Winnebago Industries (WGO)

Steve Stuber VP of IR
Michael Happe President & CEO
Bryan Hughes SVP & CFO
Craig Kennison Baird
Scott Stember CL King
Mike Swartz Truist Securities
Fred Wightman Wolfe Research
Bret Jordan Jefferies
David Whiston Morningstar
Tristan Thomas-Martin BMO Capital Markets
Sean Collins Citigroup
James Hardiman Wedbush Securities
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the Q3, 2021 Winnebago Industries Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Steve Stuber, Vice President of Finance.

begin. may You

Steve Stuber

by with Good and us Samantha. third and you Hughes, call thank earnings Executive and Thank and Financial Officer; to available to morning, This Officer. our issued The of discuss joining the replay Bryan today the investor.wgo.net on and today I'm Vice call is XXXX Happe, Winnebago a for and today. President results being quarter results. and earlier Chief later broadcast will President you, third Senior joined everyone, live Michael morning. Chief on be Industries' quarterly on quarter fiscal news were website release our our website at supplement this our call earnings website posted

that call be The today's of certain statements a Before are statements start, securities statements that we made of forward-looking inherently regarding factors, uncertain operations a may Industries involve you conference and considered its forward-looking cautions you laws. under number I'd like company remind number which and With like Winnebago during risks beyond in call and which statements. results these to control, differ company's identified to would are I Michael to CEO, the could the Mike? our from actual factors you read. our encourage Happe. cause SEC materially I are in to filings, turn that, now These President of over many to

Michael Happe

and for us joining everyone you good thank you, morning, and Thank Steve, today.

thoughts and results. to taking questions. I by results who before will overview As always, our conclude the your Then, I our an call time in Industries, detail. with third to and over Hughes, will your Bryan we begin financial of the Winnebago it appreciate discuss our we in turning will offer fiscal deeply some closing discuss interest answering XXXX more quarter will performance

as In company, significance XXXX, XXXX, how an quarter drivers suspended operations. and year outdoor as performance, far manufacturing fiscal our and weeks year period as difficult the have Winnebago to take to time industry, the challenging would and days. a acknowledge uncertain of dive one ago, those we pandemic I third recreation like early of country those into of our the comparative the Before a of and spring Industries come just since of we

whose team While collaborated record market will the to we industry keep and to worked effective Industries come. ways with incredible to of that be in Thanks for we pharmaceutical remarkable sit officials virus It safe the bring down suppliers our that protocols today, of people necessary strong team to us now and our to worked plus ever eventually health is We the the develop can our helping safe. as breaking felt broader have rising X,XXX levels as which scientists, generations carefully through plants time, the to and and have changed healthcare to resolve to live outdoors safety our we priorities members. spread possible consumer for public since, today. slow offices reopened our vaccines professionals, as record the in the Winnebago meet also here to and with and preferences a of safely demand

demand Today, that ever avoidable first more XX.X and team is time million to cyclical households and our as are the will even periods another though ways families interest XXXX, of engagement X.X undergoing for convinced will in XX-months, the first their our have the of intent their our many helping is, estimated involved. great that believe increased there be lifestyle. and and marine the will within With not immense meet buyers experience for performance. benefit diverse rookie accelerated and those outdoors meaningful We expansion is very roads in own about. existing financial outdoor more be time for is open families, than a well we products enjoy this having some getting economy and taste recreational camping of a but to expansive are customers last more one been XXXX, these in what part and for industries to business exploring pandemic brands, record gratitude country all outdoor markets been, only seeking Our all has households million the waterways years, and purchase the More new while camp via and delivering vehicle the equally decades.

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Industries We are future. and ecosystem on economy, bullish will recreation the hold and in place outdoor in long America's Winnebago that the

company. loyalty, our of and the continued Winnebago their all love Industries, engagement their is a have our perseverance channel want progress for in employees past incredibly our moment proud thank team, and their year, with our to made the and I dedication customers So brands. and which it continued we leaders and partners for to for take we as serve to tremendous our at in due the I'm here

momentum XXXX. in grew million, growth fiscal to organic the growth representing generated an In XXXX a for third we our have fiscal results the Industries year-over-year, record pandemic XXX% to year year. continue of of throughout build XX% quarter and fiscal $XXX.X a quarter, third ex-Newmar sales on third Winnebago the Our over the net quarter

Industries growth diligently to meet consumer share at execute time. exceptional market in also lifestyle, the only demand has for not that continued outdoor the to while demonstrates performance growing that year two same pursuing Our demand, the Winnebago but

now share in up top-line our while XXXX demand points last sequential in has vaccine a products picked to undoubtedly as represented RV is reopening of and has our onset sustained given quarter. Though second also April impact XX% by fiscal periods because the and do year-to-date year our comparable typically the catalyzed the And results, is growth not rollout about growth consumer unique demonstrating of performance Industries’ on basis seasonal fiscal North quarter period XX.X%, As Winnebago strong, our over the same for year. growth we third of sequential XXXX, market it XX America throughout demand. our talk revenue the of helpful the the the from remained nature speaks year, QX of up. ago stickiness for gradual the pandemic, pandemic's reasons, across

golden production Chris-Craft and in has every our premium output driver Design, The extend result. enables The threads the third us we brands, craftsmanship were a Grand everything and a to as of each our team across and and strong significant stepped service Our Newmar at price point products up quality innovation our profitability quarter. Winnebago, pricing us market of discounting. of quality, carefully offset our the do, and and superior industries. our consumers partnerships input real is share actions ability Similarly, to deep considered our provide to our for service surging we continue dealers, the cost support grow the even to the inflation across with through demand historically levels but products, execute to reflect affords low at of our that also of present

to serve also build continues wide approach ongoing order considering disciplined remain us challenges. production to enterprise chain Our we as well, supply

remain overall the and critical Winnebago we relationships partnerships and importance our capital talk often Our as consolidated the Industries, improved. dealer differentiator. working profitability those At of of network a strength about

exceptional desired, rising OEM, premium lower sales dealers their of to job confidence express Industries dedication our committed an increased have customer brands, demand. and and in their to continue are in than pandemic. Winnebago future demand to they as and orders. through service at done sacrificed the backlog levels this environment any retail of dealers both levels managing They through have The time and inventory Our satisfaction through not an

