the overall net price per unit within the Class B product line of ~~26.0%~~35.9% is primarily due to product mix changes as a result of ~~the introduction~~a much higher concentration of ~~new,~~sales of lower-priced Class B models ~~since~~as compared to the prior-year ~~quarter.~~period.

~~Cost~~

North American motorized cost of products sold ~~decreased $25,762~~increased $247,037 to ~~$309,451,~~$927,630, or ~~90.0%~~86.6% of ~~North American~~ motorized net sales, for the ~~three~~six months ended January 31, ~~2020~~2021 compared to ~~$335,213,~~$680,593, or ~~90.2%~~89.6% of ~~North American~~ motorized net sales, for the ~~three~~six months ended January 31, ~~2019.~~2020. The changes in material, labor, freight-out and warranty costs comprised ~~$24,946~~$233,824 of the ~~$25,762~~$247,037 decrease ~~primarily~~ due to the decreased sales volume. Material, labor, freight-out and warranty costs as a combined percentage of ~~North American~~ motorized net sales decreased to ~~84.3%~~81.8% for the ~~three~~six months ended January 31, 2021 compared to 84.6% for the six months ended January 31, 2020, ~~compared to 84.7% for the three months ended January 31, 2019,~~ with the decrease in percentage primarily due to decreases in both the material and ~~labor~~warranty cost percentages, partially offset by an increase in the labor cost percentage. The improvement in the material cost percentage is primarily due to a reduction in sales discounts since the prior-year period, which effectively increases net selling prices and correspondingly decreases the material cost percentage, and product mix changes. The warranty cost ~~percentage.~~percentage is lower due to favorable experience trends, while the labor cost percentage increase is due to the current competitive RV labor market conditions in northern Indiana compared to the prior-year period. Total manufacturing overhead ~~decreased $816 with the volume decrease but~~ increased ~~slightly as a percentage of motorized net sales from 5.5% to 5.7%~~$13,213 due to the ~~lower sales volume.~~

~~North American motorized gross profit decreased $2,053 to $34,229, or 10.0% of North American motorized~~ net sales ~~for the three months ended January 31, 2020 compared to $36,282, or 9.8% of North American motorized net sales, for the three months ended January 31, 2019. The~~ increase, ~~in gross profit~~but decreased as a percentage of North American motorized net sales isfrom 5.0% to 4.8%, as the increased net sales resulted in lower overhead costs per unit sold.

North American motorized gross profit increased $64,244 to $143,220, or 13.4% of motorized net sales, for the six months ended January 31, 2021 compared to $78,976, or 10.4% of motorized net sales, for the six months ended January 31, 2020. The increase in gross profit was due primarily to the increase in net sales, and the increase in the gross profit percentage was due to the decrease in the cost of products sold percentage noted above.

~~Selling,~~North American motorized selling, general and administrative expenses were ~~consistent~~$54,793, or 5.1% of motorized net sales, for the six months ended January 31, 2021 compared to $39,603, or 5.2% of motorized net sales, for the six months ended January 31, 2020. The primary reason for the $15,190 increase was the increase in North American motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $15,732. This increase was partially offset by a decrease in sales-related travel, advertising and promotional costs of $2,252, primarily due to the cancellation of the major North American RV shows, along with travel restrictions, in the ~~prior year~~current-year period due to the ongoing COVID-19 pandemic. The slight decrease in the overall selling, general and ~~totaled $17,972, or 5.2%~~administrative expense as a percentage of North American motorized net sales ~~for the three months ended January 31, 2020 compared to $17,808, or 4.8% of North American motorized net sales, for the three months ended January 31, 2019. The increase as a percentage of sales~~ was primarily due to the ~~lower~~increased net sales volumes.

North American motorized income before income taxes was ~~$14,916,~~$84,988, or ~~4.3% of North American motorized net sales, for the three months ended January 31, 2020 compared to $17,205, or 4.6%~~7.9% of motorized net sales, for the ~~three~~six months ended January 31, ~~2019.~~2021 compared to $36,691, or 4.8% of motorized net sales, for the six months ended January 31, 2020. The primary reason for ~~this slight decrease~~the increase in ~~percentage~~North American motorized income before income taxes was the increase in North American motorized net sales. The primary reason for the ~~selling, general and administrative expense~~increase in percentage ~~noted above, partially offset by~~was the decrease in the cost of products sold percentage noted above.

EUROPEAN ~~RECREATIONAL VEHICLES~~

~~The net sales for the three months ended January 31, 2020 are as follows:~~

Three Months Ended
January 31, 2020 % of
Segment
Net Sales
NET SALES:
European
Motorcaravan $ 382,422 60.0
Campervan 97,923 15.4
Caravan 69,909 11.0
Other 86,861 13.6
Total European $ 637,115 100.0
Three Months Ended
January 31, 2020 % of
Segment
Shipments
# OF UNITS:
European
Motorcaravan 7,372 51.6
Campervan 3,304 23.1
Caravan 3,620 25.3
Total European 14,296 100.0

The European recreational vehicles reportable segment for the three months ended January 31, 2020 includes the results of operations of EHG, as more fully described in Note 2 to the Condensed Consolidated Financial Statements.

