Thor Industries, Inc. · NYSE:THO
Thor Industries — Investor Presentation (March 2015)
34 slides from Thor Industries's investor presentation, Mar 5, 2015
Slide 1: www.thorindustries.com
www.thorindustries.com
Slide 2: Forward Looking Statements
Forward Looking 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, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 193
Slide 3: Who is THOR
Who is THOR Founded in 1980 by Wade Thompson & Peter Orthwein with the acquisition of Airstream, Inc. The sole owner of operating subsidiaries that, combined, represent one of the world’s largest manufacturers of recreational vehicles • #1 in overall RV 36.3% of market* • #1 in Travel Trailers 3
Slide 4: THOR's Product Range
THOR’s Product Range Towable RV Segment Products Travel Trailers FY2014 Sales* Fifth Wheels Specialty Trailers Motorized RV's $804 23% Towable Motorized RV Segment Products RV's $2,722 Class A 77% Class B & C *Fiscal year ended July 31, 2014, sales, continuing operations ($ in millions) 4
Slide 5: THOR RV Group
THOR RV Group ROSSROADS’ AA Bist: CROSSROADS | ® COACH Uj 4] { Dutchmen / RV ai. stone RV ompanyg 17 LHIOR. RECREATIONAL VEHICLES
Slide 6: THOR's Strategic Vision
THOR’s Strategic Vision At 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
Slide 7: Why Invest in THOR
Why Invest in THOR Disciplined, Profitable Growth • Profitable every year since 1980 – 34 years without an annual loss, even during the recession of 2007-09 • All time record $3.5 billion sales from continuing operations in FY2014, up 9% from $3.2 billion sales in FY2013, which was up 23% from FY2
Slide 8: What Makes THOR Different
What Makes THOR Different Proven business model: • Entrepreneurial and decentralized • No ivory tower: approximately 9,400 employees, only 42 in corporate staff* • Decision-making driven by the needs of the customer • Big, but nimble – highly responsive to changes in demand • Best management team
Slide 9: 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, without a cap, based on pre-tax income – a true pay for perf
Slide 10: THOR's Competitive Advantages
THOR’s Competitive Advantages Focus on assembly - not heavy manufacturing • Limited vertical integration – only where it makes sense • Flexibility – performance in any market condition • Low overhead costs • High return on assets employed Strong market share in the primary RV categories – Travel
Slide 11: RV Industry Conditions
RV Industry Conditions Market is competitive and very entrepreneurial Top three RV competitors account for 83.3% of industry retail sales* Thor’s strength is a resource – since the recession, consumers, dealers and lenders seek to do business with the strongest players in the market Industry
Slide 12: The RV Consumer
The RV Consumer A recent review of trends by Kampgrounds of America (KOA) revealed some interesting trends among RV consumers. There are approximately 39.5 million active campers in North America, but only 9.1 million, or 23% of them, are RV campers. The remaining campers primarily use tents or
Slide 13: RV Market Wholesale Trends: Units (000's)
13 1974 295.8 1975 339.6 1976 441.1 1977 413.9 1978 389.9 1979 199.2 1980 106.9 1981 133.6 estimate as of Winter 2014 1982 140.6 1983 196.6 1984 215.7 1985 186.9 1986 189.9 1987 211.7 1988 215.8 1989 187.9 1990 173.1 1991 163.1 1992 203.4 1993 227.8 1994 259.5 1995 247.2 Historical Data: Recreation
Slide 14: RV Market Motorized Wholesale Trends: Units (000's)
14 1974 68.9 1975 96.6 1976 156.1 1977 160.2 1978 157.2 1979 64.1 (000’s) 1980 28.5 1981 35.4 estimate as of Winter 2014 1982 41.2 1983 69.5 1984 82.0 1985 68.7 1986 67.7 1987 73.7 1988 72.8 1989 61.1 1990 52.3 1991 41.9 1992 46.9 1993 51.3 1994 58.2 1995 52.8 Historical Data: Recreation Vehicle Ind
Slide 15: RV Market Towable Wholesale Trends: Units (000's)
15 1974 226.9 1975 243.0 1976 285.0 1977 253.7 1978 232.7 1979 135.1 (000’s) 1980 78.4 estimate as of Winter 2014 1981 98.1 1982 99.4 1983 127.1 1984 133.7 1985 118.1 1986 122.1 1987 137.9 1988 142.9 1989 126.7 1990 120.8 1991 121.1 1992 156.5 1993 176.5 1994 201.3 1995 194.3 Historical Data: Recrea
Slide 16: RV: State of Balance
RV: State of Balance Dealers Consumers • Continued optimism • Better access to retail credit • Right-sized towable inventory • Historically low interest rates • Appropriate motorized inventory • Great demographic trends • Access to wholesale credit • Renewed focus on family • Financial health va
Slide 17: THOR RV Dealer Inventory
THOR RV Dealer Inventory Total Dealer inventory remains appropriate for current conditions, in both the towable and motorized segments. Dealer inventory at January 31, 2015, was up 27.1% compared with January 31, 2014, which supports current industry retail trends. Increase due in part to invent
Slide 18: The RV Market Ahead
The RV Market Ahead Retail demand has driven rebound in towables and motorized Wholesale units typically outpace retail in the early part of the calendar year; historically sales become more balanced as we reach the peak retail selling season Calendar Year 2011 2012 2013 2014 Industry Retail 246
Slide 19: Acquisition of Cruiser RV and DRV Luxury Suites
Acquisition of Cruiser RV and DRV Luxury Suites On January 5, 2015, Thor announced that its Heartland RV subsidiary acquired towable RV maker Cruiser RV (CRV) and luxury fifth wheel maker DRV Luxury Suites, both based in Howe, Indiana, for $47.4 million in cash, subject to post-closing adjustments
Slide 20: Acquisition of K-Z, Inc.