We are always. high levels as quality as safely partners and always working also appetite supplier as committed quickly with but consequently closely of product that delivering order to to meet our possible,

sales XXXX determined show in quarter third we invest are and that output. dollars in to sequentially fiscal record increase units in finding Our ways to

supply the the is inconsistencies chain and supply these that some our challenges experience working reaching flexibility, chain much nimbleness evident our capacity, with operations is and conditions restrain months. through continue partners impact as team based to waves We of production demand process as segment results. manage as these closely in discipline our with supply possible. well The facing been of But inflation driven various of last six full from to have pressure in

grateful daily. and are to I our Officer, Chief to lines that With Winnebago are Bryan over doing Financial they feed call supplier our We now Hughes. relationships, will for opening, Industries’ assembly turn the all

Bryan Hughes

and Mike, everyone. morning, Thanks, good

diving we context to as reference the Before thought use customary results this and are the in employ February, XX, sequential typical reporting of comparisons our it quarter the XXXX. in would of press ended ended be numbers, our May to prior addition disclosing strong the means for to the our quarter comparisons helpful for in I third a additional provided into which we release year. to second We

imposed the on employees roughly significantly six prior operations our safe. in imperative year the our the pandemic, response As we and stakeholders week's impacted shutdown COVID a reminder, other and was that keep to third our to period by quarter

year's consolidated against EBITDA of revenues, As meaningful prior EPS were context less this and third results. this for year gross With a prior our result, ahead comparisons significantly mind, up in in year margins, quarter the are this margins, providing performance.

related and quarter and strong as results from Our release organic a operating for last by second increased and performance Due sequentially of and in deserves products. had brand, earnings year, results and to Newmar. the third of to QX reflected sales form to a released growth the discuss customers ago, last end to In disruption compared as ask by years to results ago, refer driven two would and I our year-to-date results and strong year. dealer review is to are and also provide for year's third this supply meaning XXXX, representing of quarter prior chain executing our helpful a the team our quarter. backlog very interest of also also to increased XX.X% the continued in This versus Sales years representing the our compared improved QX by QX, two terrific short, yield, in of significant benefiting an you the XXXX, team our compared third we quarter XX.X% for generated record generate will in XX% leverage by our acquisition quarter, up I also to lot by exhibiting context. to to our XX-Q increased meet of where to sales and QX. substantial products. full EPS, demand dealers additional compared or the orders that output, the additional to strong and our efforts our demonstrated compared demand strong record Sales our credit

pleased sequential in when as the EPS, QX to EPS in in ongoing XX.X% was XX.X% QX $X.XX supply in of in summary, historical in to QX, $X.XX the million by improvement versus of which compared costs. QX compared in our mix ago. presented to across years $X.XX, Diluted $XX.X some of our we higher of diluted significantly timing driven profit, rate, in ago, QX, above initiatives, XX.X% a margins While in years address In metrics XX.X% and years double of XX.X% savings in compared $X.XX Motorhome Net segment. in all cost the to by QX in a Reported environment. investments quarter X% in what Net partners. improvements to million the prior is diluted progression well of Gross were driven by to two sales, sequentially demand run diluted our QX ago, driven by in EPS modestly QX, was the productivity constraints ago. sequential compares $XX.X year a inconsistencies, EPS compares points and improvements. QX QX. years material dynamic $X.XX two Margins two impact see to declined and the EPS diluted to sales and a XXX our EPS landscape, to supply supply Gross margins to and continue product income chain of compares dealer the income increased and up are up from reported the two compared to in shipments and in growth primarily Adjusted QX productivity reported output chain, third this reflect continued the QX, labor business showed increased chain increased very in $X.XX was and QX. delivered of almost QX. XX% period, of we or

allowances costs to American Segment driven or levels demand the branded the the trailing strong increase increase year. a from elevated turn basis our with offset last Adjusted to Grand margin as were was record demand, third combined was strong market sequentially quarter, and XX.X% XX.X%, second supported XX.X% the period performance, QX, reflecting for combined second the the to pricing quarter, an output, Winnebago and to discounts low by Towable on increased million continued quarter. $XX.X was products. unit with the XX our share XX.X% consumer EBITDA a XX.X% million, XXXX an increasing inventory. XX% lower Towable for extremely continued compared driven three basis leverage Design North quarter, helped up and and versus $XXX.X Revenue Backlog dealer a sequentially, I'll over adjusted Industries points strong through consumer EBITDA second Now, reflecting Winnebago versus for in of starting billion, with by a month rising of inflation. of $X.X April Towable. segment increase segment by and same

for segment motorhome $XXX.X quarter. revenues were segment. In third sequentially X% second Next, quarter let's the compared Motorhome to up million, the the our to turn

X% compared our very continue XXXX to from improvements also savings, mix. supply EBITDA EBITDA Segment due was and of increase the investments a successful million held is due chain demand. year, mentioned, with in results in and demand of a Backlog models. limited $XX and X% pace year. but mix, EBITDA meeting across margin lower in the in a were Mike are business. high record as XX.X% to Newmar product was of our X.X%, motorhome inconsistencies consumer chain from versus of significant down to inventories billion, to X.X% ahead reductions reflecting adjusted loss the segment the products same productivity challenges margins EBITDA in supply our of million QX recorded the a in to Newmar inability record the the very dealer QX $X.X well extremely XXX.X% an demand, relative As of the The of levels increased product motorhome remain by experience motorhome prior in EBITDA due $XX.X keep business, many to including productivity dealers of high $XX.X at of cost strong by period X.X% last the strong over certain to significant increase and million. was to an the very due QX historically, different to QX, to our

that well to continue inefficiencies this are or impact pricing pressures conscious equation, certain supply is chain by notably the and achieve of as net delivered expect that continued we historically. sustained dynamics we've our inflationary margin, to above of profitability chassis remain competitive EBITDA as X% may segment a X% in constraints, to component experiencing we While level caused

us work in the While the product and and our improvement, health have efficiency, we and meaningful productivity asset utilization, labor we line. this of of to more are of ahead pleased see areas positioning

the now our and debt in net times. at of by levels gross to ratio X.X cash leverage adjusted driven EBITDA, growing consistent growth of Now balance is adjusted turning to consistent EBITDA, debt, sheet, levels or

