Winnebago Industries Inc.

06/25/2025 | Press release | Distributed by Public on 06/25/2025 14:08

Quarterly Report for Quarter Ending May 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The terms "Winnebago," "we," "us," and "our," unless the context otherwise requires, refer to Winnebago Industries, Inc. and its wholly-owned subsidiaries.
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Unless otherwise noted, transactions and other factors significantly impacting our financial condition, results of operations and liquidity are discussed in order of magnitude.
Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended August 31, 2024 (including the information presented therein under Risk Factors), as well as our reports on Forms 10-Q and 8-K and other publicly available information. All amounts herein are unaudited. All amounts are in millions, except share and per share data, unless otherwise noted.
Overview
Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar and Barletta Boat brands, which are used primarily in leisure travel and outdoor recreation activities. We also design and manufacture advanced battery solutions that deliver "house power," supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications. Other products manufactured by us consist primarily of original equipment manufacturing parts for other manufacturers and commercial vehicles. We produce our motorhome RV units in Iowa and Indiana; our towable RV units in Indiana; our marine units in Indiana and Florida; and our battery solutions in Florida. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer. We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S.
Known Trends and Uncertainties
Our business continues to be challenged by macroeconomic conditions impacting retail consumers and our dealers, such as inflation, elevated interest rates, and lower consumer confidence. These factors have contributed to lower consumer spending and reduced short-term demand for large discretionary products such as RVs and marine products. In response, our dealers continue to exercise caution when managing stocking levels. In the first nine months of Fiscal 2025, these trends resulted in decreased sales due to declines in unit volume. While market pressures have been observed across our portfolio, they have been most acute in our Winnebago motorhome business. As part of our transformation of this business, we have recently taken significant steps to lower field inventory, improve working capital, align our production schedule to market demand, and accelerate stronger product value for our consumers in the future.
We expect that as consumer demand stabilizes, dealers will return to more stable ordering patterns across our portfolio of businesses. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders. In addition, we are closely monitoring the potential impact of new or additional U.S. tariffs and retaliatory measures from other countries, which may affect material costs or supply.
Despite the current economic uncertainty, we believe in the long-term health of consumer demand for RV and marine products.
Segment Update
In conjunction with the Grand Design RV entrance into the motorized RV category, we established a Grand Design motorhomes operating segment in the first quarter of Fiscal 2025. This newly created operating segment is included in the Motorhome RV reportable segment. Prior period amounts have not been reclassified as the impact was not significant.
Non-GAAP Financial Measures
This MD&A includes financial information prepared in accordance with generally accepted accounting principles ("GAAP"), as well as certain adjusted or non-GAAP financial measures such as EBITDA and Adjusted EBITDA. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other pretax adjustments made in order to present comparable results from period to period.
These non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, have been provided as information supplemental and in addition to the financial measures presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein. The non-GAAP financial measures presented may differ from similar measures used by other companies.
Included in "Results of Operations" below for the three and nine months ended May 31, 2025 compared to the comparable prior year period is a reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable GAAP measure. We have included these non-GAAP performance measures as a comparable measure to illustrate the effect of non-recurring transactions that occurred during the reported periods and to improve comparability of our results from period to period. We believe Adjusted EBITDA provides meaningful supplemental information about our operating performance as this measure excludes amounts from net income that we do not consider part of our core operating results when assessing our performance. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, change in fair value of note receivable, contingent consideration fair value adjustment, loss on note repurchase, asset impairment, and non-operating income or loss.
Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our Board of Directors to enable our Board of Directors to have the same measurement basis of operating performance as used by management in its assessments of performance and in forecasting; (d) to evaluate potential acquisitions; and (e) to ensure compliance with covenants and restricted activities under the terms of our ABL Credit Facility and outstanding notes, as further described in Note 8 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q. We believe these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in the industry.
