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

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Paragraph-level year-over-year comparison of THOR 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.

+324 added−337 removedSource: 10-K (2024-09-24) vs 10-K (2023-09-25)

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

324 paragraphs added · 337 removed · 249 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+11 added−17 removed62 unchanged
Biggest changeThe losses incurred due to repurchase were not material in fiscal 2023, 2022 or 2021. 7 Backlog The backlogs for our North American Towable, North American Motorized and European Recreational Vehicle segments as of July 31, 2023 and July 31, 2022, respectively, were as follows: July 31, 2023 July 31, 2022 Change Amount % Change Recreational vehicles North American Towable $ 756,047 $ 2,571,009 $ (1,814,962) (70.6) North American Motorized 1,242,936 3,436,629 (2,193,693) (63.8) Total North America 1,998,983 6,007,638 (4,008,655) (66.7) European 3,549,660 2,753,602 796,058 28.9 Total $ 5,548,643 $ 8,761,240 $ (3,212,597) (36.7) The decreases in backlogs for North American Towable and North American Motorized products are primarily a result of a reduction in orders from independent dealers.
Biggest changeLosses incurred related to repurchase agreements that were settled in fiscal 2024 totaled $7,107, and the losses incurred due to repurchases were not material in fiscal 2023 or fiscal 2022. 6 Backlog The backlogs for our North American Towable, North American Motorized and European Recreational Vehicle segments as of July 31, 2024 and July 31, 2023, respectively, were as follows: July 31, 2024 July 31, 2023 Change Amount % Change Recreational vehicles North American Towable $ 552,379 $ 756,047 $ (203,668) (26.9) North American Motorized 776,903 1,242,936 (466,033) (37.5) Total North America 1,329,282 1,998,983 (669,701) (33.5) European 1,950,793 3,549,660 (1,598,867) (45.0) Total $ 3,280,075 $ 5,548,643 $ (2,268,568) (40.9) The decrease in total North American backlog is primarily due to a reduction in orders from dealers, mainly for motorized products, which we believe is due to lower retail sales and dealer concerns over current interest costs and other carrying costs compared to the prior year.
In North America, capacity decreases can generally be achieved relatively quickly and at relatively low cost, mainly by decreasing the number of production employees. In Europe, short-term capacity decreases can generally be achieved by adjusting work schedules and reducing the number of contract and temporary workers.
In North America, capacity decreases can generally be achieved relatively quickly and at relatively low cost, mainly by decreasing the number of production employees. In Europe, short-term capacity decreases can generally be achieved by adjusting work schedules and reducing the number of short-term contract and temporary workers.
Where possible, we will continue to work closely with our suppliers on various supply chain strategies to minimize any constraints, and will continue to identify alternative suppliers where possible.
Where possible, we will continue to work closely with our suppliers on various supply chain strategies to minimize any constraints and will work to identify alternative suppliers.
We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels due to a combination of factors such as retail activity, RV wholesale prices as well as interest rates and other carrying costs.
We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels due to a combination of factors such as retail activity, RV wholesale unit prices as well as interest rates and other carrying costs.
(“ KZ ”, which includes Venture RV), Thor Motor Coach, Inc. (“ Thor Motor Coach ”) and Tiffin Motorhomes, Inc. (" Tiffin Group "). Our European recreational vehicle operations include eight primary RV production locations producing numerous brands within Europe, including Buccaneer, Buerstner, Carado, Compass, CrossCamp, Dethleffs, Elddis, Eriba, Etrusco, Hymer, Laika, LMC, Niesmann+Bischoff, Sunlight and Xplore.
(“ KZ ”, which includes Venture RV), Thor Motor Coach, Inc. (“ Thor Motor Coach ”) and Tiffin Motorhomes, Inc. (“ Tiffin Group ”). Our European recreational vehicle operations include eight primary RV production locations producing numerous brands within Europe, including Buccaneer, Buerstner, Carado, CrossCamp, Dethleffs, Elddis, Eriba, Etrusco, Hymer, Laika, LMC, Niesmann+Bischoff, Sunlight and Xplore.
Erwin Hymer Group EHG manufactures towable and motorized recreational vehicles, including motorcaravans, caravans, campervans and urban vehicles in eight primary RV production locations within Europe. EHG produces and sells numerous brands primarily within Europe, such as Buccaneer, Buerstner, Carado, Compass, CrossCamp, Dethleffs, Elddis, Eriba, Etrusco, Hymer, Laika, LMC, Niesmann+Bischoff, Sunlight and Xplore.
Erwin Hymer Group EHG manufactures towable and motorized recreational vehicles, including motorcaravans, caravans, campervans and urban vehicles in eight primary RV production locations within Europe. EHG produces and sells numerous brands primarily within Europe, such as Buccaneer, Buerstner, Carado, CrossCamp, Dethleffs, Elddis, Eriba, Etrusco, Hymer, Laika, LMC, Niesmann+Bischoff, Sunlight and Xplore.
Factors which could cause materially different results include, among others: • the impact of inflation on the cost of our products as well as on general consumer demand; • the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply constraints; • the impact of war, military conflict, terrorism and/or cyber-attacks, including state-sponsored or ransom attacks; • the impact of sudden or significant adverse changes in the cost and/or availability of energy or fuel, including those caused by geopolitical events, on our costs of operation, on raw material prices, on our suppliers, on our independent dealers or on retail customers; • the dependence on a small group of suppliers for certain components used in production, including chassis; • interest rate fluctuations and their potential impact on the general economy and, specifically, on our profitability and on our independent dealers and consumers; • the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; • the level and magnitude of warranty and recall claims incurred; • the ability of our suppliers to financially support any defects in their products; • legislative, regulatory and tax law and/or policy developments including their potential impact on our independent dealers, retail customers or on our suppliers; • the costs of compliance with governmental regulation; • the impact of an adverse outcome or conclusion related to current or future litigation or regulatory investigations; • public perception of and the costs related to environmental, social and governance matters; • legal and compliance issues including those that may arise in conjunction with recently completed transactions; • lower consumer confidence and the level of discretionary consumer spending; • the impact of exchange rate fluctuations; • restrictive lending practices which could negatively impact our independent dealers and/or retail consumers; • management changes; • the success of new and existing products and services; • the ability to maintain strong brands and develop innovative products that meet consumer demands; • the ability to efficiently utilize existing production facilities; • changes in consumer preferences; • the risks associated with acquisitions, including: the pace and successful closing of an acquisition, the integration and financial impact thereof, the level of achievement of anticipated operating synergies from acquisitions, the potential for unknown or understated liabilities related to acquisitions, the potential loss of existing customers of acquisitions and our ability to retain key management personnel of acquired companies; • a shortage of necessary personnel for production and increasing labor costs and related employee benefits to attract and retain production personnel in times of high demand; • the loss or reduction of sales to key independent dealers, and stocking level decisions of our independent dealers; • disruption of the delivery of units to independent dealers or the disruption of delivery of raw materials, including chassis, to our facilities; • increasing costs for freight and transportation; • the ability to protect our information technology systems from data breaches, cyber-attacks and/or network disruptions; • asset impairment charges; • competition; 11 • the impact of losses under repurchase agreements; • the impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; • general economic, market, public health and political conditions in the various countries in which our products are produced and/or sold; • the impact of changing emissions and other related climate change regulations in the various jurisdictions in which our products are produced, used and/or sold; • changes to our investment and capital allocation strategies or other facets of our strategic plan; and • changes in market liquidity conditions, credit ratings and other factors that may impact our access to future funding and the cost of debt.
