Company Quick10K Filing
Winnebago Industries
Price37.80 EPS3
Shares34 P/E14
MCap1,273 P/FCF8
Net Debt460 EBIT138
TTM 2019-11-30, in MM, except price, ratios
10-Q 2020-11-28 Filed 2020-12-18
10-K 2020-08-29 Filed 2020-10-21
10-Q 2020-05-30 Filed 2020-06-24
10-Q 2020-02-29 Filed 2020-03-25
10-Q 2019-11-30 Filed 2019-12-20
10-K 2019-08-31 Filed 2019-10-23
10-Q 2019-05-25 Filed 2019-06-20
10-Q 2019-02-23 Filed 2019-03-26
10-Q 2018-11-24 Filed 2018-12-20
10-K 2018-08-25 Filed 2018-10-18
10-Q 2018-05-26 Filed 2018-06-21
10-Q 2018-02-24 Filed 2018-03-22
10-Q 2017-11-25 Filed 2017-12-21
10-K 2017-08-26 Filed 2017-10-20
10-Q 2017-05-27 Filed 2017-06-23
10-Q 2017-02-25 Filed 2017-03-23
10-Q 2016-11-26 Filed 2016-12-29
10-K 2016-08-27 Filed 2016-10-18
10-Q 2016-05-28 Filed 2016-06-22
10-Q 2016-02-27 Filed 2016-03-24
10-Q 2015-11-28 Filed 2015-12-23
10-K 2015-08-29 Filed 2015-10-27
10-Q 2015-05-30 Filed 2015-06-26
10-Q 2015-02-28 Filed 2015-03-27
10-Q 2014-11-29 Filed 2014-12-30
10-K 2014-08-30 Filed 2014-10-28
10-Q 2014-05-31 Filed 2014-06-27
10-Q 2014-03-01 Filed 2014-03-28
10-Q 2013-11-30 Filed 2014-01-03
10-K 2013-08-31 Filed 2013-10-29
10-Q 2013-06-01 Filed 2013-06-28
10-Q 2013-03-02 Filed 2013-04-04
10-Q 2012-12-01 Filed 2013-01-04
10-K 2012-08-25 Filed 2012-10-23
10-Q 2012-05-26 Filed 2012-06-29
10-Q 2012-02-25 Filed 2012-03-30
8-K 2020-10-21
8-K 2020-07-08
8-K 2020-06-30
8-K 2020-06-30
8-K 2020-06-24
8-K 2020-04-29
8-K 2020-04-08
8-K 2020-03-25
8-K 2020-03-23
8-K 2019-12-20
8-K 2019-12-18
8-K 2019-12-17
8-K 2019-11-08
8-K 2019-10-29
8-K 2019-10-28
8-K 2019-10-23
8-K 2019-10-22
8-K 2019-09-15
8-K 2019-06-19
8-K 2019-06-19
8-K 2019-03-25
8-K 2018-12-19
8-K 2018-12-11
8-K 2018-10-17
8-K 2018-09-21
8-K 2018-06-20
8-K 2018-03-21
8-K 2018-03-14
8-K 2018-03-07

WGO 10Q Quarterly Report

Part I. Financial Information.
Item 1. Condensed Consolidated Financial Statements.
Note 1: Basis of Presentation
Note 2: Business Combinations
Note 3: Business Segments
Note 4: Investments and Fair Value Measurements
Note 5: Inventories
Note 6: Property, Plant, and Equipment
Note 7: Goodwill and Intangible Assets
Note 8: Product Warranties
Note 9: Long - Term Debt
Note 10: Employee and Retiree Benefits
Note 11: Contingent Liabilities and Commitments
Note 12: Revenue
Note 13: Stock - Based Compensation
Note 14: Restructuring
Note 15: Income Taxes
Note 16: Income per Share
Note 17: Accumulated Other Comprehensive Income (Loss)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II. Other Information.
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 6. Exhibits.
EX-3.A wgo-coverpageforrestatedar.htm
EX-3.C exhibit3c-winnebagoarticle.htm
EX-31.1 a2021q1exh311.htm
EX-31.2 a2021q1exh312.htm
EX-32.1 a2021q1exh321.htm
EX-32.2 a2021q1exh322.htm