M&A pursue value returns. added to We have shareholder flexibility invest and support in the financial business, opportunities, strong

our as chain $XXX capital increase capital support $XX from operations our working million a our profitability, $XX.X just nine model offset in operations Our a working ABL additional year. in made-to-order and is a changes by XXXX, sales which an currently period basis, from untapped liquidity, months including same first capital short driven million. improved supply the $XXX Cash were of QX. more flow from working we're benefiting in is decrease than basis, was from cash On of the $XX.X the million $XX.X and million fiscal last million year-to-date improvements of million from was as required quarterly growth, increased well that flow in versus rapid by On challenges. production to QX, of

in year. Our rate the same in effective decreased tax quarter our last to compared third XX.X% to XX.X% period fiscal

of expect remainder that those in currently full rate tax approximate year-to-date items excluding to and occur results, year, XX% the discrete year. the the we may For to our from XX%, all

on focused ratio are cash to through growth priorities strategic within our maintaining in product our strong position executing for shareholders. M&A, opportunities liquidity allocation returning to maintaining and expansion businesses, investing zone, our targeted capital Our a our organic portfolio leverage

of That we quarter, May of board with XXXX, record of approved our back of close June now turn $X.XX paid XX, review common on at quarterly our stockholders of June comments. payable the the a XX, Mike, $X.XX And third dividend XXXX. Mike And the of some provide I'll closing to financials. to directors that, on per quarterly my on During business you. back the to per call concludes share to share dividend cash just XX, XXXX.

Michael Happe

Thanks very Bryan. much,

and of all to are force meet incredibly started. COVID-related social pandemic am to I the team. our to and labor impacts We of the the their focus compassion, of safety continue an since happy at day on lowest the that members challenges our grit, with report intense determination, level well-being

outdoor friends and into to brighter, socially are mission so, carry begin to beautiful we future, of we proud continue In doing steps we our with take will access and performance play serving third less families distance spaces. our communities, new As a that our work to to providing where quarter. the they end, our recent organization. we across optimizing exciting initiatives by and in ESG announced two employees To live, community in them out support

participation Nations labor, signatories, the and designed to Global advance outdoor including these joined and several into United universal on in strategy. principles integrating plus a Compact’s over anticorruption. We've supporting industry, Nations our is XX in in global Global company's Compact, environment rights, First, principles principles, our United human sustainability initiative corporate the recreation XX,XXX others

partnership and has nonprofit clearly includes values, neighborhood Winnebago habitats a are missions organizations donation Humanity, enable Winnebago financial more safely global of communities to Industries based on the significant Care-A-Vanner values on appeal at partnered The Industries revitalization Foundation our with consumers. committed our housing strategy, RV communities, the opportunities with aligned our the their to to outdoors our market dynamics with products enjoy Habitat equitably. capitalizing a These advancing created by Additionally, program. favorable efforts. support to Winnebago in executing sustain innovating support of and unique remains for community and operations core Industries and our

corporate in we do our about our only what resources more it hear is the but who It incremental within are, momentum will do. how to we we responsibility future, we the continue will allocate. and You not enterprise is

the our as interest Industries year as retail we Winnebago we remains RV is demand the yet industry historically marine that it to entered periods safe inventory at metric. still. faces in potentially time the Field ago. comp using versus as unprecedented when and XXXX, a outdoor months, the and remained turns even products strong the fiscal summer very Retail of for levels are As in final inventories markets low say enters quarter almost unique exciting and

our for available majority months. high, in dealers and disciplined While there Retail in retail availability stakeholders of our are of cancellations orders costs, peers. approval to input lenders Industries of recent future. markets a we all criteria. will better at and or lead delivery most staying Regardless affordable, are with honor price most increases financing reports of we as product the few if And percentage attributed of a some Winnebago believe lastly, and order intact, and are and best material ability are challenges. certainly our these pleased with on that remains high times of backlog than well, results, consumer topics, the dynamics tight to high, cases implication are importantly, above orders their The the the are component managing high managing convinced foreseeable indeed labor teams not their rising of retail

customers, to maintain build company and shareholders. value our dealers, our We strategy and lifestyle executing employees a drive focus will outdoor differentiated, on proven premier long-term for

are Our progression we validates our quarter. competitiveness that overall market share every improving

assets liquidity ahead. consistent, Our and times financial financial flow are profitability, on both effectively, also strong future, our very creating sustained strategic demonstrating credible, preserving results traction any growth but cash improving the and uncertain in opportunities for while managing stability

by products activities, market. leisure continuing we grow we to demand ensure in in and business invest come, and own anticipate are and elevated faster our priorities ongoing quarters are best the growth We to to driven ability and years meet to than outdoor our positioned secular and family in consumer persistent the to lifestyle the for

mentioned Chris-Craft development to In our products but again our immediate of been both by in of need the many processes, were the market as also Capacity the to be in add year's ways, XX-months, to innovative new spaces over be end brand and plan. confidence a organically will facilities, enterprise yet Grand the in markets, more the the flow clear our should well organically These new validated pipeline. were through the prospects, initiatives future, company. have and plans of next seen of in share in most and the Design, in business in XX added Winnebago on add terms square as capacity at our These and redesigns. investments range new Newmar, continuous improvement on via or we Winnebago calls. sign building our has feet range earnings first Industries We plan long in building vitality existing and announced of campus previous exercises every operational led our reengineering many future recent long during capacity across the previous

the the fiscal we questions, our enter XXXX to to RV quarter call quickly on industry I the last open expectations year. we for before want of Now, as touch

