Cover Page
Cover Page - shares | 3 Months Ended | |
Nov. 30, 2019 | Dec. 13, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-06403 | |
Entity Registrant Name | WINNEBAGO INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | IA | |
Entity Tax Identification Number | 42-0802678 | |
Entity Address, Address Line One | P. O. Box 152 | |
Entity Address, City or Town | Forest City | |
Entity Address, State or Province | IA | |
Entity Address, Postal Zip Code | 50436 | |
City Area Code | 641 | |
Local Phone Number | 585-3535 | |
Title of 12(b) Security | Common Stock, $0.50 par value per share | |
Trading Symbol | WGO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,680,185 | |
Entity Central Index Key | 0000107687 | |
Current Fiscal Year End Date | --08-29 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Income Statement [Abstract] | ||
Net revenues | $ 588,458 | $ 493,648 |
Cost of goods sold | 509,845 | 422,652 |
Gross profit | 78,613 | 70,996 |
Selling, general, and administrative expenses | 51,105 | 35,712 |
Amortization of intangible assets | 3,614 | 2,659 |
Total operating expenses | 54,719 | 38,371 |
Operating income | 23,894 | 32,625 |
Interest expense | 6,049 | 4,501 |
Non-operating income | (116) | (763) |
Income before income taxes | 17,961 | 28,887 |
Provision for income taxes | 3,893 | 6,726 |
Net income | $ 14,068 | $ 22,161 |
Income per common share: | ||
Basic (in dollars per share) | $ 0.44 | $ 0.70 |
Diluted (in dollars per share) | $ 0.44 | $ 0.70 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 32,067 | 31,567 |
Diluted (in shares) | 32,267 | 31,814 |
Other comprehensive income (loss): | ||
Amortization of net actuarial loss | $ 8 | $ 8 |
Interest rate swap activity (net of tax of $22 and $7) | (22) | |
Interest rate swap activity (net of tax of $22 and $7) | (68) | |
Total other comprehensive income (loss) | (60) | (14) |
Comprehensive income | $ 14,008 | $ 22,147 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Income Statement [Abstract] | ||
Amortization of net actuarial loss, tax | $ 3 | $ 3 |
Change in fair value of interest rate swap, tax | $ 22 | |
Change in fair value of interest rate swap, tax | $ 7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 101,328 | $ 37,431 |
Receivables, less allowance for doubtful accounts ($260 and $160, respectively) | 167,290 | 158,049 |
Inventories, net | 263,333 | 201,126 |
Prepaid expenses and other assets | 13,301 | 14,051 |
Total current assets | 545,252 | 410,657 |
Property, plant, and equipment, net | 163,348 | 127,572 |
Other assets: | ||
Goodwill | 347,840 | 274,931 |
Other intangible assets, net | 423,258 | 256,082 |
Investment in life insurance | 26,958 | 26,846 |
Operating lease assets | 30,720 | 0 |
Other assets | 16,248 | 8,143 |
Total assets | 1,553,624 | 1,104,231 |
Current liabilities: | ||
Accounts payable | 93,120 | 81,635 |
Income taxes payable | 0 | 0 |
Accrued expenses: | ||
Accrued compensation | 25,885 | 20,328 |
Product warranties | 61,107 | 44,436 |
Self-insurance | 15,685 | 13,820 |
Promotional | 19,139 | 10,896 |
Accrued interest | 3,034 | 4,059 |
Other | 16,768 | 13,678 |
Current maturities of long-term debt | 12,668 | 8,892 |
Total current liabilities | 247,406 | 197,744 |
Non-current liabilities: | ||
Long-term debt, less current maturities | 450,848 | 245,402 |
Deferred income taxes | 17,210 | 12,032 |
Unrecognized tax benefits | 6,563 | 3,591 |
Operating lease liabilities | 28,066 | 0 |
Deferred compensation benefits, net of current portion | 12,594 | 12,878 |
Other | 5,328 | 372 |
Total non-current liabilities | 520,609 | 274,275 |
Contingent liabilities and commitments (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.01: Authorized-10,000 shares; Issued-none | 0 | 0 |
Common stock, par value $0.50: Authorized-60,000 shares; Issued-51,776 shares | 25,888 | 25,888 |
Additional paid-in capital | 198,733 | 91,185 |
Retained earnings | 877,469 | 866,886 |
Accumulated other comprehensive loss | (551) | (491) |
Treasury stock, at cost: 18,177 and 20,262 shares, respectively | (315,930) | (351,256) |
Total stockholders' equity | 785,609 | 632,212 |
Total liabilities and stockholders' equity | $ 1,553,624 | $ 1,104,231 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 260 | $ 160 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Capital stock common, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Capital stock common, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Capital stock common, shares issued (in shares) | 51,776,000 | 51,776,000 |
Treasury stock, at cost, shares (in shares) | 18,177,000 | 20,262,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Operating activities: | ||
Net income | $ 14,068 | $ 22,161 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 3,586 | 3,169 |
Amortization of intangible assets | 3,614 | 2,659 |
Non-cash interest expense, net | 1,023 | 0 |
Amortization of debt issuance costs | 760 | 394 |
Last-in, first-out expense | 332 | 597 |
Stock-based compensation | 1,583 | 2,472 |
Deferred income taxes | 731 | 382 |
Other, net | 65 | (570) |
Change in assets and liabilities: | ||
Receivables | 27,906 | 23,748 |
Inventories | 20,082 | 3,070 |
Prepaid expenses and other assets | (84) | 68 |
Accounts payable | (4,214) | (799) |
Income taxes and unrecognized tax benefits | 3,217 | (2,443) |
Accrued expenses and other liabilities | 6,364 | (737) |
Net cash provided by operating activities | 79,033 | 54,171 |
Investing activities: | ||
Purchases of property and equipment | (6,624) | (12,771) |
Acquisition of business, net of cash acquired | (264,280) | (702) |
Other, net | 243 | 311 |
Net cash used in investing activities | (270,661) | (13,162) |
Financing activities: | ||
Borrowings on credit agreement | 603,292 | 133,711 |
Repayments of credit agreement | (603,292) | (172,229) |
Proceeds from issuance of convertible senior notes | 300,000 | 0 |
Purchase of convertible note hedge | (70,800) | 0 |
Proceeds from issuance of warrants | 42,210 | 0 |
Payments of offering costs | (10,707) | 0 |
Payments of cash dividends | (3,469) | (3,183) |
Other, net | (1,709) | (948) |
Net cash provided by (used in) financing activities | 255,525 | (42,649) |
Net increase (decrease) in cash and cash equivalents | 63,897 | (1,640) |
Cash and cash equivalents at beginning of period | 37,431 | 2,342 |
Cash and cash equivalents at end of period | 101,328 | 702 |
Supplement cash flow disclosure: | ||
Income taxes paid, net | (311) | 8,778 |
Interest paid | 5,193 | 3,736 |
Non-cash transactions: | ||
Issuance of Winnebago common stock for acquisition of business | 92,572 | 0 |
Capital expenditures in accounts payable | $ 2,063 | $ 145 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Aug. 25, 2018 | $ 534,445 | $ 25,888 | $ 86,223 | $ 768,816 | $ 892 | $ (347,374) |
Beginning balance (in shares) at Aug. 25, 2018 | 51,776 | (20,243) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation, net of forfeitures | 2,489 | 2,448 | $ 41 | |||
Stock-based compensation, net of forfeitures (in shares) | 2 | |||||
Issuance of stock, net | 1,528 | (383) | $ 1,911 | |||
Issuance of stock, net (in shares) | 11 | |||||
Repurchase of common stock | (948) | $ (948) | ||||
Repurchase of common stock (in shares) | (48) | |||||
Common stock dividends | (3,183) | (3,183) | ||||
Actuarial loss, net of tax | 8 | 8 | ||||
Interest rate swap activity, net of tax | (22) | (22) | ||||
Net income | 22,161 | 22,161 | ||||
Ending balance at Nov. 24, 2018 | 556,478 | $ 25,888 | 88,288 | 787,794 | 878 | $ (346,370) |
Ending balance (in shares) at Nov. 24, 2018 | 51,776 | (20,278) | ||||
Beginning balance at Aug. 31, 2019 | 632,212 | $ 25,888 | 91,185 | 866,886 | (491) | $ (351,256) |
Beginning balance (in shares) at Aug. 31, 2019 | 51,776 | (20,262) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation, net of forfeitures | 1,583 | 1,574 | $ 9 | |||
Stock-based compensation, net of forfeitures (in shares) | 0 | |||||
Issuance of stock, net | 0 | (2,219) | $ 2,219 | |||
Issuance of stock, net (in shares) | 128 | |||||
Issuance of stock for acquisition | 92,572 | 57,811 | $ 34,761 | |||
Issuance of stock for acquisition (in shares) | 2,000 | |||||
Repurchase of common stock | (1,663) | $ (1,663) | ||||
Repurchase of common stock (in shares) | (43) | |||||
Common stock dividends | (3,485) | (3,485) | ||||
Actuarial loss, net of tax | 8 | 8 | ||||
Interest rate swap activity, net of tax | (68) | (68) | ||||
Equity component of convertible senior notes and offering costs, net of tax of $20,915 | 61,555 | 61,555 | ||||
Convertible note hedge purchase, net of tax of $17,417 | (53,383) | (53,383) | ||||
Warrant transactions | 42,210 | 42,210 | ||||
Net income | 14,068 | 14,068 | ||||
Ending balance at Nov. 30, 2019 | $ 785,609 | $ 25,888 | $ 198,733 | $ 877,469 | $ (551) | $ (315,930) |
Ending balance (in shares) at Nov. 30, 2019 | 51,776 | (18,177) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends paid per common share (in dollars per share) | $ 0.11 | $ 0.10 |
Equity component of convertible senior notes and deferred financing costs, net of tax | $ 20,915 | |
Convertible note hedge purchase, net of tax | $ 17,417 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Unless the context otherwise requires, the use of the terms "Winnebago," "WGO," "we," "us," and "our" in these Notes to Condensed Consolidated Financial Statements refers to Winnebago Industries, Inc. and its wholly-owned subsidiaries. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements . Interim results are not necessarily indicative of the results to be expected for the full year. The interim Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 . Fiscal Period We follow a 52-/53-week fiscal year, ending the last Saturday in August. Fiscal 2020 is a 52 -week year, while Fiscal 2019 was a 53 -week year. The extra (53rd) week in Fiscal 2019 was recognized in our fourth quarter. Subsequent Events In preparing the accompanying unaudited Condensed Consolidated Financial Statements , we evaluated subsequent events for potential recognition and disclosure through the date of this filing. There were no material subsequent events, except for the item described below. Dividend On December 18, 2019 , our Board of Directors declared a quarterly cash dividend of $0.11 per share payable on January 29, 2020 to common stockholders of record at the close of business on January 15, 2020 . Recently Adopted Accounting Pronouncements We adopted Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) , as of September 1, 2019, using the modified retrospective basis as of the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allowed us to carry forward the historical lease classification, and we elected the hindsight practical expedient. Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of $33.8 million and $33.4 million , respectively, as of September 1, 2019. The standard did not materially impact our consolidated net earnings and had no impact on our cash flows. The following table details line items impacted by the adoption of this ASU within the Condensed Consolidated Balance Sheets as of September 1, 2019: (in thousands) August 31, 2019 As Reported ASU 2016-02 Adjustment on September 1, 2019 September 1, 2019 As Adjusted Assets Other intangible assets, net $ 256,082 $ (1,310 ) $ 254,772 Operating lease assets — 33,811 33,811 Total assets $ 1,104,231 $ 32,501 $ 1,136,732 Liabilities and Stockholders' Equity Accrued expenses: Other $ 13,678 $ 1,258 $ 14,936 Total current liabilities 197,744 1,258 199,002 Operating lease liabilities — 31,243 31,243 Total non-current liabilities 274,275 31,243 305,518 Total liabilities and stockholders' equity $ 1,104,231 $ 32,501 $ 1,136,732 Also, in the first quarter of Fiscal 2020, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815) , which improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The adoption of this standard did not materially impact our Condensed Consolidated Financial Statements . Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and has since issued additional amendments. ASU 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The standard is effective for annual reporting periods beginning after December 15, 2019 (our Fiscal 2021), including interim periods within those annual reporting periods. We expect to adopt the new guidance in the first quarter of Fiscal 2021, and we do not expect a material impact to our consolidated financial statements. |
Business Combinations
Business Combinations | 3 Months Ended |
