Randy Potts

Randy Potts

Winnebago Industries Inc.’s next move could be a physical one as the Forest City, Iowa-based company seeks way to lessen the labor constraints it has in this area.

The Mason City Globe-Gazette reported that after a disappointing first quarter of fiscal year 2015, the company’s Chairman, CEO and President Randy Potts said that in effort to find employees it could expand to a facility within a 100-to-150 mile radius of Forest City within fiscal year 2015.

“Depending on the complexity of what we move and the condition of the facility, it could be fairly soon,”  Potts said during a conference call following the release of Winnebago’s fiscal 2015 first quarter earnings Thursday (Dec. 18).

Potts and CFO Sarah Nielsen cited challenges that contributed to the company’s financial results for the quarter that ended on Nov. 29. Those challenges including labor constraints, labor inefficiencies, supply chain disruptions and an increase in worker compensation claims.

After a robust fourth quarter in fiscal year 2014, the company was optimistic and expected good results in the first quarter of fiscal year 2015, only to see disappointing results, Potts said.

“A lot of things did just go the wrong way,” Potts said of the most recent quarter.

Revenues for the first quarter were $224.4 million, an increase of 0.8% versus $222.7 million for the fiscal 2014 first quarter. Net income was $9.9 million, or 37 cents per diluted share, versus $11.1 million, or 40 cents per diluted share, last year while operating income was $14.4 million compared to $16 million.

Winnebago continues to hire new workers to try and meet a healthy demand for its products, but new hires require training which has an impact on production, Nielsen said.

In short, the company had difficulty keeping up with the number of motorhomes it needed to make. Some of the labor difficulty could be eased if the company finds suitable location to expand, Potts said.

“The easiest areas (of production) to move are component manufacturing,” Potts said. “But we could also move some assembly to other facilities.”

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