Winnebago Industries Earnings 2020-11-28

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin

Washington, D.C. 20549

(Mark One)
For the quarterly period ended November 28, 2020
For the transition period from _________________ to _________________
Commission File Number:001-06403
(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
P. O. Box 152Forest CityIowa50436
(Address of principal executive offices)(Zip Code)
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.50 par value per shareWGONew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer     Accelerated Filer ☐    Non-accelerated filer ☐
    Smaller Reporting Company         Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The number of shares of common stock, par value $0.50 per share, outstanding on December 10, 2020 was 33,554,500.

Winnebago Industries, Inc.
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Item 1. Condensed Consolidated Financial Statements.

Winnebago Industries, Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
Three Months Ended
(in thousands, except per share data)November 28,
November 30,
Net revenues$793,131 $588,458 
Cost of goods sold656,127 509,845 
Gross profit137,004 78,613 
Selling, general, and administrative expenses48,399 51,105 
Amortization of intangible assets3,590 3,614 
Total operating expenses51,989 54,719 
Operating income85,015 23,894 
Interest expense9,941 6,049 
Non-operating loss (income)94 (116)
Income before income taxes74,980 17,961 
Provision for income taxes17,557 3,893 
Net income$57,423 $14,068 
Income per common share:
Basic$1.71 $0.44 
Diluted$1.70 $0.44 
Weighted average common shares outstanding:
Basic33,609 32,067 
Diluted33,839 32,267 
Net income $57,423 $14,068 
Other comprehensive income (loss):
Amortization of net actuarial loss (net of tax of $3 and $3)
9 8 
Interest rate swap activity (net of tax of $ and $22)
Total other comprehensive income (loss)9 (60)
Comprehensive income$57,432 $14,008 
See Notes to Condensed Consolidated Financial Statements.

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Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)November 28,
August 29,
Current assets:
Cash and cash equivalents$272,939 $292,575 
Receivables, less allowance for doubtful accounts ($349 and $353, respectively)
231,182 220,798 
Inventories, net263,137 182,941 
Prepaid expenses and other assets21,162 17,296 
Total current assets788,420 713,610 
Property, plant, and equipment, net171,210 174,945 
Other assets:
Goodwill348,058 348,058 
Other intangible assets, net401,178 404,768 
Investment in life insurance27,904 27,838 
Operating lease assets28,838 29,463 
Other assets15,382 15,018 
Total assets$1,780,990 $1,713,700 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$123,328 $132,490 
Income taxes payable25,565 8,840 
Accrued expenses:
Accrued compensation33,620 36,533 
Product warranties70,502 64,031 
Self-insurance18,410 17,437 
Promotional10,817 12,543 
Accrued interest8,184 4,652 
Other22,975 23,864 
Total current liabilities313,401 300,390 
Non-current liabilities:
Long-term debt, less current maturities516,527 512,630 
Deferred income taxes16,483 15,608 
Unrecognized tax benefits6,692 6,511 
Operating lease liabilities26,492 27,048 
Deferred compensation benefits, net of current portion10,884 11,130 
Other18,953 12,917 
Total non-current liabilities596,031 585,844 
Contingent liabilities and commitments (Note 11)
Stockholders' equity:
Preferred stock, par value $0.01: Authorized-10,000 shares; Issued-zero
Common stock, par value $0.50: Authorized-60,000 shares; Issued-51,776 shares
25,888 25,888 
Additional paid-in capital204,551 203,791 
Retained earnings966,945 913,610 
Accumulated other comprehensive loss(517)(526)
Treasury stock, at cost: 18,275 and 18,133 shares, respectively
Total stockholders' equity871,558 827,466 
Total liabilities and stockholders' equity$1,780,990 $1,713,700 
See Notes to Condensed Consolidated Financial Statements.

