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What changed in WINNEBAGO INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WINNEBAGO INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+171 added−160 removedSource: 10-K (2024-10-23) vs 10-K (2023-10-18)

Top changes in WINNEBAGO INDUSTRIES INC's 2024 10-K

171 paragraphs added · 160 removed · 131 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

38 edited+7 added−7 removed44 unchanged
Biggest changeIn Fiscal 2023, our days away restricted transfer rate ("DART") was 2.14, a 33% improvement compared to 3.20 in Fiscal 2022. We are an industry leader in workplace safety and our commitment to safety never stops. 9 Table of Contents Information about our Executive Officers Name Office (Year First Elected an Officer) Age Michael J.
Biggest changeWe continue to invest in workplace safety initiatives and our commitment to safety never stops. 9 Table of Contents Information about our Executive Officers Name Office (Year First Elected an Officer) Age Michael J. Happe President and Chief Executive Officer (2016) 53 Ashis N. Bhattacharya Senior Vice President, Business Development, Advanced Technology and Strategic Planning (2016) 62 Stacy L.
Item 1. Business. General The use of terms "Winnebago Industries," "Winnebago," "we," "our," and "us" in this Annual Report on Form 10-K, unless the context otherwise requires, refer to Winnebago Industries, Inc. and its wholly-owned subsidiaries.
Item 1. Business. General The use of the terms "Winnebago Industries," "Winnebago," "we," "our," and "us" in this Annual Report on Form 10-K, unless the context otherwise requires, refer to Winnebago Industries, Inc. and its wholly-owned subsidiaries.
These specialty commercial vehicles are manufactured in Forest City, Iowa and sold through our dealer network. Lithionics On April 28, 2023, we acquired 100% of the equity interests Lithionics Battery, LLC and Lithionics LLC (collectively, "Lithionics"), a premier lithium-ion battery solutions provider to the recreational equipment and specialty vehicle markets.
These specialty commercial vehicles are manufactured in Forest City, Iowa and sold through our dealer network. Lithionics On April 28, 2023, we acquired 100% of the equity interests of Lithionics Battery, LLC and Lithionics LLC (collectively, "Lithionics"), a premier lithium-ion battery solutions provider to the recreational equipment and specialty vehicle markets.
Happe joined Winnebago Industries in January 2016 as President and Chief Executive Officer. Prior to joining Winnebago, he had been employed by The Toro Company, a provider of outdoor maintenance and beautification products, from 1997 to 2016. He served as Executive Officer and Group Vice President of Toro's Residential and Contractor businesses from March 2012 to December 2015.
Happe joined Winnebago Industries in January 2016 as President and Chief Executive Officer. Prior to joining Winnebago Industries, he had been employed by The Toro Company, a provider of outdoor maintenance and beautification products, from 1997 to 2016. He served as Executive Officer and Group Vice President of Toro's Residential and Contractor businesses from March 2012 to December 2015.
These changes generally include new floor plans, features, functionality, and sizes as well as design and decor modifications. Most of our raw materials such as steel, aluminum, fiberglass, and wood products are obtainable from numerous sources. Our towable RVs are produced at two assembly campuses located in Middlebury, Indiana.
These changes generally include new floor plans, features, functionality, and sizes as well as design and decor modifications. Most of our raw materials such as steel, aluminum, fiberglass, and wood products are obtainable from numerous sources. Our towable RVs are produced at two assembly campuses located in Indiana.
Our motorhome RVs range in length from 18 to 45 feet. Motorhome RV parts and service activities represent revenues generated by service work we perform for retail customers at our Forest City, Iowa and Nappanee, Indiana facilities as well as revenues from the sale of unit parts.
Our motorhome RVs range in length from approximately 18 to 45 feet. Motorhome RV parts and service activities represent revenues generated by service work we perform for retail customers at our Forest City, Iowa and Nappanee, Indiana facilities as well as revenues from the sale of unit parts.
He became Vice President, Business Development, Specialty Vehicles, and Advanced Technology in 2019 and Senior Vice President, Business Development, Advanced Technology, and Enterprise Marketing in September 2020. Prior to joining Winnebago, Mr.
He became Vice President, Business Development, Specialty Vehicles, and Advanced Technology in 2019 and Senior Vice President, Business Development, Advanced Technology, and Enterprise Marketing in September 2020. Prior to joining Winnebago Industries, Mr.
Woodson Senior Vice President, Human Resources and Corporate Relations (2015) 53 Officers are elected annually by the Board of Directors and hold office until their successors are chosen and qualify or until their death or resignation. There are no family relationships between or among any of the Executive Officers or Directors of the Company. Mr.
Woodson Senior Vice President, Human Resources and Corporate Relations (2015) 54 Officers are elected annually by the Board of Directors and hold office until their successors are chosen and qualify or until their death or resignation. There are no family relationships between or among any of the Executive Officers or Directors of the Company. Mr.
The RVIA classifies motorhome RVs into three types, all of which we manufacture and sell under the Winnebago and Newmar brand names, which are defined as follows: Type Description Winnebago product offerings Newmar product offerings Class A Built on a heavy truck chassis in both diesel and gas models with the ability to tow a small vehicle Gas: Adventurer, Sunstar, and Vista Gas: Bay Star and Bay Star Sport Diesel: Forza and Journey Diesel: Canyon Star, Dutch Star, Essex, King Aire, Kountry Star, London Aire, Mountain Aire, New Aire, and Ventana Class B Built by adding a taller roof and amenities to an existing van, which allows for easy maneuvering Gas: Solis and Travato N/A Diesel: Boldt, Era, Revel, and Roam Class C Built on a medium truck chassis in both diesel and gas models with similar features and amenities to Class A models Gas: Ekko, Minnie Winnie, and Spirit Diesel: Super Star and Supreme Aire Diesel: Navion, Porto, View, and Vita Our Class A, Class B, and Class C motorhome RVs are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $140,000 to $1,650,000, which can vary depending on size and model, plus optional equipment and delivery charges.
The RVIA classifies motorhome RVs into three types, all of which we manufacture and sell under the Winnebago and Newmar brand names, which are defined as follows: Type Description Winnebago product offerings Newmar product offerings Class A Built on a heavy truck chassis in both diesel and gas models with the ability to tow a small vehicle Adventurer, Forza, Journey, Sunstar, and Vista Bay Star, Canyon Star, Dutch Star, Essex, King Aire, Kountry Star, London Aire, Mountain Aire, New Aire, Northern Star, and Ventana Class B Built by adding a taller roof and amenities to an existing van in both diesel and gas models, which allows for easy maneuvering Revel, Roam, Solis, Travato, and Winnebago + Adventure Wagon N/A Class C Built on a medium truck chassis in both diesel and gas models with similar features and amenities to Class A models EKKO, Minnie Winnie, Navion, Porto, Spirit, View, and Vita Super Star and Supreme Aire Our Class A, Class B, and Class C motorhome RVs are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $143,000 to $1,847,000, which can vary depending on size and model, plus optional equipment and delivery charges.
We manufacture and sell conventional travel trailers and fifth wheels under the Winnebago and Grand Design brand names, which are defined as follows: Type Description Winnebago product offerings Grand Design product offerings Travel trailer Towed by means of a hitch attached to the frame of the vehicle HIKE, Micro Minnie, Minnie, and Voyage Imagine, Momentum, Reflection, and Transcend Fifth wheel Constructed with a raised forward section that is connected to the vehicle with a special fifth wheel hitch N/A Momentum, Reflection, and Solitude Our travel trailer and fifth wheel towable RVs are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $30,000 to $150,000, which can vary depending on size and model, plus optional equipment and delivery charges. 5 Table of Contents Motorhome RV A motorhome RV is a self-propelled mobile dwelling used primarily as temporary living quarters during vacation and camping trips, or to support active and mobile lifestyles.
We manufacture and sell conventional travel trailers and fifth wheels under the Winnebago and Grand Design brand names, which are defined as follows: Type Description Winnebago product offerings Grand Design product offerings Travel trailer Towed by means of a hitch attached to the frame of the vehicle Access, HIKE, Micro Minnie, Minnie, M-Series, and Voyage Imagine, Momentum, Reflection, Serenova, and Transcend Fifth wheel Constructed with a raised forward section that is connected to the vehicle with a special fifth wheel hitch N/A Influence, Momentum, Reflection, and Solitude Our travel trailer and fifth wheel towable RVs are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $20,000 to $154,000, which can vary depending on size and model, plus optional equipment and delivery charges. 5 Table of Contents Motorhome RV A motorhome RV is a self-propelled mobile dwelling used primarily as temporary living quarters during vacation and camping trips, or to support active and mobile lifestyles.
West served as Director of Manufacturing for AGCO Corporation, an agricultural equipment manufacturer, from 2008 to 2012 and as Director of Operations and in other management positions for the Nordam Group, a manufacturer of aircraft interiors, from 1999 to 2009. Mr.
West served as Director of Manufacturing for 10 Table of Contents AGCO Corporation, an agricultural equipment manufacturer, from 2008 to 2012 and as Director of Operations and in other management positions for the Nordam Group, a manufacturer of aircraft interiors, from 1999 to 2009. Mr.
Winnebago Industries, Inc. is one of the leading North American manufacturers of recreation vehicles ("RV"s) and marine products with a diversified portfolio used primarily in leisure travel and outdoor recreational activities.
Winnebago Industries, Inc. is one of the leading North American manufacturers of recreation vehicles ("RVs") and marine products with a diversified portfolio used primarily in leisure travel and outdoor recreational activities.
In addition, we also manufacture other specialty commercial vehicles custom designed for the buyer's specific needs and requirements, such as law enforcement command centers, mobile medical clinics, and mobile office space. We also provide commercial vehicles as bare shells to third-party upfitters for conversion at their facilities.
Winnebago Specialty Vehicles We manufacture specialty commercial vehicles custom designed for the buyer's specific needs and requirements, such as law enforcement command centers, mobile medical clinics, and mobile office space. We also provide commercial vehicles as bare shells to third-party upfitters for conversion at their facilities.
Human Capital Management Our employees are our greatest strength and we are committed to providing a safe, inclusive, high-performance culture where our people thrive. We strive to recruit, develop, engage and protect our workforce.
Our employees are our greatest strength and we are committed to providing a safe, inclusive, high-performance culture where our people thrive. We strive to recruit, develop, engage and protect our workforce.
Type Chris-Craft product offerings Barletta product offerings Boats Calypso, Catalina, Launch, and Launch GT Aria, Cabrio, Corsa, Lusso, and Reserve Our boats are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $60,000 to $770,000, which can vary depending on size and model, plus optional equipment and delivery charges.
Type Chris-Craft product offerings Barletta product offerings Boats Calypso, Catalina, Launch, Launch GT, and Sportster Aria, Cabrio, Corsa, Lusso, Reserve, and Reserve Leggera Our boats are sold by dealers in the retail market with manufacturer's suggested retail prices ranging from approximately $47,000 to $768,000, which can vary depending on size and model, plus optional equipment and delivery charges.
As of August 26, 2023, our RV and marine dealer network in the U.S. and Canada included approximately 750 physical dealer locations, many of which carry more than one of our brands. None of our dealer organizations accounted for more than 10% of our net revenues during each of the past three fiscal years.
As of August 31, 2024, our RV and marine dealer network in the U.S. and Canada included over 750 physical dealer locations, many of which carry more than one of our brands. None of our dealer organizations accounted for more than 10% of our net revenues during each of the past three fiscal years.