Results of Operations - Three Months Ended May 31, 2025 Compared to Three Months Ended May 25, 2024
Consolidated Performance Summary
The following is an analysis of changes in key items included in the Consolidated Statements of Income for the three months ended May 31, 2025 compared to the three months ended May 25, 2024:
Three Months Ended
($ in millions, except per share data) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 775.1 100.0 % $ 786.0 100.0 % $ (10.9) (1.4) %
Cost of goods sold 669.1 86.3 % 667.8 85.0 % 1.3 0.2 %
Gross profit 106.0 13.7 % 118.2 15.0 % (12.2) (10.3) %
Selling, general, and administrative expenses 70.3 9.1 % 69.1 8.8 % 1.3 1.9 %
Amortization 5.5 0.7 % 5.6 0.7 % (0.1) (2.3) %
Total operating expenses 75.8 9.8 % 74.7 9.5 % 1.2 1.6 %
Operating income 30.2 3.9 % 43.5 5.5 % (13.4) (30.7) %
Interest expense, net 6.7 0.9 % 5.8 0.7 % 0.9 16.1 %
Non-operating (income) loss (0.4) (0.1) % 2.2 0.3 % (2.7) NM
Income before income taxes 23.9 3.1 % 35.5 4.5 % (11.6) (32.6) %
Income tax provision 6.3 0.8 % 6.5 0.8 % (0.2) (3.7) %
Net income $ 17.6 2.3 % $ 29.0 3.7 % $ (11.3) (39.1) %
Diluted earnings per share $ 0.62 $ 0.96 $ (0.34) (35.4) %
Diluted weighted average shares outstanding 28.4 30.4 (2.0) (6.6) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. In addition, percentages may not add in total due to rounding.
NM: Not meaningful.
Net revenues decreased primarily due to a reduction in average selling price per unit related to product mix, partially offset by targeted price increases. Unit volume growth in the Towable RV and Marine segments was partially offset by volume declines in the Motorhome RV segment as dealers continue their efforts to right-size field inventories in this segment.
Gross profit as a percentage of revenue decreased primarily due to higher warranty experience, and deleverage associated with product mix, partially offset by operational efficiencies.
Operating expenses increased primarily due to investment to support the Grand Design motorhome business growth.
The change in our effective tax rate was driven primarily by prior year's favorable increase in R&D credit and favorable reserve release in addition to lower income in the current year.
Non-GAAP Reconciliation
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the three months ended May 31, 2025 and May 25, 2024:
Three Months Ended
(in millions) May 31, 2025 May 25, 2024
Net income $ 17.6 $ 29.0
Interest expense, net 6.7 5.8
Income tax provision 6.3 6.5
Depreciation 9.6 8.9
Amortization 5.5 5.6
EBITDA 45.7 55.8
Asset impairment 1.2 -
Non-operating (income) loss (0.4) 2.2
Adjusted EBITDA $ 46.5 $ 58.0
Reportable Segment Performance Summary
Towable RV
The following is an analysis of key changes in our Towable RV segment for the three months ended May 31, 2025 compared to the three months ended May 25, 2024:
Three Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 371.7 $ 386.3 $ (14.7) (3.8) %
Adjusted EBITDA 35.4 9.5 % 41.9 10.9 % (6.6) (15.7) %
Average Selling Price ("ASP")(2)
$ 38,934 $ 41,638 $ (2,704) (6.5) %
Three Months Ended
Unit deliveries May 31, 2025
Product Mix(3)
May 25, 2024
Product Mix(3)
Unit Change % Change
Travel trailer 6,569 69.2 % 6,120 66.1 % 449 7.3 %
Fifth wheel 2,926 30.8 % 3,143 33.9 % (217) (6.9) %
Total Towable RV 9,495 100.0 % 9,263 100.0 % 232 2.5 %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
(3)Percentages may not add due to rounding differences.
Net revenues decreased primarily due to a shift in product mix toward lower price-point models, partially offset by higher unit volume.
Adjusted EBITDA margin decreased primarily due to higher warranty experience, and deleverage, including that associated with product mix, partially offset by operational efficiencies.
Motorhome RV
The following is an analysis of key changes in our Motorhome RV segment for the three months ended May 31, 2025 compared to the three months ended May 25, 2024:
Three Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 291.2 $ 299.0 $ (7.9) (2.6) %
Adjusted EBITDA 3.0 1.0 % 13.4 4.5 % (10.4) (77.7) %
ASP(2)
$ 208,146 $ 183,568 $ 24,578 13.4 %
Three Months Ended
Unit deliveries May 31, 2025
Product Mix(3)
May 25, 2024
Product Mix(3)
Unit Change % Change
Class A 288 20.1 % 417 24.8 % (129) (30.9) %
Class B 406 28.4 % 476 28.3 % (70) (14.7) %
Class C 737 51.5 % 787 46.8 % (50) (6.4) %
Total Motorhome RV 1,431 100.0 % 1,680 100.0 % (249) (14.8) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
(3)Percentages may not add due to rounding differences.