During the three months ended January 31, 2020, EHG recorded net sales of $637,115, gross profit of $79,462 or 12.5% of net sales and net income before income taxes of $4,690. The net income before income taxes includes $26,020 in total depreciation and amortization expense.

~~Six Months Ended January 31, 2020 Compared to the Six Months Ended January 31, 2019~~

NET SALES: Six Months Ended
January 31, 2020 Six Months Ended
January 31, 2019 Change
Amount %
Change
Recreational vehicles
North American Towables $ 2,184,795 $ 2,160,662 $ 24,133 1.1
North American Motorized 759,569 802,693 (43,124) (5.4)
Total North America 2,944,364 2,963,355 (18,991) (0.6)
European 1,130,122 — 1,130,122 n/a
Total recreational vehicles 4,074,486 2,963,355 1,111,131 37.5
Other 131,311 128,962 2,349 1.8
Intercompany eliminations (43,879) (45,765) 1,886 (4.1)
Total $ 4,161,918 $ 3,046,552 $ 1,115,366 36.6

# OF UNITS:
Recreational vehicles
North American Towables 78,431 81,826 (3,395) (4.1)
North American Motorized 8,293 8,458 (165) (2.0)
Total North America 86,724 90,284 (3,560) (3.9)
European 25,583 — 25,583 n/a
Total 112,307 90,284 22,023 24.4

GROSS PROFIT: % of
Segment
Net Sales % of
Segment
Net Sales Change
Amount %
Change
Recreational vehicles
North American Towables $ 314,715 14.4 $ 250,202 11.6 $ 64,513 25.8
North American Motorized 78,976 10.4 80,512 10.0 (1,536) (1.9)
Total North America 393,691 13.4 330,714 11.2 62,977 19.0
European 144,073 12.7 — — 144,073 n/a
Total recreational vehicles 537,764 13.2 330,714 11.2 207,050 62.6
Other, net 27,453 20.9 18,138 14.1 9,315 51.4
Total $ 565,217 13.6 $ 348,852 11.5 $ 216,365 62.0

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Recreational vehicles
North American Towables $ 129,148 5.9 $ 121,515 5.6 $ 7,633 6.3
North American Motorized 39,603 5.2 39,060 4.9 543 1.4
Total North America 168,751 5.7 160,575 5.4 8,176 5.1
European 136,629 12.1 — — 136,629 n/a
Total recreational vehicles 305,380 7.5 160,575 5.4 144,805 90.2
Other 4,777 3.6 4,001 3.1 776 19.4
Corporate 40,664 — 23,186 — 17,478 75.4
Total $ 350,821 8.4 $ 187,762 6.2 $ 163,059 86.8

INCOME (LOSS) BEFORE INCOME TAXES: Six Months Ended
January 31, 2020 % of
Segment
Net Sales Six Months Ended
January 31, 2019 % of
Segment
Net Sales Change
Amount %
Change
Recreational vehicles
North American Towables $ 157,748 7.2 $ 108,610 5.0 $ 49,138 45.2
North American Motorized 36,691 4.8 38,917 4.8 (2,226) (5.7)
Total North America 194,439 6.6 147,527 5.0 46,912 31.8
European (18,334) (1.6) — — (18,334) n/a
Total recreational vehicles 176,105 4.3 147,527 5.0 28,578 19.4
Other, net 20,360 15.5 11,860 9.2 8,500 71.7
Corporate (92,968) — (125,997) — 33,029 (26.2)
Total $ 103,497 2.5 $ 33,390 1.1 $ 70,107 210.0

~~CONSOLIDATED~~

Consolidated net sales for the six months ended January 31, 2020 increased $1,115,366, or 36.6%, compared to the six months ended January 31, 2019. This increase is attributable to EHG's net sales of $1,130,122, partially offset by a decrease in net sales from North America recreational vehicles and Other, net, of $14,756, or 0.5%, compared to the six months ended January 31, 2019. Consolidated gross profit for the six months ended January 31, 2020 increased $216,365, or 62.0%, compared to the six months ended January 31, 2019. The increase in gross profit included EHG's gross profit for the period of $144,073, in addition to the increase of 72,292, or 20.7%, in total North American and Other, net, gross profit compared to the prior-year period. Consolidated gross profit was 13.6% of consolidated net sales for the six months ended January 31, 2020 and 11.5% for the six months ended January 31, 2019, with the increase in percentage primarily impacted by the North American recreational vehicle improvement to 13.4% from 11.2% and the addition of EHG's gross profit percentage of 12.7%.

Selling, general and administrative expenses for the six months ended January 31, 2020 increased $163,059, or 86.8%, compared to the six months ended January 31, 2019, with EHG accounting for $136,629 of the $163,059 increase.

Amortization of intangible assets expense for the six months ended January 31, 2020 increased $23,449 compared to the six months ended January 31, 2019, primarily due to incremental amortization expense of $25,396 from EHG, partially offset by lower dealer network amortization as compared to the prior-year period.

The non-cash impairment charges for the six months ended January 31, 2020 of $10,057 relate to the North American Towables reportable segment as discussed in Note 20 to the Condensed Consolidated Financial Statements.