We are committed to continuing to build a stronger, more inclusive culture and workplace. Employee Well-being and Safety Winnebago Industries is committed to designing, operating, and maintaining safe, controlled working conditions and a zero-harm culture. We operate under the principle that all workplace injuries and illnesses are predictable and preventable.
Employee Well-being and Safety Winnebago Industries is committed to designing, operating, and maintaining safe, controlled working conditions and a zero-harm culture. We operate under the principle that all workplace injuries and illnesses are preventable.
Clark, President of Grand Design RV, became an officer of Winnebago Industries in November 2016 in accordance with the terms of the Grand Design acquisition. He co-founded Grand Design RV, LLC in 2012 and built the team at Grand Design RV. Mr. Clark has over 30 years of successful RV industry experience. Mr.
Clark, President of Grand Design RV, became an officer of Winnebago Industries in November 2016 in accordance with the terms of the Grand Design acquisition. He co-founded Grand Design RV, LLC in 2012 and built the team at Grand Design RV. Mr. Clark has over 30 years of successful RV industry experience. Pursuant to our previously announced leadership changes, Mr.
We remain involved with partners who help advance our goals including CEO Action for Diversity & Inclusion, Society of Women Engineers, Women in Manufacturing, RV Women’s Alliance, and more. We are committed to increasing inclusion across our industry and beyond. Approximately 24% of our executive and senior leadership team members are women and 11% are racially or ethnically diverse.
We remain involved with partners who help advance our goals including Society of Women Engineers, Women in Manufacturing, RV Women’s Alliance, and more. We are committed to increasing inclusion across our industry and beyond. Approximately 25% of our executive and senior leadership team members are women and 12% are racially or ethnically diverse.
We consider the collective rights under our various patents, which expire from time to time, a valuable asset, but we do not believe that our businesses are materially dependent upon any single patent or group of related patents.
We consider the collective rights under our various patents, which expire from time to time, a valuable asset, but we do not believe that our businesses are materially dependent upon any single patent or group of related patents. Human Capital Management One of our core values is to put people first.
We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications.
We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications. Other products manufactured by us consist primarily of original equipment manufacturing parts for other manufacturers and commercial vehicles.
Commitment to Inclusion, Diversity, Equity, and Action ("IDEA") We believe in the value of building a company and community where every person feels welcome, is treated fairly, and has an equal opportunity to succeed while bringing their authentic self to work.
We believe our relations with our employees are good. Commitment to Inclusion and Belonging We believe in the value of building a company and community where every person feels welcome, is treated fairly, and has an equal opportunity to succeed while bringing their authentic self to work.
Fiscal 2023 refers to the fiscal year ended August 26, 2023, Fiscal 2022 refers to the fiscal year ended August 27, 2022, and Fiscal 2021 refers to the fiscal year ended August 28, 2021. The financial statements presented are all 52-week fiscal periods. Available Information Our internet website, located at www.winnebagoind.com, provides additional information about us.
Fiscal 2023 refers to the 52-week period ended August 26, 2023 and Fiscal 2022 refers to the 52-week period ended August 27, 2022. Available Information Our internet website, located at www.winnebagoind.com, provides additional information about us.
Most recently, he served as Vice President and Global Platform Leader from February 2022 to July 2022. He also served as Vice President of Product Marketing from January 2020 to February 2022, and Vice President and General Manager from October 2015 to January 2020. 10 Table of Contents Mr.
Most recently, he served as Vice President and Global Platform Leader from February 2022 to July 2022. He also served as Vice President of Product Marketing from January 2020 to February 2022, and Vice President and General Manager from October 2015 to January 2020. Mr. West joined Winnebago Industries in September 2016 as Vice President, Operations.
We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S.
We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S. All references to Fiscal 2024 refer to the 53-week period ended August 31, 2024.
We launched our first employee resource group in 2022, the Women’s Inclusion Network ("WIN"), whose mission is to support the professional development of women by encouraging access to learning, mentoring, and networking. WIN’s goal is to provide programming and tools, increase women’s sense of belonging, and the percentage of women in leadership roles within our businesses.
For example, the Women’s Inclusion Network ("WIN"), which was established in 2022, supports the professional development of women by encouraging access to learning, mentoring, and networking. WIN’s goal is to provide programming and tools, increase women’s sense of belonging, and the percentage of women in leadership roles within our businesses.
The Recreation Vehicle Industry Association ("RVIA") classifies towable RVs into four types: conventional travel trailers, fifth wheels, folding camper trailers, and truck campers.
The Recreation Vehicle Industry Association ("RVIA") classifies towable RVs into six types: conventional travel trailers, fifth wheels, travel trailers with expandable ends, folding camping trailers, truck campers, and park models.
Hughes joined Winnebago Industries as Vice President, Chief Financial Officer of the Company in May 2017 and was appointed Senior Vice President, Finance, Information Technology and Strategic Planning, and Chief Financial Officer, in October 2020. Mr.
Clark will become Group President, Towable RVs and President, Grand Design RV, effective November 1, 2024. Mr. Hughes joined Winnebago Industries as Vice President, Chief Financial Officer of the Company in May 2017 and was appointed Senior Vice President, Finance, Information Technology and Strategic Planning, and Chief Financial Officer, in October 2020. Mr.
West joined Winnebago Industries in September 2016 as Vice President, Operations and was appointed Senior Vice President, Enterprise Operations in October 2020. He previously was Vice President of Global Supply Chain for Joy Global, a worldwide mining equipment manufacturer, from 2014 to 2016, and Operations Director from 2012 to 2014. Mr.
He previously was Vice President of Global Supply Chain for Joy Global, a worldwide mining equipment manufacturer, from 2014 to 2016, and Operations Director from 2012 to 2014. Mr.
We continue to expand our partnerships with nonprofit organizations led by and for communities of color and women and organizations helping to diversify the talent pipeline including Camber Outdoors and the Society of Women Engineers.
We continue to expand our partnerships with nonprofit organizations led by and for communities of color and women and organizations helping to diversify the talent pipeline. We also recognize the importance of having diverse perspectives on our Board of Directors as we build and refresh our Board of Directors.
To build and attract the next generation of leaders, we have developed external partnerships, introducing high school and first-generation college students to potential career opportunities in the RV and marine industries.
To build and attract the next generation of leaders, we continue to support external partnerships that introduce high school and first-generation college students to potential career opportunities in the RV and marine industries. To increase the pipeline of diverse talent in the outdoor industry and beyond, we provided support to the South Bend Elkhart Regional Partnership and The BrandLab.
We also recognize the importance of having diverse perspectives on our Board of Directors and aspire to promote diversity as we build and refresh our Board of Directors. Our IDEA framework, which serves as a roadmap to guide us forward on our inclusion journey, includes the Board of Directors, leadership development, and engagement.
Our inclusion framework, which serves as a roadmap to guide us forward on our journey, includes the Board of Directors, leadership development, and engagement. As of August 31, 2024, 30% of our Board of Directors were women, and 20% were racially or ethnically diverse.
With the mental, emotional, and physical well-being of our employees as a key focus, we have provided resources for employees to manage remote work and balance parental and other family responsibilities. In Fiscal 2023, our total recordable incident rate ("TRIR") was 4.93, a 16% improvement compared to 5.85 in Fiscal 2022.
With the mental, emotional, and physical well-being of our employees as a key focus, we have provided resources for employees to manage remote work and balance parental and other family responsibilities. We celebrated our second annual Safety Month in Fiscal 2024, focusing on the theme "Safer Together" across all locations.
Responses are reviewed by team leaders and used to help build specific action plans to continually improve our employee engagement, satisfaction, and retention. We engage employees through community volunteerism, team-building, and employee resource groups. We strive to continually improve our employee experience, develop and grow our teams, and create a culture of inclusion and belonging.
Team members respond regularly to an engagement survey, administered at least every two years, that evaluates our employees’ thoughts about their experience working at Winnebago Industries. Responses are reviewed by team leaders and used to help build specific action plans to continually improve our employee engagement, satisfaction, and retention. We engage employees through community volunteerism, team-building, and employee resource groups.
Hughes Chief Financial Officer; Senior Vice President, Finance, Investor Relations and Information Technology (2017) 54 Casey J. Tubman President, Newmar Corporation (2022) 51 Christopher D. West Senior Vice President, Enterprise Operations and Barletta Boats (2016) 51 Bret A.
Bogart Senior Vice President, General Counsel, Secretary and Corporate Responsibility President, Winnebago Industries Foundation (2018) 61 Donald J. Clark President, Grand Design RV (2016) 64 Bryan L. Hughes Chief Financial Officer; Senior Vice President, Finance, Investor Relations and Information Technology (2017) 55 Casey J. Tubman President, Newmar Corporation (2022) 52 Christopher D. West President, Winnebago Outdoors (2016) 52 Bret A.
In our second year of implementing our “All In, Outdoors” roadmap, we continued to center creating a better sense of belonging in our workplace, our communities, and the outdoors. We advanced our strategy by listening and learning, including by establishing an IDEA Speaker series, where subject matter experts provide inspiration, tools, and resources to create an inclusive culture.
In our third year of implementing our “All In, Outdoors” roadmap, we continued to prioritize creating a better sense of belonging in our workplace, our communities, and the outdoors.
As of August 26, 2023, 22% of our Board of Directors were women, and 22% were racially or ethnically diverse. We believe our company and our brands should reflect the diversity of outdoor enthusiasts. We also believe we thrive and are more successful when we empower, value, and respect our employees and our communities.
We believe time together outdoors is priceless, and that our company and our brands should reflect the full spectrum of outdoor enthusiasts. We also believe we thrive and are more successful when we empower, value, and respect our employees and our communities. We are committed to continuing to build a stronger, more inclusive culture and workplace.
As of August 26, 2023, we employed approximately 6,250 persons, of which approximately 28% and 72% were non-production and production workers, respectively. In addition, approximately 18% and 82% were salaried and hourly employees, respectively. None of our employees are covered under a collective bargaining agreement. We believe our relations with our employees are good.
We strive to continually improve our employee experience, develop and grow our teams, and create a culture of inclusion and belonging. As of August 31, 2024, we employed approximately 5,700 persons, of which approximately 20% and 80% were salaried and hourly employees, respectively. None of our employees are covered under a collective bargaining agreement.
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Reportable Segment Name Changes In the third quarter of Fiscal 2023, we changed the name of our “Towable” segment to “Towable RV” and our “Motorhome” segment to “Motorhome RV.” These name changes had no impact on the composition of our segments, or previously reported results of operations, financial position, cash flows or segment results.
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These programs focus on developing the next generation of talent while engaging Black, Latino, Asian American and Pacific Islander, and 8 Table of Contents Native/Indigenous students in meaningful paid summer internships. We also collaborate with regional education and workforce development partners to connect job seekers with on-the-job training and leadership development.
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Winnebago Specialty Vehicles We manufacture accessibility enhanced motorhomes under the Winnebago brand name, which are vehicles with a wheelchair lift to allow individuals with physical disabilities access to the motorhome.
Added
We advanced our strategy by listening and learning, and expanding our Leadership Speaker Series, where subject matter experts provide inspiration, tools, and resources to create an inclusive culture based on our leadership expectations. We also continued to expand our employee resource groups which are open to all employees across our brands.
