Winnebago Industries Inc. today (June 18) reported a $14.8 million operating loss and an $8.6 million net loss for the company’s third quarter of fiscal year ended May 30.
Revenues for the quarter were $50.8 million versus $139.7 million for the third quarter last fiscal year. The quarterly $14.8 million compared to a loss of $6.9 million for the third quarter of fiscal 2008. Net loss for the third quarter was $8.6 million versus net income of $3.0 million for the third quarter of fiscal 2008.
The third quarter was negatively impacted by lower motorhome deliveries, low absorption of fixed costs and higher production inefficiencies due to lower production volumes, significant increases of wholesale and retail promotions due to challenging market conditions and a higher mix of lower priced Class C and B motorhome deliveries. There was a positive benefit to cost of goods sold, however, from the liquidation of last-in, first-out (LIFO) inventory values due to a significant reduction of inventory levels. This has the effect of decreasing the net loss by $2.1 million.
Revenues for the first 39 weeks of fiscal 2009 were $152.1 million versus $519.1 million for the first 40 weeks of fiscal 2008. Operating loss was $50.3 million for the first 39 weeks of fiscal 2009 versus an operating income of $9.1 million for the first 40 weeks of fiscal 2008. Net loss for the first 39 weeks of fiscal 2009 was $28.5 million versus net income of $15.5 million for the first 40 weeks of fiscal 2008.
“We are pleased by our successful efforts to reduce inventory during the quarter,” said Bob Olson, Winnebago chairman, CEO and president. “While market conditions remain very challenging, we were able to generate $14.7 million of cash from operations during our third quarter as a result of aggressive management of our working capital. On a fiscal year to date basis through the third quarter, cash generated from operations has increased over 19% compared to last year.”
“While industry motorhome shipments as reported were down 76.6% during the first two months of our third fiscal quarter, we were pleased that our shipments showed a less significant decline, at 61.9% for the quarter,” Olson continued. “We have seen modest improvement industry-wide during calendar 2009 in both retail sales and wholesale shipments. Unfortunately, the improvement has not been of the magnitude that would imply a full recovery within the near term. As a result, we are continuing to reduce our cost structure as reflected by the recent announcement of the upcoming closure of our fiberglass manufacturing facility in Hampton, Iowa.”
“Credit remains the biggest hurdle the industry faces,” said Olson. “Floorplan lending institutions continue to emphasize reducing inventories and increasing turn rates for dealerships across the country. Dealer inventory of Winnebago Industries’ products has been reduced by nearly 50% since a year ago and by approximately 20% since the end of our last fiscal quarter. While our sales order backlog is over 60% less than last year at this time, we are pleased that it has increased 14% since the end of our last fiscal quarter. We continue to believe we are in a strong financial position with sufficient cash, no long-term debt and with the benefit of a respected brand name known for its quality products.”