Nov. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Newmar Corporation On November 8, 2019, pursuant to the terms of the Stock Purchase Agreement dated September 15, 2019 (the "Purchase Agreement"), Winnebago completed the acquisition of 100% of Newmar Corporation, Dutch Real Estate Corp., New-Way Transport, and New-Serv (collectively “Newmar”). Newmar is a leading manufacturer of Class A and Super C motorized recreation vehicles that are sold through an established network of independent authorized dealers throughout North America. The following table summarizes the total consideration paid for Newmar, noting that it is subject to purchase price adjustments as stipulated in the Purchase Agreement: (in thousands) November 8, 2019 Cash $ 267,749 Winnebago shares: 2,000,000 at $46.29 92,572 Total $ 360,321 The cash portion of the purchase price of the acquisition and certain transaction expenses were funded through the private placement of convertible senior notes (as further described in Note 9 , Long-Term Debt ) and cash on hand. The stock consideration was discounted by 7.0% due to lack of marketability because of the one year lock-up restrictions. The total purchase price was allocated to the net tangible and intangible assets of Newmar acquired, based on their fair values at the date of the acquisition. We believe that the information provides a reasonable basis for estimating the fair values, but we are waiting for additional information necessary to finalize the working capital adjustment as defined in the purchase agreement and the amounts related to income taxes. Thus, the preliminary measurements of fair value reflected are subject to change. We expect to finalize the valuation and complete the purchase price allocation no later than one year from the acquisition date. The following table summarizes the preliminary fair values assigned to the Newmar net assets acquired and the determination of net assets: (in thousands) November 8, 2019 Cash $ 3,469 Accounts receivable 37,147 Inventories 82,621 Prepaid expenses and other assets 9,586 Property, plant, and equipment 31,143 Goodwill 72,909 Other intangible assets 172,100 Total assets acquired 408,975 Accounts payable 14,023 Accrued compensation 4,306 Product warranties 15,147 Promotional 2,573 Other 11,637 Deferred tax liabilities 968 Total liabilities assumed 48,654 Total purchase price $ 360,321 The goodwill, recognized in our Motorhome segment, is primarily attributable to the value of the workforce, reputation of founders, customer and dealer growth opportunities, and expected synergies. Key areas of cost synergies include increased purchasing power for raw materials and supply chain consolidation. Goodwill is expected to be mostly deductible for tax purposes. The following table summarizes the other intangible assets acquired: ($ in thousands) November 8, 2019 Useful Life-Years Trade name $ 98,000 Indefinite Dealer network 64,000 12.0 Backlog 8,800 0.5 Non-compete agreements 1,300 5.0 The fair value of the trade name and dealer network were estimated using an income approach. Under the income approach, an intangible asset's fair value is equal to the present value of the future economic benefits to be derived from ownership of the asset. The fair value of the trade name was estimated using an income approach, specifically the relief from royalty method. The relief from royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenues. The fair value of the trade name was estimated using an income approach, specifically the cost to recreate/cost saving method. This method uses the replacement of the asset as an indicator of the fair value of the asset. The useful life of the intangibles was determined considering the expected cash flows used to measure the fair value of the intangible assets adjusted for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets. On the acquisition date, amortizable intangible assets had a weighted-average useful life of approximately 10.5 years . The results of Newmar's operations have been included in our Condensed Consolidated Financial Statements from the close of the acquisition within the Motorhome segment. The following table provides net revenues and operating income from the Newmar operating segment included in our consolidated results following the November 8, 2019 closing date: Three Months Ended (in thousands) November 30, 2019 Net revenues $ 35,663 Operating loss 1,283 The following unaudited pro forma information represents our results of operations as if the Fiscal 2020 acquisition of Newmar had occurred at the beginning of Fiscal 2019: Three Months Ended (in thousands, except per share data) November 30, 2019 November 24, 2018 Net revenues $ 741,717 $ 663,786 Net income 17,197 10,665 Income per share - basic $ 0.51 $ 0.32 Income per share - diluted $ 0.50 $ 0.32 The unaudited pro forma data above includes the following significant non-recurring adjustments made to account for certain costs which would have changed if the acquisition of Newmar had occurred at the beginning of Fiscal 2019: Three Months Ended (in thousands) November 30, 2019 November 24, 2018 Amortization of intangibles (1 year or less useful life) (1) $ 2,251 $ (9,210 ) Increase in amortization of intangibles (2) (1,057 ) (1,398 ) Expenses related to business combination (transaction costs) (3) 9,950 (10,606 ) Interest to reflect new debt structure (4) (3,367 ) (4,546 ) Taxes related to the adjustments to the pro forma data and to the income of Newmar (5) (832 ) 3,056 (1) Includes amortization adjustments for our backlog intangible asset and our fair-value inventory adjustment. (2) Includes amortization adjustments for our dealer network and non-compete intangible assets. (3) Pro forma transaction costs include $0.6 million incurred prior to the acquisition. (4) Includes adjustments for cash and non-cash interest expense as well as deferred financing costs. Refer to Note 9 , Long-Term Debt , for additional information on the Company's new debt structure as a result of the acquisition. (5) Calculated using our U.S. federal statutory rate of 21.0%. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction actually taken place at the beginning of Fiscal 2019, and the unaudited pro forma information does not purport to be indicative of future financial operating results. The unaudited pro forma condensed consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. Transaction costs related to the Newmar acquisition were $10.6 million , of which $10.0 million were expensed during the first three months of Fiscal 2020 and $0.6 million were expensed in the three months ended August 31, 2019. Transaction costs are included in Selling, general, and administrative expenses in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income . |
Business Segments
Business Segments | 3 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We have six operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine, and 6) Winnebago specialty vehicles. We evaluate performance based on each operating segment's Adjusted EBITDA, as defined below, which excludes certain corporate administration expenses and non-operating income and expense. Our two reportable segments include: 1) Towable (comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an aggregation of the Grand Design towables and the Winnebago towables operating segments and 2) Motorhome (comprised of products that include a motorized chassis as well as other related manufactured products and services), which is an aggregation of the Winnebago motorhomes and Newmar motorhomes operating segments. The Corporate / All Other category includes the Chris-Craft marine and Winnebago specialty vehicles operating segments as well as expenses related to certain corporate administration expenses for the oversight of the enterprise. These expenses include items such as corporate leadership and administration costs. Identifiable assets of the reportable segments exclude general corporate assets, which principally consist of cash and cash equivalents and certain deferred tax balances. The general corporate assets are included in the Corporate / All Other category. Our chief operating decision maker ("CODM") is our Chief Executive Officer. Our CODM relies on internal management reporting that analyzes consolidated results to the net earnings level and operating segment's Adjusted EBITDA. Our CODM has ultimate responsibility for enterprise decisions. Our CODM determines, in particular, resource allocation for, and monitors the performance of, the consolidated enterprise, the Towable segment, and the Motorhome segment. The operating segments' management have responsibility for operating decisions, allocating resources, and assessing performance within their respective segments. The accounting policies of both reportable segments are the same and are described in Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 . We evaluate the performance of our reportable segments based on Adjusted EBITDA. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other adjustments made in order to present comparable results from period to period. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, and non-operating income. The following table shows information by reportable segment: Three Months Ended (in thousands) November 30, November 24, Net Revenues Towable $ 341,250 $ 292,833 Motorhome 225,891 181,328 Corporate / All Other 21,317 19,487 Consolidated $ 588,458 $ 493,648 Adjusted EBITDA Towable $ 35,785 $ 30,828 Motorhome 9,331 11,976 Corporate / All Other (3,068 ) (4,351 ) Consolidated $ 42,048 $ 38,453 Capital Expenditures Towable $ 4,026 $ 8,877 Motorhome 2,240 3,192 Corporate / All Other 358 702 Consolidated $ 6,624 $ 12,771 (in thousands) November 30, August 31, Total Assets Towable $ 673,683 $ 628,994 Motorhome 674,849 332,157 Corporate / All Other 205,092 143,080 Consolidated $ 1,553,624 $ 1,104,231 Reconciliation of net income to consolidated Adjusted EBITDA: Three Months Ended (in thousands) November 30, 2019 November 24, 2018 Net income $ 14,068 $ 22,161 Interest expense 6,049 4,501 Provision for income taxes 3,893 6,726 Depreciation 3,586 3,169 Amortization of intangible assets 3,614 2,659 EBITDA 31,210 39,216 Acquisition-related fair-value inventory step-up 1,176 — Acquisition-related costs 9,950 — Restructuring expenses (172 ) — Non-operating income (116 ) (763 ) Adjusted EBITDA $ 42,048 $ 38,453 |
Derivatives, Investments, and F
Derivatives, Investments, and Fair Value Measurements | 3 Months Ended |
Nov. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Derivatives, Investments, and Fair Value Measurements | Derivatives, Investments, and Fair Value Measurements Assets and Liabilities that are Measured at Fair Value on a Recurring Basis We account for fair value measurements in accordance with Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows: Level 1 - Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 - Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets in nonactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at November 30, 2019 and August 31, 2019 according to the valuation techniques we used to determine their fair values: Fair Value at Fair Value Hierarchy (in thousands) November 30, Level 1 Level 2 Level 3 Assets that fund deferred compensation: Domestic equity funds $ 444 $ 345 $ 99 $ — International equity funds 104 37 67 — Fixed income funds 163 53 110 — Total assets at fair value $ 711 $ 435 $ 276 $ — Fair Value at Fair Value Hierarchy (in thousands) August 31, Level 1 Level 2 Level 3 Assets that fund deferred compensation: Domestic equity funds $ 373 $ 288 $ 85 $ — International equity funds 101 45 56 — Fixed income funds 155 54 101 — Interest rate swap contract 90 — 90 — Total assets at fair value $ 719 $ 387 $ 332 $ — The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Assets that fund deferred compensation Our assets that fund deferred compensation are marketable equity securities measured at fair value using quoted market prices and primarily consist of equity-based mutual funds. These securities are primarily classified as Level 1 as they are traded in an active market for which closing stock prices are readily available. These securities fund the Executive Share Option Plan and the Executive Deferred Compensation Plan. Refer to Note 10, Employee and Retiree Benefits , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for additional information regarding these plans. The proportion of the assets that will fund options which expire within a year are included in Prepaid expenses and other assets in the accompanying Condensed Consolidated Balance Sheets . The remaining assets are classified as non-current and are included in Other assets . Interest Rate Swap Contract On January 23, 2017, we entered into an interest rate swap contract, which effectively fixed our interest rate on our $300.0 million term loan agreement ("Term Loan") for a notional amount that reduced each December during the swap contract. As of August 31, 2019 , we had $120.0 million of our Term Loan fixed at an interest rate of 5.32% . In the first quarter of Fiscal 2020, we exited the swap contract prior to its expiration on December 8, 2020. The fair value of the interest rate swap was classified as Level 2 as it was determined based on observable market data. The asset was included in Other assets on the Condensed Consolidated Balance Sheets . The change in value was recorded to Accumulated other comprehensive loss on the Condensed Consolidated Balance Sheets since the interest rate swap was designated for hedge accounting. Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis Our non-financial assets, which include goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required, we must evaluate the non-financial asset for impairment. If an impairment has occurred, the asset is required to be recorded at the estimated fair value. No impairments were recorded for non-financial assets in the first quarter of Fiscal 2020 or the first quarter of Fiscal 2019 . Fair Value of Financial Instruments Our financial instruments, other than those presented in the disclosures above, include cash, receivables, accounts payable, other payables, and long-term debt. The fair values of cash, receivables, accounts payable, and other payables approximated carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. See Note 9 , Long-Term Debt , for information about the fair value of our long-term debt. |