Removed
To increase the pipeline of diverse talent in the outdoor industry, we provided founding support to the Leaders from The Future of Work Internship Program in partnership with nonprofit partner Camber Outdoors. This innovative, diversity, equity, and inclusive ("DEI") focused internship program engages Black, Latino, Asian American and Pacific Islander, and Native/Indigenous students in meaningful paid summer internships.
Added
The Veterans Network Employee Resource Group, which was established in 2023, supports the professional development of our Veteran community by providing a space and place for employees who are Veterans, Active Military and Family & Friends (also known as Allies) to discuss their experiences, address issues through learning, assistance and guidance, and conduct activities to support the growth and development of our Veteran community members in their professional careers.
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We 8 Table of Contents also collaborate with regional education and workforce development partners to connect job seekers with on-the-job training and leadership development. Team members respond regularly to an engagement survey, administered at least every two years, that evaluates our employees’ thoughts about their experience working at Winnebago Industries.
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In 2024, we launched the Mosaic Multicultural Network to engage and connect our multicultural and black, indigenous, and persons of color team members and allies. The Mosaic Multicultural Network promotes connection, while helping to bolster an inclusive workplace for all employees, and career mobility, visibility, recruitment and retention.
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In addition, our Courageous Conversations program helps build connections with employees through conversations that provide awareness and understanding around community and cultural sensitivities that can be difficult in the workplace.
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We continue focused improvement efforts to reduce both our facility and injury/illness incident risk potential, including contracting with health care providers to have physical (on-site) or virtual clinics for convenient access to health care for all employees and advance our hierarchy of control levels across our core risks.
Removed
Happe President and Chief Executive Officer (2016) 52 Ashis N. Bhattacharya Senior Vice President, Business Development, Advanced Technology and Strategic Planning (2016) 61 Stacy L. Bogart Senior Vice President, General Counsel, Secretary and Corporate Responsibility President, Winnebago Industries Foundation (2018) 60 Huw S. Bower President, Winnebago Outdoors (2020) 49 Donald J. Clark President, Grand Design RV (2016) 63 Bryan L.
Added
In Fiscal 2024, our total recordable incident rate ("TRIR") was 3.51, a 29% improvement compared to 4.93 in Fiscal 2023. In Fiscal 2024, our days away restricted transfer rate ("DART") was 1.75, an 18% improvement compared to 2.14 in Fiscal 2023.
Removed
Bower joined Winnebago Industries in October 2020 as President, Winnebago Outdoors. Prior to joining Winnebago Industries, he was President of the Boat Group at Brunswick Corporation, a developer and manufacturer of marine/boating products, from April 2016 to September 2020. Mr. Bower has over 15 years of general management, brand leadership and executive experience in the marine industry. Mr.
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He became Senior Vice President, Enterprise Operations in October 2020 and President, Winnebago Outdoors in September 2024. Pursuant to our previously announced leadership changes, Mr. West will become President, Winnebago Motorhome and Specialty Vehicles, effective November 1, 2024.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+17 added−7 removed72 unchanged
Biggest changeIn addition, foreign, federal, state, and local regulatory and legislative bodies have proposed various legislative and regulatory measures relating to climate change, regulating GHG emissions, and energy policies. If such legislation is enacted, we could incur increased energy, environmental, and other costs and capital expenditures to comply with the limitations.
Biggest changeOther policymakers, such as the SEC and the State of California, have issued requirements for companies to provide expanded climate-related disclosures, which may require us to incur significant additional costs to comply. In addition, foreign, federal, state, and local regulatory and legislative bodies have proposed various legislative and regulatory measures relating to climate change, regulating GHG emissions, and energy policies.
Specific factors affecting the RV and marine industries include: • Overall consumer confidence and the level of discretionary consumer spending; • Employment trends; • Fuel prices; • Inflationary pressures affecting disposable consumer income; • Interest rate fluctuations; • The adverse impact of global tensions on consumer spending and travel-related activities; and • The adverse impact on margins due to increases in raw material costs, which we are unable to pass on to customers without negatively affecting sales.
Specific macroeconomic factors affecting the RV and marine industries include: • Overall consumer confidence and the level of discretionary consumer spending; • Inflationary pressures affecting disposable consumer income; • Interest rate fluctuations; • Employment trends; • Fuel prices; • The adverse impact of global tensions on consumer spending and travel-related activities; and • The adverse impact on margins due to increases in raw material costs, which we are unable to pass on to customers without negatively affecting sales.
If a default of payment occurs, the lenders in our ABL Credit Facility or holders of our Senior Secured and Convertible Notes may elect to declare all of their respective outstanding debt, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.
If a default of payment occurs, the lenders in our ABL Credit Facility or holders of our Senior Secured Notes, 2030 Convertible Notes, and 2025 Convertible Notes may elect to declare all of their respective outstanding debt, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.
Additionally, there continues to be uncertainty with respect to the implementation of current trade regulations, future trade regulations and existing international trade agreements, which could continue to increase our cost of goods sold, both directly and as a result of price increases implemented by domestic suppliers, which we may not be able to pass on to our customers.
Additionally, there continues to be uncertainty with respect to the implementation of current trade regulations, future trade regulations and existing international trade agreements, which could continue to increase our cost of goods sold, both directly and 13 Table of Contents as a result of price increases implemented by domestic suppliers, which we may not be able to pass on to our customers.
Coast Guard maintains certification standards for the 15 Table of Contents manufacture of our marine products, and the safety of recreational boats in the U.S. is subject to federal regulation under the Boat Safety Act of 1971, which requires boat manufacturers to recall products for replacement of parts or components that have demonstrated defects affecting safety.
Coast Guard maintains certification standards for the manufacture of our marine products, and the safety of recreational boats in the U.S. is subject to federal regulation under the Boat Safety Act of 1971, which requires boat manufacturers to recall products for replacement of parts or components that have demonstrated defects affecting safety.
Failure to prevent or effectively respond to a breach or system failure could expose our customers', clients', or suppliers' confidential information and expose us to substantial costs and reputational damage as well as litigation and enforcement actions.
Failure to prevent or effectively respond to a security breach or system failure could expose our customers' or suppliers' confidential information and expose us to substantial costs and reputational damage as well as litigation and enforcement actions.
We periodically communicate our ESG initiatives, which include prioritizing ethics and integrity, safety, people, diversity, equity and inclusion, community, waste, emissions, and product stewardship. Failure to meet our commitments, respond to regulatory requirements, or advance our initiatives could adversely impact our reputation, as well as the demand for our products.
We periodically communicate our ESG initiatives, which include prioritizing ethics and integrity, safety, people, inclusion and belonging, community, waste, emissions, and product stewardship. Failure to meet our commitments, respond to regulatory requirements, or advance our initiatives could adversely impact our reputation, as well as the demand for our products.
In addition to the costs associated with the contractual warranty coverage provided on our products, we also occasionally incur costs as a result of additional service actions not covered by our warranties, including product recalls and customer satisfaction actions.
In addition to the costs associated with the contractual warranty coverage provided on our products, we also occasionally incur costs as a result of additional service actions not covered by our warranties, including product recalls and customer satisfaction 14 Table of Contents actions.
Our current products, products under development, and our ability to develop new and improved products may be insufficient to enable us to 11 Table of Contents compete effectively with our competitors. These competitive pressures may have a material adverse effect on our results of operations.
Our current products, products under development, and our ability to develop new and improved products may be insufficient to enable us to compete effectively with our competitors. These competitive pressures may have a material adverse effect on our results of operations.
Most of our RV and marine components are readily available from numerous sources. However, a few of our components are produced by a small group of suppliers. In Fiscal 2023, one of our suppliers individually accounted for approximately 15% of our consolidated raw material purchases.
Most of our RV and marine components are readily available from numerous sources. However, a few of our components are produced by a small group of suppliers. In Fiscal 2024, one of our suppliers individually accounted for approximately 16% of our consolidated raw material purchases.
Retail buyers purchasing one of our products may elect to finance their purchase through the dealership or a financial institution of their choice. Substantial increases in interest rates or decreases in the general availability of credit for our dealers or for the retail purchaser may have an adverse impact upon our business and results of operations.
Retail buyers purchasing one of our products from our dealers may elect to finance their purchase through the dealership or a financial institution of their choice. Substantial increases in interest rates or decreases in the availability of consumer credit may have an adverse impact upon our business and results of operations.
Our determination of whether goodwill impairment has occurred is based on a comparison of each of our reporting units’ fair value with its carrying value.
Our determination of whether goodwill impairment has occurred is based on a comparison of each of our reporting units’ fair 16 Table of Contents value with its carrying value.
Finally, federal and state authorities also have various environmental control standards relating to air, water, noise pollution, greenhouse gases ("GHG"), and hazardous waste generation and disposal that affect us and our operations.
For example, federal and state authorities have various environmental control standards relating to air, water, noise pollution, greenhouse gases ("GHG"), and hazardous waste generation and disposal that affect us and our operations.
In addition, competition could increase if new companies enter the market, existing competitors consolidate their operations, or if existing competitors expand their product lines or intensify efforts within existing product lines.
In addition, competition could increase if new companies enter the market, existing competitors consolidate their operations, or if existing competitors expand their product lines or intensify efforts within 11 Table of Contents existing product lines.
Furthermore, decisions by our suppliers to decrease production, production delays or work stoppages by the employees of such suppliers, or price increases could have a material adverse effect on our ability to produce our products and ultimately, on our results of operations, financial condition, and cash flows.
Furthermore, decisions by our suppliers to decrease production, production delays or work stoppages by the employees of such suppliers, or price increases could have a material adverse effect on our ability to produce our products and ultimately, on our results of operations, financial condition, and cash flows. Our operations are primarily centered in northern Iowa and northern Indiana.
In addition, we could be impacted by adjustments proposed by taxing authorities in connection with examinations, depending on their timing, nature and scope. Increases in tax rates, changes in tax laws or unfavorable resolution of tax matters could have a material impact on our financial results.
In addition, we could be impacted by adjustments proposed by taxing authorities in connection with examinations, depending on their timing, nature and scope. Increases in tax rates, changes in tax laws or unfavorable resolution of tax matters could have a material impact on our financial results. Finally, regulations related to climate change are increasing.
Information Systems, Legal and Regulatory Risks We may be subject to information technology system failures, inefficiencies associated with system implementations, network disruptions, and breaches in data security that could adversely affect our business.
Information Systems, Legal and Regulatory Risks We may be subject to information technology system failures, inefficiencies associated with system implementations, network disruptions, and cybersecurity incidents that could adversely affect our business.
Amongst other things, the impact could include interruptions or delays in our ability to access information, data loss, processing inefficiencies, lost revenues or other costs resulting from shutdowns, unfavorable publicity, governmental inquiry and oversight, difficulty in marketing our services, allegations by our customers and clients that we have not performed our contractual obligations, litigation by affected parties, and possible financial obligations for damages related to the theft or misuse of such information.
Amongst other things, the impact could include interruptions or delays in our ability to access information, data loss, processing inefficiencies, lost revenues or other costs resulting from shutdowns, unfavorable publicity, governmental inquiry and oversight, litigation by affected parties, and possible financial obligations for damages related to the theft or misuse of such information.
We currently manufacture most of our products in northern Iowa and northern Indiana. We also have relatively small manufacturing operations on the Gulf Coast of Florida. These facilities may be affected by natural or man-made disasters and other external events.