~~Income before income taxes for the six months ended January 31, 2020 was $103,497, as compared to $33,390 for the six months ended January 31, 2019, an increase of $70,107, or 210.0%.~~

Corporate costs included in selling, general and administrative expenses increased $17,478 to $40,664 for the six months ended January 31, 2020 compared to $23,186 for the six months ended January 31, 2019, an increase of 75.4%. This increase includes an increase in deferred compensation expense of $4,967, which relates to the equal and offsetting increase in other income related to the deferred compensation plan assets as noted below, and an increase in total salaries and incentive compensation of $1,353. Legal and professional fees also increased by $4,167, primarily due to professional fees related to the integration of the EHG operations, and sales and marketing costs increased $2,913 due to heightened corporate-wide marketing initiatives. Donations also increased $2,063, primarily due to a significant contribution to the National Forest Foundation in August 2019.

Acquisition-related costs were $99,148 for the six months ended January 31, 2019. These Corporate costs included a non-cash foreign currency forward contract loss of $73,707, with the remaining $25,441 consisting primarily of bank fees, ticking fees, legal, professional and advisory fees related to financial due diligence and implementation costs, regulatory review costs and the write-off of the remaining unamortized debt fees related to the Company's previous asset-based facility.

Corporate interest and other income and expense was $52,304 of net expense for the six months ended January 31, 2020 compared to $3,663 of net expense for the six months ended January 31, 2019. This increase in net expense of $48,641 is primarily due to an increase in interest expense and fees of $50,458 resulting from the new debt facilities related to the EHG acquisition. This increase was partially offset by the change in the fair value of the Company’s deferred compensation plan assets due to market fluctuations and investment income resulting in income, net of $3,613 in the current-year period as compared to expense, net of $1,354 in the prior-year period, a net increase in income of $4,967.

The overall effective income tax rate for the six months ended January 31, 2020 was 23.8% compared with 74.4% for the six months ended January 31, 2019. The primary reason for the decrease in the overall effective income tax rate between the comparable periods was the non-deductible foreign currency forward contract loss of $73,707 that occurred in the six months ended January 31, 2019, as discussed in Note 5 to the Condensed Consolidated Financial Statements. Under federal income tax law, the loss recognized for financial statement purposes was not deductible for federal income tax purposes.

~~Segment Reporting~~

~~NORTH AMERICAN TOWABLE~~ RECREATIONAL VEHICLES

Analysis of the change in net sales for the six months ended January 31, ~~2020~~2021 compared to the six months ended January 31, ~~2019:~~2020:

Six Months Ended
January 31, 2020 % of
Segment
Net Sales Six Months Ended
January 31, 2019 % of
Segment
Net Sales Change Amount %
Change
NET SALES:
North American Towables
Travel Trailers and Other $ 1,292,786 59.2 $ 1,297,263 60.0 $ (4,477) (0.3)
Fifth Wheels 892,009 40.8 863,399 40.0 28,610 3.3
Total North American Towables $ 2,184,795 100.0 $ 2,160,662 100.0 $ 24,133 1.1
Six Months Ended
January 31, 2020 % of
Segment
Shipments Six Months Ended
January 31, 2019 % of
Segment
Shipments Change Amount %
Change
# OF UNITS:
North American Towables
Travel Trailers and Other 59,646 76.0 62,719 76.6 (3,073) (4.9)
Fifth Wheels 18,785 24.0 19,107 23.4 (322) (1.7)
Total North American Towables 78,431 100.0 81,826 100.0 (3,395) (4.1)
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES: %
Change
North American Towables
Travel Trailers and Other 4.6
Fifth Wheels 5.0
Total North American Towables 5.2


	Six Months Ended January 31, 2021		% of Segment Net Sales	Six Months Ended January 31, 2020		% of Segment Net Sales	Change Amount		% Change
NET SALES:
European
Motorcaravan	$	737,480	55.2	$	664,155	58.8	$	73,325	11.0
Campervan	292,512		21.9	175,520		15.5	116,992		66.7
Caravan	126,849		9.5	130,941		11.6	(4,092)		(3.1)
Other	179,110		13.4	159,506		14.1	19,604		12.3
Total European	$	1,335,951	100.0	$	1,130,122	100.0	$	205,829	18.2

	Six Months Ended January 31, 2021		% of Segment Shipments	Six Months Ended January 31, 2020		% of Segment Shipments	Change Amount		% Change
# OF UNITS:
European
Motorcaravan	12,409		46.3	12,882		50.4	(473)		(3.7)
Campervan	8,398		31.3	5,935		23.2	2,463		41.5
Caravan	6,000		22.4	6,766		26.4	(766)		(11.3)
Total European	26,807		100.0	25,583		100.0	1,224		4.8

IMPACT OF CHANGE IN PRODUCT MIX, FOREIGN CURRENCY CHANGES AND PRICE ON NET SALES:									% Change
European
Motorcaravan									14.7
Campervan									25.2
Caravan									8.2
Total European									13.4