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Winnebago Industries, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended
(in thousands)November 28,
November 30,
Operating activities:
Net income$57,423 $14,068 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation4,160 3,586 
Amortization of intangible assets3,590 3,614 
Non-cash interest expense, net3,351 1,023 
Amortization of debt issuance costs606 760 
Last-in, first-out expense276 332 
Stock-based compensation2,354 1,583 
Deferred income taxes872 731 
Other, net(3,329)65 
Change in assets and liabilities:
Prepaid expenses and other assets583 (84)
Accounts payable(8,371)(4,214)
Income taxes and unrecognized tax benefits16,556 3,217 
Accrued expenses and other liabilities10,111 6,364 
Net cash (used in) provided by operating activities(2,670)79,033 
Investing activities:
Purchases of property and equipment(8,689)(6,624)
Acquisition of business, net of cash acquired (264,280)
Proceeds from sale of property and equipment7,775  
Other, net(234)243 
Net cash used in investing activities(1,148)(270,661)
Financing activities:
Borrowings on long-term debt798,359 903,292 
Repayments on long-term debt(798,359)(603,292)
Purchase of convertible bond hedge (70,800)
Proceeds from issuance of warrants 42,210 
Payments of cash dividends(4,046)(3,469)
Payments for repurchases of common stock(11,606)(1,663)
Payments of debt issuance costs (10,707)
Other, net(166)(46)
Net cash (used in) provided by financing activities(15,818)255,525 
Net (decrease) increase in cash and cash equivalents(19,636)63,897 
Cash and cash equivalents at beginning of period292,575 37,431 
Cash and cash equivalents at end of period$272,939 $101,328 

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Supplement cash flow disclosure:
Income taxes received, net$(195)$(311)
Interest paid$2,377 $5,193 
Non-cash transactions:
Issuance of Winnebago common stock for acquisition of business$ $92,572 
Capital expenditures in accounts payable$613 $2,063 
See Notes to Condensed Consolidated Financial Statements.

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Winnebago Industries, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity
Three Months Ended November 28, 2020
(in thousands,
except per share data)
Common Shares Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock Total Stockholders' Equity
Balances at August 29, 202051,776 $25,888 $203,791 $913,610 $(526)(18,133)$(315,297)$827,466 
Stock-based compensation, net of forfeitures— — 2,346 — —  8 2,354 
Issuance of stock, net— — (1,586)— — 91 1,586  
Repurchase of common stock— — — — — (233)(11,606)(11,606)
Common stock dividends; $0.12 per share
— — — (4,088)— — — (4,088)
Actuarial loss, net of tax— — — — 9 — — 9 
Net income— — — 57,423 — — — 57,423 
Balances at November 28, 202051,776 $25,888 $204,551 $966,945 $(517)(18,275)$(325,309)$871,558 
Three Months Ended November 30, 2019
(in thousands,
except per share data)
Common Shares Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock Total Stockholders' Equity
Balances at August 31, 201951,776 $25,888 $91,185 $866,886 $(491)(20,262)$(351,256)$632,212 
Stock-based compensation, net of forfeitures— — 1,574 — —  9 1,583 
Issuance of restricted stock— — (2,219)— — 128 2,219  
Issuance of stock for acquisition— — 57,811 — — 2,000 34,761 92,572 
Repurchase of common stock— — — — — (43)(1,663)(1,663)
Common stock dividends; $0.11 per share
— — — (3,485)— — — (3,485)
Actuarial loss, net of tax— — — — 8 — — 8 
Interest rate swap activity, net of tax— — — — (68)— — (68)
Equity component of convertible senior notes and offering costs, net of tax of $20,915
— — 61,555 — — — — 61,555 
Convertible note hedge purchase, net of tax of $17,417
— — (53,383)— — — — (53,383)
Warrant transactions— — 42,210 — — — — 42,210 
Net income— — — 14,068 — — — 14,068 
Balances at November 30, 201951,776 $25,888 $198,733 $877,469 $(551)(18,177)$(315,930)$785,609 
See Notes to Condensed Consolidated Financial Statements.

