Company Quick10K Filing
Winnebago Industries
Price37.80 EPS3
Shares34 P/E14
MCap1,273 P/FCF8
Net Debt460 EBIT138
TEV1,733 TEV/EBIT13
TTM 2019-11-30, in MM, except price, ratios
10-Q 2021-02-27 Filed 2021-03-24
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 Segments
Note 3: Investments and Fair Value Measurements
Note 4: Inventories
Note 5: Property, Plant, and Equipment
Note 6: Goodwill and Intangible Assets
Note 7: Product Warranties
Note 8: Long - Term Debt
Note 9: Employee and Retiree Benefits
Note 10: Contingent Liabilities and Commitments
Note 11: Revenue
Note 12: Stock - Based Compensation
Note 13: Restructuring
Note 14: Income Taxes
Note 15: Income per Share
Note 16: 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-31.1 a2021q2exh311.htm
EX-31.2 a2021q2exh312.htm
EX-32.1 a2021q2exh321.htm
EX-32.2 a2021q2exh322.htm

Winnebago Industries Earnings 2021-02-27

Balance SheetIncome StatementCash Flow
1.61.31.00.60.30.02012201420172020
Assets, Equity
0.60.50.40.20.10.02012201420172020
Rev, G Profit, Net Income
0.40.20.1-0.1-0.2-0.42012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 27, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission File Number:001-06403
wgo-20210227_g1.jpg
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Iowa42-0802678
(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)
641-585-3535
(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 March 18, 2021 was 33,600,159.



Winnebago Industries, Inc.
Table of Contents


2

Table of Contents
PART I. FINANCIAL INFORMATION.

Item 1. Condensed Consolidated Financial Statements.

Winnebago Industries, Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
(in thousands, except per share data)February 27,
2021
February 29,
2020
February 27,
2021
February 29,
2020
Net revenues$839,886 $626,810 $1,633,017 $1,215,268 
Cost of goods sold683,304 547,028 1,339,431 1,056,873 
Gross profit156,582 79,782 293,586 158,395 
Selling, general, and administrative expenses53,016 42,164 101,415 93,269 
Amortization of intangible assets3,591 7,974 7,181 11,588 
Total operating expenses56,607 50,138 108,596 104,857 
Operating income99,975 29,644 184,990 53,538 
Interest expense10,052 8,651 19,993 14,700 
Non-operating income(311)(270)(217)(386)
Income before income taxes90,234 21,263 165,214 39,224 
Provision for income taxes21,166 3,995 38,723 7,888 
Net income$69,068 $17,268 $126,491 $31,336 
Income per common share:
Basic$2.06 $0.51 $3.77 $0.95 
Diluted$2.04 $0.51 $3.74 $0.95 
Weighted average common shares outstanding:
Basic33,533 33,614 33,571 32,840 
Diluted33,910 33,918 33,821 33,143 
Net income $69,068 $17,268 $126,491 $31,336 
Other comprehensive income (loss):
Amortization of net actuarial loss (net of tax of $3, $3, $6, and $5)
8 8 17 16 
Interest rate swap activity (net of tax of $, $, $, and $22)
   (68)
Total other comprehensive income (loss)8 8 17 (52)
Comprehensive income$69,076 $17,276 $126,508 $31,284 
See Notes to Condensed Consolidated Financial Statements.
3

Table of Contents

Winnebago Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except per share data)February 27,
2021
August 29,
2020
Assets
Current assets:
Cash and cash equivalents$333,015 $292,575 
Receivables, less allowance for doubtful accounts ($301 and $353, respectively)
232,349 220,798 
Inventories, net278,468 182,941 
Prepaid expenses and other assets21,146 17,296 
Total current assets864,978 713,610 
Property, plant, and equipment, net173,609 174,945 
Other assets:
Goodwill348,058 348,058 
Other intangible assets, net397,587 404,768 
Investment in life insurance28,301 27,838 
Operating lease assets27,833 29,463 
Other assets15,429 15,018 
Total assets$1,855,795 $1,713,700 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$144,604 $132,490 
Income taxes payable 8,840 
Accrued expenses:
Accrued compensation47,086 36,533 
Product warranties76,040 64,031 
Self-insurance17,469 17,437 
Promotional11,719 12,543 
Accrued interest4,260 4,652 
Other19,825 23,864 
Total current liabilities321,003 300,390 
Non-current liabilities:
Long-term debt, less current maturities520,284 512,630 
Deferred income taxes16,528 15,608 
Unrecognized tax benefits6,207 6,511 
Operating lease liabilities25,942 27,048 
Deferred compensation benefits, net of current portion10,521 11,130 
Other12,946 12,917 
Total non-current liabilities592,428 585,844 
Contingent liabilities and commitments (Note 10)
Stockholders' equity:
Preferred stock, par value $0.01: Authorized-10,000 shares; Issued-zero
  