The increase in total ~~North American towables~~European recreational vehicle net sales of ~~1.1%~~18.2% compared to the prior-year period resulted from ~~a 4.1% decrease~~an 4.8% increase in unit shipments ~~offset by~~and a ~~5.2%~~13.4% increase in the overall net price per unit due to the impact of changes in product mix and price. This increase includes the current heightened European market demand for the Campervan product line, and the impact of current chassis supply disruption on the Motorcaravan product line. The sales increase inof $205,829 includes an increase of $95,886, or 8.5% of the ~~overall towables net price per unit of 5.2% is slightly greater than the increases in the individual travel trailer and other and fifth wheel product categories of 4.6% and 5.0%, respectively,~~18.2% increase, due to the ~~slight~~ increase in the concentration of sales of the higher-priced fifth wheel units. According to statistics published by RVIA, for the six months ended January 31, 2020, combined North American travel trailer and fifth wheel wholesale unit shipments decreased 2.0% compared to the same period last year. According to statistics published by Stat Surveys, for the six-month periods ended December 31, 2019 and 2018, our North American market share for travel trailers and fifth wheels combined was 44.9% and 50.0%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increases in the overall net price per unit within the travel trailer and other product lines of 4.6% and the fifth wheel product lines of 5.0% were both primarily due to changes in product mix and selective net price increasesforeign exchange rates since the prior-year period.

Cost of products sold decreased $40,380 to $1,870,080, or 85.6% of North American towables net sales, for the six months ended January 31, 2020 compared to $1,910,460 or 88.4% of North American towables net sales, for the six months ended January 31, 2019. The changes in material, labor, freight-out and warranty costs comprised $40,254 of the $40,380 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American towables net sales decreased to 78.8% for the six months ended January 31, 2020 compared to 81.6% for the six months ended January 31, 2019, primarily as a result of improvements in the material, labor and warranty cost percentages. The improvement in the material cost percentage is primarily due to favorable product mix, selective net price increases and stable material costs since the prior-year period. The warranty cost percentage is lower due to favorable experience trends compared to the prior-year period. Total manufacturing overhead was consistent with the prior-year period, decreasing $126 while remaining the same as a percentage of motorized net sales at 6.8% for both periods.

North American towables gross profit increased $64,513 to $314,715, or 14.4% of North American towables net sales, for the six months ended January 31, 2020 compared to $250,202, or 11.6% of North American towables net sales, for the six months ended January 31, 2019. The increases in gross profit and gross profit percentage are primarily due to the decrease in the cost of products sold percentage noted above.

Selling, general and administrative expenses were $129,148, or 5.9% of North American towables net sales, for the six months ended January 31, 2020 compared to $121,515, or 5.6% of North American towables net sales, for the six months ended January 31, 2019. The primary reason for the $7,633 increase was increased North American towables net sales and North American towables income before income taxes, which caused related commissions, bonuses and other compensation to increase by $9,265. This increase was partially offset by a decrease of $357 in legal, professional and related settlement costs and a decrease of $322 in sales related travel, advertising and promotion costs. The increase in the overall selling, general and administrative expense as a percentage of North American towables net sales is primarily due to the increased compensation noted above.

North American towables income before income taxes was $157,748, or 7.2% of North American towables net sales, for the six months ended January 31, 2020 compared to $108,610 or 5.0% of North American towables net sales, for the six months ended January 31, 2019. The primary reason for the increase in percentage was the decrease in the cost of products sold percentage noted above, partially offset by the increase in the selling, general and administrative expense percentage noted above and a 0.5% decrease due to the impairment charges discussed in Note 20 to the Condensed Consolidated Financial Statements.

~~NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES~~

~~Analysis of the change in net sales for the six months ended January 31, 2020 compared to the six months ended January 31, 2019:~~

Six Months Ended
January 31, 2020 % of
Segment
Net Sales Six Months Ended
January 31, 2019 % of
Segment
Net Sales Change
Amount %
Change
NET SALES:
North American Motorized
Class A $ 287,206 37.8 $ 400,762 49.9 $ (113,556) (28.3)
Class C 416,598 54.8 366,886 45.7 49,712 13.5
Class B 55,765 7.4 35,045 4.4 20,720 59.1
Total North American Motorized $ 759,569 100.0 $ 802,693 100.0 $ (43,124) (5.4)
Six Months Ended
January 31, 2020 % of
Segment
Shipments Six Months Ended
January 31, 2019 % of
Segment
Shipments Change
Amount %
Change
# OF UNITS:
North American Motorized
Class A 2,316 27.9 3,064 36.2 (748) (24.4)
Class C 5,524 66.6 5,146 60.8 378 7.3
Class B 453 5.5 248 3.0 205 82.7
Total North American Motorized 8,293 100.0 8,458 100.0 (165) (2.0)
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES: %
Change
North American Motorized
Class A (3.9)
Class C 6.2
Class B (23.6)
Total North American Motorized (3.4)

~~The decrease in total motorized net sales of 5.4% compared to the prior-year period resulted from a 2.0% decrease in unit shipments and a 3.4% decrease in the~~ overall net price per unit ~~due to~~increase of 13.4% includes the impact of foreign currency exchange rate changes, ~~in product mix and price. According to statistics published by RVIA,~~which accounts for 8.5% of the six months ended January 31, 2020, combined North American motorhome wholesale unit shipments decreased 12.4% compared to the same period last year. According to statistics published by Stat Surveys, for the six-month periods ended December 31, 2019 and 2018, our North American market share for motorhomes was 37.9% and 38.5%, respectively. Comparisons of Company shipments to industry shipments13.4% increase on a ~~quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.~~constant-currency basis.