Net revenues decreased primarily due to lower unit volume related to current market conditions, partially offset by product mix.
Adjusted EBITDA margin decreased primarily due to higher discounts and allowances, volume deleverage, and operational inefficiencies with the Winnebago motorhome business.
Marine
The following is an analysis of key changes in our Marine segment for the three months ended May 31, 2025 compared to the three months ended May 25, 2024:
Three Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 100.7 $ 87.9 $ 12.8 14.6 %
Adjusted EBITDA 11.6 11.6 % 8.5 9.7 % 3.1 37.0 %
ASP(2)
$ 81,185 $ 78,595 $ 2,590 3.3 %
Three Months Ended
Unit deliveries May 31, 2025 May 25, 2024 Unit Change % Change
Boats 1,254 1,127 127 11.3 %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
Net revenues increased primarily due to unit volume and targeted price increases, partially offset by product mix.
Adjusted EBITDA margin increased due to targeted price increases and volume leverage, partially offset by product mix and higher warranty expense.
Results of Operations - Nine Months Ended May 31, 2025 Compared to the Nine Months Ended May 25, 2024
Consolidated Performance Summary
The following is an analysis of changes in key items included in the Consolidated Statements of Income for the nine months ended May 31, 2025 compared to the nine months ended May 25, 2024:
Nine Months Ended
($ in millions, except per share data) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 2,020.9 100.0 % $ 2,252.6 100.0 % $ (231.7) (10.3) %
Cost of goods sold 1,755.0 86.8 % 1,913.3 84.9 % (158.3) (8.3) %
Gross profit 265.9 13.2 % 339.3 15.1 % (73.4) (21.6) %
Selling, general, and administrative expenses 212.1 10.5 % 204.4 9.1 % 7.8 3.8 %
Amortization 16.7 0.8 % 16.9 0.7 % (0.2) (1.2) %
Total operating expenses 228.8 11.3 % 221.3 9.8 % 7.6 3.4 %
Operating income 37.1 1.8 % 118.0 5.2 % (81.0) (68.6) %
Interest expense, net 19.3 1.0 % 15.2 0.7 % 4.0 26.5 %
Loss on note repurchase 2.0 0.1 % 32.7 1.5 % (30.8) (94.0) %
Non-operating (income) loss (1.0) (0.1) % 5.8 0.3 % (6.8) NM
Income before income taxes 16.8 0.8 % 64.3 2.9 % (47.5) (73.8) %
Income tax provision 4.8 0.2 % 22.2 1.0 % (17.4) (78.4) %
Net income $ 12.0 0.6 % $ 42.1 1.9 % $ (30.1) (71.4) %
Diluted earnings per share $ 0.42 $ 1.40 $ (0.98) (70.0) %
Diluted weighted average shares outstanding 28.4 30.6 (2.2) (7.2) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. In addition, percentages may not add in total due to rounding.
NM: Not meaningful.
Net revenues decreased primarily due to a reduction in average selling price per unit related to product mix and lower unit volume, partially offset by targeted price increases.
Gross profit as a percentage of revenue decreased primarily due to deleverage, including that associated with product mix, and higher warranty experience, partially offset by operational efficiencies.
Operating expenses increased primarily due to investments to support the growth of the Grand Design motorhome and Barletta marine businesses, partially offset by cost reduction initiatives.
Interest expense, net increased primarily due to the 2030 Convertible Notes issued in the second quarter of 2024.
The loss on note repurchase recorded in the nine months ended May 31, 2025 is related to the tender of $100.0 million of our Senior Secured Notes. The loss on note repurchase recorded in the nine months ended May 25, 2024 is related to the refinancing of the 2025 Convertible Notes. Refer to Note 8 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.
The change in our effective tax rate was driven primarily by the impact of the prior year non-deductible loss on note repurchase.
