Thor Reports Record Earnings
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowElkhart-based Thor Industries Inc. (NYSE: THO) is reporting record fiscal third quarter net income of $63.6 million, up from $55.1 million during the same period the previous year. Chief Executive Officer Bob Martin says the entrance of baby boomers into the core RV-buying age group makes him optimistic for future growth.
June 4, 2015
News Release
Elkhart, Ind. — Thor Industries, Inc. (NYSE: THO) today announced record sales and net income from continuing operations for the third quarter ended April 30, 2015, compared with very strong results from the third quarter of fiscal 2014.
Third-Quarter Highlights:
Sales from continuing operations for the third quarter of fiscal 2015 were $1.17 billion, up 12% from $1.05 billion in the third quarter last year, as sales of both towable and motorized RVs posted gains from a year ago. Towable results for the third quarter of fiscal 2015 included the impact of the acquisitions of K-Z, Cruiser RV, LLC and DRV, LLC, which were not included in the third quarter of fiscal 2014.
Gross profit margins increased to 14.2% in the third quarter of fiscal 2015 compared to 13.6% in the prior-year period. Gross margins in the third quarter of fiscal 2015 improved largely as a result of increased fixed cost absorption and improvements in labor and warranty costs as a percent of sales in the motorized segment.
Net income from continuing operations for the third quarter was $63.6 million, up 15% from $55.1 million in the prior-year third quarter. Including the discontinued operations of Thor's Bus business, net income for the third quarter was $62.8 million, up 14% from $55.1 million in the third quarter of fiscal year 2014.
Diluted earnings per share (EPS) from continuing operations for the third quarter was $1.19, up 16% from $1.03 in the third quarter last year. Including the discontinued operations of Thor's Bus business, diluted EPS for the third quarter was $1.17, up 14% from $1.03 in the third quarter of fiscal 2014.
Year-to-Date Highlights:
Sales from continuing operations for the nine months ended April 30, 2015 were $2.95 billion, up 19% from $2.48 billion in the prior year.
Gross profit margins increased to 13.1% in the first nine months of fiscal 2015 compared to 12.8% in the prior-year period. Gross margins in the first nine months of fiscal 2015 improved primarily as a result of increased fixed cost absorption due to the sales increase.
Net income from continuing operations for the nine months ended April 30, 2015 was $133.0 million, up 22% compared to $108.7 million in the first nine months of fiscal 2014. Including discontinued operations, net income for the nine months was $130.4 million, up 16% from $112.4 million in the first nine months of the prior year, which included the $7.1 million gain on the sale of the bus business.
Diluted EPS from continuing operations for the nine months ended April 30, 2015 was $2.49, up 22% from $2.04 in the first nine months of the prior year. Including discontinued operations, diluted EPS for the nine months was $2.44, up 16% from $2.11 in the first nine months of fiscal 2014, which included the gain on the sale of the bus business.
“We were pleased with our strong third-quarter results, which exceeded even the solid performance we achieved in the third quarter of fiscal 2014,” said Bob Martin, Thor President and CEO. “The record results for the quarter reflect the great efforts of our entire team combined with the ongoing growth of the RV market. In the near term, the market for some higher-end products remains soft, while dealers focus on inventory management as they sell through units delivered earlier in the year. We have also seen some shifting of order patterns due to the growing importance of the fall dealer Open House resulting in a shift in backlogs. Despite these factors, we see many reasons for optimism for the future of the RV industry and Thor. The continued entrance of baby boomers into the core RV buying age group as well as the rapid growth of younger buyers entering the RV market provide a solid foundation for long-term growth,” he added.
Segment Highlights:
Towable RV sales were $919.4 million for the third quarter, up 15% from $800.7 million in the prior-year period. Towable RV income before tax was $83.8 million, up 15% from $72.6 million in the third quarter last year.
Motorized RV sales were $254.9 million for the third quarter, up 4% from $246.1 million in the prior-year third quarter. Motorized RV income before tax was $19.9 million, up 12% from $17.7 million last year.
Consolidated backlog on April 30, 2015 was $726.8 million, down 11% from $820.2 million at April 30, 2014. Towable RV backlog decreased 12% to $484.2 million, compared to $548.5 million at the end of the third quarter of fiscal 2014, while Motorized RV backlog decreased 11% to $242.6 million from $271.6 million a year earlier. The decrease in backlogs reflects the impact of expanded production capacity and the Company's ability to meet higher demand levels more quickly as well as the continued shift in dealer order patterns earlier in the fiscal year.
Thor's total cash balances as of April 30, 2015 were $259.4 million, with no long-term debt.
“Our improved third-quarter revenues and profits marked a new milestone in the history of Thor, as the RV industry continued its recovery from the recession,” said Peter B. Orthwein, Thor Executive Chairman. “In the third quarter, we reaped the benefit of our ongoing acquisition strategy as we saw growth from K-Z, as well as a full quarter contribution from Cruiser RV and DRV to Heartland's results. We may see some challenges to our fourth quarter results from shifting dealer order and delivery patterns, the start-up costs of new towable expansions, and integration costs of our most recent acquisition, Postle Aluminum, all of which we consider to be short-term factors that should benefit our results over the long term. When we consider the many opportunities ahead of us, as well as the ongoing strength of our markets, we have reason for confidence in the future performance of our Company.”
About Thor Industries, Inc.
Thor is the sole owner of operating subsidiaries that, combined, represent one of the world's largest manufacturers of recreational vehicles.