Any disruption or delay at our primary manufacturing facilities could adversely affect our business and operating results. We currently manufacture most of our products in northern Iowa and northern Indiana. We also have relatively small manufacturing operations on the Gulf Coast of Florida. These facilities may be affected by natural or man-made disasters and other external events.
If the inventory levels of our dealers are higher than they desire, they may postpone product purchases from us, which could cause our sales to be lower than the end-user retail demand for our products and negatively impact our inventory management and working capital goals as well as our operating results. 13 Table of Contents Increases in raw material, commodity, and transportation costs and shortages of certain raw materials could negatively impact our business.
If the inventory levels of our dealers are higher than they desire, they may postpone product purchases from us, which could cause our sales to be lower than the end-user retail demand for our products and negatively impact our inventory management and working capital goals as well as our operating results.
We receive warranty claims from our dealers in the ordinary course of our business. Although we maintain reserves for such claims, which to date have been adequate, there can be no assurance that warranty expense levels will remain at current levels or that such reserves will continue to be adequate.
Although we maintain reserves for such claims, which to date have been adequate, there can be no assurance that warranty expense levels will remain at current levels or that such reserves will continue to be adequate.
Misuse, leakage, falsification, or breach of security of information could result in a violation of privacy laws and damage our reputation which could, in turn, have a negative impact on our results.
Misuse, leakage, falsification, or breach of security of information could result in a violation of privacy laws and damage our reputation which could, in turn, adversely affect our business or financial results.
We rely on our information systems and web applications to support our business operations, including but not limited to procurement, supply chain, manufacturing, distribution, warranty administration, invoicing, and collection of payments. We use information systems to record and report our operational results. Additionally, we rely upon information systems in our sales, marketing, human resources, and communication efforts.
Our information systems and infrastructure are used to support our operations and manage key business processes, including but not limited to, procurement, supply chain, manufacturing, distribution, warranty administration, invoicing, collection of payments, sales, marketing, human resources, communication efforts and other administrative functions. Additionally, we rely on information systems to record and report our operational results.
We believe that one of the strengths of our business is our brands, which are widely known around the world. We vigorously defend our brands and our other intellectual property rights against third parties on a global basis. We have, from time to time, had to bring claims against third parties to protect or prevent unauthorized use of our brand.
We vigorously defend our brands and our other intellectual property rights against third parties on a global basis. We have, from time to time, had to bring claims against third parties to protect or prevent unauthorized use of our brand.
The loss or interruption of services of any of our key personnel, inability to identify, attract, or retain qualified personnel in the future, delays in hiring qualified personnel, or any employee work slowdowns, strikes, or similar actions could make it difficult for us to conduct and manage our business and meet key objectives, which could harm our business, financial condition, and operating results. 14 Table of Contents Significant product repair and/or replacement costs due to product warranty claims and product recalls could have a material adverse impact on our results of operations, financial condition, and cash flows.
The loss or interruption of services of any of our key personnel, inability to identify, attract, or retain qualified personnel in the future, delays in hiring qualified personnel, or any employee work slowdowns, strikes, or similar actions could make it difficult for us to conduct and manage our business and meet key objectives, which could harm our business, financial condition, and operating results.
Likewise, the indenture related to the Convertible Notes issued to help finance the acquisition of Newmar includes certain limited covenants that could impact our ability to operate our business.
Likewise, the Indenture related to the 2025 Convertible Notes and the Indenture related to the 2030 Convertible Notes includes certain limited covenants that could impact our ability to operate our business.
One financial flooring institution held approximately 33% of our total financed dealer inventory dollars that were outstanding at August 26, 2023. In the event that this lending institution limits or discontinues dealer financing, we could experience a material adverse effect on our results of operations. Our business is also affected by the availability and terms of financing to retail purchasers.
As of August 31, 2024, two financial flooring institutions held approximately 52% of our total outstanding financed dealer inventory dollars. In the event that either of these lending institutions limits or discontinue dealer financing, we could experience an adverse effect on our results of operations. Our business is also affected by the availability and terms of financing to retail purchasers.
We purchase raw materials such as steel, aluminum, and other commodities, and components, such as chassis, refrigerators, and televisions, for use in our products. In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, copper, lead, rubber, lumber, and others that are integrated into our end products.
In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, copper, lead, rubber, lumber, and others that are integrated into our end products. Our profitability is affected by significant fluctuations in the prices of the raw materials and the components and parts we use in our products.
Significant and unanticipated changes in circumstances, such as significant and long-term adverse changes in business climate, unanticipated competition, and/or changes in technology or markets, could require a provision for impairment in a future period that could negatively impact our results of operations.
Although no other impairments were identified in Fiscal 2024, Fiscal 2023, or Fiscal 2022, significant and unanticipated changes in circumstances, such as significant and long-term adverse changes in business climate, unanticipated competition, and/or changes in technology or markets, could require future impairment charges that could be significant and could negatively impact our results of operations.
Our success is dependent on our ability to attract new dealers and maintain relationships with existing dealers. Our independent dealers maintain control over which products they carry and choose to sell, and they may promote other products, or terminate existing relationships if our products are not perceived as being desirable and profitable.
Our independent dealers maintain control over which products they carry and choose to sell, and they may promote other products, or terminate existing relationships if our products are not perceived as being desirable and profitable. Our results of operations can be adversely affected if we are unable to maintain and develop successful relationships with independent dealers.
We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. We rely on our dealers to develop and implement effective strategies to create retail demand for our products. If our independent dealers are unsuccessful in doing so, it could have an adverse effect on our results of operations.
We rely on our dealers to develop and implement effective strategies to create retail demand for our products. If our independent dealers are unsuccessful in doing so, it could have an adverse effect on our results of operations. Our success is dependent on our ability to attract new dealers and maintain relationships with existing dealers.
Some of our competitors are much larger than we are, and this size advantage provides these competitors with more financial resources and access to capital, additional purchasing power, and greater leverage with the dealer networks.
Competitors may also seek an advantage through lower prices or promotional changes, which could reduce demand for our products or adversely affect our margins. Some of our competitors are much larger than we are, and this size advantage provides these competitors with more financial resources and access to capital, additional purchasing power, and greater leverage with the dealer networks.
Climate change regulation combined with public sentiment could result in reduced demand for our products, higher fuel prices, or carbon taxes, all of which could materially adversely affect our business.
If such legislation is enacted, we could incur increased energy, environmental, and other costs and capital expenditures to comply with the limitations. Climate change regulation combined with public sentiment could result in reduced demand for our products, higher fuel prices, or carbon taxes, all of which could materially adversely affect our business.
An increase in dealer consolidation or the loss of a significant dealer could have a material adverse effect on our business. In recent periods there has been an increase in acquisitions and consolidation across the U.S. RV independent dealer network.
In recent periods there has been an increase in acquisitions and consolidation across the U.S. RV independent dealer network.
Also, unusually severe weather conditions in some markets may impact demand. Our business depends on the performance of independent dealers. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer.
We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer. We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer.
We are subject to certain government regulations that could have a material adverse impact on our business, including changing climate-related regulations that may require us to incur additional costs in order to be in compliance.
In addition, if product liability claims rise to a level of frequency or size that are significantly higher than similar claims made against our competitors, our reputation and business may be harmed. 15 Table of Contents We are subject to certain government regulations that could have a material adverse impact on our business, including changing climate-related regulations that may require us to incur additional costs in order to be in compliance.
If we are unable to protect and defend our brands or other intellectual property, it could have a material adverse effect on our results of operations or financial condition. We are also subject, in the ordinary course of business, to litigation including a variety of warranty, "Lemon Law," and product liability claims typical in the RV and marine industries.
We are also subject, in the ordinary course of business, to litigation including a variety of warranty, "Lemon Law," and product liability claims typical in the RV and marine industries.
Our results of operations can be adversely affected if we are unable to maintain and develop successful relationships with independent dealers. The financial condition of independent dealers is affected in large part by conditions and events that are beyond our control. Significant deterioration in the financial condition of independent dealers could materially and adversely affect our results of operations.
The financial condition of independent dealers is affected in large part by conditions and events that are beyond our control. Significant deterioration in the financial condition of independent dealers could materially and adversely affect our results of operations. An increase in dealer consolidation or the loss of a significant dealer could have a material adverse effect on our business.
The terms of our notes and other debt instruments could adversely affect our operating flexibility and pose risks of default. We incurred substantial indebtedness to finance the acquisitions of Grand Design and Newmar Corporation ("Newmar").
We incurred substantial indebtedness to finance the acquisitions of Grand Design and Newmar Corporation ("Newmar").
Our continued success is dependent on positive perceptions of our brands which, if impaired, could adversely affect our results of operations or financial condition. In addition, if the frequency and size of product liability and other claims against us increase, our reputation and business may be harmed.
In addition, if the frequency and size of product liability and other claims against us increase, our reputation and business may be harmed. We believe that one of the strengths of our business is our brands, which are widely known around the world.
We also issued unsecured Convertible Notes (as described in Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this 16 Table of Contents Annual Report on Form 10-K) to finance the acquisition of Newmar.
Refer to Note 7 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for more information regarding goodwill and intangible assets. The terms of our notes and other debt instruments could adversely affect our operating flexibility and pose risks of default.
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For example, in the first quarter of Fiscal 2023, the Mercedes-Benz Sprinter chassis became subject to a recall notice, which temporarily suspended all retail sales and wholesale shipments of our products built on this chassis until a recall remedy was implemented. The remedy was implemented in the second quarter of Fiscal 2023 in cooperation with Mercedes-Benz AG.
Added
A reduction in the availability of wholesale floorplan financing, or more restrictive lending practices, could have an adverse impact on our independent dealers and therefore our results of operations. In addition, an increase in the cost of financing due to interest rate fluctuations may incentivize dealers to reduce field inventory levels, which could negatively impact our sales and profitability.
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For example, on September 15, 2023, the United Auto Workers Union ("UAW") announced targeted strikes impacting certain auto manufacturers from which we purchase chassis. While we do not expect immediate disruption from the strike, the situation remains dynamic, and the exact magnitude and duration is difficult to predict at this time.
Added
Also, unusually severe weather conditions may impact demand or disrupt our manufacturing and distribution facilities, as well as our supply chain, which could have an adverse effect on our business. Our business depends on the performance of independent dealers.
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However, if the labor disputes are prolonged, there could be an adverse impact on our business, financial condition and results of operations. Our operations are primarily centered in northern Iowa and northern Indiana. Any disruption or delay at our primary manufacturing facilities could adversely affect our business and operating results.
Added
Increases in raw material, commodity, and transportation costs and shortages of certain raw materials could negatively impact our business. We purchase raw materials such as steel, aluminum, and other commodities, and components, such as chassis, refrigerators, and televisions, for use in our products.
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Our profitability is affected by significant fluctuations in the prices of the raw materials and the components and parts we use in our products.
Added
Significant product repair and/or replacement costs due to product warranty claims and product recalls could have a material adverse impact on our results of operations, financial condition, and cash flows. We receive warranty claims from our dealers in the ordinary course of our business.
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Further, we have security systems in place with the intent of maintaining the physical security of our facilities and protecting our customers', clients', and suppliers' confidential information and information related to identifiable individuals against unauthorized access through our information systems or by other electronic transmission or through the misdirection, theft, or loss of physical media.
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We rely extensively on information systems and other technology software, some of which are managed by third parties, to process, summarize, transmit, and store electronic information that is critical to operating our business efficiently and effectively.