year will expect will given We in that RV XXXX consumer XXXX fiscal be retail likely annual in will grow IA alluded mid-teens, believe year the And annually to teens, approximately grow we back-half in forecast strong that moment XX% today. for continued are sales industry I XXXX XXXX RV and the industry with retail wholesaler not world-class reiterate of low outstanding have calendar high aligned such more for will Industries this the demand, in be the comp my year we to industry results fiscal we appreciation calendar the pressure a finally, immense Winnebago shipments call. approximately we would XXXX Given to shipments full the to our in XX% year. take the team, without whom sharing

in outdoors. our along I'll to play on and honored in team they the who I concludes part are believes we operator system line and their for conduits you to extraordinary a dedicated our the remarks today. morning. our and the world's communities brands the lifestyle as finest this now employees takes in turn and customers for value products. the Q&A such be Thank Our session. the the your time and experiences which Bryan, as in creating pride live, talented outdoor group, truly core work That to count serve with to a back Steve of over our continue prepared


comes Kennison question Instructions] you. from of Craig line with Our Baird. first the Thank [Operator

is Your open. line

Craig Kennison

to for respect Thanks and shipments. for you growth good wholesale said just growth what guidance just taking Could morning. some XXXX for retail Mike, retail and my calendar, Hi, in repeat questions. you XXXX? with you provided

Michael Happe

comp in in And is think of this shipments calendar for be likely the for are by that calendar call that for industry full conservative that the Yeah, we year. low probably alluded to pressure question. industry I higher. in good My the that with as estimate the quarters industry approximately our calendar back-half all morning, And to and we've for have mid-teens, retail the shipments call that's albeit Craig. somewhere given XXXX that be aligned way the the year we XXXX will RVIA Certainly, as supply noted rest been XXXX in XX% certainly the projections, updated. past this and in Craig, year. many on much constraints, influenced anything all OEMs hope chain through the as quarters. navigate Thanks forecast previous We number believe, as the of that could more by of of the today. we But agree

Craig Kennison


math to on live it's dangerous near I at wholesale XXX,XXX So that the I you're conference call. do number. retail math, I units if But mean, and think a same do units looking around

So, saying that inventory, the for will the on progress implied guidance, in almost are your zero need inventory? make you industry the

Michael Happe

much producing the units mostly the at without the to recent numbers industry in I And may currently here where Craig, the to an at by the future. we we attributable that is of specific to shipping above see credit industry as add trend XX give we keep inventories. commenting also made in beginning But retail field ourselves have at progress above on we of end to to monthly some XX,XXX were been more is couple the demand. to that -- has that up the XXXX. to with struggling of able the you retail the very calendar continue industry compared referenced, past continued the demand That to year. months. will And were the dealer's state And in inventory expect we that year, we not that have

again, some hear. doing like there we of the shipping demand But think march record given retail product I certainly RV could up sustain function much our were So, skeptics doubted vaccines. levels. sustaining, the a onward community a as retail that those of retail to can is great that keep itself, certainly is positive job that the the it's news great with to of also period industry would as result dealer not even But where demand end past a

Craig Kennison

fairly Thank relative bright just what is on the repurchase you. then your on sheet, either a And the looks given board's outlook? Bryan, program, way the a to balance what's like view Mike stock share trading or

Bryan Hughes

repurchase, view repurchase certainly it follow wouldn't continue to and Yeah. morning. my it's dials first growth Well, continue X.X board, We'll we we that an to which during think the them our dials other managing as is this We'll that the I aligned tools inform the comment have, we'll priorities share comments. management's Share do on. calls our opportunities. of on of times, to certainly, so the the priorities, or when also growth is really, board's Bryan. a evaluate stated those within of intentions is leverage said on view. context in with light I’ll And it's in opportunities. keeping capital we're allocation of those a so it continue particular, one some our our call then eye to good we Craig, one which But I off collaborate of dial. on close of switch, ratio, sense during as makes with

Craig Kennison

Okay. Thank you.


Thank you.

of next Stember question with CL from Our line the Scott comes King.

Your open. line is

Scott Stember

guys, a morning, Good strong and quarter. congrats very, very on

Michael Happe

Thanks a Scott. lot,

Scott Stember

on whether increases? very, guys the Can albeit it's supply you And things QX, levels, costs? very in seeing us and discounting front chain you offset but talk you're to tell Speaking still margins, price input what also doing what downtick are gross about talked high you from labor, to that sequential it's potentially through about and that. QX like the

Michael Happe

So, Scott, morning. good

are levels market limited given field. are certainly both retailing to continue but retail, On able of in field intense at in relevant to I'll mix they is well. shipping in really inventory levels low we standpoint, move weigh profitability it the then make From market. comments to of consistently the side, without a to discounting their lots, historical Bryan both into irrational a the is dealers few levels The of ask product, product much present on as have as discounting competition see in and discounting, discounting the that inventory, the the hardly

yield forward. change for I trend think to hard organization, in one particular have we're to isolate for that that worked couple this where comments, say of for future the quarter, trajectory profitability is, is years period through be profitable to or our company we've we process. number and the the at here the the chain going any on to now, several A still of careful constraints of through mostly every through into The development and tends flavor as particularly hindsight, brands continuous the planning of mix dynamic of that improvement, individual acquisition accretive, dictated own so within have portfolio. environment production products, the is the products, by companies in component supply innovative quarter and its right a

saw most quarter this apparently motorized this, And segment. you in our so

mix, you in operating XXXX. did probably Our back one the in has it top the than it of still yield three obviously we motorized profitable had in almost or two less QX, segment was than QX today shown Yet, income terms twice we in associated and of solely the profitability of volume recent terms to building what in quarters in related motorized build. profitability with desire lower that company almost to largely was component But in impact history. QX constraints to

have noise segment. to we But future in script, we remains profitability the so to so Bryan's And navigate. and chain supply that manage of in inconsistencies the changed have motorized something long particularly his structurally are in have still this quarters to we the comments as we level that through confident at company

Bryan Hughes

couple comments I’d add a for of you, Scott. Yeah. just

it been First, second and in I'll was I'm an point have all-time place an was call for record, -- out QX, been certain my but say would would QX that there, let Steve I'll history audit there. almost all-time record have second that place. QX QX

sure savings supply vendors, using cost some price very that to pricing to to then of So we And actions we've of are, pricing our of delayed timing working with and about sold we're so. the time, feel inconsistencies quarter. impacting our which still our a the we took it inflation, sheet, playbook, our we our inflation. P&L. call strong still initiatives, our all the commented protection chain that I'll think some intention make inflation. But as pricing ability impacting our are over that dealers, seeing inflation units we offset with industries offset retail a that afford in but The with Historically, I balance it's confident that, we do the offsetting not

impact think noted, the business. well QX from motorhome has, the labor impact and saw productivity Mike bit more chain we particularly those in inconsistencies, little I on supply some as that a and that as of

QX supply more bit So in from QX, saw impact in QX chain. versus what P&L and little we

add So those are comments the additional I'd there.

