Thor Industries: Beats Estimates

Manufacturing company that sells various recreational vehicles throughout the United States and Canada, as well as related parts and accessories, Thor Industries Inc. (NYSE: THO) has announced their 4th quarterly earnings beating analysts’ expectations. The company reported EPS of $1.57 on revenues of $1.29 billion, compared to consensus estimates of EPS of $1.33 on revenues of $1.27 billion.

“The fourth quarter was the culmination of the strongest year in Thor’s history, with solid revenue and earnings growth generated by the tremendous efforts of our entire team augmented by strong industry conditions,” said Bob Martin, Thor President and CEO.  “During the fourth quarter, we saw continued year-over-year industry growth in most product categories and were able to capitalize on opportunities to expand our production capacity and output to meet the growing demand for affordably priced travel trailers and motorhomes.  Our products continue to hit the mark in terms of the expectations of our dealers and consumers.”

Full-Year Highlights:

-Sales for fiscal 2016 were a record $4.58 billion, up 14.4% from $4.01 billion last year. 

-Gross profit margins increased to 15.9% in fiscal 2016 from 13.9% in fiscal 2015, due primarily to improved volumes, favorable changes in product mix and improvements in material costs compared to the prior year.

-Net income from continuing operations for fiscal 2016 was a record $258.0 million, up 27.7% from $202.0 million in fiscal 2015. 

-Diluted earnings per share (EPS) from continuing operations for fiscal 2016 was a record $4.91, up 29.6% from $3.79 last year. 

-Consolidated RV backlog on July 31, 2016 was $1.20 billion, up 108.5% from $574.0 million on July 31, 2015. 

-Total dealer inventory increased 39.6% to approximately 94,500 units on July 31, 2016 from approximately 67,700 units on July 31, 2015.  The inclusion of Jayco accounted for nearly all of the dealer inventory increase (approximately 25,300 of the 26,800 unit increase came from Jayco).

-Thor’s total cash balances as of July 31, 2016 were $209.9 million while the outstanding balance on the revolving credit line stood at$360.0 million.

Guidance:

-Continued strength in the RV market and an ongoing shift toward more moderately priced towable and motorized products, as well as a full year of revenues from Jayco, is expected to result in double-digit revenue growth in fiscal 2017.

-The inclusion of lower gross-margin product sales from Jayco is expected to result in a dilution of gross margins in the coming year, though Jayco should contribute meaningful accretion to earnings per share for the full year.

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