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If we fail to maintain or protect our information systems and web applications effectively, we could experience adverse consequences that could have a material effect on our business.
Added
Operating these systems in a secure manner is critical to our business operations and strategy. We have implemented measures and incurred costs intended to protect and prevent unauthorized access to or loss of sensitive data. We also have security systems in place with the intent of maintaining the physical security of our facilities.
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In addition, if product liability claims rise to a level of frequency or size that are significantly higher than similar claims made against our competitors, our reputation and business may be harmed.
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Despite our efforts to continuously mature our cybersecurity program, our information systems, and those of our third-party service providers, are still susceptible to system shutdowns, damage, degraded performance, disruptions or other security incidents.
Added
Although these incidents have not historically had a significant impact on our business operations, there can be no guarantee that the actions and controls we have implemented and are implementing will be sufficient to protect our systems, information, or other property.
Added
While we maintain cybersecurity insurance to protect against potential losses arising from security incidents, the costs related to threats or disruption may not be fully insured. Our continued success is dependent on positive perceptions of our brands which, if impaired, could adversely affect our results of operations or financial condition.
Added
If we are unable to protect and defend our brands or other intellectual property, it could have a material adverse effect on our results of operations or financial condition. Our success in maintaining, extending, and expanding our brand image depends on our ability to adapt to a rapidly changing media environment.
Added
The growing use of social and digital media platforms by us, our customers and third parties increases the speed and extent to which information, including misinformation and opinions can be shared.
Added
Negative posts or comments about us, our brands, our products, and in some cases, our competitors, on social or digital media, whether or not valid, could damage our brands and reputation. If we do not maintain, extend, and expand our reputation or brand image, then our operating results and financial condition could be materially and adversely affected.
Added
During the fourth quarter of Fiscal 2024, we completed our annual assessment of indefinite-lived intangible assets and determined that the carrying value of the Chris-Craft reporting unit exceeded its fair value, resulting in a $30.3 million impairment charge, which represents the full goodwill balance attributable to the reporting unit.
Added
We also issued unsecured convertible senior notes due 2025 ("2025 Convertible Notes") to finance the acquisition of Newmar, and unsecured convertible senior notes due 2030 ("2030 Convertible Notes") to execute a partial repurchase of the 2025 Convertible Notes.
Added
General Risks Our common stock trading price could decline if equity research analysts issue unfavorable commentary or downgrade our common stock. The trading market for our common stock depends in part on the research and reports that third party securities analysts publish about us and the industries in which we operate.
Added
If one or more analysts cease coverage of our company, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline.
Added
Alternatively, one or more analysts could downgrade our common stock, provide more favorable recommendations about our competitors, or publish inaccurate or unfavorable research about our business or industry, which could also cause the trading volume or market price of our common stock to decline. Item 1B. Unresolved Staff Comments. None. 17 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed2 unchanged
Biggest changeUnder our Senior Secured Notes and ABL Credit Facility, we have encumbered substantially all of our real property for the benefit of the lenders thereunder. For additional information, see Note 9 in the Notes to Consolidated Financial Statements, included in 17 Table of Contents Item 8 of Part II in this Annual Report on Form 10-K.
Biggest changeUnder our Senior Secured Notes and ABL Credit Facility, we have encumbered substantially all of our real property for the benefit of the lenders thereunder. For additional information, see Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K.
The principal facilities used in our operations are in the following locations: Segment Location Status Primary Use Towable RV Elkhart, Indiana Leased Manufacturing (1) Towable RV Middlebury, Indiana Owned Manufacturing (1) and office space Towable RV Middlebury, Indiana Leased Manufacturing (1) and office space Towable RV White Pigeon, Michigan Leased Manufacturing (1) Motorhome RV Charles City, Iowa Owned Manufacturing (1) Motorhome RV Forest City, Iowa Owned Manufacturing (1) and office space Motorhome RV Lake Mills, Iowa Owned Manufacturing (1) Motorhome RV Nappanee, Indiana Owned Manufacturing (1) and office space Motorhome RV Nappanee, Indiana Leased Manufacturing (1) Motorhome RV Waverly, Iowa Owned Manufacturing (1) Marine Bristol, Indiana Leased Manufacturing (1) Marine Bristol, Indiana Owned Manufacturing (1) and office space Marine Sarasota, Florida Owned Manufacturing (1) and office space Corporate / All Other Clearwater, Florida Leased Manufacturing (1) and office space Corporate / All Other Eden Prairie, Minnesota Leased Office space Corporate / All Other Forest City, Iowa Owned Manufacturing (1) Corporate / All Other Savage, Minnesota Leased Research and development, and office space (1) Manufacturing includes production, warehouse, maintenance, and service center facilities.
The principal facilities used in our operations are in the following locations: Segment Location Status Primary Use Towable RV Elkhart, Indiana Leased Manufacturing (1) Towable RV Middlebury, Indiana Owned Manufacturing (1) and office space Towable RV Middlebury, Indiana Leased Manufacturing (1) and office space Towable RV White Pigeon, Michigan Leased Manufacturing (1) Motorhome RV Charles City, Iowa Owned Manufacturing (1) Motorhome RV Forest City, Iowa Owned Manufacturing (1) and office space Motorhome RV Lake Mills, Iowa Owned Manufacturing (1) Motorhome RV Nappanee, Indiana Owned Manufacturing (1) and office space Motorhome RV Nappanee, Indiana Leased Manufacturing (1) Motorhome RV Waverly, Iowa Owned Manufacturing (1) Marine Bristol, Indiana Leased Manufacturing (1) Marine Bristol, Indiana Owned Manufacturing (1) and office space Marine Sarasota, Florida Owned Manufacturing (1) and office space Corporate / All Other Clearwater, Florida Leased Manufacturing (1) and office space Corporate / All Other Eden Prairie, Minnesota Leased Office space Corporate / All Other Forest City, Iowa Owned Manufacturing (1) and office space Corporate / All Other Savage, Minnesota Leased Research and development, and office space (1) Manufacturing includes production, warehouse, maintenance, and service center facilities.
For a description of our legal proceedings, see Note 12 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not Applicable. 18 Table of Contents PART II
For a description of our legal proceedings, see Note 12 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not Applicable. 19 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−2 removed6 unchanged
Biggest changeBase Period Company/Index August 25, 2018 August 31, 2019 August 29, 2020 August 28, 2021 August 27, 2022 August 26, 2023 Winnebago Industries, Inc. $ 100.00 $ 86.98 $ 160.25 $ 202.11 $ 171.27 $ 181.21 S&P 500 Index 100.00 103.93 126.99 165.71 151.34 167.15 Russell 3000 Recreational Vehicles and Boats Subsector Index 100.00 72.24 105.12 134.70 121.12 120.10 Peer Group 100.00 68.41 103.66 139.25 115.72 123.13 Source: Zacks Investment Research, Inc. 20 Table of Contents Item 6. [Reserved].
Biggest changeBase Period Company/Index August 31, 2019 August 29, 2020 August 28, 2021 August 27, 2022 August 26, 2023 August 31, 2024 Winnebago Industries, Inc. $ 100.00 $ 184.24 $ 232.36 $ 196.92 $ 208.35 $ 199.06 S&P 500 Index 100.00 122.19 159.44 145.62 160.83 209.29 Russell 3000 Recreational Vehicles and Boats Subsector Index 100.00 145.51 186.46 167.66 166.24 158.94 Source: Zacks Investment Research, Inc. 21 Table of Contents Item 6. [Reserved].
We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL Credit Facility and outstanding Senior Secured Notes, we may purchase shares in the future. As of August 26, 2023, we have $300.0 million remaining on our Board of Directors approved repurchase authorization.
We continually evaluate if share repurchases reflect a prudent use of our capital and, subject to compliance with our ABL Credit Facility and outstanding Senior Secured Notes, we may purchase shares in the future. As of August 31, 2024, we have $230.0 million remaining on our Board of Directors approved repurchase authorization.
Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the New York Stock Exchange under the ticker symbol of WGO. As of October 12, 2023, there were 2,050 shareholders of record.
Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the New York Stock Exchange under the ticker symbol of WGO. As of October 16, 2024, there were 1,964 shareholders of record.
During Fiscal 2023, we repurchased approximately 795,000 shares of our common stock at a cost of $50.0 million, and approximately 90,000 shares of our common stock at a cost of $5.1 million to satisfy tax obligations on employee equity awards as they vested.
During Fiscal 2024, we repurchased approximately 1,177,000 shares of our common stock at a cost of $70.0 million, and approximately 77,000 shares of our common stock at a cost of $4.5 million to satisfy tax obligations on employee equity awards as they vested.
Dividends On August 16, 2023, our Board of Directors declared a quarterly cash dividend of $0.31 per share, totaling $9.2 million, to be paid on September 27, 2023 to common shareholders of record at the close of business on September 13, 2023.
Dividends On August 15, 2024, our Board of Directors declared a quarterly cash dividend of $0.34 per share, totaling $9.8 million, to be paid on September 25, 2024 to common shareholders of record at the close of business on September 11, 2024.
On August 17, 2022, our Board of Directors authorized a share repurchase program in the amount of $350.0 million with no time restriction on the authorization. This share repurchase program was effective immediately and replaced the prior program that was fully depleted in the fourth quarter of Fiscal 2022.
On August 17, 2022, our Board of Directors authorized a new share repurchase program in the amount of $350.0 million with no time restriction on the authorization, which took effect immediately and replaced the prior program.
It is assumed in the graph that $100 was invested in our common stock, in the Standard & Poor's 500 Index and in the stocks of the peer group companies on August 25, 2018 and that all dividends received within a quarter were reinvested in that quarter.
It is assumed in the graph that $100 was invested in our common stock, in the Standard & Poor's 500 Index, and in the Russell 3000 Recreational Vehicles and Boats Subsector Index, on August 31, 2019, and that all dividends received within a quarter were reinvested in that quarter.
There is no time restriction on this authorization. 19 Table of Contents Stock Performance Graph The following graph compares our five-year cumulative total shareholder return (including reinvestment of dividends) with the cumulative total return on the Standard & Poor's 500 Index, the Russell 3000 Recreational Vehicles and Boats Subsector Index, and the peer group used in previously filings, consisting of THOR Industries, Inc., Polaris Inc., and Brunswick Corporation.
There is no time restriction on this authorization. 20 Table of Contents Stock Performance Graph The following graph compares our five-year cumulative total shareholder return (including reinvestment of dividends) with the cumulative total return on the Standard & Poor's 500 Index and the Russell 3000 Recreational Vehicles and Boats Subsector Index, which is a widely utilized industry index that is representative of our current business.
Purchases of our common stock during each fiscal month of the fourth quarter of Fiscal 2023 are as follows: Period Total Number of Shares Purchased (1,2) Average Price Paid per Share Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1,2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (3) (in millions) 05/28/23 - 07/01/23 93,729 $ 64.09 93,606 $ 324.0 07/02/23 - 07/29/23 281,394 67.56 281,209 305.0 07/30/23 - 08/26/23 76,011 68.12 73,407 300.0 Total 451,134 $ 66.93 448,222 $ 300.0 (1) Number of shares in the above table are shown in whole numbers.