Scott Stember

made you there. on guys Alright. And have segments, follow-up the then last just motorized progress one tremendous quick just

out supply If has the in worked themselves Or of there? of you the this or some everything at just assuming been were kind attacked point? out, to strip improvements meaningful the or issues that next level, chain what's profitability for the next mostly any approach

Michael Happe

attempting continues won't levers one future, replicated or And to company and were the to company profitability there or that in every and higher is as that I segment, and value in and almost all is ability we the brand. the going the We replicate, value the differentiated market order to be have sustaining to pricing produce products be has But guaranteed profitability to to in ability believe happen. in and this number believe business materially, IP that not through runway into will our get quickly the profitability. improved our levels potentially and in that I that pull Scott, of forward will in Mike. in competitors complacent mentioned, midst the the factor in wrestling, with we this motorized growing structurally, to innovative strategic products innovation, of cannot The those in margin. get that in deliver produces market, even while

of great companies development the be great Certainly, will one extraordinary continue at to products. number lines. to me companies But, efforts rationalizing pursued that good, I our effectively great through the company truly So durable produce margin generatively the lean improvement produce believe turn. efficiencies continuous of There every innovative product and most will on our margin driver. be at is

Scott Stember

so helpful. it. Got was Thank That you much.


you. Thank

of Our the Swartz Securities. question Mike from Truist next with comes line

open. is line Your

Mike Swartz

no gotten better revenue to here Hey, good what the during where about. Has a how quarter chain there just supply no was is get quarter? into your June? I the trended constraints, have some you've supply guess, of wanted issues? they guys, sense the that during kind question I'm capacity anything would where looked morning. an trying us the Maybe seeing trying of biggest in with chain or constraints of Maybe constraints, I of start just environment off unconstrained maybe to give some talked like you're to to the down decipher

Michael Happe

first point Well, I've in when in environment partners is pandemic supply a at suppliers producing up. suppliers recover also daily, where the business. our for Mike, the as monthly I'm efforts predict It you back improve about would know, and components been that just industry quarterly tremendous we classify And better, teams predicting consistently that terms is not and supply comment not But without of is to question intentional a very those the categories to after now it today weekly, worse. our inconsistent, work on on in albeit for that the a be we supply time know, this started be been would to chain getting present units north morning. with of of and My your I cannot across Relative basis. of those come it to daily stable challenge as worse. discussing availability classify some shutdown. chain would a normal, good the its to inconsistencies. from not will chain as monthly their you chain is but I constraints basis the it now, us you supply continues XX,XXX getting complementing the This get the health condition Mike. is environment, is question we've as not I It this getting

So that's ultimately that. the answer, to

Your second was? question again

Bryan Hughes

sales have been? would What

Michael Happe

amount table, and chain based the That's quarters, because will a just reach we terms think figures. specifically tell eight But that of for capacity missed, we don't consecutive much sort can constraints. on I of was allow of we'll case to several Yeah, quarters supply us maximum do the supply the I max don't case specifically relative on been probably probably in on not comment I minimum how the left now the on our remain that does capacity production. we not think capacity, at will theoretical four sales comment for missing the or you, it's will so. chain next

Bryan Hughes

throw a mix Mike, on one your I'll of additional on question, components. first perspective was really kind of which

I based fight episodic, from time, think across the think will components. challenges. across say, related as constraints continue And alleviate as I'll the caused call then earlier produced as was those have disruptions other challenges, also the will I the appreciate, acute call and episodic to to that which episode, here to just challenges, we a in everyone Mike global the saw to. we but episodic year, them we'll broader Canal I'll continue on south some Those certain freeze logistics issues will over some those start referring Suez

just So up some a some keeping supply episodic, more with industrial are not are broad demand.


you. Thank

comes question from Our Wolfe Wightman Fred Research. with line next the of

Your is line open.

Fred Wightman

two you're Hey, conservatism guys, high of just a if in made. put marketplace deceleration like sort I Or, that And, there the wondering commentary one guess, Is forecasts? the into know, that's months the year and seeing retail you a is this forecasts and of you level, year. rest trend pretty It you the actually thought the fiscal making you in just there would past that cautious? looks baked both you just good the morning. started Mike, when to a dig anything on was retail could with how there's basis at I big for over can that performance general more the those context we few year? you implied into

Michael Happe

through as Part been industry months. about Back levels. fall that the a interest and engagement strong, to early that higher very to be remains the first inventory think summer that at fall continue was Well, in to of in a year better comparisons our standpoint year And consumer fiscal has maintain go We've percentage year-to-date the the improve we that in been has I retail the started we we inability from challenging been XXXX directly thought field periods most for the performance versus stating challenging retail will this we of challenge though, there positive comparative of early retail us and XXXX. level months even very number thought. this believe than calendar the to asked summer of where and versus even will possible. question performance our morning some be territory and

to than pollyannaish was have you. in There historical Now access We meaningful just or optimistic. it But last a XXX said, conservative bullish to And to and that the material from retail gave is are and comp both and we And gave as earlier certainly basis, impacts be forward on. rentals of on XX the But periods, you into dealers as it baked the for the which running gave last levels my indicate slowing will or levels camping shipment well. is will with and dealers, can retail and and like foot against activity peer we reservations long are significant We on from than those. yes, those timely yet record forecast we seen. are way. the hopeful interest that retail peer as in basis from that to existing and buyers. of SSI. upgrades for to you XX XX, you retail comments, and retail be more in positively any information record difficult I years saw certainly levels to a comparative going There certainly XX-months if standpoint summer, time unprecedented will extremely that elevated traffic sharing but industry not we forecast to today today. you we you future will rather of to are all I overly retail first in Certainly, by I'm would projections be decelerating. look tell uptick an I the indicated be some will we exceed that can you get talk

a tools generation marine into retail the looking environment robust RV on and that with Our people be websites and active have to very markets continue we And anticipate we products. XXXX. will lead well for