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Winnebago Industries, Inc.
Notes to Condensed Consolidated Financial Statements

Note 1: Basis of Presentation

Unless the context otherwise requires, the use of the terms "Winnebago," "Company," "WGO," "we," "us," and "our" in these Notes to Condensed Consolidated Financial Statements refers to Winnebago Industries, Inc. and its wholly-owned subsidiaries.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary for a fair presentation as prescribed by accounting principles generally accepted in the United States (“GAAP”). All adjustments were comprised of normal recurring adjustments, except as noted in these Notes to Condensed Consolidated Financial Statements.

Interim results are not necessarily indicative of the results to be expected for the full year. The interim Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended August 29, 2020.

Fiscal Period
The Company follows a 52-/53-week fiscal year, ending the last Saturday in August. Fiscal 2021 and Fiscal 2020 are both a 52-week year.

Cash and cash equivalents
Cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted. Accounts at each banking institution are insured by the Federal Deposit Insurance Corporation up to $250,000, while the remaining balances are uninsured.

Subsequent Events
In preparing the accompanying unaudited Condensed Consolidated Financial Statements, the Company evaluated subsequent events for potential recognition and disclosure through the date of this filing. There were no material subsequent events, except for the item noted below.

On December 16, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.12 per share payable on January 27, 2021 to common stockholders of record at the close of business on January 13, 2021.

Amendment to Articles of Incorporation
On October 14, 2020, the Board adopted, subject to shareholder approval, an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock, par value $0.50 per share, by 60 million shares to a total of 120 million shares. This amendment was approved by the Company’s shareholders at the 2020 Annual Meeting of Shareholders on December 15, 2020. The amendment, along with an amended and restated Articles of Incorporation, were made effective upon filing with the Secretary of State of the State of Iowa on December 16, 2020.

Coronavirus (COVID-19) pandemic
The Company is closely monitoring the impact of the novel coronavirus, or COVID-19, on all aspects of its business. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020 and the President of the United States declared the COVID-19 outbreak a national emergency on March 13, 2020. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. The Company is taking advantage of the employer payroll tax (FICA) deferral offered by the CARES Act, which allows the Company to defer the payment of employer payroll taxes for the period from March 27, 2020 to December 31, 2020. The deferred FICA liability as of November 28, 2020 was $1.2 million and will be payable in equal installments at December 2021 and December 2022. Additionally, the Company took advantage of a tax credit granted to companies under the CARES Act who continued to pay their employees when operations were fully or partially suspended. The refundable tax credit through the end of the third quarter of Fiscal 2020, reflected in cost of goods sold and within other current assets, is approximately $4.0 million and will be received in Fiscal 2021.

Recently Adopted Accounting Pronouncements
The Company adopted Accounting Standards Codification ("ASC") Topic 326, Financial Instruments—Credit Losses (“Topic 326”), effective August 30, 2020. The new impairment model (known as the current expected credit loss ("CECL") model) is based on expected losses rather than incurred losses. Topic 326 is applicable to financial assets measured at amortized cost, such as accounts receivable and deposits. It requires historical loss data to be adjusted to reflect changes in asset-specific considerations, current conditions and reasonable and supportable forecasts of future economic conditions. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The Company adopted Topic 326 using the modified

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retrospective transition approach, which involves recognizing the cumulative effect of initial adoption of Topic 326 as an adjustment to its opening retained earnings as of August 30, 2020. Therefore, comparative information prior to the adoption date has not been adjusted. As a result of adoption of Topic 326, the Company did not recognize an incremental allowance for credit losses on its accounts receivable for the period ended November 28, 2020. The adoption of this standard did not materially impact the Company's Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). ASU 2020-06 reduces the number of models used to account for convertible instruments, amends diluted EPS calculations for convertible instruments, and amends the requirements for a contract (or embedded derivative) that is potentially settled in an entity's own shares to be classified in equity. The amendments add certain disclosure requirements to increase transparency and decision-usefulness about a convertible instrument's terms and features. Under the amendment, the Company must use the if-converted method for including convertible instruments in diluted EPS as opposed to the treasury stock method. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021 (the Company's Fiscal 2023). Early adoption is allowed under the standard with either a modified retrospective or full retrospective method. The Company expects to adopt the new guidance in the first quarter of Fiscal 2023. While it will change the Company's diluted EPS reporting, the extent to which the standard will have a material impact on the Company's consolidated financial statements is uncertain at this time.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will adopt this standard when LIBOR is discontinued, and does not expect a material impact to its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740. The standard is effective for annual reporting periods beginning after December 15, 2020 (the Company's Fiscal 2022), including interim periods within those annual reporting periods. The Company expects to adopt the new guidance in the first quarter of Fiscal 2022, and does not expect a material impact to its consolidated financial statements.