Purchases of our common stock during each fiscal month of the fourth quarter of Fiscal 2024 are as follows: Period Total Number of Shares Purchased (1,2) Average Price Paid per Share Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1,2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (3) (in millions) 05/26/24 - 06/29/24 113,711 $ 53.08 113,128 $ 234.0 06/30/24 - 07/27/24 75,218 53.31 75,026 230.0 07/28/24 - 08/31/24 2,069 57.91 — 230.0 Total 190,998 $ 53.22 188,154 $ 230.0 (1) Number of shares in the above table are shown in whole numbers.
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The Russell 3000 Recreational Vehicles and Boats Subsector Index replaces the peer group in this analysis and going forward, as it is a widely utilized industry index that is representative of our current busin ess.
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In accordance with the guidelines of the SEC, the shareholder return for each entity in the peer group index has been weighted on the basis of market capitalization as of each annual measurement date set forth in the graph.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+16 added−13 removed35 unchanged
Biggest changeResults of Operations - Fiscal 2023 Compared to Fiscal 2022 Consolidated Performance Summary The following is an analysis of changes in key items included in the statements of operations for the fiscal year ended August 26, 2023 compared to the fiscal year ended August 27, 2022: (in millions, except per share data) 2023 % of Revenues (1) 2022 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 3,490.7 100.0 % $ 4,957.7 100.0 % $ (1,467.1) (29.6) % Cost of goods sold 2,904.6 83.2 % 4,028.4 81.3 % (1,123.8) (27.9) % Gross profit 586.1 16.8 % 929.3 18.7 % (343.3) (36.9) % Selling, general, and administrative expenses ("SG&A") 267.7 7.7 % 316.4 6.4 % (48.7) (15.4) % Amortization 17.7 0.5 % 29.4 0.6 % (11.7) (39.8) % Total operating expenses 285.4 8.2 % 345.8 7.0 % (60.5) (17.5) % Operating income 300.7 8.6 % 583.5 11.8 % (282.8) (48.5) % Interest expense, net 20.5 0.6 % 41.3 0.8 % (20.7) (50.1) % Non-operating loss 1.0 — % 27.5 0.6 % (26.5) (96.5) % Income before income taxes 279.2 8.0 % 514.7 10.4 % (235.6) (45.8) % Provision for income taxes 63.3 1.8 % 124.1 2.5 % (60.8) (49.0) % Net income $ 215.9 6.2 % $ 390.6 7.9 % $ (174.8) (44.7) % Diluted earnings per share $ 6.23 $ 11.84 $ (5.61) (47.4) % Diluted weighted average shares outstanding 35.4 33.0 2.5 7.5 % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Biggest changeWe believe these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in the industry. 23 Table of Contents Results of Operations - Fiscal 2024 Compared to Fiscal 2023 Consolidated Performance Summary The following is an analysis of changes in key items included in the statements of operations for the fiscal year ended August 31, 2024 compared to the fiscal year ended August 26, 2023: (in millions, except per share data) 2024 % of Revenues (1) 2023 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 2,973.5 100.0 % $ 3,490.7 100.0 % $ (517.2) (14.8) % Cost of goods sold 2,540.0 85.4 % 2,904.6 83.2 % (364.6) (12.6) % Gross profit 433.5 14.6 % 586.1 16.8 % (152.6) (26.0) % Selling, general, and administrative expenses ("SG&A") 280.0 9.4 % 267.7 7.7 % 12.5 4.7 % Amortization 23.0 0.8 % 17.7 0.5 % 5.3 29.7 % Goodwill impairment (Note 7) 30.3 1.0 % — — % 30.3 NM Total operating expenses 333.3 11.2 % 285.4 8.2 % 48.0 16.8 % Operating income 100.2 3.4 % 300.7 8.6 % (200.5) (66.7) % Interest expense, net 21.1 0.7 % 20.5 0.6 % 0.5 2.6 % Loss on note repurchase (Note 9) 32.7 1.1 % — — % 32.7 NM Non-operating loss 8.0 0.3 % 1.0 — % 7.0 718.9 % Income before income taxes 38.4 1.3 % 279.2 8.0 % (240.8) (86.3) % Provision for income taxes 25.4 0.9 % 63.3 1.8 % (37.9) (59.9) % Net income $ 13.0 0.4 % $ 215.9 6.2 % $ (202.9) (94.0) % Diluted earnings per share $ 0.44 $ 6.23 $ (5.79) (92.9) % Diluted weighted average shares outstanding 29.5 35.4 (5.9) (16.7) % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
(2) ASP excludes off-invoice dealer incentives. (3) Percentages may not add due to rounding differences. (4) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months.
(2) ASP excludes off-invoice dealer incentives. (3) Percentages may not add due to rounding differences. (4) Our backlog includes all accepted orders from dealers which generally have been requested to be shipped within the next six months.
Deferred Compensation Obligations Refer to Note 11 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for information regarding our deferred compensation plans. We expect to pay $1.8 million in the next 12 months and $7.9 million beyond 12 months.
Deferred Compensation Obligations Refer to Note 11 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for information regarding our deferred compensation plans. We expect to pay $1.7 million in the next 12 months and $6.6 million beyond 12 months.
We produce our motorhome RV units in Iowa and Indiana; our towable RV units in Indiana; and our marine units in Indiana and Florida. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer.
We produce our motorhome RV units in Iowa and Indiana; our towable RV units in Indiana; our marine units in Indiana and Florida; and our battery solutions in Florida. We distribute our RV and marine products primarily through independent dealers across the U.S. and Canada, who then retail the products to the end consumer.
Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain reasonable liquidity, maintain a leverage ratio that reflects a prudent capital structure in light of the cyclical industries we compete in, and then return excess cash over time 27 Table of Contents to shareholders through dividends and share repurchases.
Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain reasonable liquidity, maintain a leverage ratio that reflects a prudent capital structure in light of the cyclical industries we compete in, and then return excess cash over time to shareholders through dividends and share repurchases.
Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, royalty rates and asset lives, among other items. 28 Table of Contents We used the income approach to value certain intangible assets.
Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, royalty rates and asset lives, among other items. We used the income approach to value certain intangible assets.
Included in "Results of Operations - Fiscal 2023 Compared to Fiscal 2022" is a reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable GAAP measure.
Included in "Results of Operations - Fiscal 2024 Compared to Fiscal 2023" is a reconciliation of EBITDA and Adjusted EBITDA from net income, the most directly comparable GAAP measure.
The discussion of Fiscal 2021 results and related year-over-year comparisons as of and for the fiscal years ended August 27, 2022 and August 28, 2021 are found in Item 7 of Part II of our Form 10-K for the fiscal year ended August 27, 2022.
The discussion of Fiscal 2022 results and related year-over-year comparisons as of and for the fiscal years ended August 26, 2023 and August 27, 2022 are found in Item 7 of Part II of our Form 10-K for the fiscal year ended August 26, 2023.
The year-over-year comparisons in this MD&A are as of and for the fiscal years ended August 26, 2023 and August 27, 2022, unless stated otherwise.
The year-over-year comparisons in this MD&A are as of and for the fiscal years ended August 31, 2024 and August 26, 2023, unless stated otherwise.
A hypothetical change of a 10% increase or decrease in our warranty liability as of August 26, 2023 would not have a material effect on our net income.
A hypothetical change of a 10% increase or decrease in our warranty liability as of August 31, 2024 would not have a material effect on our net income.
Refer to Item 5 of Part II of this Annual Report on Form 10-K for discussion about our share repurchase program and dividend declared on August 16, 2023. Cash Requirements Our cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities.
Refer to Item 5 of Part II of this Annual Report on Form 10-K for discussion about our share repurchase program and dividend declared on August 15, 2024. Cash Requirements Our cash requirements within the next twelve months include accounts payable, current maturities of long-term debt, accrued expenses, purchase commitments and other current liabilities.
Interest payments are based on fixed interest rates for the Senior Secured Notes and Convertible Notes. Operating and Finance Leases Refer to Note 10 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for information regarding our lease obligations and the timing of expected future payments.
Operating and Finance Leases Refer to Note 10 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for information regarding our lease obligations and the timing of expected future payments.
This method requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
Accounting for Business Combinations We account for business combinations under the acquisition method of accounting. This method requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
Refer to Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for additional information. Other Financial Measures Working capital as of August 26, 2023 and August 27, 2022 was $600.7 million and $571.7 million, respectively.
Refer to Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for additional information. Working Capital Working capital as of August 31, 2024 and August 26, 2023 was $584.0 million and $600.7 million, respectively.
Contracted Services Contracted services include agreements with third-party service providers primarily for software, payroll services, and equipment maintenance services for periods up to Fiscal 2026. We expect to pay approximately $16.8 million in the next 12 months and approximately $26.2 million beyond 12 months.
Contracted Services Contracted services include agreements with third-party service providers primarily for software, payroll services, and equipment maintenance services for periods up to Fiscal 2028. We expect to pay approximately $22.6 million in the next 12 months and approximately $19.6 million beyond 12 months.
We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications.
We also design and manufacture advanced battery solutions that deliver “house power,” supporting internal electrical features and appliances for a variety of outdoor products including RVs, boats, specialty and other low-speed vehicles, as well as other industrial applications. Other products manufactured by us consist primarily of original equipment manufacturing parts for other manufacturers and commercial vehicles.
During these valuations, we make significant estimates, assumptions, and judgments, including current and projected future levels of income based on management’s plans, business trends, market and economic conditions, and market-participant considerations. Actual results may differ from assumed and estimated amounts. No impairments were recorded in Fiscal 2023, 2022, and 2021.
During these valuations, we make significant estimates, assumptions, and judgments, including current and projected future levels of income based on management’s plans, business trends, market and economic conditions, and market-participant considerations. Actual results may differ from assumed and estimated amounts, which could result in future impairment losses.
On July 8, 2020, we closed our private offering (the “Senior Secured Notes Offering”) of $300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the “Senior Secured Notes”).
On July 8, 2020, we closed our private offering (the “Senior Secured Notes Offering”) of $300.0 million aggregate principal amount of 6.25% Senior Secured Notes due 2028 (the “Senior Secured Notes”). On November 1, 2019, we issued $300.0 million in aggregate principal amount of 1.5% unsecured Convertible Senior Notes due 2025 (“2025 Convertible Notes”).
Net revenues decreased primarily due to a decline in unit volume related to retail market conditions and higher levels of discounts and allowances compared to prior year, partially offset by price increases related to higher chassis costs. Adjusted EBITDA margin decreased due to volume deleverage, higher discounts and allowances, and operational efficiency challenges.
Net revenues decreased primarily due to a decline in unit volume related to market conditions and higher levels of discounts and allowances, partially offset by price increases related to higher motorized chassis cost. Adjusted EBITDA margin decreased due to deleverage, higher warranty expense, and operational challenges, partially offset by cost containment efforts.
Capital Expenditures We anticipate capital expenditures in Fiscal 2024 of approximately $60.0 million to $80.0 million. We will continue to support organic growth through facility improvements to benefit a safer operating environment, operational improvements, and investments in software and our digital capabilities.
We will continue to support organic growth through facility improvements to benefit a safer operating environment, operational improvements, and investments in software and our digital capabilities.