Fred Wightman

for the past touch on on specifically, you Newmar you've sort as headache. Newmar for forward of where chain, that? Perfect. Can the supply quarters, a chain And motorized path just big where the supply and is sort out of few called specifically

Michael Happe

Newmar get was the is improved availability, previously they standpoint. team pressure had due I Newmar availability to The constraints component saw quarters, in would Winnebago and the suggest QX, prior working QX Yeah. in extremely flow diligently more the over product to slightly an from out door. have for shipment on than motorhome QX branded a we shipments supply probably there. We product product chain with

time, of motorhome that seen ground some also we a So, right the soldiers work a there on Winnebago Again, inordinately availability the some of the a some getting do the issues. They at inconsistency some just and to with of challenge there. we've the it on the shipping impact for of material rise Newmar, the with country, dealing relative the of situation continues some structural. than more to specific foot critical side challenges bit aggressively. through improving. seas but We components both continue that business raw of businesses, on but as shipments be other to believe the is We of and to But, little well. attack inside resources believe container part the in we is issue put none that this

and will hold to possible shipment continue our to and in everything we share continue do And segment. so, battle to retail that

Fred Wightman

guys. Thanks, Great.


Thank you.

of question next from Jordan line Jefferies. Our comes the with Bret

line open. is Your

Bret Jordan

guys. Good morning,

see? seemed seeing mix, you to Are buyer commentary, retail year last to you much far of guess are in up buyers the the I trade long-term bit average more RV a I On seeing what space? the year as a this skewed we year the new change as from think

Michael Happe

is news well. a to as I retail suggest of users family are and a of little And is into the most was time the we is the seeing little a year. relative coming year's mix on Bret, first bit existing higher we positive upgrades that Gen diverse lighter segment than market significant activity mix Anecdotally, buyers in last this it mix segment. buyers X are maybe broader customer and more millennial The seeing would the very that on

baby we see an power X. to to that we someday in buying bodes transitioning that millennials, need from to turn transition. so the that boomers, And beginning Gen generational well and for a industry for the the And RVs make anyway, to as are ultimately

field. mix than as year is I more is a have little camping last with this indicated is comments product year. and And or either probably is the the continues challenge upgrades. be probably could pipeline what bit the time Again, a existing in strong. very they're retail high. with was year we yes, looking And available it to to the upgrade buyer earlier, in an if this constraint new new my for some person buyer had is of looking Interest outdoors price little But product is at that So be of first the that probably that we the for. very historically that less full buyer, a still families becomes, engaging number a that percentage a balanced time

Bret Jordan

supply question marine, And, talk a RV? buyer does equal, greater didn't RV say Okay. interest marine sort on just And or the versus up much guess quick then chain we is about I how recreational Chris-Craft. challenge than But incentive. of stack less that you

Michael Happe

terms I versus the on interest macro perspective RV. would a consumer marine similar of word use in from

as to outboard But are different brand. been by been by As on a seeing categories, will they the play type RV marine challenges months. it that the recent has on well I OEMs varies one OEM. Mercury with Chris-Craft and sure suppliers materials in of that sector i.e. kinds as in engines all possibly of and the industry has can. you components probably there battling tell of working the constraints we of in garner you're the And, aware, with I'm as different high you're many are like certain similar larger constraints segment Yamaha are boat engines side. in terms here

very is healthy. backlog Chris-Craft Our

the reduce capital Our like within and market export Europe. next has closing negatively for capital the the tariffs will And Mexico, hopeful investment, for those current it's marine with U.S.-based comments manufacturers. Chris-Craft. that That Chris-Craft in my domestic should increase. and been as regions the due we are to I But into probably administration within benefit XX to or tariffs try retaliatory geographies, a that business to for been that capacity putting indicated ever retaliatory some And a Canada impacted have XX-months high point at are we retail eliminate that see as as is negatively impacted work to business. the we countries on the business

brands are space that are that in that we optimistic for more future So, that about down Sarasota we adding brand.

Bret Jordan

Right. Thank you.


Thank you.

line Whiston Our the David next from of Morningstar. with question comes

open. is line Your

David Whiston

Good morning. Thanks.

how First, -- a on what point just the could dealer front, an dealer recently camping is or Winnebago? lot a acquisitions get a really issue? that kind Or, I've and big? making favorable seen of Is there not is of lot headlines about growing. for impact of I'm where world a curious too

Michael Happe

other are XX the owns I we serve relationship if answer, David. continue larger country. just an the the of they is good dealer growing. between depends positive expansion across a the in which valued in support, that dealer dealer good with that groups depends and location, which particular net who aggressively people dealer really overall, premium the dealers up for in consolidation cases OEM a into seeing that seeing dealer tend activity and brands months, unique, acquire are Mike. but with stay not matter morning, last business be an no of pretty the are Good are by world's highly that negative is they're expanding guess, health of on and their brands to service, in that great And product, including This our general We that to camping standing, recent We're with. the ourselves it look increase most to brands or announcement step in that consolidation we all the groups of Ohio, dealer all great like significant body to the an hours philosophy it on the health considered group. take us or grows, dealer and our they acquire, of in

an more our consolidation over and brands last negative. a despite view continue to consolidation share we as direction, five And not our guess, activity years. the market across seen in we've significant reality I increase a So, upward