Factors which could cause materially different results include, among others: • the impact of inflation on the cost of our products as well as on general consumer demand; • the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply constraints; • the impact of war, military conflict, terrorism and/or cyber-attacks, including state-sponsored or ransom attacks; • the impact of sudden or significant adverse changes in the cost and/or availability of energy or fuel, including those caused by geopolitical events, on our costs of operation, on raw material prices, on our suppliers, on our independent dealers or on retail customers; • the dependence on a small group of suppliers for certain components used in production, including chassis; • interest rates and interest rate fluctuations and their potential impact on the general economy and, specifically, on our independent dealers and consumers and our profitability; • the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; • the level and magnitude of warranty and recall claims incurred; • the ability of our suppliers to financially support any defects in their products; • the financial health of our independent dealers and their ability to successfully manage through various economic conditions; • legislative, regulatory and tax law and/or policy developments including their potential impact on our independent dealers, retail customers or on our suppliers; • the costs of compliance with governmental regulation; • the impact of an adverse outcome or conclusion related to current or future litigation or regulatory investigations; • public perception of and the costs related to environmental, social and governance matters; • legal and compliance issues including those that may arise in conjunction with recently completed transactions; • lower consumer confidence and the level of discretionary consumer spending; • the impact of exchange rate fluctuations; • restrictive lending practices which could negatively impact our independent dealers and/or retail consumers; • management changes; • the success of new and existing products and services; • the ability to maintain strong brands and develop innovative products that meet consumer demands; • the ability to efficiently utilize existing production facilities; • changes in consumer preferences; • the risks associated with acquisitions, including: the pace and successful closing of an acquisition, the integration and financial impact thereof, the level of achievement of anticipated operating synergies from acquisitions, the potential for unknown or understated liabilities related to acquisitions, the potential loss of existing customers of acquisitions and our ability to retain key management personnel of acquired companies; • a shortage of necessary personnel for production and increasing labor costs and related employee benefits to attract and retain production personnel in times of high demand; • the loss or reduction of sales to key independent dealers, and stocking level decisions of our independent dealers; • disruption of the delivery of units to independent dealers or the disruption of delivery of raw materials, including chassis, to our facilities; • increasing costs for freight and transportation; • the ability to protect our information technology systems from data breaches, cyber-attacks and/or network disruptions; • asset impairment charges; 10 • competition; • the impact of losses under repurchase agreements; • the impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; • general economic, market, public health and political conditions in the various countries in which our products are produced and/or sold; • the impact of changing emissions and other related climate change regulations in the various jurisdictions in which our products are produced, used and/or sold; • changes to our investment and capital allocation strategies or other facets of our strategic plan; and • changes in market liquidity conditions, credit ratings and other factors that may impact our access to future funding and the cost of debt.
Keystone manufactures and sells conventional travel trailers and fifth wheels under trade names such as Montana , Springdale , Hideout , Sprinter , Outback , Arcadia , Bullet , Fuzion , Raptor , Passport and Cougar , while the Dutchmen travel trailer and fifth wheel trade names include Coleman , Kodiak , Aspen Trail , Astoria and Voltage .
Keystone manufactures and sells conventional travel trailers and fifth wheels under trade names such as Montana , Springdale , Hideout , Sprinter , Outback , Arcadia , Bullet , Fuzion , Raptor , Passport, Cougar and Coleman , while the Dutchmen travel trailer and fifth wheel trade names include Kodiak , Aspen Trail , Astoria, Voltage and Colorado .
Postle Postle Operating, LLC ("Postle") manufactures and sells aluminum extrusions and specialized component products to RV and other manufacturers. 3 Product Line Sales and Segment Information The Company has three reportable segments: (1) North American Towable Recreational Vehicles, (2) North American Motorized Recreational Vehicles and (3) European Recreational Vehicles.
Postle Postle Operating, LLC (“Postle”) manufactures and sells aluminum extrusions and specialized component products to RV and other manufacturers. 2 Product Line Sales and Segment Information The Company has three reportable segments: (1) North American Towable Recreational Vehicles, (2) North American Motorized Recreational Vehicles and (3) European Recreational Vehicles.
For more information on THOR’s human capital resources, please visit www.thorindustries.com/sustainability . 10 Forward-Looking Statements This Annual Report on Form 10-K includes certain statements that are “forward-looking” statements within the meaning of the U.S.
For more information on THOR’s human capital resources, please visit www.thorindustries.com/sustainability . 9 Forward-Looking Statements This Annual Report on Form 10-K includes certain statements that are “forward-looking” statements within the meaning of the U.S.
Entegra Coach manufactures and sells Class A motorhomes under trade names such as Insignia , Aspire , Anthem and Cornerstone and Class A, Class B and Class C motorhomes under trade names such as Odyssey , Esteem and Emblem . Keystone Keystone manufactures and sells conventional travel trailers and fifth wheels and includes the operations of Keystone, Dutchmen and CrossRoads.
Entegra Coach manufactures and sells Class A motorhomes under trade names such as Insignia , Aspire , Anthem and Cornerstone and Class A, Class B and Class C motorhomes under trade names such as Odyssey , Esteem and Emblem . 1 Keystone Keystone manufactures and sells conventional travel trailers and fifth wheels and includes the operations of Keystone, Dutchmen and CrossRoads.
Airstream manufactures and sells travel trailers under the trade names Airstream Classic , Airstream Pottery Barn , Globetrotter , International , Flying Cloud , Caravel , Bambi and Basecamp . Airstream also sells the Interstate, Atlas and Rangeline series of Class B motorhomes.
Airstream manufactures and sells travel trailers under the trade names Airstream Classic , Airstream Pottery Barn , Globetrotter , International , Tradewind, Flying Cloud , Caravel , Bambi and Basecamp . Airstream also sells the Interstate, Atlas and Rangeline series of Class B motorhomes.
In Europe, we produce numerous types of motorized and towable recreational vehicles, including motorcaravans, campervans, urban vehicles, caravans and other RV-related products and services. 4 North American Recreational Vehicles Travel trailers are non-motorized vehicles which are designed to be towed by passenger automobiles, pickup trucks, SUVs or vans.
In Europe, we produce numerous types of motorized and towable recreational vehicles, including motorcaravans, campervans, urban vehicles, caravans and other RV-related products and services. 3 North American Recreational Vehicles Travel trailers are non-motorized vehicles which are designed to be towed by passenger automobiles, pickup trucks, SUVs or vans.
Approximately 45% of independent European dealers sell EHG brands exclusively. Each of our recreational vehicle operating subsidiaries has its own wholesale sales force that works directly with its independent dealers. Typically, there are wholesale shows held during the year in certain locations within the United States and Europe.
Approximately 53% of independent European dealers sell EHG brands exclusively. Each of our recreational vehicle operating subsidiaries has its own wholesale sales force that works directly with its independent dealers. Typically, there are wholesale shows held during the year in certain locations within the United States and Europe.
Additionally, these vehicles are equipped with a pop-up roof to provide additional sleeping quarters. 5 Production In order to minimize finished inventory, our recreational vehicles in both North America and Europe are generally produced to dealer order. Our facilities are designed to provide efficient, assembly-line manufacturing of products.
Additionally, these vehicles are equipped with a pop-up roof to provide additional sleeping quarters. 4 Production In order to minimize finished inventory, our recreational vehicles in both North America and Europe are generally produced to dealer order. Our facilities are designed to provide efficient, assembly-line manufacturing of products.
European Recreational Vehicles THOR, through its Erwin Hymer Group ("EHG") operating subsidiary, is a leading manufacturer of recreational vehicles in Europe, according to statistics published by the Caravaning Industry Association e.V. (“CIVD”) and the European Caravan Foundation (“ECF”).
