Thor Industries, Inc. · NYSE:THO
Thor Industries — Q1 FY2017 Earnings Presentation
60 slides from Thor Industries's earnings presentation, Nov 28, 2016
Slide 1: Investor Presentation
www.thorindustries.comInvestor Presentation Investor PresentationNovember 28, 2016 November 28, 2016
Slide 2: Forward Looking Statements
THO FORWARD LOOKING FORWARD LOOKING STATEMENTS STATEMENTS This presentation includes certain statements that are“forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995,Section27AoftheSecuritiesActof1933,asamended,andSection21EoftheSecuritiesExchan
Slide 3: Table of Contents
THO TABLE OF CONTENTS TABLE OF CONTENTS First Quarter 2017 Update –Page 4 Thor Basics: An Introduction to the Company –Page 16 Appendix 1: Investor Q&A –Page 31 Appendix 2: Financial and Market Data –Page 52
Slide 4: XS c °o N - o . ad i ®& = <} ed ”
XS c °o N - o . ad i ®& = <} ed ” i F THOR
Slide 5: First Quarter Key Messages
FIRST QUARTER KEY FIRST QUARTER KEY MESSAGES MESSAGES Jayco integration has been smooth with significant contributions to consolidated financial results We see no signs of a slowdown in the industry and expect continued favorable growth over the coming year We are judiciously expanding capacity to m
Slide 6: A Record Start to the Year
THO A RECORD START TO THE A RECORD START TO THE YEAR YEAR Record revenues and earnings for the first quarter of fiscal 2017 Revenues grew 65.8% to $1.71 billion from $1.03 billion in the first quarter of fiscal 2016 ..Towable revenues grew 62.6% to $1.21 billion ..Motorized revenues grew 83.8% to $4
Slide 7: A Record Start to the Year (CEO commentary)
THO A RECORD START TO THE A RECORD START TO THE YEAR YEAR Bob Martin –Thor President & CEO: “Fiscal 2017 began like fiscal 2016 ended, with continued robust performance throughout the Company. The strong revenue and earnings growth reflects the ongoing enthusiastic reception of our product offerings
Slide 8: First Quarter 2017 Key Stats – Income Statement
THO FIRST QUARTER 2017 KEY FIRST QUARTER 2017 KEY STATS STATS – –INCOME INCOME STATEMENT STATEMENT $2,640 $3,242 $3,525 $4,007 $4,582 $1,030 $1,709 FY12 FY13 FY14 FY15 FY16 FY16YTD FY17YTD Net Sales (ContinuingOps., $ millions) 5 - year CAGR: 14.4% $2.07 $2.86 $3.29 $3.79 $4.91 $0.97 $1.49 FY12 FY13
Slide 9: First Quarter 2017 Key Stats – Balance Sheet
THO FIRST QUARTER 2017 KEY FIRST QUARTER 2017 KEY STATS STATS – –BALANCE SHEET BALANCE SHEET $220.0 $237.3 $289.3 $183.5 $209.9 $179.3 $161.7 FY12 FY13 FY14 FY15 FY16 1Q16 1Q17 Cash & Investments ($ Millions) $373.8 $469.0 $473.3 $397.5 $365.2 $431.5 $404.9 FY12 FY13 FY14 FY15 FY16 1Q16 1Q17 Working
Slide 10: First Quarter Reflects Continued Record Performance
THO FIRST QUARTER REFLECTS FIRST QUARTER REFLECTS CONTINUED RECORD CONTINUED RECORD PERFORMANCE PERFORMANCE Amounts in millions, except per share data 20162015% Chg. Net Sales 1,708.5$ 1,030.4$ 65.8% Gross Profit236.8 152.2 55.5% % of Sales 13.9%14.8% SG&A102.3 68.5 49.5% % of Sales6.0%6.6% Income B
Slide 11: First Quarter 2017 Results from Continuing Operations Up Double Digits
THO FIRST QUARTER 2017 RESULTS FIRST QUARTER 2017 RESULTS FROM CONTINUING OPERATIONS FROM CONTINUING OPERATIONS UP DOUBLE DIGITS UP DOUBLE DIGITS Peter B. Orthwein, Thor Executive Chairman : “With what I believe is the best team in the business, we have continued to execute our strategic plan and de
Slide 12: First Quarter 2017 – Segments All Show Strong Results
THO FIRST QUARTER 2017 FIRST QUARTER 2017 – – SEGMENTS ALL SHOW SEGMENTS ALL SHOW STRONG RESULTS STRONG RESULTS 1Q171Q16Recreational Vehicles Towables94,173$ 63,224$ Motorized 28,92321,653Total Recreational Vehicles123,09684,877Other, net*6,3782,656Corporate(13,674) (9,842) Total 115,800$ 77,691$ In
Slide 13: Investing in the Future