Inventories
Inventories | 3 Months Ended |
Nov. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: (in thousands) November 30, August 31, Finished goods $ 77,315 $ 53,417 Work-in-process 105,779 82,926 Raw materials 121,592 105,804 Total 304,686 242,147 Less last-in, first-out ("LIFO") reserve 41,353 41,021 Inventories, net $ 263,333 $ 201,126 Inventory valuation methods consist of the following: (in thousands) November 30, August 31, LIFO basis $ 164,340 $ 184,007 First-in, first-out basis 140,346 58,140 Total $ 304,686 $ 242,147 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Nov. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment is stated at cost, net of accumulated depreciation, and consists of the following: (in thousands) November 30, August 31, Land $ 10,749 $ 6,799 Buildings and building improvements 147,770 119,638 Machinery and equipment 113,594 107,701 Software 29,622 29,169 Transportation 4,009 3,865 Property, plant, and equipment, gross 305,744 267,172 Less accumulated depreciation 142,396 139,600 Property, plant, and equipment, net $ 163,348 $ 127,572 Depreciation expense was $3.6 million and $3.2 million during the first quarter of Fiscal 2020 and 2019 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Nov. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill by segment were as follows for the first three months of Fiscal 2020 and 2019 , of which there were no accumulated impairment losses: (in thousands) Towable Motorhome Corporate / All Other Total Balances at August 25, 2018 $ 244,684 $ — $ 29,686 $ 274,370 Chris-Craft purchase price adjustment (1) — — 702 702 Balances at November 24, 2018 $ 244,684 $ — $ 30,388 $ 275,072 Balances at August 31, 2019 $ 244,684 $ — $ 30,247 $ 274,931 Acquisition of Newmar (2) — 72,909 — 72,909 Balances at November 30, 2019 $ 244,684 $ 72,909 $ 30,247 $ 347,840 (1) Refer to Note 2, Business Combinations , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for additional information. (2) Refer to Note 2 , Business Combinations , for additional information. Other intangible assets, net of accumulated amortization, consist of the following: November 30, 2019 August 31, 2019 ($ in thousands) Weighted Average Life-Years Cost Accumulated Amortization Weighted Average Life-Years Cost Accumulated Amortization Trade names Indefinite $ 275,250 Indefinite $ 177,250 Dealer networks 12.1 159,581 $ 22,618 12.2 95,581 $ 20,329 Backlog 0.5 28,327 19,543 0.5 19,527 19,527 Non-compete agreements 4.3 6,647 4,386 4.1 5,347 3,077 Leasehold interest-favorable — — 8.1 2,000 690 Other intangible assets, gross 469,805 46,547 299,705 43,623 Less accumulated amortization 46,547 43,623 Other intangible assets, net $ 423,258 $ 256,082 The weig hted average remaining amortization period for intangible assets as of November 30, 2019 was approximatel y 11 years. Remaining estimated aggregate annual amortization expense by fiscal year is as follows: (in thousands) Amount Fiscal 2020 $ 18,495 Fiscal 2021 14,361 Fiscal 2022 13,719 Fiscal 2023 13,526 Fiscal 2024 13,424 Thereafter 74,483 Total amortization expense remaining $ 148,008 |
Product Warranties
Product Warranties | 3 Months Ended |
Nov. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties We provide certain service and warranty on our products. From time to time, we also voluntarily incur costs for certain warranty-type expenses occurring after the normal warranty period to help protect the reputation of our products and the goodwill of our customers. Estimated costs related to product warranty are accrued at the time of sale and are based upon historical warranty and service claims experience. Adjustments are made to accruals as claim data and cost experience becomes available. In addition to the costs associated with the contractual warranty coverage provided on our products, we also occasionally incur costs as a result of additional service actions not covered by our warranties, including product recalls and customer satisfaction actions. Although we estimate and reserve for the cost of these service actions, there can be no assurance that expense levels will remain at current levels or such reserves will continue to be adequate. Changes in our product warranty liability are as follows: Three Months Ended (in thousands) November 30, November 24, Balance at beginning of period $ 44,436 $ 40,498 Business acquisition (1) 15,147 — Provision 15,318 10,757 Claims paid (13,794 ) (9,952 ) Balance at end of period $ 61,107 $ 41,303 (1) Refer to Note 2 , Business Combinations , for additional information. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Nov. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The components of long-term debt are as follows: (in thousands) November 30, August 31, ABL Credit Facility $ — $ — Term Loan 260,000 260,000 Convertible Notes 300,000 — Long-term debt, gross 560,000 260,000 Convertible Notes unamortized interest discount (83,998 ) — Debt issuance costs, net (12,486 ) (5,706 ) Long-term debt 463,516 254,294 Less current maturities 12,668 8,892 Long-term debt, less current maturities $ 450,848 $ 245,402 Credit Agreements On November 8, 2016 , we entered into a $125.0 million credit facility ("ABL Credit Facility") and a $300.0 million loan agreement ("Term Loan") with JPMorgan Chase Bank, N.A. (the agreements governing the ABL Credit Facility and the Term Loan, collectively the "Credit Agreements"). On October 22, 2019 , our ABL Credit Facility was amended and restated to, among other things, increase the commitments thereunder to $192.5 million . The Credit Agreements contain certain financial covenants. As of November 30, 2019 , we are in compliance with all financial covenants of the Credit Agreements. Convertible Notes On November 1, 2019 , we issued $300.0 million in aggregate principal amount of 1.5% unsecured convertible senior notes due 2025 (“Convertible Notes”). The net proceeds from the issuance of the Convertible Notes, after deducting the initial purchasers' transaction fees and offering expense payable by us, were approximately $290.2 million . The Convertible Notes bear interest at the annual rate of 1.5% , payable on April 1 and October 1 of each year, beginning on April 1, 2020 , and will mature on April 1, 2025 , unless earlier converted or repurchased by us. The Convertible Notes will be convertible into cash, shares of our common stock or a combination thereof, at our election, at an initial conversion rate of 15.6906 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $63.73 per share, as adjusted pursuant to the terms of the indenture governing the Convertible Notes (the "Indenture"). The Convertible Notes may be converted at any time on or after October 1, 2024 , until the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate of the Convertible Notes may be adjusted in certain circumstances, including in connection with a conversion of the Convertible Notes made following certain fundamental changes and under other circumstances set forth in the Indenture. It is our current intent to settle all conversions of the Convertible Notes through settlement of cash. Prior to the close of business on the business day immediately preceding October 1, 2024 , the Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after December 31, 2019 if the closing sale price of the common stock is more than 130% of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the 5 consecutive business day period after any 5 consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the Convertible Notes on each such trading day; or (3) upon the occurrence of certain specified corporate events set forth in the indenture. We may not redeem the Convertible Notes at our option prior to the maturity date, and no sinking fund is provided for the Convertible Notes. On October 29, 2019 and October 30, 2019 , in connection with the offering of the Convertible Notes, we entered into privately negotiated convertible note hedge transactions (collectively, the “Hedge Transactions”) that cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that initially underlie the Convertible Notes, and are expected generally to reduce the potential dilution and/or offset any cash payments we are required to make in excess of the principal amount due, as the case may be, upon conversion of the Convertible Notes in the event that the market price of our common stock is greater than the strike price of the Hedge Transactions, which was initially $63.73 per share (subject to adjustment under the terms of the Hedge Transactions), corresponding to the initial conversion price of the Convertible Notes. On October 29, 2019 and October 30, 2019 , we also entered into privately negotiated warrant transactions (collectively, the “Warrant Transactions” and, together with the Hedge Transactions, the “Call Spread Transactions”), whereby we sold warrants at a higher strike price relating to the same number of shares of our common stock that initially underlie the Convertible Notes, subject to customary anti-dilution adjustments. The initial strike price of the warrants is $96.20 per share (subject to adjustment under the terms of the Warrant Transactions), which is 100% above the last reported sale price of our common stock on October 29, 2019 . The Warrant Transactions could have a dilutive effect to our stockholders to the extent that the market price per share of our common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. We used $28.6 million of the net proceeds from the issuance of the Convertible Notes to pay the cost of the Call Spread Transactions. The Hedge Transactions and the Warrant Transactions are separate transactions, in each case, and are not part of the terms of the Convertible Notes and will not affect any holder’s rights under the Convertible Notes. Holders of the Convertible Notes will not have any rights with respect to the Call Spread Transactions. Accounting Treatment of the Convertible Notes and Related Hedge Transactions and Warrant Transactions The Call Spread Transactions were classified as equity. We bifurcated the proceeds from the offering of the Convertible Notes between liability and equity components. On the date of issuance, the liability and equity components were calculated to be approximately $215.0 million and $85.0 million , respectively. The initial $215.0 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature assuming a hypothetical interest rate of 8% . The initial $85.0 million ( $64.1 million net of tax) equity component represents the difference between the fair value of the initial $215.0 million in debt and the $300.0 million of gross proceeds. The related initial debt discount of $85.0 million is being amortized over the life of the Convertible Notes as non-cash interest expense using the effective interest method. In connection with the above-noted transactions, we incurred approximately $9.8 million of offering-related costs. These offering fees were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt and equity issuance costs, respectively. We allocated $7.2 million of debt issuance costs to the liability component, which were capitalized as deferred financing costs within Long-term debt. These costs are being amortized as interest expense over the term of the debt using the effective interest method. The remaining $2.6 million of transaction costs allocated to the equity component were recorded as a reduction of the equity component. Fair Value and Future Maturities As of November 30, 2019 , the fair value of long-term debt, gross, was $561.0 million . As of August 31, 2019 , the fair value of long-term debt, gross, approximated the carrying value. Aggregate contractual maturities of debt in future fiscal years are as follows: (in thousands) Amount Fiscal 2020 $ 10,250 Fiscal 2021 15,000 Fiscal 2022 15,000 Fiscal 2023 15,000 Fiscal 2024 204,750 Thereafter 300,000 Total Term Loan and Convertible Notes $ 560,000 |