The decrease in the overall net price per unit within the Class A product line of 3.9% was primarily due to a lower concentration of sales of the generally larger and more expensive diesel units versus the more modestly-priced gas units compared to the prior-year period. The increase in the overall net price per unit within the ~~Class C~~Motorcaravan product line of ~~6.2%~~14.7% was primarily due to the 8.5% increase in foreign exchange rates from the prior-year period, product mix changes and selective net selling price increases since the prior year. The increase in the overall net price per unit within the Campervan product line of 25.2% was primarily due to the net impact of product mix changes, ~~and~~including more sales of units with higher chassis content than the prior year, in addition to selective net price ~~increases.~~increases and the 8.5% increase in exchange rates. The ~~decrease~~increase in the overall net price per unit within the ~~Class B~~Caravan product line of ~~23.6%~~8.2% is primarily due to the 8.5% increase in foreign exchange rates from the prior-year period, partially offset by the impact of product mix ~~as a result of the introduction of new lower-priced models since the prior-year period.~~changes.

~~Cost~~

European recreational vehicle cost of products sold ~~decreased $41,588~~increased $182,884 to ~~$680,593,~~$1,168,933, or ~~89.6%~~87.5% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2020~~2021 compared to ~~$722,181,~~$986,049, or ~~90.0%~~87.3% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2019.~~2020. The changes in material, labor, freight-out and warranty costs comprised ~~$39,709~~$168,596 of the ~~$41,588 decrease~~$182,884 increase primarily due to the ~~decreased~~increased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of ~~motorized~~European recreational vehicle net sales ~~decreased~~increased to ~~84.6%~~77.7% for the six months ended January 31, 2021 compared to 77.0% for the six months ended January 31, 2020, ~~compared to 85.0% for the six months ended January 31, 2019,~~ with the ~~decrease in percentage~~increase primarily due to ~~a lower labor~~an increase in the material cost percentage. This material cost percentage increase was mainly attributable to changes in product mix, including a higher concentration of the Motorcaravan and Campervan motorized products in the current year as compared to the prior year, which carry a higher material percentage than caravan products due to the chassis. Total manufacturing overhead ~~decreased $1,879~~increased $14,288 with the volume ~~decrease~~increase but ~~remained the same~~decreased as a percentage of motorized net sales ~~at 5.0% for both periods.~~from 10.3% to 9.8% due to the higher net sales volume.

~~Motorized~~European recreational vehicle gross profit ~~decreased $1,536~~increased $22,945 to ~~$78,976,~~$167,018, or ~~10.4%~~12.5% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2020~~2021 compared to ~~$80,512,~~$144,073, or ~~10.0%~~12.7% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2019.~~2020. The increase in gross profit is due to the increase in net sales, while the slight decrease in gross profit ~~was due primarily to the 2.0% decrease in unit sales volume noted above, and the increase~~ as a percentage of ~~motorized~~European recreational vehicle net sales is due to the ~~decrease~~increase in the cost of products sold percentage noted above.

~~Selling,~~European recreational vehicle selling, general and administrative expenses were ~~fairly consistent with the prior year and totaled $39,603,~~$126,730, or ~~5.2%~~9.5% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2020~~2021 compared to ~~$39,060,~~$136,629, or ~~4.9%~~12.1% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2019.~~2020. The primary reason for the $9,899 decrease was the decrease in sales-related travel, advertising and promotional costs of $21,842, primarily due to not participating in European trade shows, along with travel restrictions, in the current-year period due to the ongoing COVID-19 pandemic. This decrease was partially offset by the impact of the increase in European recreational vehicle net sales and income before income taxes, which caused commissions, incentive and other compensation and benefits to increase by $6,847. Professional fees also increased $5,611. The decrease in the overall selling, general and administrative expense as a percentage of European recreational vehicle net sales ~~was~~is primarily due to the ~~lower sales volumes.~~reduction in actual selling, general and administrative expenses in tandem with the increase in net sales.

~~Motorized~~European recreational vehicle net income before income taxes was ~~$36,691,~~$4,710, or ~~4.8%~~approximately 0.4% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2020~~2021 compared to ~~$38,917,~~a net loss of $18,334, or ~~4.8%~~1.6% of ~~motorized~~European recreational vehicle net sales, for the six months ended January 31, ~~2019.~~2020. The primary reason for the increase in income before income taxes was the increase in European recreational vehicle net sales and the decrease in selling, general and administrative expenses noted above. The increase in percentage was primarily due to the decrease in the selling, general and administrative expense percentage noted above.