THO INVESTING IN THE INVESTING IN THE FUTURE FUTURE $10,063 $24,305 $30,406 $42,283 $51,976 $15,922 $26,164 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 FY12 FY13 FY14 FY15 FY16 FY16YTD FY17YTD Thousands Capital Expenditures $99,562 $170 $10,718 $86,092 $194,486 $557,651 $0 $100,000 $200,000 $
Slide 14: First Quarter Jayco Impact
THO FIRST QUARTER JAYCO FIRST QUARTER JAYCO IMPACT IMPACT $0 $500 $1,000 $1,500 $2,000 $2,500 Revenues Gross Profit Backlog Jayco Impact on First Quarter Financials ($ Millions) Thor Jayco Jayco had a significant, positive impact on the first quarter: •Added $467.1 million in revenues •Modestly dilu
Slide 15: Current RV Industry Conditions Remain Positive
THO CURRENT RV INDUSTRY CURRENT RV INDUSTRY CONDITIONS REMAIN CONDITIONS REMAIN POSITIVE POSITIVE Consumer confidence remains strong. Final results were up to 93.8 in November from October’s final reading of 87.2, after a surge of optimism following the presidential election. This compares with 91.3
Slide 16: Thor Basics: An Introduction to the Company
THO Thor Basics: An Introduction Thor Basics: An Introduction to the Company to the Company
Slide 17: Thor – Quick Facts
THO /Volumes/Clients/Thor Industries/Art/Photography/New Silos/USE THESE/Airstream.1.26.png THOR THOR – –QUICK FACTS QUICK FACTS Thor is the sole owner of operating subsidiaries that, combined, represent one of the world’s largest RV manufacturers Founded in 1980 by Wade Thompson & Peter Orthwein wi
Slide 18: Key Stats – Other
THO KEY STATS KEY STATS – –OTHER OTHER Key Ratios FY16 FY15 Total Assets $2.3 billion $1.5 billion Working Capital $365.2million $397.5 million Debtto Total Assets 0.15 0.00 Gross Margin 15.9% 13.9% InventoryTurnover 14.1x 17.3x Towable RV's$3,338.7 73% Motorized RV's$1,094.2 24% Other$149.2 3% FY20
Slide 19: Thor Operating Entities
THO THOR OPERATING THOR OPERATING ENTITIES ENTITIES Airstream heartlandlogo_nobkgd Keystone-RV-Logo_nobkgd TMClogo_nobkgd CrossRoads Logo w Crossing Roads KZRV_Logo rec-logo-bison GrayRed-CRV-LOGO High Res DRV_Logo_Embossed Postle Aluminum Dutchmen_Logo_horizontal-2-color Jayco Logo - 3D COLOR Enteg
Slide 20: Thor Overview
THO THOR OVERVIEW THOR OVERVIEW What started as one RV company has grown into a family of subsidiaries that together make up one of the world’s largest RV manufacturers. Thor Industries is more than just strength in numbers; it’s strength in quality. Whether organically or through acquisition, we’ve
Slide 21: Thor's RV Product Range
THO THOR’S RV PRODUCT THOR’S RV PRODUCT RANGE RANGE Travel Trailers (hitch to the bumper of the tow vehicle) Fifth Wheels (hitch to a speciallymounted hitch in the bed of a pickup truck) Specialty Trailers (includescamping trailers, truck campers and horse trailers with living quarters) Towable RV S
Slide 22: What Makes Thor Different
THOR We strive to provide RV consumers with superior products and services through innovative solutions which enhance the enjoyment of the RV lifestyle Our decentralized operating structure and independent operating subsidiaries foster an entrepreneurial spirit and an unending focus on the needs of
Slide 23: Corporate Integrity
CORPORATE INTEGRITY CORPORATE INTEGRITY No golden parachutes No ‘pro forma’ earnings. We report net income, not adjusted earnings to cover up performance Consistent focus on shareholder value Simple compensation philosophy: ..Mainly cash compensation based on pre-tax income –a true pay-for- performa
Slide 24: Regular Quarterly Dividends
THO REGULAR QUARTERLY REGULAR QUARTERLY DIVIDENDS DIVIDENDS $0.15 $0.18 $0.23 $0.27 $0.30 $0.33 FY12 FY13 FY14 FY15 FY16 FY17 Fiscal Years Ended July 31 5 - Year CAGR = 17.1% *In addition to regular quarterly dividends, Thor paid special dividends of $1.50 in FY13 and $1.00 in FY14. The declaration
Slide 25: Consumer Trends: Growing RV Popularity