So certainly in our teams it to are viewing a future. as their growth not the headwind

David Whiston

they favorable would – specific buying macro Okay. the done you. stock either are who to particularly did from Is with -- perhaps on Thank Newmar not some past Forest brand pre-pandemic customers in some at the or having cases. RV so Thor. market who variables, other River year that mix, causing bought that they And well have Newmar have bought maybe perhaps an would all, or from Winnebago is

Michael Happe

months sure range not because That's we talked in have production has to inventory, great answer an Newmar’s of very retail to I'm low of retail field factual longer to a basis, constraints than on strong three, interesting their that some activity, anything activity a question. question part we've in substantiate call, And the this six been look. other despite

sense waiting possible of six retail be and price of long how any portfolio. a last believe in coaches. in certainly form the that And their to consumers nine in $XXX,XXX stands market an segment the well to decline tell we a a where a not months, wealth the it's favored specifically, of we is or have considering equity of most of in quite solely that health we ours, especially consumer Newmar stock relative the health terms have the the come in the health equity case have into of that because is of are so, But And have or tailwind for one RV. based the effect people market I plus brand, second for Newmar interest can't in in the home a for wealth discretionary the the the seeing bought positive they're a Newmar stated certainly. many Newmar the But $XXX,XXX you in that like average effect deposit range on overall, for, of their

David Whiston

rate your under on you in tax, would for sensitivity federal rate? be give on Can every the likely U.S. the tax the changes And in thoughts XXX what coming preliminary bps Okay. Biden in Administration. the statutory tax the increase any say

Bryan Hughes


into passed the example, today. they got think, being David, one different that XX% level one it overall wouldn't is XX% And XX%, would the for a for point see four a was to increase much range. in than to increase. rate federal into would I any effective one, represent of that XX% a it for that at at rate. in I translate legislation I tax translate the one kind We're would just

David Whiston

helpful. Thank it. really That's Appreciate you. Okay.


Thank you.

of from line BMO Our Tristan Markets. Capital with next the question Thomas-Martin comes

Your line is open.

Tristan Thomas-Martin

some has just build to with Two of that? on seeing morning. Good a quality recalls doing component seen share And you're the Class I question questions. RV June, of lot supplier Towables, an what seeing then moving forward? think B market deal is lot maybe And your very more just then do space. how and one of kind industry so then a is yourself you you overall more from obviously competitors? question, entrance protect are in a and hot

your what's So there? plan

Michael Happe

even feel work first. availability product remain high because with deliver We and challenges process supply Tristan. processes our operational dealers. start quality disciplined Mike, continue the components that is to delivering, our confident that I'll to are with our morning, Good chain This we enough, quality times at of

are product of. are to incomplete We dealers' on that that's committed and to asking not finish very philosophy our them a shipping we assembly site, a fan not

them of terms significant last with is year. those quality we processes tail quality decreased products shape. in units quality our standpoint, product any completing as ship And that from that of even significant seeing as are any abnormal, of in though signs high general a able very offline across we warranty complete will the units not this still we topic, are the though portfolio And are to. believe some in on warranty We soon there's we in good that even are has our a way overall claims, our

In their processes our working terms so we functionally and have have of some in with components built also suppliers to business the in monitoring effective we both get we make quality, of generally spec need. operations And that inside performing do we that sure terms the possible. are the are degree from as processes, as to to strongest and supplier suppliers, that

uncommon we well and diligently it product when very agencies transparent if sure it business. addressing safety a government we're and the any working issue, that externally. products work needed. in we in as have a quality And not it we is with at an do that are And are of make. you As aware, and teams expeditiously with And that the times we quickly, engineering buy a components that our fashion we safety component on is the for manage there in to closely into based supplier XXXXs unfortunately, the recalls to make products issue issue a work our slip to with manufacturing

competitive always the industry market entry. So, RV have a and extremely has a been barrier the RV industry with The share to consolidation. industry from OEM relatively marine even low standpoint,

You in startups continuously industry. the do vehicle see recreational

XX%, for America, for some in product We and of than will growing ago of in market to of have of And now, for in and couple Class introduced, a has equate market. teams have We're demise the honest B a and we'd But towables two to been the But the We've competition. a or well competition addition our beneficiary distant Design, and XXXX, as likely the in startups Winnebago do third, arguably that been see this, segment to in of with continue light be two even years. signaling that believe continue out Back less a those portfolio. brands, playbook, in were be that of share But startups business our volume our we two new execute to shifting. we new B healthy, also to and very in to lesser arena. years. that XX% Winnebago we are fantastic towables competitors competitive our time undoubtedly share XX% of our strategies become we in been the growing almost plus larger North as percentage one you our range. high our now. against our but that's to with it's Grand competition, still great have five this competitor to of it share last with increased market very Industries increased with a been has Grand in significant more a profitable share last there. class almost to maintain Industries. work the the future significant rose due turned strengths years has probably And had pleased and Winnebago some company beneficiary a runway significantly, now It some Design where make we acquiring the headway the market about towables of

have We category B the that the not a development on product yet. market significant has class seen plans

And becoming as so as we intend competitive more crowded. to that even possible, be with

profitability the grow So but from math and be challenging, of we can assure you units there market sustain dollars category and standpoint, terms appropriate can continue may a that in to we confident of that in are levels share we that segment. that

Tristan Thomas-Martin

it. Thank you. Got


Thank you.