Common stock, par value $0.50: Authorized-120,000 shares; Issued-51,776 shares
25,888 25,888 
Additional paid-in capital209,727 203,791 
Retained earnings1,032,020 913,610 
Accumulated other comprehensive loss(509)(526)
Treasury stock, at cost: 18,225 and 18,133 shares, respectively
(324,762)(315,297)
Total stockholders' equity942,364 827,466 
Total liabilities and stockholders' equity$1,855,795 $1,713,700 
See Notes to Condensed Consolidated Financial Statements.
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Winnebago Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
(in thousands)February 27,
2021
February 29,
2020
Operating activities:
Net income$126,491 $31,336 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation8,559 7,720 
Amortization of intangible assets7,181 11,588 
Non-cash interest expense, net6,769 4,182 
Amortization of debt issuance costs1,229 1,457 
Last-in, first-out expense552 664 
Stock-based compensation6,981 3,640 
Deferred income taxes914 576 
Other, net(3,460)252 
Change in assets and liabilities:
Receivables(11,547)11,734 
Inventories(96,079)45,275 
Prepaid expenses and other assets2,321 (4,081)
Accounts payable12,487 4,688 
Income taxes and unrecognized tax benefits(10,698)(966)
Accrued expenses and other liabilities15,222 1,099 
Net cash provided by operating activities66,922 119,164 
Investing activities:
Purchases of property and equipment(14,920)(19,057)
Acquisition of business, net of cash acquired (264,280)
Proceeds from sale of property and equipment7,778  
Other, net(223)179 
Net cash used in investing activities(7,365)(283,158)
Financing activities:
Borrowings on long-term debt1,647,764 1,412,294 
Repayments on long-term debt(1,647,764)(1,115,044)
Purchase of convertible bond hedge (70,800)
Proceeds from issuance of warrants 42,210 
Payments of cash dividends(8,075)(7,174)
Payments for repurchases of common stock(12,109) 
Payments of debt issuance costs(224)(10,761)
Other, net1,291 (1,223)
Net cash (used in) provided by financing activities(19,117)249,502 
Net increase in cash and cash equivalents40,440 85,508 
Cash and cash equivalents at beginning of period292,575 37,431 
Cash and cash equivalents at end of period$333,015 $122,939 
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Supplemental cash flow disclosure:
Income taxes paid, net$47,804 $7,652 
Interest paid$12,244 $9,938 
Non-cash transactions:
Issuance of Winnebago common stock for acquisition of business$ $92,572 
Capital expenditures in accounts payable$195 $118 
See Notes to Condensed Consolidated Financial Statements.
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Winnebago Industries, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
Three Months Ended February 27, 2021
(in thousands,
except per share data)
Common Shares Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock Total Stockholders' Equity
NumberAmountNumberAmount
Balances at November 28, 202051,776 $25,888 $204,551 $966,945 $(517)(18,275)$(325,309)$871,558 
Stock-based compensation, net of forfeitures— — 4,622 — — 1 5 4,627 
Issuance of stock, net— — 554 — — 58 1,045 1,599 
Repurchase of common stock— — — — — (9)(503)(503)
Common stock dividends; $0.12 per share
— — — (3,993)— — — (3,993)
Actuarial loss, net of tax— — — — 8 — — 8 
Net income— — — 69,068 — — — 69,068 
Balances at February 27, 202151,776 $25,888 $209,727 $1,032,020 $(509)(18,225)$(324,762)$942,364 
Six Months Ended February 27, 2021
(in thousands,
except per share data)
Common SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Stockholders' Equity
NumberAmountNumberAmount
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— — 6,968 — — 1 13 6,981 
Issuance of stock, net— — (1,032)— — 149 2,631 1,599 
Repurchase of common stock— — — — — (242)(12,109)(12,109)
Common stock dividends; $0.24 per share
— — — (8,081)— — — (8,081)
Actuarial loss, net of tax— — — — 17 — — 17 
Net income— — — 126,491 — — — 126,491 
Balances at February 27, 202151,776 $25,888 $209,727 $1,032,020 $(509)(18,225)$(324,762)$942,364 
Three Months Ended February 29, 2020
(in thousands,
except per share data)
Common Shares Additional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock Total Stockholders' Equity
NumberAmountNumberAmount
Balances at November 30, 201951,776 $25,888 $198,733 $877,469 $(551)(18,177)$(315,930)$785,609 
Stock-based compensation, net of forfeitures— — 1,830 — —  8 1,838 
Issuance of stock, net— — 188 — — 25 430 618 
Repurchase of common stock— — — — — (1)(74)(74)
Common stock dividends; $0.11 per share
— — — (3,743)— — — (3,743)
Actuarial loss, net of tax— — — — 8 — — 8 
Net income— — — 17,268 — — — 17,268 
Balances at February 29, 202051,776 $25,888 $200,751 $890,994 $(543)(18,153)$(315,566)$801,524 
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Six Months Ended February 29, 2020
(in thousands,
except per share data)
Common SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Stockholders' Equity
NumberAmountNumberAmount
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— — 3,624 — — — 17 3,641 
Issuance of stock, net— — (2,031)— — 153 2,649 618 
Issuance of stock for acquisition— — 57,811 — — 2,000 34,761 92,572 
Repurchase of common stock— — — — — (44)(1,737)(1,737)
Common stock dividends; $0.22 per share
— — — (7,228)— — — (7,228)
Actuarial loss, net of tax— — — — 16 — — 16 
Interest rate swap activity, net of tax— — — — (68)— — (68)
Equity component of convertible senior notes and offering costs, net of tax of $20,840
— — 61,335 — — — — 61,335 
Convertible note hedge purchase, net of tax of $17,417
— — (53,383)— — — — (53,383)
Warrant transactions— — 42,210 — — — — 42,210 
Net income— — — 31,336 — — — 31,336 
Balances at February 29, 202051,776 $25,888 $200,751 $890,994 $(543)(18,153)$(315,566)$801,524 
See Notes to Condensed Consolidated Financial Statements.
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Winnebago Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1: Basis of Presentation