THO CONSUMER TRENDS: CONSUMER TRENDS: GROWING RV POPULARITY GROWING RV POPULARITY Leisure Travel Such as Camping Continues to be Popular* Approximately 28.6 million households in North America camp at least once a year, but only 22% of them are RV campers. The remaining campers primarily use tents o
Slide 26: Consumer Trends: Growing RV Popularity
THO CONSUMER TRENDS: CONSUMER TRENDS: GROWING RV POPULARITY GROWING RV POPULARITY Opportunities with Millennials* Millennials (defined as age 19-35) are camping more, with 58% surveyed indicating they plan to camp more nights. This demographic is camping in groups, as they view camping as an opportu
Slide 27: Jayco Acquisition – June 30, 2016
THO JAYCO ACQUISITION JAYCO ACQUISITION – – JUNE 30, 2016 JUNE 30, 2016 Jayco ..Jayco is a $1.5 billion manufacturer and marketer of recreational vehicles, of which approximately 65% of revenue is from towable RVs and 35% of revenue is from motorized RVs* ..Jayco sells both towable and motorized RVs
Slide 28: Jayco – Strategic Rationale
THO JAYCO JAYCO – – STRATEGIC R STRATEGIC RATIONALE ATIONALE STRATEGIC FIT: Jayco has a strong cultural fit with Thor, including an entrepreneurial spirit, a focus on dealers and customers and a commitment to high quality products and innovation ACQUISITION FIT:Jayco meets Thor’s criteria of acquiri
Slide 29: Jayco – Product Profile
THO Vegas RUV : Class A Motorhomes COMPLEMENTARY PRODUCTS: Jayco complements Thor’s other RV subsidiaries through its travel trailers, folding camping trailers, “Super C” motorhomes and luxury Class A diesel motorhomes JAYCO JAYCO – – PRODUCT PRODUCT P PROFILE ROFILE CAMPING TRAILER TRAVEL TRAILER F
Slide 30: Thor Fundamentals
THO THOR FUNDAMENTALS THOR FUNDAMENTALS Profitable every year since our founding in 1980 ..36 years of continuous profitability We are primarily assemblers, not manufacturers Variable cost structure provides flexibility in cyclical industry An industry leader in innovation, product quality and custo
Slide 31: Appendix 1: Investor Q&A
THO Appendix 1: Appendix 1: Investor Investor Q&A
Slide 32: Investor Q&A: Executive Overview
THOR INVESTOR Q&A: EXECUTIVE OVERVIEW EXECUTIVE OVERVIEW Executive Overview: ..The first quarter marked a continuation of the strong momentum for Thor and the RV industry following a record fiscal year in 2016. In the quarter, we generated impressive revenue and earnings growth reflecting the enthus
Slide 33: Investor Q&A: First Quarter Operating Results
INVESTOR Q&A: FIRST FIRST QUARTER QUARTER OPERATING OPERATING RESULTS RESULTS What was the impact on Thor’s results from the Jayco acquisition? ..We posted strong growth in revenues, both organically and from acquisitions in the first quarter, with double-digit organic growth in both towables and mo
Slide 34: Investor Q&A: First Quarter Operating Results (Continued)
INVESTOR Q&A: FIRST FIRST QUARTER QUARTER OPERATING OPERATING RESULTS (CONTINUED) RESULTS (CONTINUED) What was the impact of Jayco on Towable and Motorized unit volumes, Dealer Inventory and Backlog? ..The impact on Towable and Motorized unit volumes, Dealer Inventory and Backlog is illustrated belo
Slide 35: Investor Q&A: First Quarter Operating Results (Continued)
INVESTOR Q&A: FIRST FIRST QUARTER OPERATING QUARTER OPERATING RESULTS (CONTINUED) RESULTS (CONTINUED) What specific actions are you taking to improve Jayco’s gross margins? ..All of our subsidiaries are focused on continuous improvements in their operations, and Jayco’s management team shares that f
Slide 36: Investor Q&A: First Quarter Operating Results (Continued)
INVESTOR Q&A: FIRST FIRST QUARTER OPERATING QUARTER OPERATING RESULTS (CONTINUED) RESULTS (CONTINUED) Backlog is up significantly, even absent the increase from the Jayco products. What’s driving the increase and do you have the capacity to fulfill demand? ..Backlogs have been driven up as a result
Slide 37: Investor Q&A: First Quarter Operating Results (Continued)