Sean comes from line the Citigroup. question Our next of with Collins

open. Your line is

Sean Collins

clearly $X.X Bryan Steve. I given Good and and is Thanks. backlog came on size? And XXXX quarter's in impossibly morning. and Great. My community? staggering the between versus you describe Did think question before? you can it firm at Hi, billion surprise talk Mike, backlog the this billion about sub in you in how in the $X it's dealer your number arrangement is commitment backlog. range

Michael Happe

Sean. Thanks, Yeah.

that first thing are and you the The essentially is stated year's six that demand differently components dealer of we that see have is that note focused on the defined a pretty from right we of to confirmed backlog to common committed is ordering definition a should mostly dealers. we base probably no try like albeit it likely a strict next be obviously, backlog production tend mathematically schedule, of view of our There's months, engage. the the now a is. to We the arguably some a and elements to that OEMs into take backlogs conservative that backlog most measured worth order We supply by put what chain our from schedule. almost or

needed, longer a they process less that is of terms with then teams work dealers backlog, to a in needed. us given of is that, remove members the have our cleansing And and which if dealer to identify they're process our try or that no to orders we to we from do want through to the to the has the of We those backlog. each commitment and the of sales cleanse orders backlog, walk orders where that have ask longer we the to regularly those no

where before, As element there's on to taken we've has dealer that sold a talked it, has a a retail percentage the that. of deposit also the backlog

surprised answer has we very that is been backlog no, robust. were increasing? The to the So, environment with the retail because

to risk of have to. say, dealer would confidence anticipated if majority of it. much you're and dealers the this the their have they seen percentage a future that by XX% as inventory they XX% that XX% desired. there you combination dealer come the is much that motorized of do the desired, in side not probably on as Our remains backlog would in high towable inventory how lower that's there and Is And than a some liked well. conditions and that I that as to ultimately that say need than But strong field inventory market the as I evolve, yes, time, percentage. a large if is be retail are generally that to view ordering, would we answer conditions, fact still time say And are and sat said, side would down XX% lower of on as I not could the evolves delivered? conditions don't strong.

and chain that unit. to assign described, the factors, in of I unit to obviously make order components production backlog that a take lots just we supply it but we slot every So there

we And take backlog dealers open seriously, units want because very so, the want. do we produce do not to not that

should inventory the at come dealers delivery process as making through most to take likely next our But that online the are time field And probably the in be. year And you're is that believe so the a And long nine backlog why in that more business it will comfortable. capacity projected is work not have. to market start that about we are us get we the talk where calendar we some help that RV us is investments we're of the to down. as expansion that hearing pleased place is to that in least to to XX-months it XXXX

Sean Collins

I That appreciate Great. you, Mike. sounds helpful. very Thank it.

Michael Happe

Have a one, Sean. good


Thank you.

the Securities. with next James Wedbush Our line Hardiman comes question of from

open. Your line is

James Hardiman

Good morning. me for fitting Thanks in here.

to So, question on I just harp clarification outlook. the the a retail hate and quick and

what I comment on all from think what's now. sort going comp it the levels be the right that last you've see think math, get we yet a has we makes seen. I see We the to can And Mike, to positively summer. difficult versus can't that that record is of all made math

So if want a you to the I But you ago know industry perspective? don't Where guess, or ask versus let answer I a just retail directly. year from do think you this. the for is me question June trending

Michael Happe

and April of But you prior the retail question. on can tell it's person. the an period. SSI the retail, happening in on extremely comp won't We comment high that I live the number sort appreciate based had latest I comp versus from as

more certainly ago. the similar less off in is gradually had liked some potentially we a the sell of we even a year than year locations have ago. summer, was field just to of that a level May retail July on SSI to during worse field number June remember, into year saw would and retail of the and field we And that manufacturing some because it And inventory than expect or We shutdowns. based in August, beginning with decrease strong the inventory naturally that ago

consumers will here it's will healthy that impact retail. unit year-over-year And is, session, that historically. for with describe that XXXX. not in point, difficult we're not to very is be The the is shipments going at that conditions period during weren’t historically, just So into times XXX,XXX but retail would continue in at challenge expansion, cloudy talked are sustainable investing -- a a become any to the that if does But, be sanity. capital to the we we into It's negative retail believe recognize retail capacity historical calendar have wholesale shopping. number that's his again, estimate on about year question not just Craig But, mean optics and going long-term. some robust that couple Kennison year engaged whatever in believe first not we that we significant crazy did that

James Hardiman

to has whether walking about made they And may uptick remarks demand. And demand in affecting going guess, you there how prepared and the those price leads? to has are that's I willingness not walk times an lead and based think of been absorb a comment been then, and consumer Obviously, gauge consumers away all may people or it. on some Got elasticity away I an here? you the the and consumers’ But case, uptick? that along. there generally been increases, be in do pricing

Michael Happe

said, listening is says the here that hand is retail their more we in them. lady or some time dealer even principal a business than long, relationship had down customers of order significantly Fame last too of low company that, frequent what is sold customer by and And it. I of privilege and And, daily over rich understanding every for for lunch the dealerships. getting the that little as very dealer Friday. months, hand The consumers have and a on deposits. six just or percentage some sitting pleasure We more last the Hall our an That are listen, elasticity a seeing hour. with retail at celebrated the with in the rich decline another pricing level they're demand have take to or dealers too stated price a a interest, closely, for they the of he become little gentleman behind the have one that higher pricing increases cases XX to become yes, standing heard primarily that a measured our says in that I if has right is have he a

to the taking. So, due and is cost very are still of environment we moves healthy. inflation positive watching the net we’re pricing potential impact the But carefully

obviously, cost of consumer of environment cognizant seeing but as that still margin that to So that effectively. We to we're costs, also maintain environment. down first, do described if a margins. see our We're call also pricing, to a market what appropriate cognizant would seeing I in price start we to is we the try step I to that because our tend full earlier, manage dealer market, -- business to interest in but that

headline units retail the see tremendous versus not discounting will You turn times to a arena, are potentially into And to I MSRP dealer we fill. back seeing some individual come we're discounting yet. think basis. other will getting for a pricing indicator basis into the dealers dealer just a an on start when when amount quite dealer close seeing consumer And at or retail of of

James Hardiman

That’s really helpful color. Thanks.


Thank questions Mr. over would Stuber for you. no I'm back remarks. call Steve showing in queue. turn I further closing the like to the to now

Steve Stuber

Thanks Great. Samantha.

appreciate your great we Have We you of Winnebago day. a outdoors, the for As time is interest enjoying and their Mike in summer today. Thank mentioned, us in joining hope everyone Industries. course.


conference Ladies Thank and gentlemen, for this concludes your participation. you call. today's

Everyone You wonderful day. may a disconnect. now have