Winnebago Industries posts wider 4Q loss

RV maker Winnebago Industries struggles with falling sales but says turnaround may have begun

• On 10:26 am EDT, Thursday October 15, 2009

FOREST CITY, Iowa (AP) -- Winnebago Industries Inc. said Thursday its fourth-quarter loss widened as the nation's top motor home maker struggled with falling deliveries and promotional pricing and said customers are still having a hard time getting financing.

But the company said dealer inventories are very close to reaching bottom, and expects dealers will soon need to start replenishing stock. Winnebago said its sales order backlog climbed 58 percent during the quarter, suggesting a recovery may be beginning. That news sent the company's shares up $1.96, or 13.7 percent, to $16.32 in morning trading.

The Forest City, Iowa-based company said it lost $50.2 million, or $1.73 per share, compared with a loss of $12.7 million, or 44 cents per share, in the same quarter last year.

Excluding a charge of $1.41 per share related to a tax allowance, Winnebago would have posted a loss for the latest quarter of 19 cents per share. On that basis, results topped expectations of analysts polled by Thomson Reuters, who had forecast a larger adjusted loss of 29 cents per share.

Revenue for the quarter ended Aug. 29 was $59.5 million, down 30 percent from $85.3 million for the fourth quarter of 2008.

The quarter was hurt by fewer motor home deliveries that resulted in reduced factory use, Winnebago said. Revenue also was impacted by a continuation of wholesale and retail product incentives, but benefited from a better mix of Class A diesel products.

For the full year, Winnebago lost $78.8 million, or $2.71 per share, down sharply from a $2.8 million profit, or 10 cents per share, for 2008. Excluding non-cash charges related to taxes, the fiscal 2009 loss would have totaled $37.2 million, or $1.28 per share, the company said. Revenue for the 52 weeks was $211.5 million versus $604.4 million a year earlier.

Bob Olson, chairman, president and CEO, said fiscal 2009 was one of the most challenging in the company's 51 years and the history of the recreational vehicle industry. The company, however, increased its cash flow by cutting inventories by 58 percent from the end of fiscal 2008 to the end of fiscal 2009, he said.

"Our sales order backlog was 940 motor homes at August 29, 2009, an increase of approximately 58 percent compared to the end of fiscal 2008, and an increase of 146 percent from May 30, 2009, the end of our third quarter," Olson said. "We have seen particular strength in the backlog for our Class A gas and diesel products."

Olson said the economic environment and the level of retail demand remain uncertain, and noted that credit availability remains difficult on both the wholesale and retail level. But he said that dealer inventory declined 54 percent during the company's fiscal year, to 1,694 motor homes as of Aug. 29.

"Since retail sales have been much higher than wholesale shipments throughout the past year, we believe dealer inventory is very close to reaching the bottom, and our dealer partners will need to start to replenish soon to satisfy retail demand going forward," he added. "The increase in our sales order backlog referenced above may also be a sign that the replenishment process is now beginning."

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