Acquisition of K-Z, Inc. On May 1, 2014 Thor acquired RV manufacturer K-Z, Inc., based in Shipshewana, Indiana, for $55.3 million in cash, after post-closing adjustments. K-Z generated sales of nearly $150 million in calendar 2013, and we expect the acquisition to be accretive to earnings. Appro
Slide 21: Three-Year Strategic Plan Update
Three-Year Strategic Plan Update In mid-fiscal 2013, Thor’s management team developed a three-year Strategic Plan focused on growth and operational improvement. The rolling three-year plan has been updated to cover the FY15-FY17 periods. Thor’s Strategic Goals: RETURNS: Strive to be unceasingly at
Slide 22: Three-Year Strategic Plan Update
Three-Year Strategic Plan Update Key Milestones to achieving the plan: Mid-single-digit top line growth through FY17 driven by organic growth, strategic expansion of production and capacity, as well as opportunistic acquisitions. Dedication to maintaining strong relationships with our dealers to
Slide 23: Comments on 2nd Quarter 2015 Results
Comments on 2nd Quarter 2015 Results Solid sales growth in both motorized and towable sales resulting in a 34% improvement in sales from continuing operations, to $852.4 million in the second quarter. Results for the second quarter of fiscal 2014 were adversely affected by the harsh winter weather
Slide 24: THOR - Key Takeaways
THOR - Key Takeaways Profitable every year since our founding in 1980 – 34 years of profitability Successfully weathered a severe downturn in 2007-09 while remaining profitable Recent capital investments position Thor for growth and margin improvement over the long term #1 overall RV market
Slide 25: Appendix: Financial & Market Data
Appendix: Financial & Market Data
Slide 26: THOR's RV Competitive Advantage
THOR’s RV Competitive Advantage U.S. and Canada Retail Registrations (units) Y/E 12/31/14 Y/E 12/31/13 Y/E 12/31/12 Y/E 12/31/11 Total Share % Total Share % Total Share % Total Share % THOR* 118,380 36.3% 115,539 38.3% 102,780 39.1% 95,478 38.8% Forest River** 111,765 34.3% 99,822 33.1% 81,873 31.2%
Slide 27: Sales, Continuing Operations ($ millions)
Sales, Continuing Operations ($ millions) Fiscal years ended July 31, Year-to-Date through January 31 $3,525 $3,242 $2,640 $2,340 $1,849 $1,774 $1,435 $1,115 2009 2010 2011 2012 2013 2014 2014 YTD 2015 YTD 27
Slide 28: Net Income, Continuing Operations ($ millions)
Net Income, Continuing Operations ($ millions) Fiscal years ended July 31, Year-to-Date through January 31 $179.0 $151.7 $111.4 $91.2 $91.6 $69.5 $53.6 $2.5 2009 2010 2011 2012 2013 2014 2014 YTD 2015 YTD 28
Slide 29: Diluted EPS, Continuing Operations
Diluted EPS, Continuing Operations Fiscal years ended July 31, Year-to-Date through January 31 $3.29 $2.86 $2.07 $1.72 $1.66 $1.30 $1.01 $0.04 2009 2010 2011 2012 2013 2014 2014 YTD 2015 YTD 29
Slide 30: Regular Quarterly Dividends
Regular Quarterly Dividends Fiscal years ended July 31 $0.27 $0.23 $0.18 $0.15 $0.10 $0.07 2010 2011 2012 2013 2014 2015 30 In addition to regular quarterly dividends, Thor paid special dividends of $0.50 per share in FY11, $1.50 in FY13 and $1.00 in FY14.
Slide 31: 2nd Quarter Financial Summary
2nd Quarter Financial Summary 2015 2014 % Change Net Sales by segment: Net Sales $852.4 $635.3 34.2% • Towables +43%, motorized +9% Gross Profit 102.0 70.3 45.0% % of Sales 12.0% 11.1% SG&A 54.3 43.8 24.1% Income before tax by segment: % of Sales 6.4% 6.9% • Towables 6.0%, up from 4.0% All Other 3.6
Slide 32: Quarterly Thor RV Unit Shipments
Quarterly Thor RV Unit Shipments 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1Q2006 1Q2007 1Q2008 1Q2009 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 1Q2015 32
Slide 33: Thor RV Retail Market Share: Units
Thor RV Retail Market Share: Units Towable Retail Share* Class A/C Retail Share* Class B Retail Share* 41.2% 40.9% 41.2% 40.2% 37.4% 38.0% 23.8% 23.3% 22.1% 21.9% 19.5% 20.0% 17.8% 16.1% 16.7% 14.4% 12.4% 6.7% 2009 2010 2011 2012 2013 2014 *Source: Statistical Surveys Inc., U.S. and Canada, Historic
Slide 34: www.thorindustries.com
www.thorindustries.com