European Recreational Vehicles THOR, through its Erwin Hymer Group (“EHG”) operating subsidiary, is a leading manufacturer of recreational vehicles in Europe, according to statistics published by the Caravaning Industry Association e.V. (“CIVD”) and the European Caravan Foundation (“ECF”).
As of July 31, 2023, there were approximately 2,400 independent, non-franchise dealership locations carrying our products in the U.S. and Canada and approximately 1,100 dealership locations, of which two are Company-owned, carrying our products throughout Europe.
As of July 31, 2024, there were approximately 2,400 independent, non-franchise dealership locations carrying our products in the U.S. and Canada and approximately 1,100 dealership locations, of which two are Company-owned, carrying our products throughout Europe.
This means that the existing driver/passenger area is complemented by an attached living area. As a result, the advantages of the basic vehicle are enhanced by mobile living. An alcove motorcaravan is one where there is an additional sleeping space located above the driver’s cab. This superstructure is called an “alcove” and it comprises sleeping accommodations for two people.
This means that the existing driver/passenger area is complemented by an attached living area. As a result, the advantages of the basic vehicle are enhanced by mobile living. An alcove motorcaravan is one where there is an additional sleeping space located above the driver’s cab. This superstructure is called an “alcove,” and it comprises sleeping accommodations for two people.
The North American recreational vehicle industry has, from time to time, experienced shortages of chassis for various reasons, including component shortages, production delays or other production issues and work stoppages at the chassis manufacturers.
The North American recreational vehicle industry has, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays or other production issues and work stoppages at the chassis manufacturers.
We believe that we, and our dealers, are better positioned now to reach new and existing RV consumers through a strategic combination of retail shows and digital marketing activities. We also benefit in the United States from the recreational vehicle awareness advertising and marketing programs sponsored by the RVIA in national print media and television.
We believe that we, and our dealers, are well-positioned to reach new and existing RV consumers through a strategic combination of retail shows and digital marketing activities. We also benefit in the United States from the recreational vehicle awareness advertising and marketing programs sponsored by the RVIA in national print media and television.
In addition, the SEC maintains a website that contains reports, proxy and information statements and other information that is filed electronically with the SEC. The website can be accessed at www.sec.gov . 12
In addition, the SEC maintains a website that contains reports, proxy and information statements and other information that is filed electronically with the SEC. The website can be accessed at www.sec.gov . 11
Total assets include those assets used in the operation of each reportable and non-reportable segment, and the Corporate assets consist primarily of cash and cash equivalents, deferred income taxes, deferred compensation plan assets and certain Corporate real estate holdings primarily utilized by certain U.S.-based operating subsidiaries.
Total assets include those assets used in the operation of each reportable and non-reportable segment, and the Corporate assets consist primarily of cash and cash equivalents, deferred income taxes, deferred compensation plan assets, equity and other investments and certain Corporate real estate holdings primarily utilized by certain U.S.-based operating subsidiaries.
The Company manufactures a wide variety of RVs in the United States and Europe, and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe.
The Company manufactures a wide variety of RVs in the United States (“U.S.”) and Europe, and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe.
For example, these standards, which are generally applicable to all companies, control our choice of paints, our air compressor discharge, the handling of our waste water and the noise emitted by our factories.
For example, these standards, which are generally applicable to all companies, control our choice of paints, our air compressor discharge, the handling of our waste water and the noise emitted by our factories, among other things.
EHG manufactures a full line of motorized and towable recreational vehicles, including motorcaravans, campervans, urban vehicles and caravans in eight RV production facilities within Europe. The operations of the Company’s Airxcel and Postle subsidiaries are included in “Other" in Note 3 to the Consolidated Financial Statements.
EHG manufactures a full line of motorized and towable recreational vehicles, including motorcaravans, campervans, urban vehicles and caravans in eight RV production locations within Europe. The operations of the Company’s Airxcel and Postle subsidiaries are included in “Other” in Note 3 to the Consolidated Financial Statements.
We believe North American dealer inventory levels for most towable products are generally higher than the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs.
We believe North American dealer inventory levels for most products are generally at, or slightly higher than, the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs.
Our primary RV competitors within the European Recreational Vehicle segment are Trigano, Hobby/Fendt, Knaus Tabbert and various vehicle manufacturers. According to CIVD, EHG’s current European market share for the six months ended June 30, 2023 based on unit retail sales was approximately 20.6% for motorcaravans and campervans combined and approximately 18.5% for caravans.
Our primary RV competitors within the European Recreational Vehicle segment are Trigano, Hobby/Fendt, Knaus Tabbert and various vehicle manufacturers. According to CIVD, EHG’s current European market share for the six months ended June 30, 2024 based on unit retail sales was approximately 25.3% for motorcaravans and campervans combined and approximately 18.3% for caravans.
In North America, capacity increases can generally be achieved relatively quickly and at relatively low cost, largely by acquiring, leasing or building additional facilities and equipment and increasing the number of production employees. In Europe, that process usually takes a bit longer and involves higher costs.
In North America, capacity increases can generally be achieved relatively quickly and at relatively low cost, largely by acquiring, leasing or building additional facilities and equipment and increasing the number of production employees. In Europe, that process is typically longer and involves higher costs.
Barring any significant and longer-term material supply constraints, the existing backlogs of the North American Towable, North American Motorized and European Recreational Vehicle segments are expected to be filled in the remainder of calendar 2023 and calendar 2024.
Barring any significant and longer-term material supply constraints, the existing backlogs of the North American Towable, North American Motorized and European Recreational Vehicle segments are generally expected to be filled in the remainder of calendar 2024 and the first half of calendar 2025.
We generally do not finance dealer purchases. Most dealers are financed on a “floor plan” basis by an unrelated bank or financing company, which lends the dealer all, or substantially all, of the wholesale purchase price and retains a security interest in the vehicles purchased.
Most dealers are financed on a “floor plan” basis by an unrelated bank or financing company, which lends the dealer all, or substantially all, of the wholesale purchase price and retains a security interest in the vehicles purchased.
We are the largest recreational vehicle manufacturer in North America in terms of both units sold and revenue. According to Statistical Surveys, Inc., for the six months ended June 30, 2023, THOR’s current combined U.S. and Canadian market share based on unit retail sales was approximately 42.7% for travel trailers and fifth wheels combined and approximately 49.0% for motorhomes.
We are the largest recreational vehicle manufacturer in North America in terms of both units sold and revenue. According to Statistical Surveys, Inc., for the six months ended June 30, 2024, THOR’s current combined U.S. and Canadian market share based on unit retail sales was approximately 40.2% for travel trailers and fifth wheels combined and approximately 47.2% for motorhomes.
Tiffin Motorhomes, Inc. manufactures and sells premium diesel and gasoline Class A, Class C and Class B motorhomes under trade names such as Allegro, Allegro Bay, Allegro Breeze, Allegro Bus, Allegro Red , Byway, Midas, Phaeton, Wayfarer and Zephyr .
Tiffin Group The Tiffin Group manufactures and sells conventional motorhomes and includes the operations of Tiffin Motorhomes, Inc. Tiffin Motorhomes, Inc. manufactures and sells premium diesel and gasoline Class A, Class C and Class B motorhomes under trade names such as Allegro, Allegro Bay, Allegro Breeze, Allegro Bus, Allegro Red , Byway, GH1, Midas, Phaeton, Wayfarer and Zephyr .