Backlog decreased due to continued softness in retail conditions and a cautious dealer network. 25 Table of Contents Marine The following is an analysis of key changes in our Marine segment for Fiscal 2023 and 2022: (in millions, except ASP and units) 2023 % of Revenues (1) 2022 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 469.7 $ 425.3 $ 44.4 10.5 % Adjusted EBITDA 60.5 12.9 % 60.8 14.3 % (0.3) (0.6) % ASP (2) 83,060 75,023 8,037 10.7 % Unit deliveries 2023 2022 Unit Change % Change Boats 5,714 5,692 22 0.4 % August 26, 2023 August 27, 2022 Change (1) % Change (1) Backlog (3) Units 2,545 3,595 (1,050) (29.2) % Dollars $ 194.7 $ 314.7 $ (120.0) (38.1) % Dealer Inventory (4) Units 3,376 2,077 1,299 62.5 % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Backlog decreased due to current market conditions and a cautious dealer network. 27 Table of Contents Marine The following is an analysis of key changes in our Marine segment for Fiscal 2024 and 2023: (in millions, except ASP and units) 2024 % of Revenues (1) 2023 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 325.5 $ 469.7 $ (144.2) (30.7) % Adjusted EBITDA 25.6 7.9 % 60.5 12.9 % (34.8) (57.6) % ASP (2) 80,641 83,060 (2,419) (2.9) % Unit deliveries 2024 2023 Unit Change % Change Boats 4,149 5,714 (1,565) (27.4) % August 31, 2024 August 26, 2023 Change (1) % Change (1) Backlog (3) Units 3,403 2,545 858 33.7 % Dollars $ 260.0 $ 194.7 $ 65.2 33.5 % Dealer Inventory (4) Units 2,564 3,376 (812) (24.1) % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
We anticipate that as field inventory levels further normalize and consumer demand stabilizes, dealers will exhibit a growing willingness to replenish inventories in the second half of Fiscal 2024. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders.
We anticipate that as consumer demand stabilizes, dealers will exhibit a willingness to maintain stable inventory levels and ordering patterns. We continue to produce and ship in accordance with dealer demand as evidenced and requested by dealer orders.
Examples of items excluded from Adjusted EBITDA include acquisition-related costs, litigation reserves, restructuring expenses, gain or loss on property, plant, and equipment, contingent consideration fair value adjustment, and non-operating income or loss.
Examples of items excluded from Adjusted EBITDA include acquisition-related costs, litigation reserves, change in fair value of note receivable and other investments, contingent consideration fair value adjustment, goodwill impairment, loss on note repurchase, and non-operating income or loss.
Backlog decreased primarily driven by cautious dealer sentiment related to rising inventory levels. 26 Table of Contents Analysis of Financial Condition, Liquidity, and Capital Resources Cash Flows The following table summarizes our cash flows from total operations for Fiscal 2023 and 2022: (in millions) 2023 2022 Total cash provided by (used in): Operating activities $ 294.5 $ 400.6 Investing activities (170.0) (315.7) Financing activities (96.8) (237.3) Net increase (decrease) in cash and cash equivalents $ 27.7 $ (152.4) Operating Activities During Fiscal 2023, cash provided by operating activities was $294.5 million compared to $400.6 million in Fiscal 2022.
Backlog increased primarily driven by the improvement in inventory position with dealers and continued market share growth. 28 Table of Contents Analysis of Financial Condition, Liquidity, and Capital Resources Cash Flows The following table summarizes our cash flows from total operations for Fiscal 2024 and 2023: (in millions) 2024 2023 Total cash provided by (used in): Operating activities $ 143.9 $ 294.5 Investing activities (45.9) (170.0) Financing activities (77.0) (96.8) Net increase in cash and cash equivalents $ 21.0 $ 27.7 Operating Activities During Fiscal 2024, cash provided by operating activities was $143.9 million compared to $294.5 million in Fiscal 2023.
Non-GAAP Reconciliation The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for Fiscal 2023 and 2022: (in millions) 2023 2022 Net income $ 215.9 $ 390.6 Interest expense, net 20.5 41.3 Provision for income taxes 63.3 124.1 Depreciation 29.2 24.2 Amortization 17.7 29.4 EBITDA 346.6 609.6 Acquisition-related costs 7.5 5.2 Litigation reserves (0.4) 6.6 Contingent consideration fair value adjustment 0.6 29.4 Non-operating loss (income) 0.4 (1.9) Adjusted EBITDA $ 354.7 $ 648.9 23 Table of Contents Reportable Segment Performance Summary Towable RV The following is an analysis of key changes in our Towable RV segment for Fiscal 2023 and 2022: (in millions, except ASP and units) 2023 % of Revenues (1) 2022 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 1,415.3 $ 2,597.4 $ (1,182.1) (45.5) % Adjusted EBITDA 172.1 12.2 % 383.6 14.8 % (211.5) (55.1) % Average Selling Price ("ASP") (2) 45,568 43,038 2,530 5.9 % Unit deliveries 2023 Product Mix (3) 2022 Product Mix (3) Unit Change % Change Travel trailer 21,352 68.8 % 40,739 68.1 % (19,387) (47.6) % Fifth wheel 9,701 31.2 % 19,125 31.9 % (9,424) (49.3) % Total Towable RV 31,053 100.0 % 59,864 100.0 % (28,811) (48.1) % August 26, 2023 August 27, 2022 Change (1) % Change (1) Backlog (4) Units 5,111 14,588 (9,477) (65.0) % Dollars $ 208.1 $ 576.5 $ (368.4) (63.9) % Dealer Inventory Units 16,744 22,797 (6,053) (26.6) % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Our effective tax rate increased primarily due to the impact of the non-deductible debt inducement loss and non-deductible goodwill impairment over a lower pretax income. 24 Table of Contents Non-GAAP Reconciliation The following table reconciles net income to consolidated EBITDA and Adjusted EBITDA for Fiscal 2024 and 2023: (in millions) 2024 2023 Net income $ 13.0 $ 215.9 Interest expense, net 21.1 20.5 Provision for income taxes 25.4 63.3 Depreciation 35.6 29.2 Amortization 23.0 17.7 EBITDA 118.1 346.6 Acquisition-related costs 1.5 7.5 Litigation reserves — (0.4) Change in fair value of note receivable and other investments 6.0 — Contingent consideration fair value adjustment 1.1 0.6 Goodwill impairment (Note 7) 30.3 — Loss on note repurchase (Note 9) 32.7 — Non-operating loss 0.9 0.4 Adjusted EBITDA $ 190.6 $ 354.7 25 Table of Contents Reportable Segment Performance Summary Towable RV The following is an analysis of key changes in our Towable RV segment for Fiscal 2024 and 2023: (in millions, except ASP and units) 2024 % of Revenues (1) 2023 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 1,318.8 $ 1,415.3 $ (96.5) (6.8) % Adjusted EBITDA 122.4 9.3 % 172.1 12.2 % (49.7) (28.9) % Average Selling Price ("ASP") (2) 41,004 45,568 (4,564) (10.0) % Unit deliveries 2024 Product Mix (3) 2023 Product Mix (3) Unit Change % Change Travel trailer 21,636 67.5 % 21,352 68.8 % 284 1.3 % Fifth wheel 10,403 32.5 % 9,701 31.2 % 702 7.2 % Total Towable RV 32,039 100.0 % 31,053 100.0 % 986 3.2 % August 31, 2024 August 26, 2023 Change (1) % Change (1) Backlog (4) Units 4,850 5,111 (261) (5.1) % Dollars $ 137.1 $ 208.1 $ (71.0) (34.1) % Dealer Inventory Units 15,940 16,744 (804) (4.8) % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Investing Activities Cash used in investing activities decreased in Fiscal 2023 compared to Fiscal 2022 primarily due to our acquisition of Barletta during the first quarter of Fiscal 2022 compared to the acquisition of Lithionics during the third quarter of Fiscal 2023.
Investing Activities Cash used in investing activities decreased compared to prior year, primarily due to our acquisition of Lithionics during the third quarter of Fiscal 2023 and elevated capital expenditures in Fiscal 2023 to support operational expansion and organic growth.
We have not made any material changes during the past three fiscal years, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below. Accounting for Business Combinations We account for business combinations under the acquisition method of accounting.
We have reviewed these critical accounting policies and estimates and related disclosures with the Audit Committee of our Board of Directors. 30 Table of Contents We have not made any material changes during the past three fiscal years, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below.
Financing Activities Cash used in financing activities decreased in Fiscal 2023 compared to Fiscal 2022 primarily due to a decrease in share repurchases in Fiscal 2023. Debt and Capital We maintain a $350.0 million asset-based revolving credit facility ("ABL Credit Facility") with a maturity date of July 15, 2027 subject to certain factors which may accelerate the maturity date.
Debt and Capital We maintain a $350.0 million asset-based revolving credit facility ("ABL Credit Facility") with a maturity date of July 15, 2027 subject to certain factors which may accelerate the maturity date. As of August 31, 2024, we had no borrowings against the ABL Credit Facility and $330.9 million in cash and cash equivalents.
(4) Due to the nature of the Marine industry, this amount includes a higher proportion of retail sold units than our other segments. Net revenues increased primarily due to price increases, partially offset by higher discounts and allowances. Adjusted EBITDA margin decreased due to higher discounts and allowances compared to prior year.
(4) Due to the nature of the Marine industry, this amount includes a higher proportion of retail sold units than our other segments. Net revenues decreased primarily due to a decline in unit volume related to market conditions, and product mix. Adjusted EBITDA margin decreased due to deleverage, partially offset by lower incentive-based compensation and cost containment efforts.
Backlog decreased compared to the prior year due to continued softness in retail conditions and a cautious dealer network. 24 Table of Contents Motorhome RV The following is an analysis of key changes in our Motorhome RV segment for Fiscal 2023 and 2022: (in millions, except ASP and units) 2023 % of Revenues (1) 2022 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 1,560.1 $ 1,911.2 $ (351.1) (18.4) % Adjusted EBITDA 142.0 9.1 % 238.0 12.5 % (96.0) (40.3) % ASP (2) 185,514 156,917 28,597 18.2 % Unit deliveries 2023 Product Mix (3) 2022 Product Mix (3) Unit Change % Change Class A 2,142 25.5 % 2,640 21.9 % (498) (18.9) % Class B 3,845 45.8 % 6,748 56.0 % (2,903) (43.0) % Class C 2,407 28.7 % 2,670 22.1 % (263) (9.9) % Total Motorhome RV 8,394 100.0 % 12,058 100.0 % (3,664) (30.4) % August 26, 2023 August 27, 2022 Change (1) % Change (1) Backlog (4) Units 3,828 12,024 (8,196) (68.2) % Dollars $ 688.6 $ 1,687.6 $ (999.0) (59.2) % Dealer Inventory Units 4,068 3,824 244 6.4 % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Backlog decreased due to current market conditions and a cautious dealer network as well as reduced order lead times due to production capacity. 26 Table of Contents Motorhome RV The following is an analysis of key changes in our Motorhome RV segment for Fiscal 2024 and 2023: (in millions, except ASP and units) 2024 % of Revenues (1) 2023 % of Revenues (1) $ Change (1) % Change (1) Net revenues $ 1,279.8 $ 1,560.1 $ (280.4) (18.0) % Adjusted EBITDA 73.7 5.8 % 142.0 9.1 % (68.3) (48.1) % ASP (2) 191,844 185,514 6,330 3.4 % Unit deliveries 2024 Product Mix (3) 2023 Product Mix (3) Unit Change % Change Class A 1,625 24.0 % 2,142 25.5 % (517) (24.1) % Class B 2,278 33.7 % 3,845 45.8 % (1,567) (40.8) % Class C 2,854 42.2 % 2,407 28.7 % 447 18.6 % Total Motorhome RV 6,757 100.0 % 8,394 100.0 % (1,637) (19.5) % August 31, 2024 August 26, 2023 Change (1) % Change (1) Backlog (4) Units 897 3,828 (2,931) (76.6) % Dollars $ 234.4 $ 688.6 $ (454.1) (66.0) % Dealer Inventory Units 3,933 4,068 (135) (3.3) % (1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
These estimates require our most difficult, subjective, or complex judgments because they relate to matters that are inherently uncertain. We have reviewed these critical accounting policies and estimates and related disclosures with the Audit Committee of our Board of Directors.