Non-GAAP Reconciliation
The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for the nine months ended May 31, 2025 and May 25, 2024:
Nine Months Ended
(in millions) May 31, 2025 May 25, 2024
Net income $ 12.0 $ 42.1
Interest expense, net 19.3 15.2
Income tax provision 4.8 22.2
Depreciation 28.7 25.5
Amortization 16.7 16.9
EBITDA 81.5 121.9
Acquisition-related costs - 1.5
Change in fair value of note receivable - 3.0
Contingent consideration fair value adjustment - 1.1
Loss on note repurchase 2.0 32.7
Asset impairment 1.2 -
Non-operating (income) loss (1.0) 1.7
Adjusted EBITDA $ 83.7 $ 161.9
Reportable Segment Performance Summary
Towable RV
The following is an analysis of key changes in our Towable RV segment for the nine months ended May 31, 2025 compared to the nine months ended May 25, 2024:
Nine Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 913.9 $ 1,001.8 $ (87.9) (8.8) %
Adjusted EBITDA 66.0 7.2 % 101.8 10.2 % (35.9) (35.2) %
ASP(2)
$ 38,906 $ 41,841 $ (2,935) (7.0) %
Nine Months Ended
Unit deliveries May 31, 2025
Product Mix(3)
May 25, 2024
Product Mix(3)
Unit Change % Change
Travel trailer 16,034 68.7 % 15,987 67.0 % 47 0.3 %
Fifth wheel 7,302 31.3 % 7,869 33.0 % (567) (7.2) %
Total Towable RV 23,336 100.0 % 23,856 100.0 % (520) (2.2) %
May 31, 2025 May 25, 2024
$ Change(1)
% Change(1)
Dealer Inventory(4)
Units 17,747 18,110 (363) (2.0) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
(3)Percentages may not add due to rounding differences.
(4)Data is based on the latest information available from our dealer partners and is subject to timing of reporting and other limitations.
Net revenues decreased primarily due to a shift in product mix toward lower price-point models and lower unit volume due to market conditions, partially offset by targeted price increases.
Adjusted EBITDA margin decreased primarily due to deleverage, including that associated with product mix, and higher warranty experience, partially offset by targeted price increases.
Motorhome RV
The following is an analysis of key changes in our Motorhome RV segment for the nine months ended May 31, 2025 compared to the nine months ended May 25, 2024:
Nine Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 798.5 $ 971.8 $ (173.3) (17.8) %
Adjusted EBITDA 10.9 1.4 % 60.7 6.2 % (49.8) (82.0) %
ASP(2)
$ 204,588 $ 189,356 $ 15,232 8.0 %
Nine Months Ended
Unit deliveries May 31, 2025
Product Mix(3)
May 25, 2024
Product Mix(3)
Unit Change % Change
Class A 808 20.2 % 1,269 24.3 % (461) (36.3) %
Class B 1,158 29.0 % 1,815 34.8 % (657) (36.2) %
Class C 2,031 50.8 % 2,128 40.8 % (97) (4.6) %
Total Motorhome RV 3,997 100.0 % 5,212 100.0 % (1,215) (23.3) %
May 31, 2025 May 25, 2024
$ Change(1)
% Change(1)
Dealer Inventory(4)
Units 3,614 4,386 (772) (17.6) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
(3)Percentages may not add due to rounding differences.
(4)Data is based on the latest information available from our dealer partners and is subject to timing of reporting and other limitations.
Net revenues decreased primarily due to lower unit volume related to market conditions, partially offset by the introduction of the Grand Design motorhome business, and product mix.
Adjusted EBITDA margin decreased primarily due to volume deleverage, operational inefficiencies, and higher discounts and allowances associated with the Winnebago motorhome business.
Marine
The following is an analysis of key changes in our Marine segment for the nine months ended May 31, 2025 compared to the nine months ended May 25, 2024:
Nine Months Ended
(in millions, except ASP and units) May 31, 2025
% of Revenues(1)
May 25, 2024
% of Revenues(1)
$ Change(1)
% Change(1)
Net revenues $ 272.9 $ 245.0 $ 27.9 11.4 %
Adjusted EBITDA 27.7 10.2 % 20.1 8.2 % 7.6 38.1 %
ASP(2)
$ 79,846 $ 80,819 $ (973) (1.2) %
Nine Months Ended
Unit deliveries May 31, 2025 May 25, 2024 Unit Change % Change
Boats 3,471 3,107 364 11.7 %
May 31, 2025 May 25, 2024
$ Change(1)
% Change(1)
Dealer Inventory(3,4)
Units 3,069 3,400 (331) (9.7) %
(1)Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2)ASP excludes off-invoice dealer incentives.