We believe that we maintain a good working relationship with our employees. 9 We and our operating subsidiaries share a global commitment to all our stakeholders to foster an inclusive workplace where dignity and respect for team members is encouraged and where each team member is supported to achieve their maximum potential.
We and our operating subsidiaries share a global commitment to all our stakeholders to foster an inclusive workplace where dignity and respect for team members is encouraged and where each team member is supported to achieve their maximum potential.
The Company’s total commercial commitments under standby repurchase obligations on dealer inventory financing as of July 31, 2023 and July 31, 2022 were $3,893,048 and $4,308,524, respectively.
The Company’s total commercial commitments under standby repurchase obligations on dealer inventory financing as of July 31, 2024 and July 31, 2023 were $3,642,137 and $3,893,048, respectively.
The increase in European Recreational Vehicle backlog is primarily a result of increased selling prices. Backlog represents unfilled dealer orders on a particular day which can and do fluctuate on a seasonal basis. The manufacturing time in the recreational vehicle business is relatively short.
Backlog represents unfilled dealer orders on a particular day which can and do fluctuate on a seasonal basis. The manufacturing time in the recreational vehicle business is relatively short.
Its products are sold under trade names such as Ace, Aria, Axis, Chateau, Compass, Dazzle, Delano, Echelon, Four Winds, Gemini, Geneva, Hurricane, Magnitude, Miramar, Omni, Outlaw, Palazzo, Quantum, Resonate, Rize, Riviera, Sanctuary, Scope, Sequence, Tellaro, Tiburon, Tranquility, Twist, Vegas and Windsport . 2 Tiffin Group The Tiffin Group manufactures and sells conventional motorhomes and includes the operations of Tiffin Motorhomes, Inc.
Its products are sold under trade names such as Ace, Aria, Axis, Challenger, Chateau, Compass, Dazzle, Delano, Echelon, Four Winds, Gemini, Geneva, Hurricane, Inception, Indigo, Luminate, Magnitude, Miramar, Omni, Outlaw, Palazzo, Palazzo GT, Quantum, Resonate, Rize, Riviera, Sanctuary, Scope, Sequence, Tellaro, Tiburon, Tranquility, Tuscany, Twist, Vegas and Windsport .
If shortages of chassis or other component parts were to become more significant, or if other factors were to impact our suppliers' ability to fully supply our needs for key components, our costs of such components and our production output could be adversely affected.
If supply shortages or delivery delays were to adversely impact our suppliers’ ability to fully meet our needs for key components, our costs of such components and our production output could be adversely affected.
The table below sets forth the contribution of each of the Company’s reportable segments to net sales in each of the last three fiscal years: 2023 2022 2021 Amount % Amount % Amount % Recreational vehicles: North American Towable (1) $ 4,202,628 37.8 $ 8,661,945 53.1 $ 6,221,928 50.5 North American Motorized (1) 3,314,170 29.8 3,979,647 24.4 2,669,391 21.7 European 3,037,147 27.3 2,887,453 17.7 3,200,079 26.0 Total recreational vehicles 10,553,945 94.9 15,529,045 95.2 12,091,398 98.2 Other (2) 777,639 7.0 1,225,824 7.5 373,174 3.0 Intercompany eliminations (209,979) (1.9) (442,344) (2.7) (147,192) (1.2) Total $ 11,121,605 100.0 $ 16,312,525 100.0 $ 12,317,380 100.0 (1) The North American Towable and North American Motorized totals include approximately 7 months of operations in FY 2021 for the Tiffin Group from the December 18, 2020 acquisition date.
The table below sets forth the contribution of each of the Company’s reportable segments to net sales in each of the last three fiscal years: 2024 2023 2022 Amount % Amount % Amount % Recreational vehicles: North American Towable $ 3,679,671 36.6 $ 4,202,628 37.8 $ 8,661,945 53.1 North American Motorized 2,445,850 24.4 3,314,170 29.8 3,979,647 24.4 European 3,364,980 33.5 3,037,147 27.3 2,887,453 17.7 Total recreational vehicles 9,490,501 94.5 10,553,945 94.9 15,529,045 95.2 Other (1) 781,927 7.8 777,639 7.0 1,225,824 7.5 Intercompany eliminations (229,020) (2.3) (209,979) (1.9) (442,344) (2.7) Total $ 10,043,408 100.0 $ 11,121,605 100.0 $ 16,312,525 100.0 (1) Other totals include 11 months of operations in FY 2022 for Airxcel from the September 1, 2021 acquisition date.
The principal types of recreational vehicles that we produce in North America include conventional travel trailers and fifth wheels as well as Class A, Class C and Class B motorhomes.
North American recreational vehicle classifications are based upon standards established by the RV Industry Association (“RVIA”). The principal types of recreational vehicles that we produce in North America include conventional travel trailers and fifth wheels as well as Class A, Class C and Class B motorhomes.
Seasonality Historically, since recreational vehicles were used primarily by vacationers and campers, our recreational vehicle sales tended to be seasonal and, in most geographical areas, tended to be lower during the winter months than in other periods.
Changes typically include new sizes and floor plans, different decors or design features and engineering and technological improvements. 5 Seasonality Historically, since recreational vehicles were used primarily by vacationers and campers, our recreational vehicle sales tended to be seasonal and, in most geographical areas, tended to be lower during the winter months than in other periods.
Generally, our recreational vehicle operating subsidiaries each have separate dealer agreements. One dealer, FreedomRoads, LLC, accounted for approximately 13.0% of our consolidated net sales in fiscal 2023, 2022 and 2021. This dealer also accounted for approximately 13.0% of the Company’s consolidated trade accounts receivable at July 31, 2023 and approximately 10.0% at July 31, 2022.
Generally, our recreational vehicle operating subsidiaries each have separate dealer agreements. One dealer, FreedomRoads, LLC, accounted for approximately 14.0% of our consolidated net sales in fiscal 2024 and for approximately 13.0% in both fiscal 2023 and fiscal 2022.
Issues can be communicated anonymously using our multilingual, third-party hotline via phone, email or online inquiry systems. Every report is investigated and, if warranted, corrective actions are taken or implemented, and we have a policy that protects team members who report issues from any retaliation.
Every report is investigated and, if warranted, corrective actions are taken or implemented, and we have a policy that protects team members who report issues from any retaliation.
We also comply with the National Highway Traffic Safety Administration (“NHTSA”) in the U.S. and with similar standards within Canada and Europe as it relates to the safety of our products. Governmental authorities in the regions in which we operate have various environmental control standards relating to air, water and noise pollution which affect our business and operations.
We also comply with the National Highway Traffic Safety Administration (“NHTSA”) in the U.S. and with similar standards within Canada and Europe as it relates to the safety of our products.
We rely upon certifications obtained by chassis manufacturers with respect to the compliance of our vehicles with applicable emission control standards. 8 Our plants are subject to, and are periodically inspected by, various governmental and industry agencies concerned with health and safety in the workplace to ensure that our plants and products comply with applicable governmental and industry standards.
Our facilities are subject to, and are periodically inspected by, various governmental and industry agencies concerned with health and safety in the workplace to ensure that our facilities and products comply with applicable governmental and industry standards.
Generally, our North American and European RV operating subsidiaries introduce new or improved lines or models of recreational vehicles each year. Changes typically include new sizes and floor plans, different decors or design features and engineering and technological improvements.
Generally, our North American and European RV operating subsidiaries introduce new or improved lines or models of recreational vehicles each year.
As a result of being primarily used for vacations, our recreational vehicle sales were historically lowest during our second fiscal quarter, which ends on January 31 of each year.
