Motorized Sales Drive Thor 1Q Income Gains
Sales from continuing operations for the first quarter of fiscal 2014 were $800 million compared to $761.4 million in the first quarter last year, driven by continued strong growth in motorized sales, which was partially offset by a small decrease in towable RV sales.
Net income from continuing operations rose 27% to $36.4 million, or 68 cents per share, versus $28.7 million, or 54 cents per share, in the prior-year first quarter. Including the discontinued operations of Thor’s bus business, net income for the first quarter was $41.1 million, up 33% from $31 million in the first quarter of fiscal 2013. Results of discontinued operations included a gain on the sale of the bus business of approximately $7.8 million.
Gross profit margins improved to 13.1% in the first quarter compared to 12.1% in the prior year period. Thor noted that it completed acquisitions of Livin’ Lite Recreational Vehicles LLC and Bison Coach, expanding its “breadth of products in complementary towable RV markets.”
“Thor made significant progress toward achieving our strategic goals over the past year and that is evidenced by our improved financial results,” said Bob Martin, Thor president and CEO. “Despite these improvements, we faced a number of short-term challenges as we transitioned the first motorized production line to Wakarusa, Ind., near the end of the first quarter, which created some start-up costs that may continue as we open a second line this quarter. We also closed two smaller production facilities on the West Coast and are in the process of consolidating their production into our larger complex in Oregon. In addition to these events, we completed two acquisitions and built on our strategic foundation leaving us confident in our ability to meet the expectations of our dealers and customers while delivering improved results for our shareholders.”
First-quarter highlights included:
• Towable RV sales were $622.9 million for the first quarter, down 3% from $639.2 million in the prior year period. Income before tax was $45.6 million, up 7% from $42.7 million in the first quarter last year, primarily as a result of ongoing efforts to improve operating margins and efficiencies.
• Motorized RV sales were $177.1 million for the first quarter, up 45% from $122.2 million in the prior year first quarter. Income before tax was $13.4 million, up 60% from $8.4 million last year, which was driven primarily by increased sales volumes.
• Consolidated backlog on Oct. 31 was $733.2 million, up 41.9% from $516.7 million at the end of the first quarter last year. Towable RV backlog increased 13.5% to $419.8 million, compared to $369.9 million at the end of the first quarter of fiscal 2013. Motorized RV backlog increased 113.6% to $313.4 million from $146.8 million a year earlier.
“Although our first and second quarters are generally characterized by a more seasonally competitive environment, Thor generated improved operating results for the first quarter of fiscal 2014,” said Peter B. Orthwein, Thor executive chairman. “As we look ahead to the largest RV trade show of the year being held in Louisville this week, we have reason for optimism given the strength of our products and continued improvement in industry retail demand heading into the early retail show season in January.”
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