Leases
Leases | 3 Months Ended |
Nov. 30, 2019 | |
Leases [Abstract] | |
Operating Leases | Leases Our leases primarily include operating leases for office and manufacturing space and equipment. Our finance leases are primarily for real estate. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Condensed Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets ; we recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, certain of our leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. For our operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The following table details the supplemental balance sheet information related to our leases: (in thousands) Classification November 30, 2019 Assets Operating leases Operating lease assets $ 30,720 Finance leases Other assets 4,761 Total lease assets $ 35,481 Liabilities Current: Operating leases Accrued expenses: Other $ 2,416 Current: Finance leases Accrued expenses: Other 516 Non-Current: Operating leases Operating lease liabilities 28,066 Non-Current: Finance leases Non-current liabilities: Other 5,275 Total lease liabilities $ 36,273 The following table details the operating lease cost incurred: Three Months Ended (in thousands) Classification November 30, 2019 Operating lease expense (1) Costs of goods sold and SG&A $ 1,763 Finance lease cost: Depreciation of lease assets Costs of goods sold and SG&A 43 Interest on lease liabilities Interest expense 31 Total lease cost $ 1,837 (1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial. Our future lease commitments for future fiscal years as of November 30, 2019 included the following related party and non-related party leases: Operating Leases Finance Leases (in thousands) Related Party Amount Non-Related Party Amount Total Non-Related Party Amount Fiscal 2020 $ 2,147 $ 1,036 $ 3,183 $ 642 Fiscal 2021 2,863 1,220 4,083 855 Fiscal 2022 2,863 904 3,767 851 Fiscal 2023 3,463 646 4,109 842 Fiscal 2024 3,763 477 4,240 845 Thereafter 20,073 1,371 21,444 3,443 Total future undiscounted lease payments 35,172 5,654 40,826 7,478 Less: Interest 9,422 922 10,344 1,687 Total reported lease liabilities $ 25,750 $ 4,732 $ 30,482 $ 5,791 Our future minimum lease payments for future fiscal years as determined prior to the adoption of ASC 842, Leases , and as disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 , included the following related party and non-related party leases: Operating Leases (in thousands) Related Party Amount Non-Related Party Amount Total Fiscal 2020 $ 2,864 $ 1,236 $ 4,100 Fiscal 2021 2,863 1,068 3,931 Fiscal 2022 2,863 759 3,622 Fiscal 2023 3,597 530 4,127 Fiscal 2024 3,963 361 4,324 Thereafter 25,064 1,359 26,423 Total future lease commitments $ 41,214 $ 5,313 $ 46,527 The following table details additional information related to our leases: Three Months Ended (in thousands) November 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 554 Operating cash flows from finance leases 31 Financing cash flows from finance leases 46 Leased assets obtained in exchange for lease liabilities: Operating leases 2,317 Finance leases (1) 5,664 November 30, 2019 Weighted average remaining lease term (in years): Operating leases 9.5 Finance leases 8.6 Weighted average discount rate: Operating leases 6.2 % Finance leases 6.2 % (1) Represents the lease liability added. Lease assets are offset by a $1.0 million unfavorable lease liability created by the acquisition of Newmar. |
Financing Leases | Leases Our leases primarily include operating leases for office and manufacturing space and equipment. Our finance leases are primarily for real estate. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Condensed Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets ; we recognize lease expense for these leases on a straight-line basis over the lease term. When the terms of multiple lease agreements are materially consistent, we have elected the portfolio approach for our asset and liability calculations. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We generally use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our assumed lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Some of our real estate operating leases require payment of real estate taxes, common area maintenance, and insurance. In addition, certain of our leases are subject to annual changes in the consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. For our operating leases, we recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The following table details the supplemental balance sheet information related to our leases: (in thousands) Classification November 30, 2019 Assets Operating leases Operating lease assets $ 30,720 Finance leases Other assets 4,761 Total lease assets $ 35,481 Liabilities Current: Operating leases Accrued expenses: Other $ 2,416 Current: Finance leases Accrued expenses: Other 516 Non-Current: Operating leases Operating lease liabilities 28,066 Non-Current: Finance leases Non-current liabilities: Other 5,275 Total lease liabilities $ 36,273 The following table details the operating lease cost incurred: Three Months Ended (in thousands) Classification November 30, 2019 Operating lease expense (1) Costs of goods sold and SG&A $ 1,763 Finance lease cost: Depreciation of lease assets Costs of goods sold and SG&A 43 Interest on lease liabilities Interest expense 31 Total lease cost $ 1,837 (1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial. Our future lease commitments for future fiscal years as of November 30, 2019 included the following related party and non-related party leases: Operating Leases Finance Leases (in thousands) Related Party Amount Non-Related Party Amount Total Non-Related Party Amount Fiscal 2020 $ 2,147 $ 1,036 $ 3,183 $ 642 Fiscal 2021 2,863 1,220 4,083 855 Fiscal 2022 2,863 904 3,767 851 Fiscal 2023 3,463 646 4,109 842 Fiscal 2024 3,763 477 4,240 845 Thereafter 20,073 1,371 21,444 3,443 Total future undiscounted lease payments 35,172 5,654 40,826 7,478 Less: Interest 9,422 922 10,344 1,687 Total reported lease liabilities $ 25,750 $ 4,732 $ 30,482 $ 5,791 Our future minimum lease payments for future fiscal years as determined prior to the adoption of ASC 842, Leases , and as disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 , included the following related party and non-related party leases: Operating Leases (in thousands) Related Party Amount Non-Related Party Amount Total Fiscal 2020 $ 2,864 $ 1,236 $ 4,100 Fiscal 2021 2,863 1,068 3,931 Fiscal 2022 2,863 759 3,622 Fiscal 2023 3,597 530 4,127 Fiscal 2024 3,963 361 4,324 Thereafter 25,064 1,359 26,423 Total future lease commitments $ 41,214 $ 5,313 $ 46,527 The following table details additional information related to our leases: Three Months Ended (in thousands) November 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 554 Operating cash flows from finance leases 31 Financing cash flows from finance leases 46 Leased assets obtained in exchange for lease liabilities: Operating leases 2,317 Finance leases (1) 5,664 November 30, 2019 Weighted average remaining lease term (in years): Operating leases 9.5 Finance leases 8.6 Weighted average discount rate: Operating leases 6.2 % Finance leases 6.2 % (1) Represents the lease liability added. Lease assets are offset by a $1.0 million unfavorable lease liability created by the acquisition of Newmar. |
Employee and Retiree Benefits
Employee and Retiree Benefits | 3 Months Ended |
Nov. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee and Retiree Benefits | Employee and Retiree Benefits Deferred compensation liabilities are as follows: (in thousands) November 30, August 31, Non-qualified deferred compensation $ 12,672 $ 13,093 Supplemental executive retirement plan 2,085 2,072 Executive share option plan — 12 Executive deferred compensation plan 715 621 Deferred compensation benefits 15,472 15,798 Less current portion (1) 2,878 2,920 Deferred compensation benefits, net of current portion $ 12,594 $ 12,878 (1) Included in Accrued compensation on the Condensed Consolidated Balance Sheets . |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments | 3 Months Ended |
Nov. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | Contingent Liabilities and Commitments Repurchase Commitments Generally, manufacturers in our industries enter into repurchase agreements with lending institutions which have provided wholesale floorplan financing to dealers. Most dealers are financed on a "floorplan" basis under which a bank or finance company lends the dealer all, or substantially all, of the purchase price, collateralized by a security interest in the units purchased. Our repurchase agreements generally provide that, in the event of default by the dealer on the agreement to pay the lending institution, we will repurchase the financed merchandise. The terms of these agreements, which generally can last up to 24 months , provide that our liability will be the lesser of remaining principal owed by the dealer to the lending institution, or dealer invoice less periodic reductions based on the time since the date of the original invoice. Our liability cannot exceed 100% of the dealer invoice. In certain instances, we also repurchase inventory from our dealers due to state law or regulatory requirements that govern voluntary or involuntary relationship terminations. Although laws vary from state to state, some states have laws in place that require manufacturers of recreational vehicles or boats to repurchase current inventory if a dealership exits the business. Our total contingent liability on all repurchase agreements was approximately $1,291.6 million and $874.9 million at November 30, 2019 and August 31, 2019 , respectively. Repurchased sales are not recorded as a revenue transaction, but the net difference between the original repurchase price and the resale price are recorded against the loss reserve, which is a deduction from gross revenue. Our loss reserve for repurchase commitments contains uncertainties because the calculation requires management to make assumptions and apply judgment regarding a number of factors. Our risk of loss related to these repurchase commitments is significantly reduced by the potential resale value of any products that are subject to repurchase and is spread over numerous dealers and lenders. The aggregate contingent liability related to our repurchase agreements represents all financed dealer inventory at the period reporting date subject to a repurchase agreement, net of the greater of periodic reductions per the agreement or dealer principal payments. Based on these repurchase agreements and our historical loss experience, we establish an associated loss reserve which is included in Accrued expenses: Other on the Condensed Consolidated Balance Sheets . Our accrued losses on repurchases were $1.2 million and $0.9 million at November 30, 2019 and August 31, 2019 , respectively. Repurchase risk is affected by the credit worthiness of our dealer network, and we do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to establish the loss reserve for repurchase commitments. There was no material activity related to repurchase agreements during the three months ended November 30, 2019 and November 24, 2018 . Litigation |
Revenue
Revenue | 3 Months Ended |