Note 2: Business Combinations

Newmar Corporation
On November 8, 2019, pursuant to the terms of the Stock Purchase Agreement dated September 15, 2019 (the "Purchase Agreement"), Winnebago completed the acquisition of 100% of Newmar Corporation, Dutch Real Estate Corp., New-Way Transport, and New-Serv (collectively “Newmar”). Newmar is a leading manufacturer of Class A and Super C motorized recreation vehicles that are sold through an established network of independent authorized dealers throughout North America.
The following table summarizes the total consideration paid for Newmar as stipulated in the Purchase Agreement:

(in thousands)November 8, 2019
Winnebago Industries shares: 2,000,000 at $46.29

The cash portion of the purchase price of the acquisition and certain transaction expenses were funded through the private placement of convertible senior notes (as further described in Note 9, Long-Term Debt) and cash on hand. The stock consideration was discounted by 7.0% due to lack of marketability because of the one year lock-up restrictions.

The total purchase price was allocated to the net tangible and intangible assets of Newmar acquired, based on their fair values at the date of the acquisition. The Company believes that the information provides a reasonable basis for estimating the fair values. During the third quarter of Fiscal 2020, the Company finalized the valuation and completed the purchase price allocation, which included purchase price adjustments of $3.3 million.


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The following table summarizes the fair values assigned to the Newmar net assets acquired and the determination of net assets:
(in thousands)November 8, 2019
Accounts receivable37,147 
Prepaid expenses and other assets9,830 
Property, plant, and equipment31,143 
Other intangible assets172,100 
Total assets acquired409,437 
Accounts payable14,023 
Accrued compensation4,306 
Product warranties15,147 
Deferred tax liabilities968 
Total liabilities assumed52,432 
Total purchase price$357,005 

The goodwill, recognized in the Company's Motorhome segment, is primarily attributable to the value of the workforce, reputation of founders, customer and dealer growth opportunities, and expected synergies. Key areas of cost synergies include increased purchasing power for raw materials and supply chain consolidation. The full amount of goodwill is deductible for tax purposes.

The following table summarizes the other intangible assets acquired:
($ in thousands)November 8, 2019Useful Life-Years
Trade name$98,000 Indefinite
Dealer network64,000 12.0
Backlog8,800 0.5
Non-compete agreements1,300 5.0

The fair value of the trade name and dealer network were estimated using an income approach. Under the income approach, an intangible asset's fair value is equal to the present value of the future economic benefits to be derived from ownership of the asset. The fair value of the trade name was estimated using an income approach, specifically the relief from royalty method. The relief from royalty method is based on the hypothetical royalty stream that would be received if we were to license the trade name and was based on expected revenues. The fair value of the dealer network was estimated using an income approach, specifically the cost to recreate/cost saving method. This method uses the replacement of the asset as an indicator of the fair value of the asset. The useful life of the intangibles was determined considering the expected cash flows used to measure the fair value of the intangible assets adjusted for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of intangible assets. On the acquisition date, amortizable intangible assets had a weighted-average useful life of approximately 10.5 years.