(3)Due to the nature of the Marine industry, this amount includes a higher proportion of retail sold units than our other segments.
(4)Data is based on the latest information available from our dealer partners and is subject to timing of reporting and other limitations.
Net revenues increased primarily due to unit volume and targeted price increases, partially offset by a reduction in average selling price per unit related to product mix.
Adjusted EBITDA margin increased due to targeted price increases and volume leverage, partially offset by product mix.
Analysis of Financial Condition, Liquidity, and Capital Resources
Cash Flows
The following table summarizes our cash flows from operations:
Nine Months Ended
(in millions) May 31, 2025 May 25, 2024
Total cash (used in) provided by:
Operating activities $ (52.5) $ 103.2
Investing activities (25.5) (36.4)
Financing activities (242.4) (58.6)
Net (decrease) increase in cash and cash equivalents $ (320.4) $ 8.2
Operating Activities
During the nine months ended May 31, 2025, net cash used in operating activities was $52.5 million compared to net cash provided by operating activities of $103.2 million during the same period last year. The change in operating cash flow is primarily driven by lower profitability adjusted for non-cash items, an increase in inventory to support the growth of the Grand Design motorhome business and an increase in accounts receivable due to timing of invoicing and collections.
Investing Activities
Cash used in investing activities decreased primarily due to favorable changes in other investing activities and lower capital expenditures compared to the prior year. Other investing activities include cash proceeds from asset sales and strategic investment activity.
Financing Activities
Cash used in financing activities increased primarily due to partial settlement of high-yield notes and maturity of 2025 Convertible Notes.
Debt and Capital
We maintain a $350.0 million asset-based revolving credit facility ("ABL Credit Facility") with a maturity date of July 15, 2027, subject to certain factors which may accelerate the maturity date. As of May 31, 2025, we had no borrowings against the ABL Credit Facility.
As of May 31, 2025, we had $10.5 million in cash and cash equivalents and $350.0 million in unused ABL Credit Facility. Our cash and cash equivalent balances consist of high quality, short-term money market instruments.
On January 23, 2024, we issued $350.0 million in aggregate principal amount of 3.25% unsecured convertible senior notes due 2030 (the "2030 Convertible Notes").
On July 8, 2020, we closed our private offering (the "Senior Secured Notes Offering") of $300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the "Senior Secured Notes"). On February 3rd, 2025, we executed a tender offer to purchase for cash up to $75.0 million aggregate principal amount of the Senior Secured Notes (the "Tender Offer"). On February 18, 2025, we amended the Tender Offer by increasing the maximum aggregate principal amount of Notes to $100.0 million. On February 20, 2025, $100.0 million aggregate principal amount of the Senior Secured Notes were validly tendered and accepted.
On November 1, 2019, we issued $300.0 million in aggregate principal amount of 1.50% unsecured Convertible Senior Notes due 2025 (the "2025 Convertible Notes"). On January 18, 2024, we entered into privately negotiated transactions (the "2025 Convertible Note Repurchases") with certain holders of the 2025 Convertible Notes to repurchase $240.7 million aggregate principal amount of the 2025 Convertible Notes using proceeds received from the 2030 Convertible Notes. On April 1, 2025, the 2025 Convertible Notes matured. We paid $59.3 million in aggregate principal amount and $0.4 million in accrued interest to holders of the notes, fully settling the outstanding balance (the "2025 Convertible Note Maturity Settlement"). The settlement was funded with cash on hand, consistent with our stated intent, with no shares of common stock issued.
As of May 31, 2025, we have no debt maturing in the next twelve months that is classified as current on our Consolidated Balance Sheets.
We believe cash flow from operations, existing lines of credit, and access to debt and capital markets will be sufficient to meet our current liquidity needs, and we have committed liquidity and cash reserves in excess of our anticipated funding requirements. We evaluate the financial stability of the counterparties for the 2030 Convertible Notes, the Senior Secured Notes, and the ABL Credit Facility, and will continue to monitor counterparty risk on an on-going basis.
