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Citing the impact of “lower motorhome deliveries,” Winnebago Industries Inc. reported a decline in earnings and revenues for the company’s second quarter of fiscal 2005, ended Feb. 26.
The Forest City, Iowa-based builder reported net income for the three-month period was $14.4 million compared to $15.9 million during the same period of fiscal 2004 while revenues declined to $239 from $266 million.
Bruce Hertzke, Winnebago’s chairman, CEO and president, attributed the decline, in part, to overproduction by manufacturers, which resulted in “an imbalance of motorhome inventory.”
“Although current industry motorhome retail sales appear to be fairly closely aligned with retail sales at this time last year, there are indications that industry motorhome production has exceeded market demand,” said Hertzke. “As is our practice, we continue to monitor our inventories on hand, as well as our product inventories at the dealer level on a daily basis to ensure that we produce to the market demand. Going forward, we believe our sales will closely follow the retail pull of the RV market.”
Net income for the first six months of both fiscal 2005 and 2004 was $33.9 million. Revenues for the period decreased to $505.5 million compared to $521 million the previous year.
“Comparisons with last year were extremely difficult,” Hertzke noted. “We spent the majority of the first half of fiscal 2004 on 45-hour work weeks, replenishing inventories at the wholesale level that had been drawn down during the initial months of the war in Iraq, as well as responding to the increase in retail demand. In contrast, during the first half of fiscal 2005, dealer inventory was at a more appropriate level.
“Dealer inventory increased by 1,414 units during the first half of fiscal 2004 compared to 623 units during the first half of fiscal 2005.”
Hertzke also reported that Class A diesel motorhomes continued to perform well while new product introductions were bolstering sales in the Class C sector.
In addition, Winnebago Industries repurchased 52,600 shares of common stock during the second quarter for an aggregate price of approximately $1.8 million. The company has approximately $25 million remaining on the current stock repurchase authorization from its board of directors.