The results of Newmar's operations have been included in the Company's Condensed Consolidated Financial Statements from the close of the acquisition within the Motorhome segment. The following table provides net revenues and operating income from the Newmar operating segment included in the Company's consolidated results following the November 8, 2019 closing date:
Three Months Ended
(in thousands)November 28, 2020November 30, 2019
Net revenues$118,779 $35,663 
Operating income (loss)4,084 (1,283)


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The following information represents the Company's actual results of operations for the three months ended November 28, 2020, and proforma information for the three months ended November 30, 2019 as if the Fiscal 2020 acquisition of Newmar had occurred at the beginning of Fiscal 2020:
Three Months Ended
(in thousands, except per share data)November 28, 2020November 30, 2019
Net revenues$793,131 $741,717 
Net income57,423 17,197 
Income per share - basic$1.71 $0.51 
Income per share - diluted$1.70 $0.50 

The Company's actual results of operations for the three months ended November 28, 2020 did not include any significant non-recurring adjustments related to the close of the transaction. The unaudited pro forma data for the three months ended November 30, 2019 above includes the following significant non-recurring adjustments made to account for certain costs which would have changed if the acquisition of Newmar had occurred at the beginning of Fiscal 2020:
Three Months Ended
(in thousands)November 30, 2019
Amortization of intangibles (1 year or less useful life)(1)
Amortization of intangibles(2)
Expenses related to business combination (transaction costs)9,950 
Interest to reflect new debt structure(3)
Taxes related to the adjustments to the pro forma data and to the income of Newmar(4)
(1)    Includes amortization adjustments for our backlog intangible asset and our fair-value inventory adjustment.
(2)    Includes amortization adjustments for our dealer network and non-compete intangible assets.
(3)    Includes adjustments for cash and non-cash interest expense as well as deferred financing costs. Refer to Note 9, Long-Term Debt, for additional information on the Company's new debt structure as a result of the acquisition.
(4)    Calculated using our U.S. federal statutory rate of 21.0%.

The unaudited pro forma information for the three months ended November 30, 2019 is not necessarily indicative of the results that the Company would have achieved had the transaction actually taken place at the beginning of Fiscal 2020, and the unaudited pro forma information for the three months ended November 30, 2019 does not purport to be indicative of future financial operating results. The unaudited pro forma condensed consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition.

Total transaction costs related to the Newmar acquisition were $10.4 million, of which $9.8 million were expensed during Fiscal 2020 and $0.6 million were expensed during the fourth quarter of Fiscal 2019. There were no transaction costs incurred during the first three months of Fiscal 2021. Transaction costs are included in Selling, general, and administrative expenses in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

Note 3: Business Segments

The Company has six operating segments: 1) Grand Design towables, 2) Winnebago towables, 3) Winnebago motorhomes, 4) Newmar motorhomes, 5) Chris-Craft marine, and 6) Winnebago specialty vehicles. The Company evaluates performance based on each operating segment's Adjusted EBITDA, as defined below, which excludes certain corporate administration expenses and non-operating income and expense.

The Company's two reportable segments include: 1) Towable (comprised of products which are not motorized and are generally towed by another vehicle as well as other related manufactured products and services), which is an aggregation of the Grand Design towables and the Winnebago towables operating segments and 2) Motorhome (comprised of products that include a motorized chassis as well as other related manufactured products and services), which is an aggregation of the Winnebago motorhomes and Newmar motorhomes operating segments.

The Corporate / All Other category includes the Chris-Craft marine and Winnebago specialty vehicles operating segments as well as expenses related to certain corporate administration expenses for the oversight of the enterprise. These expenses include items such as corporate leadership and administration costs.

Identifiable assets of the reportable segments exclude general corporate assets, which principally consist of cash and cash equivalents and certain deferred tax balances. The general corporate assets are included in the Corporate / All Other category.

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The Company's chief operating decision maker ("CODM") is its Chief Executive Officer. The Company's CODM relies on internal management reporting that analyzes consolidated results to the net earnings level and operating segment's Adjusted EBITDA. The Company's CODM has ultimate responsibility for enterprise decisions. The Company's CODM determines, in particular, resource allocation for, and monitors the performance of, the consolidated enterprise, the Towable segment, and the Motorhome segment. The operating segments' management have responsibility for operating decisions, allocating resources, and assessing performance within their respective segments. The accounting policies of both reportable segments are the same and are described in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended August 29, 2020.