As a result of being primarily used for vacations, our recreational vehicle sales were historically lowest during our second fiscal quarter, which ends on January 31 of each year. Marketing and Distribution We sell our recreational vehicles primarily to independent, non-franchise dealers located throughout the United States, Canada and Europe.
Within the United States, we are a member of the RVIA, a voluntary association of recreational vehicle manufacturers which promulgates recreational vehicle safety standards in the United States. We place an RVIA seal on each of our North American recreational vehicles to certify that the RVIA’s standards have been met.
We manufacture recreational vehicles in accordance with these standards and, in turn, are permitted to place an RVIA seal on each of our North American recreational vehicles to certify that the RVIA’s standards have been met.
The Company purchased the Tiffin Group to complement its existing RV product offerings and North American independent dealer base. 1 North American Recreational Vehicles THOR, through its operating subsidiaries, is currently the largest manufacturer of RVs in North America, by units sold and revenue, based on retail statistics published by Statistical Surveys, Inc. ("Stat Surveys") and other reported data.
North American Recreational Vehicles For the fiscal years ended July 31, 2024, 2023 and 2022, THOR, through its operating subsidiaries, is the largest manufacturer of RVs in North America, by units sold and revenue, based on retail statistics published by Statistical Surveys, Inc. (“Stat Surveys”) and other reported data.
The risk of loss under repurchase agreements is spread over numerous dealers and is further reduced by the resale value of the units which we would be required to repurchase. Based on current conditions, we believe that future losses under these agreements would not have a material adverse effect on our Company.
The risk of loss under repurchase agreements is spread over numerous dealers and is further reduced by the resale value of the units which we would be required to repurchase. Estimating the timing and volume of any potential future repurchase demands, and the related losses to the Company, is difficult and subject to uncertainty.
Recreational Vehicles Overview We manufacture a wide variety of recreational vehicles in the United States and Europe and sell those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe. North American recreational vehicle classifications are based upon standards established by the RV Industry Association (“RVIA”).
For additional information regarding our segments, see Note 3 to the Consolidated Financial Statements. Recreational Vehicles Overview We manufacture a wide variety of recreational vehicles in the United States and Europe and sell those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe.
We endeavor to operate in a way that our word is trusted, and we are committed to providing a safe work environment for our team members while empowering them to seize opportunities around them and give them avenues to grow and learn.
We endeavor to operate in a way that our word is trusted, and we are committed to providing a safe work environment for our team members while empowering them to seize opportunities around them and give them avenues to grow and learn. 8 At July 31, 2024, we employed approximately 22,300 full-time employees worldwide, including approximately 13,900 full-time employees in the United States, of which approximately 2,300 were salaried, and approximately 8,400 full-time employees in Europe, of which approximately 4,100 were salaried.
While the North American and European RV industries have also at times faced supply shortages or delivery delays of other, non-chassis, raw material components, our supply chain has been resilient enough to mostly support our fiscal 2023 sales, although falling somewhat short in Europe.
While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis raw material components, the supply chain is currently able to support our demand.
Commitment to Ethical Behavior Each year, we conduct training with certain employees, based on their role and level in the organization, on our business ethics policy. Providing our team members with resources to help make good decisions through an ethics program cultivates strong teamwork and productivity.
With each strategy, our companies have utilized THOR’s guide to measure effectiveness and goal achievement. Commitment to Ethical Behavior Each year, we conduct training with certain employees, based on their role and level in the organization, on our business ethics policy.
In addition, EHG’s operations include other RV-related products and services. Other Airxcel AirX Intermediate, Inc. (“Airxcel”) manufactures a comprehensive line of high-quality RV-related products which they sell primarily to RV original equipment manufacturers as well as consumers via aftermarket sales through dealers and retailers.
(“Airxcel”), through its operating divisions and subsidiaries (including Aqua-Hot, Cleer Vision Windows, Coleman-Mach, Dicor Products, InVision, Maxxair, MCD Innovations, Suburban, United Shade, Velarium and Vixen Composites) manufactures a comprehensive line of high-quality RV-related products which they sell primarily to RV original equipment manufacturers as well as consumers via aftermarket sales through dealers and retailers.
Our European-based operations are subject to employee contracts, Works Councils and certain other labor organizations.
As of July 31, 2024, approximately 250 of our North American employees were represented by certified labor organizations. Our European-based operations are subject to employee contracts, Works Councils and certain other labor organizations. We believe that we maintain a good working relationship with our employees.
Modifying available chassis for certain motorized products to use for other products is not a viable alternative, particularly in the short term, due to engineering requirements. These factors may continue to negatively impact our production schedule and cost structure as we try to balance our production and personnel staffing levels and schedules to the available chassis, often with short notice.
It is extremely difficult to predict when or whether future supply chain issues related to chassis or other components used in the production of RVs will arise. Modifying available chassis for certain motorized products to use for other products is not a viable alternative, particularly in the short term, due to engineering requirements.
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Acquisitions Fiscal 2022 Airxcel On September 1, 2021, the Company acquired Wichita, Kansas-based AirX Intermediate, Inc. (“Airxcel”) as part of its long-term strategic growth plan. Airxcel manufactures a comprehensive line of high-quality component products which are sold primarily to RV original equipment manufacturers ("OEMs") as well as consumers via aftermarket sales through dealers and retailers.
Added
In addition, EHG’s operations include other RV-related products and services. Other Airxcel Airxcel, Inc.
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Airxcel provides industry-leading products in recreational vehicle heating, cooling, ventilation, cooking, window coverings, sidewalls and roofing materials, among others. The acquisition provides numerous benefits, including strengthening the RV supply chain, diversifying the Company's revenue sources and expanding Airxcel’s supply chain business in North America and Europe.
Added
In Europe, while overall chassis supply has improved, we anticipate disruptions in the sequence of chassis delivery to continue through the remainder of calendar year 2024. The sequence of chassis supply inhibits our ability to efficiently and consistently maintain our planned production levels. Uncertainties related to changing emission standards may also impact consumer buying patterns.
Removed
Airxcel operates as an independent operation in the same manner as the Company's other subsidiaries.
Added
In Europe, we continued to experience cost increases, supply shortages and delivery delays of other, non-chassis raw material components which negatively impacted the efficiency of our production in the current fiscal year.
Removed
Fiscal 2021 Tiffin Group On December 18, 2020, the Company closed on a Stock Purchase Agreement (“Tiffin Group SPA”) for the acquisition of all of the issued and outstanding capital stock of luxury motorized recreational vehicle manufacturer Tiffin Motorhomes, Inc., and certain other associated operating and supply companies, which primarily supply component parts and services to Tiffin Motorhomes, Inc.
Added
We believe these shortages and delays will continue to result in production inefficiencies in the near term, which will have a negative impact on our operating results due to lost efficiencies as a result of not completing units off the production line within the normal production schedule.
Removed
(collectively, the "Tiffin Group"). Tiffin Group, LLC, a wholly-owned subsidiary of the Company, owns the Tiffin Group. Tiffin Motorhomes, Inc. operates out of various locations in Alabama and Mississippi.
Added
Furthermore, to minimize the future impact of supply chain constraints, we have identified a second-source supplier base for certain component parts, however, the engineering requirements required with an alternate component part, particularly the chassis our various units are built upon, limit the impact of these alternative suppliers on reducing any near-term supply constraints.
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(2) Other totals include 11 months of operations in FY 2022 for Airxcel from the September 1, 2021 acquisition date. For additional information regarding our segments, see Note 3 to the Consolidated Financial Statements.
Added
This dealer also accounted for approximately 10.0% of the Company’s consolidated trade accounts receivable at July 31, 2024 and approximately 13.0% at July 31, 2023. We generally do not finance dealer purchases.