Unless the context otherwise requires, the use of the terms "Winnebago Industries," "Winnebago", and "the Company" 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.

Dividend
On March 17, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.12 per share payable on April 28, 2021 to common stockholders of record at the close of business on April 14, 2021.

CARES Act
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 February 27, 2021 was $16.2 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, of which $3.2 million is outstanding, 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 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 first six months ended February 27, 2021. The adoption of this standard did not materially impact the Company's Condensed Consolidated Financial Statements.

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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 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 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.

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 and each 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
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and equipment, and non-operating income. The following table shows information by reportable segment:

Three Months EndedSix Months Ended
(in thousands)February 27,
2021
February 29,
2020
February 27,
2021
February 29,
2020
Net Revenues
Towable$439,284 $283,463 $894,185 $624,713 
Motorhome382,575 325,542 704,964 551,433 
Corporate / All Other18,027 17,805 33,868 39,122 
Consolidated$839,886 $626,810 $1,633,017 $1,215,268 
Adjusted EBITDA
Towable$62,366 $34,746 $125,509 $70,531 
Motorhome50,969 14,946 81,312 24,277 
Corporate / All Other(5,370)(4,263)(9,563)(7,331)
Consolidated$107,965 $45,429 $197,258 $87,477 
Capital Expenditures
Towable$2,714 $5,640 $6,851 $9,666 
Motorhome3,268 5,372 7,271 7,612 
Corporate / All Other249 1,421 798 1,779 
Consolidated$6,231 $12,433 $14,920 $19,057 


(in thousands)February 27,
2021
August 29,
2020
Total Assets
Towable$723,388 $718,253 
Motorhome694,077 600,304 
Corporate / All Other438,330 395,143 
Consolidated$1,855,795 $1,713,700 

Reconciliation of net income to consolidated Adjusted EBITDA:
Three Months EndedSix Months Ended
(in thousands)February 27, 2021February 29, 2020February 27, 2021February 29, 2020
Net income$69,068 $17,268 $126,491 $31,336 
Interest expense10,052 8,651 19,993 14,700 
Provision for income taxes21,166 3,995 38,723 7,888 
Depreciation4,399 4,134 8,559 7,720 
Amortization of intangible assets3,591 7,974 7,181 11,588 
EBITDA108,276 42,022 200,947 73,232 
Acquisition-related fair-value inventory step-up 3,634  4,810 
Acquisition-related costs   9,950 
Restructuring expenses 43 93 (129)
Gain on sale of property and equipment  (3,565) 
Non-operating income(311)(270)(217)(386)
Adjusted EBITDA$107,965 $45,429 $197,258 $87,477 

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Note 3: 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.

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 February 27, 2021 and August 29, 2020 according to the valuation techniques the Company used to determine their fair values:
Fair Value atFair Value Hierarchy
(in thousands)February 27,
2021
Level 1Level 2Level 3
Assets that fund deferred compensation:
Domestic equity funds$838 $838 $ $ 
International equity funds36 36   
Fixed income funds47 47   
Total assets at fair value$921 $921 $ $ 

Fair Value atFair Value Hierarchy
(in thousands)August 29,
2020
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
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Financial Statements included in the Company's 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 second quarter of Fiscal 2021 or the second 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 8, Long-Term Debt, for information about the fair value of the Company's long-term debt.

Note 4: Inventories

Inventories consist of the following:
(in thousands)February 27,
2021
August 29,
2020
Finished goods$9,184 $17,141 
Work-in-process145,092