The Company evaluates the performance of its reportable segments based on 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 adjustments made in order to present comparable results from period to period. Examples of items excluded from Adjusted EBITDA include acquisition-related fair-value inventory step-up, acquisition-related costs, restructuring expenses, gain or loss on sale of property and equipment, and non-operating income. The following table shows information by reportable segment:

Three Months Ended
(in thousands)November 28,
November 30,
Net Revenues
Towable$454,901 $341,250 
Motorhome322,389 225,891 
Corporate / All Other15,841 21,317 
Consolidated$793,131 $588,458 
Adjusted EBITDA
Towable$63,143 $35,785 
Motorhome30,343 9,331 
Corporate / All Other(4,193)(3,068)
Consolidated$89,293 $42,048 
Capital Expenditures
Towable$4,137 $4,026 
Motorhome4,003 2,240 
Corporate / All Other549 358 
Consolidated$8,689 $6,624 

(in thousands)November 28,
August 29,
Total Assets
Towable$732,419 $718,253 
Motorhome671,761 600,304 
Corporate / All Other376,810 395,143 
Consolidated$1,780,990 $1,713,700 


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Reconciliation of net income to consolidated Adjusted EBITDA:
Three Months Ended
(in thousands)November 28, 2020November 30, 2019
Net income$57,423 $14,068 
Interest expense9,941 6,049 
Provision for income taxes17,557 3,893 
Depreciation4,160 3,586 
Amortization of intangible assets3,590 3,614 
EBITDA92,671 31,210 
Acquisition-related fair-value inventory step-up 1,176 
Acquisition-related costs 9,950 
Restructuring expenses93 (172)
Gain on sale of property and equipment(3,565) 
Non-operating loss (income)94 (116)
Adjusted EBITDA$89,293 $42,048 

Note 4: Investments and Fair Value Measurements
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurement. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows:

Level 1 - Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2 - Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets in nonactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by other observable market data.

Level 3 - Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.


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The following tables set forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at November 28, 2020 and August 29, 2020 according to the valuation techniques the Company used to determine their fair values:
Fair Value atFair Value Hierarchy
(in thousands)November 28,
Level 1Level 2Level 3
Assets that fund deferred compensation:
Domestic equity funds$783 $783 $ $ 
International equity funds35 35   
Fixed income funds49 49   
Total assets at fair value$867 $867 $ $ 

Fair Value atFair Value Hierarchy
(in thousands)August 29,
Level 1Level 2Level 3
Assets that fund deferred compensation:
Domestic equity funds$626 $626 $ $ 
International equity funds34 34   
Fixed income funds50 50   
Total assets at fair value$710 $710 $ $ 

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Assets that fund deferred compensation
The Company's assets that fund deferred compensation are marketable equity securities measured at fair value using quoted market prices and primarily consist of equity-based mutual funds. These securities are classified as Level 1 as they are traded in an active market for which closing stock prices are readily available. These securities fund the Executive Share Option Plan and the Executive Deferred Compensation Plan. Refer to Note 11, Employee and Retiree Benefits, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended August 29, 2020 for additional information regarding these plans.

The proportion of the assets that will fund options which expire within a year are included in Prepaid expenses and other assets in the accompanying Condensed Consolidated Balance Sheets. The remaining assets are classified as non-current and are included in Other assets.

Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis
The Company's non-financial assets, which include goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required, the Company must evaluate the non-financial asset for impairment. If an impairment has occurred, the asset is required to be recorded at the estimated fair value. No impairments were recorded for non-financial assets in the first quarter of Fiscal 2021 or the first quarter of Fiscal 2020.

Fair Value of Financial Instruments
The Company's financial instruments, other than those presented in the disclosures above, include cash, receivables, accounts payable, other payables, and long-term debt. The fair values of cash, receivables, accounts payable, and other payables approximated carrying values because of the short-term nature of these instruments. If these instruments were measured at fair value in the financial statements, they would be classified as Level 1 in the fair value hierarchy. See Note 9, Long-Term Debt, for information about the fair value of our long-term debt.