~~EUROPEAN RECREATIONAL VEHICLES~~

~~The net sales for the six months ended January 31, 2020 are as follows:~~

Six Months Ended
January 31, 2020 % of
Segment
Net Sales
NET SALES:
European
Motorcaravan $ 664,155 58.8
Campervan 175,520 15.5
Caravan 130,941 11.6
Other 159,506 14.1
Total European $ 1,130,122 100.0
Six Months Ended
January 31, 2020 % of
Segment
Shipments
# OF UNITS:
European
Motorcaravan 12,882 50.4
Campervan 5,935 23.2
Caravan 6,766 26.4
Total European 25,583 100.0

The European recreational vehicles reportable segment for the six months ended January 31, 2020 includes the results of operations of EHG, as more fully described in Note 2 to the Condensed Consolidated Financial Statements.

During the six months ended January 31, 2020, EHG recorded net sales of $1,130,122, gross profit of $144,073 or 12.7% of net sales and a net loss before tax of $18,334. The net loss before income taxes includes $53,503 in total depreciation and amortization expense.

Financial Condition and Liquidity

As of January 31, ~~2020,~~2021, we had ~~$242,134~~$183,634 in cash and cash equivalents, of which ~~$91,785 is~~$123,223 was held in the U.S. and the equivalent of ~~$150,349,~~$60,411, predominantly in Euros, was held in Europe, compared to ~~$425,615~~$538,519 on July 31, ~~2019,~~2020, of which ~~$223,394~~$276,841 was held in the U.S. and the equivalent of ~~$202,221,~~$261,678, predominantly in Euros, was held in Europe. Cash and cash equivalents held internationally may be subject to foreign withholding taxes if repatriated to the U.S. The components of this ~~$183,481~~$354,885 decrease in cash and cash equivalents are described in more detail ~~below, but the decrease was primarily attributable to cash used in financing activities of $173,288.~~

below.

Net working capital at January 31, ~~2020~~2021 was ~~$572,570~~$823,142 compared to ~~$589,032~~$586,996 at July 31, ~~2019.~~2020. This ~~decrease~~increase is primarily attributable to the increases in inventory and accounts receivable, partially offset by the decrease in cash and cash equivalents noted above ~~largely offset by seasonal increases~~and an increase in ~~trade~~ accounts ~~receivable and inventory.~~payable. Capital expenditures of ~~$52,858~~$48,097 for the six months ended January 31, ~~2020~~2021 were made primarily for ~~land and~~ production building additions and improvements and replacing machinery and equipment used in the ordinary course of business.

We strive to maintain adequate cash balances to ensure we have sufficient resources to respond to opportunities and changing business conditions. We believe our on-hand cash and cash equivalents and funds generated from operations, along with funds available under the revolving asset-based credit facility, will be sufficient to fund expected ~~future~~ operational requirements for the foreseeable future.

Our ~~main short-term~~ priorities for the use of current and future available cash generated from operations ~~are~~remain consistent with our history, and include reducing our indebtedness, maintaining and, ~~paying regular dividends. Our long-term priorities also include~~over time, growing our dividend payments and funding our growth both organically and ~~over time,~~opportunistically through ~~acquisition, and maintaining and growing our regular dividends over time.~~acquisitions. We ~~will~~may also consider strategic and opportunistic repurchases of shares ~~under the share repurchase program, as discussed in Note 17 to the Condensed Consolidated Financial Statements,~~ and special dividends ~~or other strategic share repurchases,~~ as determined by the Company’s ~~Board.~~Board of Directors and subject to potential customary limits and restrictions pursuant to our credit facilities and applicable legal limitations.

~~In regard to reducing indebtedness, subsequent~~Subsequent to January 31, ~~2020,~~2021, we ~~made additional principal payments totaling $32,000 on the U.S. term loan. We also~~ made principal payments of ~~25,000~~$35,000 and 10,000 Euro ~~to pay off the entire existing balance~~(approximately $12,100) on ~~the~~our revolving asset-based credit facility. The ~~term loan and~~revolving asset-based credit facility ~~are~~is discussed in more detail in Note 1312 to the Condensed Consolidated Financial Statements. ~~As of March 6, 2020, our related outstanding balances on these debt instruments were as follows:~~

March 6, 2020 January 31, 2020
Term loan – U.S. $ 963,002 $ 995,002
Asset-based credit facility $ — $ 27,630

~~In regard to growing our business, we~~We anticipate capital expenditures during the remainder of fiscal ~~2020~~2021 for the Company ~~ranging from~~of approximately ~~$75,000 to $85,000,~~$100,000, primarily for ~~the completion of~~ certain building projects and replacing and upgrading machinery, equipment and other assets throughout our facilities to be used in the ordinary course of business.

The Company’s Board currently intends to continue regular quarterly cash dividend payments in the future. As is customary under ~~the~~ credit facilities, certain actions, including our ability to pay dividends, are subject to the satisfaction of certain payment conditions prior to payment. The conditions for the payment of dividends under the existing debt facilities include a minimum level of adjusted excess cash availability and a fixed charge coverage ratio test, both as defined in the credit agreements. The declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board, and will be dependent upon future earnings, cash flows and other factors, in addition to compliance with any then-existing financing facilities.

Future purchases of the Company’s common stock or special cash dividends may occur based upon market and business conditions and excess cash availability, subject to potential customary limits and restrictions pursuant to the credit facilities, applicable legal limitations and determination by the Board.