INVESTOR Q&A: FIRST FIRST QUARTER OPERATING QUARTER OPERATING RESULTS (CONTINUED) RESULTS (CONTINUED) What was the nature and amount of expenses recognized in the first quarter that were directly related to the Jayco acquisition? ..In the first quarter of fiscal 2017, we incurred purchase accounting
Slide 38: Investor Q&A: Balance Sheet and Cash Flow
THOR INVESTOR Q&A: BALANCE SHEET AND CASH FLOW What payments did you make on the debt facility and what was the average interest rate for borrowings during the quarter? How much availability existed at October 31, 2016 under the line? ..During the quarter we paid the debt facility down by $20 millio
Slide 39: Investor Q&A: Balance Sheet and Cash Flow (Continued)
THOR INVESTOR Q&A: BALANCE SHEET AND CASH FLOW (CONTINUED) What drove the significant increase in Accounts Receivable in the first quarter? ..The $86.4 million increase in accounts receivable was driven by the significant increase in sales during the quarter as well as the timing of sales near the e
Slide 40: Investor Q&A: Market Conditions
THOR INVESTOR Q&A: MARKET CONDITIONS Are you seeing any signs of slowing in the market? ..No, at this point we are seeing continued strong demand in the market as new consumers continue to pursue the RV lifestyle. This is confirmed by the strong growth we’ve seen in our backlogs as well as the conti
Slide 41: Investor Q&A: Market Conditions (Continued)
THOR INVESTOR Q&A: MARKET CONDITIONS (CONTINUED) What is the nature of the current Dealer and Consumer credit environment? ..The wholesale lending environment remains healthy, with normal credit line utilization and continued discipline among lenders concerning curtailments. Consumer credit is avail
Slide 42: Investor Q&A: Market Conditions (Continued)
THOR INVESTOR Q&A: MARKET CONDITIONS (CONTINUED) What is the long-term outlook for industry growth? ..Currently the RVIA is forecasting 8.3% unit growth for the industry in calendar 2016, with an additional 1.4% growth in industry unit volumes in calendar 2017. Given current industry shipment trends
Slide 43: Investor Q&A: Market Conditions (Continued)
THOR INVESTOR Q&A: MARKET CONDITIONS (CONTINUED) What is the current state of the Canadian RV market? ..The Canadian market remains challenging as the weakness in the value of the Canadian dollar relative to the U.S. dollar continues. Since we sell our products to Canadian dealers priced in U.S. dol
Slide 44: Investor Q&A: Market Conditions (Continued)
THOR INVESTOR Q&A: MARKET CONDITIONS (CONTINUED) How does consolidation within the dealer base impact Thor? ..Consolidation within the dealer base, as well as expansion of dealers with new locations, can be a positive for Thor as dealers value partnering with strong manufacturers like Thor on their
Slide 45: Investor Q&A: Market Conditions (Continued)
THOR INVESTOR Q&A: MARKET CONDITIONS (CONTINUED) How do used RVs impact the demand and pricing for new products? ..Robust demand for used RV inventory enhances trade-in values, which is necessary to support the new RV market where many consumers choose to purchase new units every 3-5 years. In recen
Slide 46: Investor Q&A: Outlook
THOR INVESTOR Q&A: OUTLOOK What is your outlook for the remainder of fiscal year 2017? ..Currently, we see continued growth in our industry as consumers remain fairly optimistic about future economic conditions and we continue to see new consumers entering the RV market. With the addition of Jayco f
Slide 47: Investor Q&A: Outlook (Continued)
THOR INVESTOR Q&A: OUTLOOK (CONTINUED) What is the current status of your efforts to meet the demand for RVs in the West Coast markets? ..Demand for product on the West Coast remains strong, and we see additional opportunities for growth in the West Coast markets, particularly in California and the
Slide 48: Investor Q&A: Outlook (Continued)