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While we have recently seen improvement in the supply of chassis from both North American and European suppliers from some, but not all, chassis suppliers, we do not believe the chassis supply chain is back to pre-pandemic levels.
Added
The decrease in European Recreational Vehicle backlog is primarily due to improved chassis supply availability resulting in normalized dealer stocking levels at July 31, 2024, while chassis constraints in the prior year resulted in the significantly elevated backlog as of July 31, 2023.
Removed
Currently it is uncertain as to what impact the current labor disputes and work stoppages involving certain U.S. automakers, who also supply chassis to us, will have on the future availability of chassis. Even beyond these issues, it is extremely difficult to predict when or whether future supply chain issues related to chassis will arise.
Added
Within the United States, we are a member of the RVIA, a voluntary association of recreational vehicle manufacturers which promulgates recreational vehicle safety standards in the United States.
Removed
The geographic centrality of the North American RV industry in northern Indiana, where the majority of our facilities and many of our suppliers are located, could exacerbate supply chain and other COVID-19 related risks should northern Indiana, or any of the other areas in which we, our suppliers or our customers operate, become disproportionately impacted by the COVID-19 pandemic or other factors.
Added
We rely upon certifications obtained by chassis manufacturers with respect to compliance with applicable motorized vehicle emission control standards and work with chassis manufacturers to ensure they remain compliant with the United States Environmental Protection Agency (“EPA”)) and state-specific requirements, including mandates on the production and sale of zero-emission vehicles and near-zero emission vehicles. 7 Governmental authorities in the regions in which we operate have various environmental control standards relating to air, water and noise pollution which affect our business and operations.
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However, industry wholesale shipments in calendar 2021 and the first half of calendar 2022 did not follow typical historical seasonal patterns as we and dealers responded to the high consumer demand for RVs.
Added
Our commitment is to foster an inclusive workplace where dignity and respect for team members are championed and where each team member is supported to achieve their maximum potential. Guided by THOR’s commitment to such principles, each of our operating companies develops and establishes its own specific inclusion strategy.
Removed
Our typical historical seasonal patterns began to return in fiscal 2023, and we currently expect that our typical historical seasonal patterns will return in full in fiscal 2024 as dealer inventory levels and consumer demand become more aligned. 6 Marketing and Distribution We sell our recreational vehicles primarily to independent, non-franchise dealers located throughout the United States, Canada and Europe.
Added
Providing our team members with resources to help make good decisions through an ethics program cultivates strong teamwork and productivity. Issues can be communicated anonymously using our multilingual, third-party hotline via phone, email or online inquiry systems.
Removed
Due to the COVID-19 pandemic and efforts to limit its spread, most retail show sponsors and dealers cancelled these shows in calendar 2020 and calendar 2021. Since January 2022, however, many of these retail shows have returned and have been well attended.
Removed
We believe dealer inventory levels for motorized product lines are generally more closely aligned to dealers’ desired stocking levels as of the end of July 2023, although carrying costs, chassis availability and retail sales activity have been factors considered as the dealers determine their stocking levels and orders.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough the RV industry recently experienced increased sales and operating results as a result of the unique consumer demand for recreational vehicles associated with the COVID-19 pandemic, more recently we have seen demand for RVs decrease amid high inflation, rising interest rates, political uncertainty and numerous other macroeconomic indices which have generally worsened in the regions in which we operate.
Biggest changeRecently, we have seen demand for RVs decrease, particularly in North America, amid high inflation, rising interest rates, political uncertainty and numerous other macroeconomic indices which have generally worsened in the regions in which we operate. If economic and political conditions worsen and RV sales decline, our operating results and financial condition would be negatively affected.
If future health emergencies or other circumstances that inhibit transportation of our products emerge in the regions in which we operate or sell our products, the transportation contractors may again have difficulty finding drivers who are willing to deliver in those regions, or governmental agencies or other actors may restrict movement of goods in those regions.
If future health emergencies or other circumstances that inhibit transportation of our products emerge in the regions in which we operate or sell our products, transportation contractors may have difficulty finding drivers who are willing to deliver in those regions, or governmental agencies or other actors may restrict movement of goods in those regions.
Continued consolidation in the U.S. independent dealer network could negatively impact our sales or gross margins and increase the concentration of our exposure under repurchase obligations related to independent dealers. A material portion of our revenue is derived from sales of our products to international sources.
Continued consolidation in the U.S. independent dealer network could negatively impact our sales or gross margins and increase the concentration of our exposure under repurchase obligations related to these independent dealers. A material portion of our revenue is derived from sales of our products to international sources.
ITEM 1A. RISK FACTORS The following risk factors should be considered carefully in addition to the other information contained in this filing. The risks and uncertainties described below are not the only ones we face and represent risks that our management believes are material to our Company and our business.
ITEM 1A. RISK FACTORS The following risk factors should be considered carefully in addition to the other information contained in this filing. The risks and uncertainties described below are not the only ones we face and represent risks that our management believes are currently material to our Company and our business.
The inability to timely deliver our products to our independent dealers could adversely affect our relationships with those dealers and negatively impact our sales and net income. 19 Interruption of information systems service or misappropriation or breach of our information systems could cause disruption to our operations, disclosure of confidential or personal information or cause damage to our reputation.
The inability to timely deliver our products to our independent dealers could adversely affect our relationships with those dealers and negatively impact our sales and net income. Interruption of information systems service or misappropriation or breach of our information systems could cause disruption to our operations, disclosure of confidential or personal information or cause damage to our reputation.
The North American and European RV industries have, from time to time in the past, experienced shortages of chassis for various other reasons, including component shortages, production delays, capacity constraints, labor constraints and work stoppages at the chassis manufacturers.
The North American and European RV industries have, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays, capacity constraints, labor constraints and work stoppages at the chassis manufacturers.
An adverse outcome from such litigation could have a material effect on operating results. 21 Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
An adverse outcome from such litigation could have a material effect on operating results. Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
Our long-term success and competitiveness depends on the successful execution of our innovation initiatives. A key driver in our historical performance and growth has been our ability to maintain our strong brands and to continuously develop and introduce innovative new and improved products at a reasonable cost that are desired by consumers.
Our long-term success and competitiveness depend on the successful execution of our innovation initiatives. A key driver in our historical performance and growth has been our ability to maintain our strong brands and to continuously develop and introduce innovative new and improved products at a reasonable cost that are desired by consumers.
Long-lived assets, identifiable intangible assets and goodwill are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable from future cash flows.
Long-lived assets, equity investments, identifiable intangible assets and goodwill are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable from future cash flows.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among other things, the following: • Development of new products and features by our competitors; • Development of new collaborative arrangements by us, our competitors or other parties; • Actual or anticipated changes in government regulations applicable to our business in the various jurisdictions in which we operate; • Changes in investor perception of our business and/or management; • Changes in global economic conditions or general market conditions in our industry; • Changes in interest rates and credit availability and their impact on our industry; • Changes in market expectations of our future growth and profitability; • Future health crisis developments, including the imposition of various governmental mandates; • Occurrence of disruptive or catastrophic economic or political events; and • Sales of our common stock held by certain equity investors or members of management.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among other things, the following: • Development of new products and features by our competitors; • Development of new collaborative arrangements by us, our competitors or other parties; • Actual or anticipated changes in government regulations applicable to our business in the various jurisdictions in which we operate; • Changes in investor perception of our business and/or management; • Changes in global economic conditions or general market conditions in our industry; • Changes in interest rates and credit availability and their impact on our industry; • Changes in market expectations of our future growth and profitability; • Occurrence of disruptive or catastrophic health, economic or political events; and • Sales of our common stock held by certain equity investors or members of management.