Nov. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We generate all of our operating revenue from contracts with customers. Our primary source of revenue is generated through the sale of manufactured motorized units, non-motorized towable units, and marine units to our independent dealer network (our customers). The following table disaggregates revenue by reportable segment and product category: Three Months Ended (in thousands) November 30, November 24, Net Revenues Towable: Fifth Wheel $ 195,189 $ 162,749 Travel Trailer 140,463 125,626 Other (1) 5,598 4,458 Total Towable 341,250 292,833 Motorhome: Class A 65,644 48,678 Class B 85,456 68,720 Class C 66,876 56,142 Other (1) 7,915 7,788 Total Motorhome 225,891 181,328 Corporate / All Other: Other (2) 21,317 19,487 Total Corporate / All Other 21,317 19,487 Consolidated $ 588,458 $ 493,648 (1) Relates to parts, accessories, and services. (2) Relates to marine and specialty vehicle units, parts, accessories, and services. We do not have material contract assets or liabilities. We establish allowances for uncollectible receivables based on historical collection trends and write-off history. Concentration of Risk None of our dealer organizations accounted for more than 10% of our net revenue for the first quarter of Fiscal 2020 or 2019 . |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Nov. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On December 11, 2018, our shareholders approved the Winnebago Industries, Inc. 2019 Omnibus Incentive Plan ("2019 Plan") as detailed in our Proxy Statement for the 2018 Annual Meeting of Shareholders. The 2019 Plan allows us to grant or issue non-qualified stock options, incentive stock options, share awards, and other equity compensation to key employees and to non-employee directors. The 2019 Plan replaces our 2014 Omnibus Equity, Performance Award, and Incentive Compensation Plan (as amended, the "2014 Plan"). The number of shares of our Common Stock that may be the subject of awards and issued under the 2019 Plan is 4.1 million , plus the shares subject to any awards outstanding under the 2014 Plan and our predecessor plan, the 2004 Incentive Compensation Plan (the “2004 Plan”), on December 11, 2018 that subsequently expire, are forfeited or canceled, or are settled for cash. Until such time, however, awards under the 2014 Plan and the 2004 Plan, respectively, that are outstanding on December 11, 2018 will continue to be subject to the terms of the 2014 Plan or 2004 Plan, as applicable. Shares remaining available for future awards under the 2014 Plan were not carried over into the 2019 Plan. Stock-based compensation expense was $1.6 million and $2.5 million during the first quarter of Fiscal 2020 and 2019 , respectively. Compensation expense is recognized over the requisite service period of the award. |
Restructuring
Restructuring | 3 Months Ended |
Nov. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring On February 4, 2019, we announced our intent to move our diesel production from Junction City, OR to Forest City, IA to enable more effective product development and improve our cost structure. The following table details the restructuring charges incurred: Motorhome Three Months Ended Cumulative (in thousands) November 30, 2019 November 24, 2018 November 30, 2019 Cost of goods sold $ (219 ) $ — $ 1,505 Selling, general, and administrative expenses 47 — 266 Restructuring expense $ (172 ) $ — $ 1,771 Expenses in the current period include adjustments to employee-related expenses and facility closure costs. We expect additional expenses of approximately $0.5 million |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate decreased to 21.7% for the three months ended November 30, 2019 from 23.3% for the three months ended November 24, 2018 primarily due to an increase in estimated research and development tax credits and excess tax benefits related to stock-based compensation in Fiscal 2020. We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. As of November 30, 2019, our federal returns from Fiscal 2016 to present are subject to review by the Internal Revenue Service. With limited exception, state returns from Fiscal 2015 to present continue to be subject to review by state taxing jurisdictions. We are currently under review by certain U.S. state tax authorities for Fiscal 2015 through 2018. We believe we have adequately reserved for our exposure to additional payments for uncertain tax positions in our liability for unrecognized tax benefits. |
Income Per Share
Income Per Share | 3 Months Ended |
Nov. 30, 2019 | |
Earnings Per Share [Abstract] | |
Income Per Share | Income Per Share The following table reflects the calculation of basic and diluted income per share: Three Months Ended (in thousands, except per share data) November 30, November 24, Numerator Net income $ 14,068 $ 22,161 Denominator Weighted average common shares outstanding 32,067 31,567 Dilutive impact of stock compensation awards 200 247 Weighted average common shares outstanding, assuming dilution 32,267 31,814 Anti-dilutive securities excluded from Weighted average common shares outstanding, assuming dilution 73 90 Basic income per common share $ 0.44 $ 0.70 Diluted income per common share $ 0.44 $ 0.70 Anti-dilutive securities were not included in the computation of diluted income per common share because they are considered anti-dilutive under the treasury stock method. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Nov. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in Accumulated Other Comprehensive Income ("AOCI") by component, net of tax, were: Three Months Ended November 30, 2019 November 24, 2018 (in thousands) Defined Benefit Pension Items Interest Rate Swap Total Defined Benefit Pension Items Interest Rate Swap Total Balance at beginning of period $ (559 ) $ 68 $ (491 ) $ (591 ) $ 1,483 $ 892 OCI before reclassifications — (80 ) (80 ) — (22 ) (22 ) Amounts reclassified from AOCI 8 12 20 8 — 8 Net current-period OCI 8 (68 ) (60 ) 8 (22 ) (14 ) Balance at end of period $ (551 ) $ — $ (551 ) $ (583 ) $ 1,461 $ 878 Reclassifications out of AOCI in net periodic benefit costs, net of tax, were: Three Months Ended (in thousands) Location on Consolidated Statements of Income and Comprehensive Income November 30, November 24, Amortization of net actuarial loss SG&A $ 8 $ 8 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Unless the context otherwise requires, the use of the terms "Winnebago," "WGO," "we," "us," and "our" in these Notes to Condensed Consolidated Financial Statements refers to Winnebago Industries, Inc. and its wholly-owned subsidiaries. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements . Interim results are not necessarily indicative of the results to be expected for the full year. The interim Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 . |
Fiscal Period | Fiscal Period We follow a 52-/53-week fiscal year, ending the last Saturday in August. Fiscal 2020 is a 52 -week year, while Fiscal 2019 was a 53 -week year. The extra (53rd) week in Fiscal 2019 was recognized in our fourth quarter. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements We adopted Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) , as of September 1, 2019, using the modified retrospective basis as of the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allowed us to carry forward the historical lease classification, and we elected the hindsight practical expedient. Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of $33.8 million and $33.4 million , respectively, as of September 1, 2019. The standard did not materially impact our consolidated net earnings and had no impact on our cash flows. The following table details line items impacted by the adoption of this ASU within the Condensed Consolidated Balance Sheets as of September 1, 2019: (in thousands) August 31, 2019 As Reported ASU 2016-02 Adjustment on September 1, 2019 September 1, 2019 As Adjusted Assets Other intangible assets, net $ 256,082 $ (1,310 ) $ 254,772 Operating lease assets — 33,811 33,811 Total assets $ 1,104,231 $ 32,501 $ 1,136,732 Liabilities and Stockholders' Equity Accrued expenses: Other $ 13,678 $ 1,258 $ 14,936 Total current liabilities 197,744 1,258 199,002 Operating lease liabilities — 31,243 31,243 Total non-current liabilities 274,275 31,243 305,518 Total liabilities and stockholders' equity $ 1,104,231 $ 32,501 $ 1,136,732 Also, in the first quarter of Fiscal 2020, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815) , which improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The adoption of this standard did not materially impact our Condensed Consolidated Financial Statements . Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and has since issued additional amendments. ASU 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The standard is effective for annual reporting periods beginning after December 15, 2019 (our Fiscal 2021), including interim periods within those annual reporting periods. We expect to adopt the new guidance in the first quarter of Fiscal 2021, and we do not expect a material impact to our consolidated financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Balance Sheet Impacts By Adoption of Leases Accounting Standard Update | The following table details line items impacted by the adoption of this ASU within the Condensed Consolidated Balance Sheets as of September 1, 2019: (in thousands) August 31, 2019 As Reported ASU 2016-02 Adjustment on September 1, 2019 September 1, 2019 As Adjusted Assets Other intangible assets, net $ 256,082 $ (1,310 ) $ 254,772 Operating lease assets — 33,811 33,811 Total assets $ 1,104,231 $ 32,501 $ 1,136,732 Liabilities and Stockholders' Equity Accrued expenses: Other $ 13,678 $ 1,258 $ 14,936 Total current liabilities 197,744 1,258 199,002 Operating lease liabilities — 31,243 31,243 Total non-current liabilities 274,275 31,243 305,518 Total liabilities and stockholders' equity $ 1,104,231 $ 32,501 $ 1,136,732 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the total consideration paid for Newmar, noting that it is subject to purchase price adjustments as stipulated in the Purchase Agreement: (in thousands) November 8, 2019 Cash $ 267,749 Winnebago shares: 2,000,000 at $46.29 92,572 Total $ 360,321 Three Months Ended (in thousands) November 30, 2019 Net revenues $ 35,663 Operating loss 1,283 |
Schedule of Preliminary Fair Values Assigned | The following table summarizes the preliminary fair values assigned to the Newmar net assets acquired and the determination of net assets: (in thousands) November 8, 2019 Cash $ 3,469 Accounts receivable 37,147 Inventories 82,621 Prepaid expenses and other assets 9,586 Property, plant, and equipment 31,143 Goodwill 72,909 Other intangible assets 172,100 Total assets acquired 408,975 Accounts payable 14,023 Accrued compensation 4,306 Product warranties 15,147 Promotional 2,573 Other 11,637 Deferred tax liabilities 968 Total liabilities assumed 48,654 Total purchase price $ 360,321 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the other intangible assets acquired: ($ in thousands) November 8, 2019 Useful Life-Years Trade name $ 98,000 Indefinite Dealer network 64,000 12.0 Backlog 8,800 0.5 Non-compete agreements 1,300 5.0 |
Schedule of Indefinite-lived Intangible Assets | The following table summarizes the other intangible assets acquired: ($ in thousands) November 8, 2019 Useful Life-Years Trade name $ 98,000 Indefinite Dealer network 64,000 12.0 Backlog 8,800 0.5 Non-compete agreements 1,300 5.0 |
Schedule of Pro Forma Information | The following unaudited pro forma information represents our results of operations as if the Fiscal 2020 acquisition of Newmar had occurred at the beginning of Fiscal 2019: Three Months Ended (in thousands, except per share data) November 30, 2019 November 24, 2018 Net revenues $ 741,717 $ 663,786 Net income 17,197 10,665 Income per share - basic $ 0.51 $ 0.32 Income per share - diluted $ 0.50 $ 0.32 |
Pro Forma Data With Non-Recurring Adjustments | The unaudited pro forma data above includes the following significant non-recurring adjustments made to account for certain costs which would have changed if the acquisition of Newmar had occurred at the beginning of Fiscal 2019: Three Months Ended (in thousands) November 30, 2019 November 24, 2018 Amortization of intangibles (1 year or less useful life) (1) $ 2,251 $ (9,210 ) Increase in amortization of intangibles (2) (1,057 ) (1,398 ) Expenses related to business combination (transaction costs) (3) 9,950 (10,606 ) Interest to reflect new debt structure (4) (3,367 ) (4,546 ) Taxes related to the adjustments to the pro forma data and to the income of Newmar (5) (832 ) 3,056 (1) Includes amortization adjustments for our backlog intangible asset and our fair-value inventory adjustment. (2) Includes amortization adjustments for our dealer network and non-compete intangible assets. (3) Pro forma transaction costs include $0.6 million incurred prior to the acquisition. (4) Includes adjustments for cash and non-cash interest expense as well as deferred financing costs. Refer to Note 9 , Long-Term Debt , for additional information on the Company's new debt structure as a result of the acquisition. (5) Calculated using our U.S. federal statutory rate of 21.0%. |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table shows information by reportable segment: Three Months Ended (in thousands) November 30, November 24, Net Revenues Towable $ 341,250 $ 292,833 Motorhome 225,891 181,328 Corporate / All Other 21,317 19,487 Consolidated $ 588,458 $ 493,648 Adjusted EBITDA Towable $ 35,785 $ 30,828 Motorhome 9,331 11,976 Corporate / All Other (3,068 ) (4,351 ) Consolidated $ 42,048 $ 38,453 Capital Expenditures Towable $ 4,026 $ 8,877 Motorhome 2,240 3,192 Corporate / All Other 358 702 Consolidated $ 6,624 $ 12,771 (in thousands) November 30, August 31, Total Assets Towable $ 673,683 $ 628,994 Motorhome 674,849 332,157 Corporate / All Other 205,092 143,080 Consolidated $ 1,553,624 $ 1,104,231 Reconciliation of net income to consolidated Adjusted EBITDA: Three Months Ended (in thousands) November 30, 2019 November 24, 2018 Net income $ 14,068 $ 22,161 Interest expense 6,049 4,501 Provision for income taxes 3,893 6,726 Depreciation 3,586 3,169 Amortization of intangible assets 3,614 2,659 EBITDA 31,210 39,216 Acquisition-related fair-value inventory step-up 1,176 — Acquisition-related costs 9,950 — Restructuring expenses (172 ) — Non-operating income (116 ) (763 ) Adjusted EBITDA $ 42,048 $ 38,453 |