These estimates require our most difficult, subjective, or complex judgments because they relate to matters that are inherently uncertain.
A significant increase in dealership labor rates, the cost of parts, or the frequency of claims could have a material adverse impact on our operating results for the period or periods in which such claims or additional costs materialize.
Although we estimate and reserve for the cost of these service actions, there can be no assurance that expense levels will remain at current levels or such reserves will continue to be adequate. 31 Table of Contents A significant increase in dealership labor rates, the cost of parts, or the frequency of claims could have a material adverse impact on our operating results for the period or periods in which such claims or additional costs materialize.
The decrease is primarily driven by lower profitability adjusted for non-cash items, partially offset by net favorable changes in operating assets and liabilities.
The decrease in operating cash flow is primarily driven by lower profitability adjusted for non-cash items, an increase in accounts receivable due to timing of invoicing and collections, and changes in inventory levels due to market conditions, partially offset by favorable changes in accounts payable balances and timing of payments.
In addition, percentages may not add in total due to rounding. 22 Table of Contents Net revenues decreased primarily due to lower unit sales related to retail market conditions and higher discounts and allowances compared to prior year, partially offset by carryover price increases.
In addition, percentages may not add in total due to rounding. NM: Not meaningful. Net revenues decreased primarily due to product mix and lower unit sales related to market conditions. Gross profit as a percentage of revenue decreased primarily due to deleverage, higher warranty expense, and operational challenges.
We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S. Change in Presentation In the first quarter of Fiscal 2023, we changed our presentation in tables from thousands to millions, unless otherwise designated.
We also distribute our marine products internationally through independent dealers, who then retail the products to the end consumer. Our battery solutions are primarily sold to customers in the U.S. Known Trends and Uncertainties Our business continues to be challenged by macroeconomic conditions impacting retail consumers and our dealers, such as inflation and elevated interest rates.
On November 1, 2019, we issued $300.0 million in aggregate principal amount of 1.5% unsecured Convertible Senior Notes due 2025 (“Convertible Notes”), which were used to partially fund the Newmar acquisition. We continue to evaluate the financial stability of the counterparties and counterparty risk for the Convertible Notes, the Senior Secured Notes, and the ABL Credit Facility.
We evaluate the financial stability of the counterparties for the 2030 Convertible Notes, the 2025 Convertible Notes, the Senior Secured Notes, and the ABL Credit Facility, and will continue to monitor counterparty risk on an on-going basis.
This recall impacted our Motorhome RV segment net sales and profitability in Fiscal 2023. 21 Table of Contents Non-GAAP Financial Measures This MD&A includes financial information prepared in accordance with generally accepted accounting principles ("GAAP"), as well as certain adjusted or non-GAAP financial measures, such as EBITDA and Adjusted EBITDA.
Refer to Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for more information. Non-GAAP Financial Measures This MD&A includes financial information prepared in accordance with generally accepted accounting principles ("GAAP"), as well as certain adjusted or non-GAAP financial measures, such as EBITDA and Adjusted EBITDA.
Known Trends and Uncertainties Our business continues to be challenged by macroeconomic conditions impacting retail consumers, such as inflation and rising interest rates. These factors have contributed to lower consumer spending and reduced short-term demand for large discretionary products such as RVs and marine products.
These factors have contributed to lower consumer spending and reduced short-term demand for large discretionary products such as RVs and marine products. In response, our dealers continue to exercise caution when managing stocking levels. In Fiscal 2024, these trends resulted in decreased sales due to declines in unit volume.
Adjusted EBITDA margin decreased primarily due to volume deleverage and higher discounts and allowances compared to prior year, partially offset by successful cost reduction initiatives and favorable warranty experience.
Net revenues decreased primarily due to a reduction in average selling price per unit related to product mix and targeted price reductions, partially offset by an increase in unit volume. Adjusted EBITDA margin decreased primarily due to deleverage, higher warranty expense due to a favorable prior year trend, and operational challenges at the Winnebago branded towable business.
Removed
As a result, certain rounding adjustments have been made to prior period disclosed amounts in order to conform to the current year presentation. In addition, certain prior period amounts may not recalculate due to rounding. These changes were not significant, and no other updates were made to previously reported financial information.
Added
Despite the current economic uncertainty, we believe in the long-term health of consumer demand for RV and marine products. 22 Table of Contents Other Matters During the fourth quarter of Fiscal 2024, we recognized a $30.3 million impairment charge equal to the full carrying value of goodwill associated with the Chris-Craft reporting unit.
Removed
In the fourth quarter of 2023, these trends resulted in decreased sales due to declines in unit volume associated with the retail market conditions and a cautious dealer network. In response, we are working closely with dealer partners across all our segments to align field inventory levels to meet end consumer demand.
Added
The decline in fair value of the Chris-Craft reporting unit was driven primarily by a downward revision to forecasted cash flows made during the fourth quarter of Fiscal 2024 as part of our annual long range planning process, and a decline in market capitalization observed from guideline public companies.
Removed
Despite the current economic uncertainty, we believe in the long-term health of consumer demand for RV and marine products. Other Matters On September 15, 2023, the UAW announced targeted strikes impacting certain auto manufacturers from which we purchase chassis.
Added
Projected future cash flows for the Chris-Craft reporting unit have declined compared to prior expectations as a result of sustained macroeconomic challenges impacting consumer demand, such as inflationary pressures and elevated interest rates, and the current uncertainty regarding timing and degree of economic recovery.
Removed
While we do not expect immediate disruption from the strike, the situation remains dynamic, and the exact magnitude and duration is difficult to predict at this time. Refer to Item 1A — Risk Factors in this Annual Report on Form 10-K for additional information.
Added
Refer to Note 7 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for more information.
Removed
In the first quarter of Fiscal 2023, Mercedes-Benz AG issued a global recall related to an electronic parking brake defect affecting 2019 through 2022 Sprinter chassis. As a result, all retail sales and wholesale shipments of our products built on this chassis were temporarily suspended until a recall remedy was implemented.
Added
During the second quarter of Fiscal 2024, we entered into separate, privately negotiated transactions with certain holders of the 2025 Convertible Notes to repurchase $240.7 million aggregate principal amount of the 2025 Convertible Notes using $293.8 million of the net proceeds received from the issuance of the 2030 Convertible Notes.
Removed
During the second quarter of Fiscal 2023, the recall remedy was implemented in cooperation with Mercedes-Benz AG.
Added
In connection with the 2025 Convertible Note repurchases, we recorded a loss on note repurchase of $32.7 million in the accompanying Consolidated Statements of Income during Fiscal 2024.
Removed
We believe these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in the industry.
Added
The loss on note repurchase represents the difference between the fair value of consideration transferred to the holders of the repurchased 2025 Convertible Notes and the conversion value of 2025 Convertible Notes repurchased pursuant to the original conversion terms.
Removed
Gross profit as a percentage of revenue decreased primarily due to volume deleverage and higher discounts and allowances compared to prior year. Operating expenses decreased primarily due to lower incentive and volume-based compensation related to performance, lower amortization related to Barletta intangible assets, lower legal settlement expenses, and other cost reduction efforts, partially offset by strategic investments.
Added
Operating expenses increased primarily due to the goodwill impairment charge associated with the Chris-Craft reporting unit, a full year of Lithionics operations and increased intangible amortization, start-up costs associated with the launch of the Grand Design motorized business, and strategic investments in engineering, digital technology development, and increased data and information technology capabilities, partially offset by lower incentive-based compensation.
Removed
Non-operating loss decreased due to a lower contingent consideration fair value adjustment related to the earnout from the acquisition of Barletta. Our effective tax rate decreased primarily due to both an increase in tax credits year-over-year over decreased income in the current year and favorable return to provision adjustments.
Added
The loss on note repurchase recorded in Fiscal 2024 is related to the refinancing of the 2025 Convertible Notes. Refer to Note 9 in the Notes to Consolidated Financial Statements, included in Item 8 of Part II in this Annual Report on Form 10-K for further information.
Removed
Net revenues decreased primarily due to a decline in unit volume associated with retail market conditions, a reduction in dealer inventories, and higher levels of discounts and allowances compared to prior year, partially offset by carryover price increases.
Added
Financing Activities Cash used in financing activities decreased compared to prior year, primarily due to $39.1 million of net cash proceeds related to the debt refinancing, partially offset by higher share repurchases compared to prior year.
Removed
The favorable impact of operating assets and liabilities is primarily due to changes in accounts receivable due to lower sales and timing of invoicing/collections, and changes in inventory due to elevated purchases in Fiscal 2022 to support customer demand, partially offset by a decrease in accounts payable due to lower purchasing requirements.
Added
Our cash and cash equivalent balances consist of high quality, short-term money market instruments. On January 23, 2024, we issued $350.0 million in aggregate principal amount of 3.25% unsecured convertible senior notes due 2030 ("2030 Convertible Notes").
Removed
As of August 26, 2023, we had $309.9 million in cash and cash equivalents and no borrowings against the ABL Credit Facility. Our cash and cash equivalent balances consist of high quality, short-term money market instruments.
Added
On January 18, 2024, we entered into privately negotiated transactions (the "2025 Convertible Note Repurchases") with certain holders of the 2025 Convertible Notes to repurchase $240.7 million aggregate principal amount of the 2025 Convertible Notes using proceeds received from the 2030 Convertible Notes.
Removed
Although we estimate and reserve for the cost of these service actions, there can be no assurance that expense levels will remain at current levels or such reserves will continue to be adequate.
Added
As of August 31, 2024, we had $59.1 million of debt maturing in the next twelve months that is classified as current on our Consolidated Balance Sheets.
Added
We currently expect cash on hand, funds generated from operations, and the borrowing available under our ABL Credit Facility to be sufficient to cover both short-term and long-term operating requirements. 29 Table of Contents Capital Expenditures We anticipate capital expenditures in Fiscal 2025 of approximately $50.0 million to $60.0 million.
Added
Interest payments are based on fixed interest rates for the 2030 Convertible Notes, the 2025 Convertible Notes, and the Senior Secured Notes.
Added
During the fourth quarter of Fiscal 2024, we completed our annual assessment of indefinite-lived intangible assets and determined that the carrying value of the Chris-Craft reporting unit exceeded its fair value, resulting in a $30.3 million impairment charge, which represents the full goodwill balance attributable to the reporting unit. Comparatively, no impairments were recorded in Fiscal 2023 and Fiscal 2022.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed1 unchanged
Biggest changeInterest Rate Risk The ABL Credit Facility is our only floating rate debt instrument, which remains undrawn as of August 26, 2023. 29 Table of Contents
Biggest changeInterest Rate Risk The ABL Credit Facility is our only floating rate debt instrument, which remains undrawn as of August 31, 2024. 32 Table of Contents

Other WGO 10-K year-over-year comparisons