Future substantial or sudden increases in interest rates and decreases in the general availability of credit could have an adverse impact on our independent dealers and therefore on our business and results of operations.
Ongoing elevated interest rates or future substantial or sudden increases in interest rates and decreases in the general availability of credit could have an adverse impact on our independent dealers and therefore on our business and results of operations.
Adoption of new technological advances and changing governmental regulatory mandates could result in changes in consumer preferences for recreational vehicles or the types of recreational vehicles consumers prefer. These changes could include shifts to smaller recreational vehicles, electric recreational vehicles, autonomous recreational vehicles or other currently unanticipated changes.
Adoption of new technological advances and changing governmental regulatory mandates could result in changes to product offerings and in consumer preferences for recreational vehicles or the types of recreational vehicles consumers prefer. These changes could include shifts to smaller recreational vehicles, electric recreational vehicles, autonomous recreational vehicles, connected recreational vehicles, or other currently unanticipated changes.
In addition, within our European operations, unpredictable deliveries of chassis by the chassis manufacturers during this same period had a further negative impact on our results of operations due to missed sales plus increased labor and overhead costs related to adjusting our own production schedules to accommodate the chassis received versus the chassis expected to be delivered.
In addition, within our European operations, unpredictable deliveries of chassis by the chassis manufacturers during this same period, and in calendar 2024, had a further negative impact on our results of operations due to missed sales and/or increased labor and overhead costs related to adjusting our own production schedules to accommodate the chassis received versus the chassis expected to be delivered.
In addition, our debt level could limit our ability to raise additional capital, if necessary, or increase borrowing costs on future debt if we are unable to replace existing debt with comparable new debt and may have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions, requiring us to use a portion of our cash flows to repay indebtedness and placing us at a disadvantage compared to competitors with lower debt obligations. 23 Our ability to make payments on and to refinance our indebtedness depends on our ability to generate cash in the future.
In addition, our debt level could limit our ability to raise additional capital, if necessary, or increase borrowing costs on future debt if we are unable to replace existing debt with comparable new debt and may have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions, requiring us to use a portion of our cash flows to repay indebtedness and placing us at a disadvantage compared to competitors with lower debt obligations.
The pace and significance of acquisitions and the nature and extent of integration of acquired companies, assets, operations, joint venture arrangements and other equity investment arrangements involve a number of related risks including, but not limited to: • The diversion of management’s attention from the management of existing operations to various transaction and integration activities; • The potential for disruption to existing operations and strategic plans; • The assimilation and retention of employees, including key employees; • Risks related to transacting business in geographies outside the U.S., including but not limited to: foreign currency exchange rate changes, expanded macroeconomic risks due to operations in and sales to a wide base of countries, political and regulatory exposures to a wide array of countries, varying employee/employer relationships, including the existence of Works Councils and labor organizations and other challenges caused by distance, language and cultural differences, making it harder to do business in certain jurisdictions; • Risks related to regulatory environments or product categories with which we have limited or no experience, 17 • Risks related to acquisitions outside of our historical RV OEM operations, which may carry new and less well known operational challenges; • The ability of our management teams to manage expanded operations, including international operations, to meet operational and financial expectations; • The integration of departments and systems, including accounting systems, technologies, books and records, controls and procedures; • The adverse impact on profitability if acquired operations, joint ventures or other equity investments do not achieve expected financial results or realize the synergies and other benefits expected; • The potential loss of, or adverse effects on, existing business relationships with suppliers and customers; • The assumption of liabilities of the acquired businesses, which could be greater than anticipated; • The potential failure of our due diligence efforts to identify and properly evaluate risks or liabilities acquired or assumed in acquisition transactions; • The potential negative impact on available cash and/or future cash flows to support acquisitions, joint ventures or equity investments and related commitments; and • The potential adverse impact on operating results if, in future periods, impairments of significant amounts of goodwill and other assets occur.
The pace and significance of acquisitions and the nature and extent of integration of acquired companies, assets, operations, joint venture arrangements and other equity investment arrangements involve a number of related risks including, but not limited to: • The diversion of management’s attention from the management of existing operations to various transaction and integration activities; • The potential for disruption to existing operations and strategic plans; • The assimilation and retention of employees, including key employees; • Risks related to transacting business in geographies outside the U.S., including but not limited to: foreign currency exchange rate changes, expanded macroeconomic risks due to operations in and sales to a wide base of countries, political and regulatory exposures to a wide array of countries, varying employee/employer relationships, including the existence of works councils and labor organizations and other challenges caused by distance, language and cultural differences, making it harder to do business in certain jurisdictions; • Risks related to regulatory environments or product categories with which we have limited or no experience; • Risks related to acquisitions outside of our historical RV OEM operations, which may carry new and less well-known operational challenges; • The ability of our management teams to manage expanded operations, including international operations, to meet operational and financial expectations; • The integration of departments and systems, including accounting systems, technologies, books and records, controls and procedures; • The adverse impact on profitability if acquired operations, joint ventures or other equity investments do not achieve expected financial results or realize the synergies and other benefits expected; • The potential loss of, or adverse effects on, existing business relationships with suppliers and customers; • The assumption of liabilities of the acquired businesses, which could be greater than anticipated; • The potential failure of our due diligence efforts to identify and properly evaluate risks or liabilities acquired or assumed in acquisition transactions; • The potential negative impact on available cash and/or future cash flows to support acquisitions, joint ventures or equity investments and related commitments; and • The potential adverse impact on operating results if, in future periods, impairments of significant amounts of goodwill and other assets occur. 17 Our long-term viability and financial success are dependent upon our ability to attract and retain an experienced and skilled workforce, including within our management teams, while also maintaining a flexible and competitive compensation and benefit cost structure.
A decrease in availability of consumer credit resulting from unfavorable economic conditions, or additional increases in the cost of consumer credit, may cause consumers to reduce discretionary spending which could, in turn, reduce demand for our products and negatively affect our sales and profitability.
A decrease in availability of consumer credit resulting from unfavorable economic conditions, or ongoing elevated interest rates or future additional increases in the cost of consumer credit, may cause consumers to reduce discretionary spending which could, in turn, reduce demand for our products and negatively affect our sales and profitability.
Combined sales from the United States to foreign countries (predominately Canada) and sales from our foreign subsidiaries to countries other than the U.S. (predominately within the European Union) represented approximately 33.1% of THOR’s consolidated sales for fiscal 2023. Global political uncertainty poses risks of volatility in global markets, which could negatively affect our operations and financial results.
Combined sales from the United States to foreign countries (predominately Canada) and sales from our foreign subsidiaries to countries other than the U.S. (predominately within the European Union) represented approximately 38.4% of THOR’s consolidated sales for fiscal 2024. Global political uncertainty poses risks of volatility in global markets, which could negatively affect our operations and financial results.
If there is a shortage of raw materials or component parts in our supply chain or a supplier is unable to deliver raw materials and component parts to us because of a production issue, limited availability of materials, shipping problems or other reason, the shortage may disrupt our operations or increase our cost of production.
If there is a shortage of raw materials or component parts in our supply chain or a supplier is unable to deliver raw materials and component parts to us because of production issues, labor constraints, limited availability of materials, shipping problems or other reasons, the shortage may disrupt our operations or increase our cost of production.
If we fail to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, analysts or investors could change their opinions and/or recommendations regarding our stock and our stock price may decline, which could have a material adverse impact on investor confidence. 13 With our global footprint, our business could be adversely affected by macroeconomic and geopolitical developments as well as actual or potential public health emergencies.