Derivatives, Investments, and_2
Derivatives, Investments, and Fair Value Measurements (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at November 30, 2019 and August 31, 2019 according to the valuation techniques we used to determine their fair values: Fair Value at Fair Value Hierarchy (in thousands) November 30, Level 1 Level 2 Level 3 Assets that fund deferred compensation: Domestic equity funds $ 444 $ 345 $ 99 $ — International equity funds 104 37 67 — Fixed income funds 163 53 110 — Total assets at fair value $ 711 $ 435 $ 276 $ — Fair Value at Fair Value Hierarchy (in thousands) August 31, Level 1 Level 2 Level 3 Assets that fund deferred compensation: Domestic equity funds $ 373 $ 288 $ 85 $ — International equity funds 101 45 56 — Fixed income funds 155 54 101 — Interest rate swap contract 90 — 90 — Total assets at fair value $ 719 $ 387 $ 332 $ — |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: (in thousands) November 30, August 31, Finished goods $ 77,315 $ 53,417 Work-in-process 105,779 82,926 Raw materials 121,592 105,804 Total 304,686 242,147 Less last-in, first-out ("LIFO") reserve 41,353 41,021 Inventories, net $ 263,333 $ 201,126 Inventory valuation methods consist of the following: (in thousands) November 30, August 31, LIFO basis $ 164,340 $ 184,007 First-in, first-out basis 140,346 58,140 Total $ 304,686 $ 242,147 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, plant, and equipment is stated at cost, net of accumulated depreciation, and consists of the following: (in thousands) November 30, August 31, Land $ 10,749 $ 6,799 Buildings and building improvements 147,770 119,638 Machinery and equipment 113,594 107,701 Software 29,622 29,169 Transportation 4,009 3,865 Property, plant, and equipment, gross 305,744 267,172 Less accumulated depreciation 142,396 139,600 Property, plant, and equipment, net $ 163,348 $ 127,572 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill by segment were as follows for the first three months of Fiscal 2020 and 2019 , of which there were no accumulated impairment losses: (in thousands) Towable Motorhome Corporate / All Other Total Balances at August 25, 2018 $ 244,684 $ — $ 29,686 $ 274,370 Chris-Craft purchase price adjustment (1) — — 702 702 Balances at November 24, 2018 $ 244,684 $ — $ 30,388 $ 275,072 Balances at August 31, 2019 $ 244,684 $ — $ 30,247 $ 274,931 Acquisition of Newmar (2) — 72,909 — 72,909 Balances at November 30, 2019 $ 244,684 $ 72,909 $ 30,247 $ 347,840 (1) Refer to Note 2, Business Combinations , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for additional information. (2) Refer to Note 2 , Business Combinations , for additional information. |
Schedule of Other Intangible Assets | Other intangible assets, net of accumulated amortization, consist of the following: November 30, 2019 August 31, 2019 ($ in thousands) Weighted Average Life-Years Cost Accumulated Amortization Weighted Average Life-Years Cost Accumulated Amortization Trade names Indefinite $ 275,250 Indefinite $ 177,250 Dealer networks 12.1 159,581 $ 22,618 12.2 95,581 $ 20,329 Backlog 0.5 28,327 19,543 0.5 19,527 19,527 Non-compete agreements 4.3 6,647 4,386 4.1 5,347 3,077 Leasehold interest-favorable — — 8.1 2,000 690 Other intangible assets, gross 469,805 46,547 299,705 43,623 Less accumulated amortization 46,547 43,623 Other intangible assets, net $ 423,258 $ 256,082 |
Schedule of Remaining Estimated Aggregate Annual Amortization Expense | Remaining estimated aggregate annual amortization expense by fiscal year is as follows: (in thousands) Amount Fiscal 2020 $ 18,495 Fiscal 2021 14,361 Fiscal 2022 13,719 Fiscal 2023 13,526 Fiscal 2024 13,424 Thereafter 74,483 Total amortization expense remaining $ 148,008 |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in our product warranty liability are as follows: Three Months Ended (in thousands) November 30, November 24, Balance at beginning of period $ 44,436 $ 40,498 Business acquisition (1) 15,147 — Provision 15,318 10,757 Claims paid (13,794 ) (9,952 ) Balance at end of period $ 61,107 $ 41,303 (1) Refer to Note 2 , Business Combinations , for additional information. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The components of long-term debt are as follows: (in thousands) November 30, August 31, ABL Credit Facility $ — $ — Term Loan 260,000 260,000 Convertible Notes 300,000 — Long-term debt, gross 560,000 260,000 Convertible Notes unamortized interest discount (83,998 ) — Debt issuance costs, net (12,486 ) (5,706 ) Long-term debt 463,516 254,294 Less current maturities 12,668 8,892 Long-term debt, less current maturities $ 450,848 $ 245,402 |
Schedule of Maturities of Long-term Debt | Aggregate contractual maturities of debt in future fiscal years are as follows: (in thousands) Amount Fiscal 2020 $ 10,250 Fiscal 2021 15,000 Fiscal 2022 15,000 Fiscal 2023 15,000 Fiscal 2024 204,750 Thereafter 300,000 Total Term Loan and Convertible Notes $ 560,000 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information | The following table details the supplemental balance sheet information related to our leases: (in thousands) Classification November 30, 2019 Assets Operating leases Operating lease assets $ 30,720 Finance leases Other assets 4,761 Total lease assets $ 35,481 Liabilities Current: Operating leases Accrued expenses: Other $ 2,416 Current: Finance leases Accrued expenses: Other 516 Non-Current: Operating leases Operating lease liabilities 28,066 Non-Current: Finance leases Non-current liabilities: Other 5,275 Total lease liabilities $ 36,273 |
Schedule of Lease Costs | The following table details the operating lease cost incurred: Three Months Ended (in thousands) Classification November 30, 2019 Operating lease expense (1) Costs of goods sold and SG&A $ 1,763 Finance lease cost: Depreciation of lease assets Costs of goods sold and SG&A 43 Interest on lease liabilities Interest expense 31 Total lease cost $ 1,837 (1) Operating lease expense includes short-term leases and variable lease payments, which are immaterial. The following table details additional information related to our leases: Three Months Ended (in thousands) November 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 554 Operating cash flows from finance leases 31 Financing cash flows from finance leases 46 Leased assets obtained in exchange for lease liabilities: Operating leases 2,317 Finance leases (1) 5,664 November 30, 2019 Weighted average remaining lease term (in years): Operating leases 9.5 Finance leases 8.6 Weighted average discount rate: Operating leases 6.2 % Finance leases 6.2 % (1) Represents the lease liability added. Lease assets are offset by a $1.0 million unfavorable lease liability created by the acquisition of Newmar. |
Future Lease Commitments for Future Fiscal Years of Operating Leases | Our future lease commitments for future fiscal years as of November 30, 2019 included the following related party and non-related party leases: Operating Leases Finance Leases (in thousands) Related Party Amount Non-Related Party Amount Total Non-Related Party Amount Fiscal 2020 $ 2,147 $ 1,036 $ 3,183 $ 642 Fiscal 2021 2,863 1,220 4,083 855 Fiscal 2022 2,863 904 3,767 851 Fiscal 2023 3,463 646 4,109 842 Fiscal 2024 3,763 477 4,240 845 Thereafter 20,073 1,371 21,444 3,443 Total future undiscounted lease payments 35,172 5,654 40,826 7,478 Less: Interest 9,422 922 10,344 1,687 Total reported lease liabilities $ 25,750 $ 4,732 $ 30,482 $ 5,791 |
Future Lease Commitments for Future Fiscal Years of Financing Leases | Our future lease commitments for future fiscal years as of November 30, 2019 included the following related party and non-related party leases: Operating Leases Finance Leases (in thousands) Related Party Amount Non-Related Party Amount Total Non-Related Party Amount Fiscal 2020 $ 2,147 $ 1,036 $ 3,183 $ 642 Fiscal 2021 2,863 1,220 4,083 855 Fiscal 2022 2,863 904 3,767 851 Fiscal 2023 3,463 646 4,109 842 Fiscal 2024 3,763 477 4,240 845 Thereafter 20,073 1,371 21,444 3,443 Total future undiscounted lease payments 35,172 5,654 40,826 7,478 Less: Interest 9,422 922 10,344 1,687 Total reported lease liabilities $ 25,750 $ 4,732 $ 30,482 $ 5,791 |
Schedule of Future Minimum Lease Payments Prior to Adoption of ASC 842 | Our future minimum lease payments for future fiscal years as determined prior to the adoption of ASC 842, Leases , and as disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 , included the following related party and non-related party leases: Operating Leases (in thousands) Related Party Amount Non-Related Party Amount Total Fiscal 2020 $ 2,864 $ 1,236 $ 4,100 Fiscal 2021 2,863 1,068 3,931 Fiscal 2022 2,863 759 3,622 Fiscal 2023 3,597 530 4,127 Fiscal 2024 3,963 361 4,324 Thereafter 25,064 1,359 26,423 Total future lease commitments $ 41,214 $ 5,313 $ 46,527 |
Employee and Retiree Benefits (
Employee and Retiree Benefits (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Deferred Compensation Liabilities | Deferred compensation liabilities are as follows: (in thousands) November 30, August 31, Non-qualified deferred compensation $ 12,672 $ 13,093 Supplemental executive retirement plan 2,085 2,072 Executive share option plan — 12 Executive deferred compensation plan 715 621 Deferred compensation benefits 15,472 15,798 Less current portion (1) 2,878 2,920 Deferred compensation benefits, net of current portion $ 12,594 $ 12,878 (1) Included in Accrued compensation on the Condensed Consolidated Balance Sheets . |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenue by reportable segment and product category: Three Months Ended (in thousands) November 30, November 24, Net Revenues Towable: Fifth Wheel $ 195,189 $ 162,749 Travel Trailer 140,463 125,626 Other (1) 5,598 4,458 Total Towable 341,250 292,833 Motorhome: Class A 65,644 48,678 Class B 85,456 68,720 Class C 66,876 56,142 Other (1) 7,915 7,788 Total Motorhome 225,891 181,328 Corporate / All Other: Other (2) 21,317 19,487 Total Corporate / All Other 21,317 19,487 Consolidated $ 588,458 $ 493,648 (1) Relates to parts, accessories, and services. (2) Relates to marine and specialty vehicle units, parts, accessories, and services. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges Incurred | The following table details the restructuring charges incurred: Motorhome Three Months Ended Cumulative (in thousands) November 30, 2019 November 24, 2018 November 30, 2019 Cost of goods sold $ (219 ) $ — $ 1,505 Selling, general, and administrative expenses 47 — 266 Restructuring expense $ (172 ) $ — $ 1,771 |
Income Per Share (Tables)
Income Per Share (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Income Per Share | The following table reflects the calculation of basic and diluted income per share: Three Months Ended (in thousands, except per share data) November 30, November 24, Numerator Net income $ 14,068 $ 22,161 Denominator Weighted average common shares outstanding 32,067 31,567 Dilutive impact of stock compensation awards 200 247 Weighted average common shares outstanding, assuming dilution 32,267 31,814 Anti-dilutive securities excluded from Weighted average common shares outstanding, assuming dilution 73 90 Basic income per common share $ 0.44 $ 0.70 Diluted income per common share $ 0.44 $ 0.70 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income By Component | Changes in Accumulated Other Comprehensive Income ("AOCI") by component, net of tax, were: Three Months Ended November 30, 2019 November 24, 2018 (in thousands) Defined Benefit Pension Items Interest Rate Swap Total Defined Benefit Pension Items Interest Rate Swap Total Balance at beginning of period $ (559 ) $ 68 $ (491 ) $ (591 ) $ 1,483 $ 892 OCI before reclassifications — (80 ) (80 ) — (22 ) (22 ) Amounts reclassified from AOCI 8 12 20 8 — 8 Net current-period OCI 8 (68 ) (60 ) 8 (22 ) (14 ) Balance at end of period $ (551 ) $ — $ (551 ) $ (583 ) $ 1,461 $ 878 |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI in net periodic benefit costs, net of tax, were: Three Months Ended (in thousands) Location on Consolidated Statements of Income and Comprehensive Income November 30, November 24, Amortization of net actuarial loss SG&A $ 8 $ 8 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 18, 2019 | Nov. 30, 2019 | Sep. 01, 2019 | Aug. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 30,720 | $ 33,811 | $ 0 | |
