Corporate executives from Winnebago Industries included a quick update on Chris-Craft during the company’s fourth quarter and fiscal year 2018 conference call.
FY 2018 was a tremendous step forward for Winnebago Industries in all aspects – strategically, financially, and culturally, stated President and CEO Michael Happe.
“We made strong strides in the journey to transform ourselves into a premier, outdoor lifestyle company, especially with our fourth-quarter entry into the attractive marine market with the acquisition of Chris-Craft,” Happe said Wednesday.
The Chris-Craft integration has been well executed in the last three months, Happe reported.
“More than two years ago, in June 2016, we began to share with our employees and external stakeholders a new vision statement here at Winnebago Industries,” Happe said. “The Chris-Craft deal represents our initial entry into a new industry that has many, long-term secular growth characteristics to the RV industry. We have strong intentions to grow the Chris-Craft business and brand across the globe, and travel the learning curve expeditiously in the marine segment.”
Winnebago has made good post-acquisition progress in integrating key background functions such as finance, human resources, and information technology, Happe said.
“As we move forward, we are excited about implementing our growth plan for the business, which includes driving new product development and organic growth through line extensions, improving manufacturing efficiencies, expanding our reach by improving the quality and the quantity of our dealer channel, and supporting Chris-Craft’s growth with brand and marketing development efforts,” he said.
In FY 2018, Happe said Winnebago reached $2 billion of revenue in the first time in the company’s history and recorded more than $100 million in net income, another all-time record.
The RV industry, while transitioning to a more moderate pace of shipments in the short-term, continues to be positioned for strong secular growth in the years ahead, as does the marine industry. Happe said.
Revenues for the FY 2018 fourth quarter ended August 25, 2018, were $536.2 million, an increase of 17.9 percent compared to $454.9 million for the FY 2017 period. Gross profit was $83.8 million, an increase of 13.9 percent compared to $73.6 million for the FY 2017 period.
Operating income was $45.7 million for the quarter, an improvement of 5.1 percent compared to $43.5 million in the fourth quarter of last year. FY 2018 fourth quarter net income was $29.8 million, an increase of 19.5 percent compared to $24.9 million in the same period last year.
“We realigned our operating segments following the Chris-Craft acquisition,” Happe said. “We will now have two, non-reportable operating segments, marine and speciality vehicles. Certain corporate costs will be combined together in other reporting categories.”
CFO Bryan Hughes said marine and speciality vehicles, as well as certain corporate charges, will combined in the company’s financial reporting. Those charges include corporate administrative charges, CEO, board of directors, CFO, general counsel, and business development costs.
“As we diversify and grow the company and broaden our reach and portfolio, these corporate administrative charges are less tied to the specific segments and more associated with directing the enterprise,” Hughes said.
Regarding potential 2019 Chris-Craft revenues, Happe said he could not share specific numbers, but he did indicate a growth strategy was on the horizon.
“It’s a business that we intend to grow materially into the future,” Happe said. “It’s a big brand, but a small business. We bought it because we think we can grow it significantly, but be very careful and respectful to the iconic brand that it is.” It’s also a strategic play into a new industry segment, and as we learn about the marine segment, and work with the new talent we have, it allows us to consider other opportunities within Chris-Craft.”