Winnebago Industries Inc. will achieve more than $1 billion in annual sales in three years thanks, in part, to its growing diesel-pusher business, according to Chairman, President and CEO Bruce Hertzke, who participated in a webcast interview available at www.wallst.net.
Winnebago’s fiscal year 2003 ended a few weeks. The firm will not reveal its fourth-fiscal-quarter and full-fiscal-year 2003 sales and earnings until Oct. 16.
The company reported $620 million in sales during the nine months ended May 31 and $828 million in sales during fiscal 2002.
Winnebago is the largest producer of Class C motorhomes by a wide margin and it is No. 2 in retail market share in Class A motorhomes largely because of the strength of its gas Class A’s.
But Hertzke said Winnebago’s diesel Class A lineup could generate $100 million in annual sales relatively soon.
“We were not in diesels three or four years ago and we’ve been ramping our product up in the diesel area,” Hertzke said during the Wallst.net interview. “With our two new models introduced at Dealer Days (in July), the Winnebago Vectra and Itasca Horizon, and the new (Itasca) Meridian, these product lines will allow Winnebago Industries to grow in the diesel category.
“We are proud to say our Journey, which was our first entry into the diesel product line, was the No. 1 selling diesel product in 2002. So we decided to expand into other price ranges and categories in diesels, which should allow us to expand our sales.”
A stable work force and Winnebago’s strong brand recognition also will help the company grow, Hertzke said. “We are very proud that we are like the Coca-Cola or Xerox of our industry. We are aggressively promoting the Winnebago name because we think the Baby Boomers are much more brand-name oriented than past generations and we think the Winnebago name will be a very strong asset to our corporation’s growth.
“We see that Winnebago will have to continue to grow with that market segment,” Hertzke said. “In the last four years, we’ve gone from $500 million in sales to $800 and some million in sales this the past year and we will need to grow to keep up with the population growth.
“And not only are there the Baby Boomers, but people are living longer and a University of Michigan survey found that people as young as 35 are buying motorhomes to enjoy tailgating at football games or motorsports events or going to the desert to use dune buggies and dirt bikes … to support a lot of other hobbies besides camping. Our prime target market used to be 55 to 65 years of age, but our prime target now is 35 to 75.”
Concerning Winnebago’s work force, Hertzke said, the average employee has been with the company nine years and the average product designer for 15 years.
“We have longevity and that experience shows why we were rated the Top Quality manufacturer by the Recreation Vehicle Dealers Association through its DSI survey,” Hertzke said.
“We feel we have a growth opportunity for 30 years,” said Hertzke, who added that Winnebago has no debt and “a lot of available cash for future growth.”