Operating Activities

Net cash ~~provided by~~used in operating activities for the six months ended January 31, ~~2020~~2021 was ~~$5,298~~$88,566 as compared to net cash provided by operating activities of ~~$134,630~~$5,298 for the six months ended January 31, ~~2019.~~2020.

For the six months ended January 31, 2021, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles and stock-based compensation) provided $376,007 of operating cash. The change in net working capital resulted in the use of $464,573 of operating cash during that period, primarily due to an increase in inventory, as production levels have increased due to the current heightened demand, backlog has increased significantly and there has also been an increase in production lines and capacity. Accounts receivable also reflects a seasonal increase, and required income tax payments during the six months ended January 31, 2021 exceeded the income tax provision for the period as well. These increases were partially offset by an increase in accounts payable related to the inventory growth.

For the six months ended January 31, 2020, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles, impairment and stock-based compensation) provided $206,428 of operating cash. The change in ~~net~~ working capital ~~used~~resulted in the use of $201,130 of operating cash during that period, primarily due to seasonal increases in accounts receivable and inventory.

~~For~~Investing Activities

Net cash used in investing activities for the six months ended January 31, 2019, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles, forward currency forward contract loss, deferred income tax benefit and stock-based compensation) provided $138,981 of operating cash. The changes in working capital used $4,351 of operating cash during that period, due in part to an increase in finished goods inventory2021 was $357,589, primarily due to ~~January 2019 month-end shipments being delayed due to severe weather conditions,~~$310,576 used in business acquisitions and ~~a decrease in accounts payable due to the timing~~capital expenditures of payments for inventory. Incentive compensation payables also decreased due to reduced income before income taxes, and estimated income tax payments exceeded the income tax provision during the period as well. All these decreases were mostly offset by a reduction in accounts receivable due to reduced sales levels.

~~Investing Activities~~$48,097.

Net cash used in investing activities for the six months ended January 31, 2020 was $37,035, primarily due to capital expenditures of $52,858, partially offset by proceeds from the dispositions of property, plant and equipment of $20,350.

Financing Activities

Net cash ~~used in investing~~provided by financing activities for the six months ended January 31, ~~2019~~2021 was ~~$58,236,~~$86,961, consisting primarily ~~due to~~of borrowings of $213,632 on the revolving asset-based credit facilities, which included $165,000 borrowed in connection with the acquisition of Tiffin Group and $48,632 for working capital ~~expenditures~~needs, partially offset by $67,222 in debt payments and regular quarterly dividend payments of ~~$54,802.~~

~~Financing Activities~~$0.41 per share for each of the first two quarters of fiscal 2021 totaling $45,400.

Net cash used in financing activities for the six months ended January 31, 2020 was $173,288, consisting primarily of $210,055 in debt payments, partially offset by $75,007 in borrowings on the asset-based revolving credit facilities. Additionally, the Company made its regular quarterly dividend payments of $0.40 per share for each of the first two quarters of fiscal 2020 totaling $44,159.

~~Net cash used in financing activities for the six months ended January 31, 2019 was $45,810, primarily for~~The Company increased its previous regular quarterly ~~cash~~ dividend ~~payments~~ of ~~$0.39~~$0.40 per share ~~for each of~~to $0.41 per share in October 2020. In October 2019, the ~~first two quarters of fiscal 2019 totaling $41,189.~~

~~The~~ Company increased its previous regular quarterly dividend of $0.39 per share to $0.40 per ~~share in October 2019. In October 2018, the Company increased its previous regular quarterly dividend of $0.37 per share to $0.39 per~~ share.

Accounting Standards

Reference is made to Note 1 of our Condensed Consolidated Financial Statements contained in this report for a summary of recently issued accounting standards applicable to the Company.

4349

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign currency exchange rates and interest rates. The Company enters into various hedging transactions to mitigate certain of these risks in accordance with guidelines established by the Company's management. The Company does not use financial instruments for trading or speculative purposes.

CURRENCY EXCHANGE RISK – The Company's principal currency exposures mainly relate to the Euro and British Pound Sterling. The Company periodically uses foreign currency forward contracts to manage certain foreign exchange rate exposure related to anticipated sales transactions in Pounds Sterling with financial instruments whose maturity date, along with the realized gain or loss, occurs on or near the execution of the anticipated transaction.

The Company also holds ~~$817,381~~$768,237 of debt denominated in Euros at January 31, ~~2020.~~2021. A hypothetical 10% change in the Euro/U.S. Dollar exchange rate would change our January 31, ~~2020~~2021 debt balance by approximately ~~$81,738.~~$76,824.

INTEREST RATE RISK – The Company uses pay-fixed, receive-floating interest rate swaps to convert a portion of the Company’s long-term debt from floating to fixed-rate debt. As of January 31, ~~2020,~~2021, the Company has ~~$756,600~~$581,913 as notional amounts hedged in relation to the floating-to-fixed interest rate swap. The notional amounts hedged will decrease on a quarterly basis to zero by August 1, 2023.