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Note 5: Inventories

Inventories consist of the following:
(in thousands)November 28,
August 29,
Finished goods$9,295 $17,141 
Work-in-process137,280 86,651 
Raw materials152,671 114,982 
Total299,246 218,774 
Less last-in, first-out ("LIFO") reserve36,109 35,833 
Inventories, net$263,137 $182,941 

Inventory valuation methods consist of the following:
(in thousands)November 28,
August 29,
LIFO basis$124,002 $88,675 
First-in, first-out basis175,244 130,099 
Total$299,246 $218,774 

The above value of inventories, before reduction for the LIFO reserve, approximates replacement cost at the respective dates.

Note 6: Property, Plant, and Equipment
Property, plant, and equipment is stated at cost, net of accumulated depreciation, and consists of the following:
(in thousands)November 28,
August 29,
Land$9,111 $11,101 
Buildings and building improvements144,701 144,565 
Machinery and equipment118,317 117,370 
Software28,359 28,456 
Transportation4,840 4,913 
Construction in progress17,907 20,778 
Property, plant, and equipment, gross323,235 327,183 
Less accumulated depreciation152,025 152,238 
Property, plant, and equipment, net$171,210 $174,945 

Depreciation expense was $4.2 million and $3.6 million during the first quarters of Fiscal 2021 and 2020, respectively.

Note 7: Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by segment were as follows for the first three months of Fiscal 2021 and 2020, of which there were no accumulated impairment losses:
(in thousands)TowableMotorhomeCorporate / All OtherTotal
Balances at August 31, 2019$244,684 $ $30,247 $274,931 
Acquisition of Newmar(1)
 72,909  72,909 
Balances at November 30, 2019$244,684 $72,909 $30,247 $347,840 
Balances at August 29, 2020 and November 28, 2020(2)
$244,684 $73,127 $30,247 $348,058 
(1)    The change in Motorhome activity is related to the acquisition of Newmar. Refer to Note 2, Business Combinations, for additional information.
(2) There was no activity in the three months beginning August 29, 2020 and ending November 28, 2020.


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Other intangible assets, net of accumulated amortization, consist of the following:
November 28, 2020August 29, 2020
($ in thousands)Weighted Average Life-YearsCostAccumulated AmortizationWeighted Average Life-YearsCostAccumulated Amortization
Trade namesIndefinite$275,250 Indefinite$275,250 
Dealer networks12.1159,581 $35,778 12.2159,581 $32,487 
Backlog0.528,327 28,327 0.528,327 28,327 
Non-compete agreements4.36,647 4,522 4.16,647 4,223 
Other intangible assets, gross469,805 68,627 469,805 65,037 
Less accumulated amortization68,627 65,037 
Other intangible assets, net$401,178 $404,768 

The weighted average remaining amortization period for intangible assets as of November 28, 2020 was approximately 10 years.

Remaining estimated aggregate annual amortization expense by fiscal year is as follows:
(in thousands)Amount
Fiscal 2021$10,771 
Fiscal 202213,719 
Fiscal 202313,526 
Fiscal 202413,424 
Fiscal 202513,219 
Total amortization expense remaining$125,928 

Note 8: Product Warranties

The Company provides certain service and warranty on its products. From time to time, the Company also voluntarily incurs costs for certain warranty-type expenses occurring after the normal warranty period to help protect the reputation of the Company's products and the goodwill of the Company's customers. Estimated costs related to product warranty are accrued at the time of sale and are based upon historical warranty and service claims experience. Adjustments are made to accruals as claim data and cost experience becomes available.

In addition to the costs associated with the contractual warranty coverage provided on products, the Company also occasionally incurs costs as a result of additional service actions not covered by warranties, including product recalls and customer satisfaction actions. Although the Company estimates and reserves for the cost of these service actions, there can be no assurance that expense levels will remain at current levels or such reserves will continue to be adequate.

Changes in the Company's product warranty liability are as follows:
Three Months Ended
(in thousands)November 28,
November 30,
Balance at beginning of period$64,031 $44,436 
Business acquisition(1)
Provision21,703 15,318 
Claims paid(15,232)(13,794)
Balance at end of period$