Elkhart, Ind.-based Thor Industries Inc. today (March 5) announced improved sales and net income from continuing operations for the second quarter, ended Jan. 31, compared with the weaker results reported a year ago that were adversely affected by the harsh winter conditions in early 2014.
Sales from continuing operations for the second quarter of fiscal 2015 were $852.4 million, up 34% from $635.3 million in the second quarter last year, as sales of both towable and motorized RVs posted gains from a year ago. Thor noted the 2015 towable results included the impact of the acquisitions of K-Z RV, Cruiser RV and DRV Luxury Suites.
Net income from continuing operations for the second quarter was $30.3 million, up 76% from $17.2 million in the prior-year second quarter. Including the discontinued operations of Thor’s bus business, net income for the second quarter was $28.6 million, up 77% from $16.2 million in the second quarter of fiscal year 2014. Diluted earnings per share (EPS) from continuing operations for the second quarter was 57 cents, up 78% from 32 cents in the second quarter last year. Including the discontinued operations of Thor’s bus business, diluted EPS for the second quarter was 54 cents, up 80% from 30 cents in the second quarter of fiscal 2014.
Gross profit margins increased to 12% in the second quarter compared to 11.1% in the prior-year period. Gross margins in the second quarter of fiscal 2015 improved largely as a result of better fixed cost absorption associated with the higher level of net sales.
Sales from continuing operations for the six months were $1.77 billion, up 24% from $1.44 billion in the prior year. Net income from continuing operations was $69.5 million, up 30% compared to $53.6 million in the first six months of fiscal 2014. Including discontinued operations, net income for the six months was $67.6 million, up 18% from $57.3 million in the first six months of the prior year. Diluted EPS from continuing operations for the six months was $1.30, up 29% from $1.01 in the first six months of the prior year. Including discontinued operations, diluted EPS for the six months was $1.26, up 18% from $1.07 in the first six months of fiscal 2014, which included the gain on the sale of the bus business.
“Our second-quarter results marked a dramatic improvement over last year as Thor posted strong growth in net sales and income from continuing operations driven by continuing growth in both our towable and motorized operations,” said Bob Martin, Thor president and CEO. “Unlike the second quarter of fiscal 2014, we did not have to contend with harsh winter conditions that adversely impacted our results last year. In addition to the better weather, many of our subsidiaries took advantage of the seasonally slower winter months to increase production during a time when they typically have excess capacity. As a result, we saw very strong performance in both sales and profitability.”
Segment highlights included:
- Towable RV sales were $675.1 million for the second quarter, up 43% from $472.5 million in the prior year period. Towable RV income before tax was $40.3 million, more than double the $18.9 million in the second quarter last year.
- Motorized RV sales were $177.3 million for the second quarter, up 9% from $162.9 million in the prior year second quarter. Motorized RV income before tax was $11.9 million, up 6% from $11.2 million last year.
- Consolidated backlog on Jan. 31 was $942.1 million, up 11% from $845.2 million at January 31, 2014. Towable RV backlog increased 25% to $626.1 million, compared to $501.9 million at the end of the second quarter of fiscal 2014. Motorized RV backlog decreased 8% to $316 million from $343.3 million a year earlier, reflecting the impact of expanded production capacity and the company’s ability to meet higher demand levels more quickly.
- After completing the acquisition of Cruiser RV LLC and DRV LLC on Jan. 5, Thor’s total cash balances as of Jan. 31 were $248.3 million, with no long-term debt.
“We are pleased with the strong results generated in the second quarter, which highlights the strength of Thor’s product offerings and our ability to produce and deliver quality products to our dealers,” said Peter B. Orthwein, Thor executive chairman. “Despite these great results, we realize the second half of the fiscal year will likely be more challenging, given the tougher comparisons to last year as well as the potential that some sales pulled forward into the second quarter this year as compared to being pushed back into the second half of last year due to the extreme winter weather.
“Many dealers chose to order and take delivery of units earlier this year in the hopes of avoiding the delivery delays experienced last year as a result of the weather and delivery driver shortage. We continue to face tight labor conditions in northern Indiana and we will also incur additional costs from new and expanded towable facilities in the third and fourth quarters as these plants begin operations. In light of these factors, we expect modest improvement in our financial results for the remainder of fiscal 2015.”