Operating lease liabilities | $ 30,482 | |||
Subsequent Event | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash dividend (in dollars per share) | $ 0.11 | |||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | 33,811 | |||
Operating lease liabilities | $ 33,400 |
Basis of Presentation - Balance
Basis of Presentation - Balance Sheet Impacts by Adoption of Leases Accounting Standard Update (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Sep. 01, 2019 | Aug. 31, 2019 |
Assets | |||
Other intangible assets, net | $ 423,258 | $ 254,772 | $ 256,082 |
Operating lease assets | 30,720 | 33,811 | 0 |
Total assets | 1,553,624 | 1,136,732 | 1,104,231 |
Liabilities and Stockholders' Equity | |||
Accrued expenses: Other | 16,768 | 14,936 | 13,678 |
Total current liabilities | 247,406 | 199,002 | 197,744 |
Operating lease liabilities | 28,066 | 31,243 | 0 |
Total non-current liabilities | 520,609 | 305,518 | 274,275 |
Total liabilities and stockholders' equity | $ 1,553,624 | 1,136,732 | $ 1,104,231 |
Accounting Standards Update 2016-02 | |||
Assets | |||
Other intangible assets, net | (1,310) | ||
Operating lease assets | 33,811 | ||
Total assets | 32,501 | ||
Liabilities and Stockholders' Equity | |||
Accrued expenses: Other | 1,258 | ||
Total current liabilities | 1,258 | ||
Operating lease liabilities | 31,243 | ||
Total non-current liabilities | 31,243 | ||
Total liabilities and stockholders' equity | $ 32,501 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Nov. 08, 2019 | Nov. 30, 2019 | Aug. 31, 2019 | Nov. 24, 2018 |
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ 600 | $ 600 | ||
Acquisition-related costs expensed | 9,950 | $ 0 | ||
Newmar | ||||
Business Acquisition [Line Items] | ||||
Stock consideration discount | 7.00% | |||
Weighted-average useful life | 10 years 6 months | |||
Acquisition related costs | 10,600 | |||
Acquisition-related costs expensed | $ 10,000 | |||
Newmar | Newmar | ||||
Business Acquisition [Line Items] | ||||
Percent of voting interest acquired | 100.00% |
Business Combinations - Conside
Business Combinations - Consideration Paid and Net Revenues and Operating Income (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 08, 2019 | Nov. 30, 2019 | Nov. 24, 2018 |
Business Acquisition [Line Items] | |||
Net revenues | $ 588,458 | $ 493,648 | |
Operating loss | (23,894) | $ (32,625) | |
Newmar | |||
Business Acquisition [Line Items] | |||
Cash | $ 267,749 | ||
Winnebago shares: 2,000,000 at $46.29 | 92,572 | ||
Total | $ 360,321 | ||
Number of shares in business combination (in shares) | 2,000,000 | ||
Share price in business combination (in dollars per share) | $ 46.29 | ||
Motorhome | Newmar | |||
Business Acquisition [Line Items] | |||
Net revenues | 35,663 | ||
Operating loss | $ 1,283 |
Business Combinations Business
Business Combinations Business Combinations - Schedule of Preliminary Fair Values Assigned (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Nov. 08, 2019 | Aug. 31, 2019 | Nov. 24, 2018 | Aug. 25, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 347,840 | $ 274,931 | $ 275,072 | $ 274,370 | |
Newmar | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 3,469 | ||||
Accounts receivable | 37,147 | ||||
Inventories | 82,621 | ||||
Prepaid expenses and other assets | 9,586 | ||||
Property, plant, and equipment | 31,143 | ||||
Goodwill | 72,909 | ||||
Other intangible assets | 172,100 | ||||
Total assets acquired | 408,975 | ||||
Accounts payable | 14,023 | ||||
Accrued compensation | 4,306 | ||||
Product warranties | 15,147 | ||||
Promotional | 2,573 | ||||
Other | 11,637 | ||||
Deferred tax liabilities | 968 | ||||
Total liabilities assumed | 48,654 | ||||
Total purchase price | $ 360,321 |
Business Combinations - Schedul
Business Combinations - Schedule of Intangible Assets (Details) - Newmar $ in Thousands | Nov. 08, 2019USD ($) |
Business Acquisition [Line Items] | |
Other intangible assets | $ 172,100 |
Trade name | |
Business Acquisition [Line Items] | |
Other intangible assets | 98,000 |
Dealer network | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 64,000 |
Useful Life-Years | 12 years |
Backlog | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 8,800 |
Useful Life-Years | 6 months |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 1,300 |
Useful Life-Years | 5 years |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Nov. 30, 2019 | Aug. 31, 2019 | Nov. 24, 2018 | |
Business Acquisition [Line Items] | |||
Acquisition related costs | $ 600 | $ 600 | |
Newmar | |||
Business Acquisition [Line Items] | |||
Pro forma net revenues | 741,717 | $ 663,786 | |
Pro forma net income | $ 17,197 | $ 10,665 | |
Pro forma income per share - basic (in dollars per share) | $ 0.51 | $ 0.32 | |
Pro forma income per share - diluted (in dollars per share) | $ 0.50 | $ 0.32 | |
Acquisition related costs | $ 10,600 | ||
Newmar | Amortization of intangibles (1 year or less useful life)(1) | |||
Business Acquisition [Line Items] | |||
Nonrecurring adjustments | 2,251 | $ (9,210) | |
Newmar | Increase in amortization of intangibles(2) | |||
Business Acquisition [Line Items] | |||
Nonrecurring adjustments | (1,057) | (1,398) | |
Newmar | Expenses related to business combination (transaction costs) | |||
Business Acquisition [Line Items] | |||
Nonrecurring adjustments | 9,950 | (10,606) | |
Newmar | Interest to reflect new debt structure | |||
Business Acquisition [Line Items] | |||
Nonrecurring adjustments | (3,367) | (4,546) | |
Newmar | Taxes related to the adjustments to the pro forma data and to the income of Newmar(5) | |||
Business Acquisition [Line Items] | |||
Nonrecurring adjustments | $ (832) | $ 3,056 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | |||
Nov. 30, 2019USD ($)segment | Nov. 24, 2018USD ($) | Sep. 01, 2019USD ($) | Aug. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 6 | |||
Number of reportable segments | segment | 2 | |||
Net Revenues | $ 588,458 | $ 493,648 | ||
Adjusted EBITDA | 42,048 | 38,453 | ||
Capital Expenditures | 6,624 | 12,771 | ||
Total Assets | 1,553,624 | $ 1,136,732 | $ 1,104,231 | |
Net income | 14,068 | 22,161 | ||
Interest expense | 6,049 | 4,501 | ||
Provision for income taxes | 3,893 | 6,726 | ||
Depreciation | 3,586 | 3,169 | ||
Amortization of intangible assets | 3,614 | 2,659 | ||
EBITDA | 31,210 | 39,216 | ||
Acquisition-related fair-value inventory step-up | 1,176 | 0 | ||
Acquisition-related costs | 9,950 | 0 | ||
Restructuring expenses | (172) | 0 | ||
Non-operating income | (116) | (763) | ||
Operating Segments | Towable | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 341,250 | 292,833 | ||
Adjusted EBITDA | 35,785 | 30,828 | ||
Capital Expenditures | 4,026 | 8,877 | ||
Total Assets | 673,683 | 628,994 | ||
Operating Segments | Motorhome | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 225,891 | 181,328 | ||
Adjusted EBITDA | 9,331 | 11,976 | ||
Capital Expenditures | 2,240 | 3,192 | ||
Total Assets | 674,849 | 332,157 | ||
Corporate / All Other | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 21,317 | 19,487 | ||
Adjusted EBITDA | (3,068) | (4,351) | ||
Capital Expenditures | 358 | $ 702 | ||
Total Assets | $ 205,092 | $ 143,080 |
Derivatives, Investments, and_3
Derivatives, Investments, and Fair Value Measurements - Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Domestic equity funds | $ 444 | $ 373 |
International equity funds | 104 | 101 |
Fixed income funds | 163 | 155 |
Interest rate swap contract | 90 | |
Total assets at fair value | 711 | 719 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Domestic equity funds | 345 | 288 |
International equity funds | 37 | 45 |
Fixed income funds | 53 | 54 |
Interest rate swap contract | 0 | |
Total assets at fair value | 435 | 387 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Domestic equity funds | 99 | 85 |
International equity funds | 67 | 56 |
Fixed income funds | 110 | 101 |
Interest rate swap contract | 90 | |
Total assets at fair value | 276 | 332 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Domestic equity funds | 0 | 0 |
International equity funds | 0 | 0 |
Fixed income funds | 0 | 0 |
Interest rate swap contract | 0 | |
Total assets at fair value | $ 0 | $ 0 |
Derivatives, Investments, and_4
Derivatives, Investments, and Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | ||
Nov. 30, 2019 | Aug. 31, 2019 | Jan. 23, 2017 | |
Fair Value, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset impairment charges | $ 0 | ||
Term Loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt amount | $ 300,000,000 | ||
Term Loan | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Notional amount | $ 120,000,000 | ||
Interest rate, stated percentage | 5.32% |
- Schedule of Inventories (Deta
- Schedule of Inventories (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 77,315 | $ 53,417 |
Work-in-process | 105,779 | 82,926 |
Raw materials | 121,592 | 105,804 |
Total | 304,686 | 242,147 |
Less last-in, first-out (LIFO) reserve | 41,353 | 41,021 |
Inventories, net | $ 263,333 | $ 201,126 |
Inventories - Inventory Valuati
Inventories - Inventory Valuation Methods (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Inventory Disclosure [Abstract] | ||
LIFO basis | $ 164,340 | $ 184,007 |
First-in, first-out basis | 140,346 | 58,140 |
Total | $ 304,686 | $ 242,147 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 24, 2018 | Aug. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | $ 305,744 | $ 267,172 | |
Less accumulated depreciation | 142,396 | 139,600 | |
Property, plant, and equipment, net | 163,348 | 127,572 | |
Depreciation | 3,586 | $ 3,169 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 10,749 | 6,799 | |
Buildings and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 147,770 | 119,638 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 113,594 | 107,701 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | 29,622 | 29,169 | |
Transportation | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant, and equipment, gross | $ 4,009 | $ 3,865 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 274,931 | $ 274,370 |
Chris-Craft purchase price adjustment | 702 | |
Acquisition of Newmar | 72,909 | |
Ending balance | 347,840 | 275,072 |
Towable | ||
Goodwill [Roll Forward] | ||
Beginning balance | 244,684 | 244,684 |
Chris-Craft purchase price adjustment | 0 | |
Acquisition of Newmar | 0 | |
Ending balance | 244,684 | 244,684 |
Motorhome | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0 | 0 |
Chris-Craft purchase price adjustment | 0 | |
Acquisition of Newmar | 72,909 | |
Ending balance | 72,909 | 0 |
Corporate / All Other | ||
Goodwill [Roll Forward] | ||
Beginning balance | 30,247 | 29,686 |
Chris-Craft purchase price adjustment | 702 | |
Acquisition of Newmar | 0 | |
Ending balance | $ 30,247 | $ 30,388 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Aug. 31, 2019 | Sep. 01, 2019 | |
Schedule of Intangible Assets [Line Items] | |||
Other intangible assets, gross | $ 469,805 | $ 299,705 | |
Accumulated Amortization | 46,547 | 43,623 | |
Other intangible assets, net | $ 423,258 | $ 256,082 | $ 254,772 |
Weighted average remaining amortization period | 11 years | ||
Dealer networks | |||
Schedule of Intangible Assets [Line Items] | |||
Weighted Average Life-Years | 12 years 1 month 6 days | 12 years 2 months 12 days | |
Other intangible assets, gross | $ 159,581 | $ 95,581 | |
Accumulated Amortization | $ 22,618 | $ 20,329 | |
Backlog | |||
Schedule of Intangible Assets [Line Items] | |||
Weighted Average Life-Years | 6 months | 6 months | |
Other intangible assets, gross | $ 28,327 | $ 19,527 | |
Accumulated Amortization | $ 19,543 | $ 19,527 | |
Non-compete agreements | |||
Schedule of Intangible Assets [Line Items] | |||
Weighted Average Life-Years | 4 years 3 months 18 days | 4 years 1 month 6 days | |
Other intangible assets, gross | $ 6,647 | $ 5,347 | |
Accumulated Amortization | 4,386 | $ 3,077 | |
Leasehold interest-favorable | |||
Schedule of Intangible Assets [Line Items] | |||
Weighted Average Life-Years | 8 years 1 month 6 days | ||
Other intangible assets, gross | 0 | $ 2,000 | |
Accumulated Amortization | 0 | 690 | |
Trade names | |||
Schedule of Intangible Assets [Line Items] | |||
Other intangible assets, gross | $ 275,250 | $ 177,250 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization of Intangible Assets (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Fiscal 2020 | $ 18,495 |
Fiscal 2021 | 14,361 |
Fiscal 2022 | 13,719 |
Fiscal 2023 | 13,526 |