Based on our interest rate exposure at January 31, ~~2020,~~2021, assumed floating-rate debt levels throughout the next 12 months and the effects of our existing derivative instruments, a one-percentage-point increase in interest rates (approximately ~~19.7%~~10.0% of our weighted-average interest rate at January 31, ~~2020)~~2021) would result in an estimated ~~$7,400~~$7,553 pre-tax reduction in net earnings over a one-year period.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures,” as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at attaining the level of reasonable assurance noted above.

During the quarter ended January 31, ~~2020,~~2021, there were no changes in our internal ~~control~~controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal ~~control~~controls over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws”, warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

ITEM 1A. RISK FACTORS

~~In addition~~Although risks specific to the COVID-19 pandemic are ongoing, there have been no material changes in those risks or any others from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, we are exposed to certain additional risks and uncertainties which could have a material adverse impact on our business, financial condition and operating results due to the recent coronavirus outbreak.

The supply of certain raw material components sourced directly by us or through third-party suppliers to our U.S. and European based operations may be negatively impacted by the coronavirus outbreak, which in turn could negatively impact our production schedules or the cost of such component parts.

We depend on timely and sufficient delivery of components from our suppliers. While we do not source a significant amount of raw materials directly from China, the recent coronavirus outbreak may have an impact on the availability of certain component products that are purchased by our current raw material suppliers from China. We continue to monitor the supply of components and potential alternatives. If the impact of the coronavirus on the availability of material sourced from China or other regions is prolonged, this could have an adverse impact on our raw material availability, production schedules or the cost of such material and lead to an adverse impact on our sales and earnings.2020.

ITEM 6. EXHIBITS


Exhibit			Description
10.1			Copy of Stock Purchase Agreement, dated as of December 18, 2020, by and among Thor Industries, Inc., the shareholders of Tiffin Motorhomes, Inc., Vanleigh RV, Inc., Water-Way, Inc., Wynne Enterprises, Inc., Tiffin Door Co., Inc., Roma Enterprises, Inc., Drive-A-Way of Red Bay, Inc., and TVL Real Estate, LLC (incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 8-K, filed December 22, 2020)
31.1			Chief Executive Officer’s Rule 13a-14(a) Certification
31.2			Chief Financial Officer’s Rule 13a-14(a) Certification
32.1			Chief Executive Officer’s Section 1350 Certification
32.2			Chief Financial Officer’s Section 1350 Certification
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Calculation Linkbase Document
101.PRE			Inline XBRL Taxonomy Presentation Linkbase Document
101.LAB			Inline XBRL Taxonomy Label Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
104			Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)

Attached as Exhibits 101 to this report are the following financial statements from the Company's Quarterly report on Form 10-Q for the quarter ended January 31, ~~2020~~2021 formatted in XBRL ("eXtensible Business Reporting Language"): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity and (v) related notes to these financial statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THOR INDUSTRIES, INC.

(Registrant)


DATE:	March 9, ~~2020~~2021	/s/ Robert W. Martin
		Robert W. Martin
		President and Chief Executive Officer

DATE:	March 9, ~~2020~~2021	/s/ Colleen Zuhl
		Colleen Zuhl
		Senior Vice President and Chief Financial Officer


	Weighted-Average
	Remaining	January 31, 2020						July 31, 2019
	Life in Years at			Accumulated				Accumulated
	January 31, 2020	Cost		Amortization		Cost		Amortization
Dealer networks/customer relationships	18	$	740,172	$	217,913	$	750,641	$	191,017
Trademarks	17	265,889		40,511		268,778		34,518
Design technology and other intangibles	9	195,032		29,058		196,616		19,689


Total amortizable intangible assets		$	1,201,093	$	287,482	$	1,216,035	$	245,224


	Operating Leases		Finance Leases
For the fiscal year ending July 31, 2020	$	8,785	$	974
For the fiscal year ending July 31, 2021	6,809		993
For the fiscal year ending July 31, 2022	5,437		1,015
For the fiscal year ending July 31, 2023	3,980		1,037
For the fiscal year ending July 31, 2024	3,424		1,061
For the fiscal year ending July 31, 2025 and thereafter	20,745		3,037
Total future lease payments	$	49,180	8,117
Less: amount representing interest			(2,427)
Total lease liability			5,690
Less: current portion			(444)
Long-term finance lease obligations			$	5,246


NET SALES:	Six Months Ended January 31, 2020		Six Months Ended January 31, 2019		Change Amount		% Change
Recreational vehicles
North American Towables	$	2,184,795	$	2,160,662	$	24,133	1.1
North American Motorized	759,569		802,693		(43,124)		(5.4)
Total North America	2,944,364		2,963,355		(18,991)		(0.6)
European	1,130,122		—		1,130,122		n/a
Total recreational vehicles	4,074,486		2,963,355		1,111,131		37.5
Other	131,311		128,962		2,349		1.8
Intercompany eliminations	(43,879)		(45,765)		1,886		(4.1)
Total	$	4,161,918	$	3,046,552	$	1,115,366	36.6


	March 6, 2020		January 31, 2020
Term loan – U.S.	$	963,002	$	995,002
Asset-based credit facility	$	—	$	27,630