THOR INVESTOR Q&A: OUTLOOK (CONTINUED) With all your current capacity additions, do you expect the startup of production to have an adverse impact on margins? ..Although we usually experience costs associated with the startup of production in new or expanded facilities, it is important to understand
Slide 49: Investor Q&A: Outlook (Continued)
THOR INVESTOR Q&A: OUTLOOK (CONTINUED) Thor has continued to grow revenues since the recession. Has Thor reached its peak? ..We do not believe either Thor or the RV Industry has reached a peak. RVIA continues to forecast strong growth in industry wholesale shipments for calendar 2016 of more than 8%
Slide 50: Investor Q&A: Outlook (Continued)
THOR INVESTOR Q&A: OUTLOOK (CONTINUED) Given this is the longest expansion in the RV industry in history, what gives you confidence that it will continue? ..Unlike many of the expansions we’ve experienced over the past two decades, the current expansion has been driven largely by newer consumers ent
Slide 51: Investor Q&A: Outlook (Continued)
THOR INVESTOR Q&A: OUTLOOK (CONTINUED) What is your strategic plan for future acquisitions? Given that there are fewer RV manufacturers as potential targets, are you targeting other adjacent industries? Suppliers? ..We will continue to evaluate acquisitions as we have done in the past. We will conti
Slide 52: Appendix 2: Financial and Market Data
THOR Appendix 2: Financial and Market Data
Slide 53: RV Wholesale Market Trends (Units 000s)
THOR RV WHOLESALE MARKET TRENDS (UNITS 000S) 583.0 528.8 295.8 339.6 441.1 413.9 389.9 199.2 106.9 133.6 140.6 196.6 215.7 186.9 189.9 211.7 215.8 187.9 173.1 163.1 203.4 227.8 259.5 247.2 247.5 254.5 292.7 321.2 300.1 256.8 311.0 320.8 370.1 384.4 390.5 353.5 237.0 165.6 242.3 252.3 285.8 321.2 356
Slide 54: RV Wholesale Market Motorized Trends (Units 000s)
THOR RV WHOLESALE MARKET MOTORIZED TRENDS (UNITS 000S) 118.8 129.0 68.9 96.6 156.1 160.2 157.2 64.1 28.5 35.4 41.2 69.5 82.0 68.7 67.7 73.7 72.8 61.1 52.3 41.9 46.9 51.3 58.2 52.8 55.3 55.1 63.5 71.5 61.0 49.2 60.4 62.0 71.7 61.4 55.8 55.4 28.4 13.2 25.2 24.8 28.2 38.4 44.0 47.3 52.2 53.9 1972 1973
Slide 55: RV Wholesale Market Towable Trends (Units 000s)
THOR RV WHOLESALE MARKET TOWABLE TRENDS (UNITS 000S) (UNITS 000S) 466.2 399.8 226.9 243.0 285.0 253.7 232.7 135.1 78.4 98.1 99.4 127.1 133.7 118.1 122.1 137.9 142.9 126.7 120.8 121.1 156.5 176.5 201.3 194.3 192.2 199.5 229.1 249.6 239.1 207.6 250.6 258.9 298.3 323.0 334.5 298.1 208.6 152.4 217.1 227
Slide 56: RV Industry Demand
THOR RV INDUSTRY DEMAND Industry retail demand has shifted toward more light-weight, affordably priced towables and gas Class A and Class C motorhomes as consumers seek value Wholesale units typically outpace retail in the early part of the calendar year; historically sales become more balanced as w
Slide 57: Backlog & Dealer Inventory
THOR BACKLOG & DEALER INVENTORY Dealers remain confident with orders reflecting normal ordering patterns Orders generally expected to reflect 1-for-1 replacement as units are sold at retail Jayco added approximately $577.5 million to backlog as of October 31, 2016 Backlog ($000s) October 31, 2016 Oc
Slide 58: RV Industry Retail Market Share
THOR RV INDUSTRY RETAIL MARKET SHARE TotalShare %TotalShare %TotalShare %TotalShare % THOR*163,202 47.7%177,178 47.9%160,663 48.9%153,514 50.9% Forest River**122,155 35.7%131,198 35.5%112,979 34.4%99,822 33.1% Winnebago10,531 3.1%11,857 3.2%10,395 3.2%8,661 2.9% Grand Design8,953 2.6%6,967 1.9%4,174
Slide 59: RV Retail Market Trend (Units)
THOR RV RETAIL MARKET TREND (UNITS) 54.8% 54.9% 53.7% 51.3% 50.0% 49.2% 24.4% 25.4% 29.4% 31.0% 33.2% 37.5% 14.4% 16.7% 22.1% 21.9% 22.5% 18.0% 2011 2012 2013 2014 2015 2016 YTD** Towable Retail Share* Class A/C Retail Share* Class B Retail Share* *Source: Statistical Surveys Inc., U.S. and Canada,
Slide 60: www.thorindustries.com
THOR www.thorindustries.com