Fiscal 2024 | 13,424 |
Thereafter | 74,483 |
Total amortization expense remaining | $ 148,008 |
Product Warranties - Schedule o
Product Warranties - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of period | $ 44,436 | $ 40,498 |
Business acquisition | 15,147 | 0 |
Provision | 15,318 | 10,757 |
Claims paid | (13,794) | (9,952) |
Balance at end of period | $ 61,107 | $ 41,303 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 560,000 | $ 260,000 |
Convertible Notes unamortized interest discount | (83,998) | 0 |
Debt issuance costs, net | (12,486) | (5,706) |
Long-term debt | 463,516 | 254,294 |
Less current maturities | 12,668 | 8,892 |
Long-term debt, less current maturities | 450,848 | 245,402 |
ABL | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 260,000 | 260,000 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 300,000 | $ 0 |
Long-Term Debt - Credit Agreeme
Long-Term Debt - Credit Agreements Narrative (Details) - USD ($) | Oct. 22, 2019 | Jan. 23, 2017 | Nov. 08, 2016 |
Term Loan | |||
Debt Instrument [Line Items] | |||
Debt amount | $ 300,000,000 | ||
ABL | |||
Debt Instrument [Line Items] | |||
Credit facility amount | $ 192,500,000 | $ 125,000,000 |
Long-Term Debt - Convertible No
Long-Term Debt - Convertible Notes Narrative (Details) | Nov. 01, 2019USD ($)trading_day$ / shares | Oct. 30, 2019USD ($)$ / shares | Nov. 30, 2019USD ($) | Aug. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Offering-related costs | $ 12,486,000 | $ 5,706,000 | ||
Call Spread Transactions | ||||
Debt Instrument [Line Items] | ||||
Percentage increase of strike price | 100.00% | |||
Equity component of issuance | 85,000,000 | |||
Equity component of issuance, net of tax | 64,100,000 | |||
Offering-related costs | 9,800,000 | |||
Deferred offering costs classified as liability | 7,200,000 | |||
Deferred offering costs classified as equity | 2,600,000 | |||
Call Spread Transactions | Warrant | ||||
Debt Instrument [Line Items] | ||||
Strike price (in dollars per share) | $ / shares | $ 96.20 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Debt amount | $ 300,000,000 | 300,000,000 | ||
Interest rate, stated percentage | 1.50% | |||
Proceeds from issuance of notes | $ 290,200,000 | |||
Conversion rate | 15.6906 | |||
Conversion price | $ / shares | $ 63.73 | |||
Number of consecutive trading days | trading_day | 30 | |||
Consecutive trading days | trading_day | 5 | |||
Convertible Notes | Call Spread Transactions | ||||
Debt Instrument [Line Items] | ||||
Debt amount | $ 215,000,000 | |||
Interest rate, stated percentage | 8.00% | |||
Proceeds from issuance of notes | $ 28,600,000 | |||
Convertible Notes | Convertible Note Hedge Transactions | ||||
Debt Instrument [Line Items] | ||||
Strike price (in dollars per share) | $ / shares | $ 63.73 | |||
Convertible Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Percentage of the conversion price | 130.00% | |||
Number of trading days | trading_day | 20 | |||
Convertible Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Percentage of the conversion price | 98.00% |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt Contractual Maturities (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Debt Instrument [Line Items] | ||
Fair value of long-term debt, gross | $ 561,000 | |
Total Term Loan and Convertible Notes | 560,000 | $ 260,000 |
Term Loan and Convertible Notes | ||
Debt Instrument [Line Items] | ||
Fiscal 2020 | 10,250 | |
Fiscal 2021 | 15,000 | |
Fiscal 2022 | 15,000 | |
Fiscal 2023 | 15,000 | |
Fiscal 2024 | 204,750 | |
Thereafter | 300,000 | |
Total Term Loan and Convertible Notes | $ 560,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Sep. 01, 2019 | Aug. 31, 2019 |
Assets | |||
Operating leases | $ 30,720 | $ 33,811 | $ 0 |
Finance leases | 4,761 | ||
Total lease assets | 35,481 | ||
Liabilities | |||
Current: Operating leases | 2,416 | ||
Current: Finance leases | 516 | ||
Non-Current: Operating leases | 28,066 | $ 31,243 | $ 0 |
Non-Current: Finance leases | 5,275 | ||
Total lease liabilities | $ 36,273 |
Leases - Operating Lease Cost (
Leases - Operating Lease Cost (Details) $ in Thousands | 3 Months Ended |
Nov. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 1,763 |
Finance lease cost: | |
Depreciation of lease assets | 43 |
Interest on lease liabilities | 31 |
Total lease cost | $ 1,837 |
Leases - Future Lease Commitmen
Leases - Future Lease Commitments for Future Fiscal Years (Details) $ in Thousands | Nov. 30, 2019USD ($) |
Operating Leases | |
Fiscal 2020 | $ 3,183 |
Fiscal 2021 | 4,083 |
Fiscal 2022 | 3,767 |
Fiscal 2023 | 4,109 |
Fiscal 2024 | 4,240 |
Thereafter | 21,444 |
Total future undiscounted lease payments | 40,826 |
Less: Interest | 10,344 |
Total reported lease liabilities | 30,482 |
Related Party Amount | |
Operating Leases | |
Fiscal 2020 | 2,147 |
Fiscal 2021 | 2,863 |
Fiscal 2022 | 2,863 |
Fiscal 2023 | 3,463 |
Fiscal 2024 | 3,763 |
Thereafter | 20,073 |
Total future undiscounted lease payments | 35,172 |
Less: Interest | 9,422 |
Total reported lease liabilities | 25,750 |
Non-Related Party Amount | |
Operating Leases | |
Fiscal 2020 | 1,036 |
Fiscal 2021 | 1,220 |
Fiscal 2022 | 904 |
Fiscal 2023 | 646 |
Fiscal 2024 | 477 |
Thereafter | 1,371 |
Total future undiscounted lease payments | 5,654 |
Less: Interest | 922 |
Total reported lease liabilities | 4,732 |
Finance Leases | |
Fiscal 2020 | 642 |
Fiscal 2021 | 855 |
Fiscal 2022 | 851 |
Fiscal 2023 | 842 |
Fiscal 2024 | 845 |
Thereafter | 3,443 |
Total future undiscounted lease payments | 7,478 |
Less: Interest | 1,687 |
Total reported lease liabilities | $ 5,791 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Prior to 842 Adoption (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Related Party Transaction [Line Items] | |
Fiscal 2020 | $ 4,100 |
Fiscal 2021 | 3,931 |
Fiscal 2022 | 3,622 |
Fiscal 2023 | 4,127 |
Fiscal 2024 | 4,324 |
Thereafter | 26,423 |
Total future lease commitments | 46,527 |
Related Party Amount | |
Related Party Transaction [Line Items] | |
Fiscal 2020 | 2,864 |
Fiscal 2021 | 2,863 |
Fiscal 2022 | 2,863 |
Fiscal 2023 | 3,597 |
Fiscal 2024 | 3,963 |
Thereafter | 25,064 |
Total future lease commitments | 41,214 |
Non-Related Party Amount | |
Related Party Transaction [Line Items] | |
Fiscal 2020 | 1,236 |
Fiscal 2021 | 1,068 |
Fiscal 2022 | 759 |
Fiscal 2023 | 530 |
Fiscal 2024 | 361 |
Thereafter | 1,359 |
Total future lease commitments | $ 5,313 |
Leases - Additional Lease Costs
Leases - Additional Lease Costs (Details) $ in Thousands | 3 Months Ended |
Nov. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 554 |
Operating cash flows from finance leases | 31 |
Financing cash flows from finance leases | 46 |
Leased assets obtained in exchange for lease liabilities: | |
Leased assets obtained in exchange for lease liabilities: | 2,317 |
Finance leases | $ 5,664 |
Weighted average remaining lease term (in years): | |
Weighted average remaining lease term (in years): | 9 years 6 months |
Finance Lease, Weighted Average Remaining Lease Term | 8 years 7 months 6 days |
Weighted average discount rate: | |
Weighted average discount rate: | 6.20% |
Finance leases | 6.20% |
Unfavorable lease liability | $ 1,000 |
Employee and Retiree Benefits -
Employee and Retiree Benefits - Schedule of Deferred Compensation Benefits (Details) - USD ($) $ in Thousands | Nov. 30, 2019 | Aug. 31, 2019 |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||
Non-qualified deferred compensation | $ 12,672 | $ 13,093 |
Supplemental executive retirement plan | 2,085 | 2,072 |
Executive share option plan | 0 | 12 |
Executive deferred compensation plan | 715 | 621 |
Deferred compensation benefits | 15,472 | 15,798 |
Less current portion | 2,878 | 2,920 |
Deferred compensation benefits, net of current portion | $ 12,594 | $ 12,878 |
Contingent Liabilities and Co_2
Contingent Liabilities and Commitments - Repurchase Commitments Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 30, 2019 | Aug. 31, 2019 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Repurchase agreement term | 24 months | |
Accrued loss on repurchases | $ 1.2 | $ 0.9 |
Obligation to Repurchase from Dealers | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Contingent liability on repurchase agreements | $ 1,291.6 | $ 874.9 |
Revenue - Revenue Disaggregatio
Revenue - Revenue Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 588,458 | $ 493,648 |
Operating Segments | Towable | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 341,250 | 292,833 |
Operating Segments | Towable | Fifth Wheel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 195,189 | 162,749 |
Operating Segments | Towable | Travel Trailer | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 140,463 | 125,626 |
Operating Segments | Towable | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 5,598 | 4,458 |
Operating Segments | Motorhome | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 225,891 | 181,328 |
Operating Segments | Motorhome | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 7,915 | 7,788 |
Operating Segments | Motorhome | Class A | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 65,644 | 48,678 |
Operating Segments | Motorhome | Class B | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 85,456 | 68,720 |
Operating Segments | Motorhome | Class C | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 66,876 | 56,142 |
Corporate / All Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 21,317 | 19,487 |
Corporate / All Other | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 21,317 | $ 19,487 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 24, 2018 | Aug. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1,583 | $ 2,472 | |
Incentive Compensation Plan 2019 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of awards issued under the plan | 4.1 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | Aug. 29, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 172 | $ 0 | |
Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 1,771 | ||
Cost of goods sold | Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 1,505 | ||
Selling, general, and administrative expenses | Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 266 | ||
Motorhome | Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | (172) | 0 | |
Motorhome | Junction City, OR Production Site | Forecast | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 500 | ||
Motorhome | Cost of goods sold | Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | (219) | 0 | |
Motorhome | Selling, general, and administrative expenses | Junction City, OR Production Site | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 47 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.70% | 23.30% |
Income Per Share (Details)
Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Numerator | ||
Net income | $ 14,068 | $ 22,161 |
Denominator | ||
Weighted average common shares outstanding (in shares) | 32,067,000 | 31,567,000 |
Dilutive impact of stock compensation awards (in shares) | 200,000 | 247,000 |
Weighted average common shares outstanding, assuming dilution (in shares) | 32,267,000 | 31,814,000 |
Basic income per common share (in dollars per share) | $ 0.44 | $ 0.70 |
Diluted income per common share (in dollars per share) | $ 0.44 | $ 0.70 |
Share-based Payment Arrangement, Option | ||
Denominator | ||
Anti-dilutive securities excluded from Weighted average common shares outstanding, assuming dilution (in shares) | 73,000 | 90,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | $ (491) | |
OCI before reclassifications | (80) | |
OCI before reclassifications | $ (22) | |
Amounts reclassified from AOCI | 20 | 8 |
Net current-period OCI | (60) | (14) |
Balance at end of period | (551) | |
Defined Benefit Pension Items | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (559) | (591) |
Amounts reclassified from AOCI | 8 | 8 |
Net current-period OCI | 8 | 8 |
Balance at end of period | (551) | (583) |
Interest Rate Swap | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | 68 | 1,483 |
OCI before reclassifications | (80) | |
OCI before reclassifications | (22) | |
Amounts reclassified from AOCI | 12 | |
Net current-period OCI | (68) | (22) |
Balance at end of period | 0 | 1,461 |
Total | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at beginning of period | (491) | 892 |
OCI before reclassifications | (22) | |
Balance at end of period | $ (551) | $ 878 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2019 | Nov. 24, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of net actuarial loss | $ 8 | $ 8 |
Reclassification out of Accumulated Other Comprehensive Income | Selling, general, and administrative expenses | Amortization of net actuarial loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of net actuarial loss | $ 8 | $ 8 |