Working Capital
Working capital at May 31, 2025 and August 31, 2024 was $444.2 million and $584.0 million, respectively. We currently expect cash on hand, funds generated from operations, and the borrowing available under our ABL Credit Facility to be sufficient to cover both short-term and long-term operating requirements.
Share Repurchases
We repurchase our common stock and pay dividends pursuant to programs approved by our Board of Directors. Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain a debt leverage ratio within our targeted zone, maintain reasonable liquidity, and then return excess cash over time to shareholders through dividends and share repurchases.
On August 17, 2022, our Board of Directors authorized a new share repurchase program in the amount of $350.0 million with no time restriction on the authorization, which took effect immediately and replaced the prior program. In the nine months ended May 31, 2025, we repurchased approximately 951,000 shares of our own common stock at a cost of $50.0 million under this authorization, and approximately 64,000 shares at a cost of $3.6 million to satisfy tax obligations on employee equity awards vested. We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL Credit Facility and Senior Secured Notes, we may purchase shares in the future. As of May 31, 2025, we have $180.0 million remaining on our Board approved repurchase authorization.
On May 16, 2025, our Board of Directors approved a quarterly cash dividend of $0.34 per share payable on June 25, 2025, to common stockholders of record at the close of business on June 11, 2025.
Contractual Obligations and Commercial Commitments
There have been no material changes in our contractual obligations since the end of Fiscal 2024. See our Annual Report on Form 10-K for the fiscal year ended August 31, 2024 for additional information regarding our contractual obligations and commercial commitments.
Critical Accounting Estimates
We describe our critical accounting policies in Note 1 in the Notes to Consolidated Financial Statements included in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024. We discuss our critical accounting estimates in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024. There have been no material changes to our critical accounting policies or critical accounting estimates since the end of Fiscal 2024.
Recently Issued Accounting Pronouncements
For a summary of new applicable accounting pronouncements, see Note 1 in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), provide a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about their companies. With the exception of historical information, the matters discussed in this Quarterly Report on Form 10-Q are forward-looking statements and may be identified by the use of words such as "anticipate," "assume," "believe," "estimate," "expect," "guidance," "intend," "outlook," "plan," "project," and other words and terms of similar meaning. Such statements reflect our current views and estimates with respect to future market conditions, company performance and financial results, operational investments, business prospects, new strategies, the competitive environment, and other events. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in such forward-looking statements. Readers should review Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, and Item 1A of Part II of this Quarterly Report on Form 10-Q, for a description of important factors that could cause our actual results to differ materially from those contemplated by the forward-looking statements made in this Quarterly Report on Form 10-Q. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following:
•General economic uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth.
•Availability of financing for RV and marine dealers and retail purchasers.
•Competition and new product introductions by competitors.
•Ability to innovate and commercialize new products.
•Ability to manage our inventory to meet demand.
•Risk related to cyclicality and seasonality of our business.
•Risk related to independent dealers.
•Risk related to dealer consolidation or the loss of a significant dealer.
•Significant increase in repurchase obligations.
•Ability to retain relationships with our suppliers and obtain components.
•Business or production disruptions.
•Inadequate management of dealer inventory levels.
•Increased material and component costs, including availability and price of fuel and other raw materials.
•Ability to integrate mergers and acquisitions.
•Ability to attract and retain qualified personnel and changes in market compensation rates.
•Exposure to warranty claims and product recalls.
•Ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems.
•Ability to retain brand reputation and related exposure to product liability claims.
•Governmental regulation, including for climate change.
•Increased attention to environmental, social, and governance ("ESG") matters, and our ability to meet our commitments.
•Impairment of goodwill and trade names.
•Risks related to our 2030 Convertible Notes and Senior Secured Notes, including our ability to satisfy our obligations under these notes.
•Changes in recommendations or a withdrawal of coverage by third party securities analysts.
We caution that the foregoing list of important factors is not complete. Any forward-looking statements speak only as of the date they are made, and we assume no obligation to update any forward-looking statement that we may make.
Winnebago Industries Inc. published this content on June 25, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on June 25, 2025 at 20:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]