If we fail to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, analysts or investors could change their opinions and/or recommendations regarding our stock and our stock price may decline, which could have a material adverse impact on investor confidence. 12 With our global footprint, our business could be adversely affected by macroeconomic and geopolitical developments or other events.
Certain jurisdictions also prohibit the sale of vehicles exceeding length restrictions. U.S. federal and state, as well as various European, authorities have environmental control standards relating to air, water, noise pollution and hazardous waste generation and disposal which affect our business and operations. Numerous other U.S. and European laws and regulations affect a wide range of the Company’s activities.
U.S. federal and state, as well as various European, authorities have environmental control standards relating to air, water, noise pollution and hazardous waste generation and disposal which affect our business and operations. Numerous other U.S. and European laws and regulations affect a wide range of the Company’s activities.
We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets. We have a material amount of goodwill, intangible assets and other long-lived assets. At least annually, we review goodwill for impairment.
We could incur impairment charges for goodwill, intangible assets, equity investments or other long-lived assets. We have a material amount of goodwill, intangible assets, equity investments and other long-lived assets, including property, plant and equipment. At least annually, we review goodwill for impairment.
In addition, multiple recalls to address safety or significant operating concerns could erode consumer confidence in our brands resulting in lower sales and an adverse impact on our business and results of operations.
In addition, multiple recalls to address safety or significant operating concerns could erode consumer confidence in our brands and adversely affect our reputation or the public perception and market acceptance of our products, resulting in lower sales and an adverse impact on our business and results of operations.
Due to the robust interest in the RV lifestyle, a number of start-up companies in North America, and certain automotive manufacturers, in both North America and Europe, have recently entered the RV industry with the introduction of products that directly compete with our products.
Due to the anticipated long-term interest in the RV lifestyle, a number of start-up companies in North America, and certain automotive manufacturers, in both North America and Europe, have entered the RV industry within the last few years and introduced products that directly compete with our products.
While we continually employ capabilities, processes and other security measures designed to reduce and mitigate the risk of cyber-attacks, we rely on our suppliers, independent dealers and third-party providers to do the same for their operations; however, we may not be aware of all vulnerabilities and such preventative measures cannot provide absolute security and may not be sufficient in all circumstances to mitigate all potential risks.
While we continually employ capabilities, processes and other security measures designed to reduce and mitigate the risk of cyber-attacks, we rely on our suppliers, independent dealers and third-party providers to do the same for their operations; however, we may not be aware of all vulnerabilities and such preventative measures cannot provide absolute security and may not be sufficient in all circumstances to mitigate all potential risks. 19 The methods and technologies used to obtain unauthorized access to our information systems are constantly changing as are laws and regulations concerning data protection and privacy.
While we record, and adjust on a quarterly basis, reserves for known claims or possible claims to reflect our best estimate of the amount necessary to settle the claim, litigation is unpredictable by its nature and final adjudications may be materially worse than our estimate. 16 The loss of our largest independent dealer or an increase in independent dealer consolidations could have a material negative effect on our business.
While we record, and adjust on a quarterly basis, reserves for known claims or possible claims to reflect our best estimate of the amount necessary to settle the claim, litigation is unpredictable by its nature and final adjudications may be materially worse than our estimate.
As a result, we could face adverse consequences related to the termination of independent dealer relationships. In addition, ongoing consolidation of independent dealers, as well as the growth of large, multi-location dealers, has in the past and could in the future result in increased bargaining power on the part of these independent dealers.
In addition, ongoing consolidation of independent dealers, as well as the growth of large, multi-location dealers, has in the past and could in the future result in increased bargaining power on the part of these independent dealers.
Our business relies on information systems and other technology (“information systems”) to support aspects of our global business operations, including, but not limited to, procurement, supply chain management, manufacturing, design, distribution, invoicing, financial transactions with banks and financing institutions and other transactions with various third-party providers. We also use information systems to accumulate, analyze and report our operational results.
Our business relies on information systems and other technology (“information systems”), some of which are managed or hosted by third parties, to support aspects of our global business operations, including, but not limited to, procurement, supply chain management, manufacturing, design, distribution, invoicing, financial transactions with banks and financing institutions and other transactions with various third-party providers.
Any disruption in our relationships with these third-party associations could adversely affect the cost of our labor and our ability to attract and retain qualified employees to meet our manufacturing needs.
Any disruption in our relationships with these third-party associations could adversely affect the cost of our labor and our ability to attract and retain qualified employees to meet our manufacturing needs. Additional unionization of our North American facilities could result in higher costs and increased risk of work stoppages.
Various factors such as public health issues, constraints in the labor pool, supply chain disruptions, economic conditions and desired dealer stocking levels have disrupted, and may disrupt in the future, the historical trends in the seasonality of our business in both North America and Europe.
Various factors such as constraints in the labor pool, supply chain disruptions, economic conditions and desired dealer stocking levels have disrupted, and may disrupt in the future, the historical trends in the seasonality of our business in both North America and Europe. Our business is structured to quickly align production rates and cost structure to meet rapidly changing market conditions.
Our operations and certain motorized products we sell are subject to rules limiting emissions and other climate-related regulations in certain jurisdictions where we operate or sell our products. In addition, our towable products are generally towed by vehicles that would also be subject to emission and climate-related regulations.
Our operations and certain motorized products we sell are subject to rules limiting emissions and other climate-related regulations in certain jurisdictions where we operate or sell our products.
As of July 31, 2023, total gross outstanding debt was $1,327,405, consisting of $758,094 outstanding on our term loan facility which matures on February 1, 2026; $500,000 of Senior Unsecured Notes due October 15, 2029 and $69,311 outstanding on other debt facilities with varying maturity dates through September 2032.
As of July 31, 2024, total gross outstanding debt was $1,151,279, consisting of $594,361 outstanding on our term loan facility which matures on November 15, 2030; $500,000 of Senior Unsecured Notes due October 15, 2029 and $56,918 outstanding on other debt facilities with varying maturity dates through September 2032.
Estimated warranty costs are accounted for at the time of product sale and adjusted on a quarterly basis to reflect our best estimate of the amounts necessary to settle existing and future claims on our products.
These warranties extend to some, but not all, of our vendor-supplied raw materials and component parts as well. Estimated warranty costs are accounted for at the time of product sale and adjusted on a quarterly basis to reflect our best estimate of the amounts necessary to settle existing and future claims on our products.
Changes in U.S. policy regarding foreign trade or manufacturing may create negative sentiment about the U.S. among non-U.S. dealers, end customers, employees or prospective employees, all of which could adversely affect our business, sales, hiring and employee retention.
Changes in U.S. policy regarding foreign trade or manufacturing may create negative sentiment about the U.S. among non-U.S. dealers, end customers, employees or prospective employees, all of which could adversely affect our business, sales, hiring and employee retention. 16 Implications related to our non-U.S. sales have negatively impacted our financial operating results in the past and are likely to reoccur in the future at varying levels.
In addition, a number of our key suppliers are also located in northern Indiana and are impacted by similar risks. LEGAL AND REGULATORY RISKS Climate-related regulations and ongoing compliance requirements with chassis emissions standards designed to address climate change may result in additional required disclosures and related compliance costs, in both the U.S. and Europe.
LEGAL AND REGULATORY RISKS Climate-related regulations and ongoing compliance requirements with chassis emissions standards designed to address climate change may result in additional required disclosures and related compliance costs, in both the U.S. and Europe.
We may incur material costs related to product recalls, customer satisfaction actions and complying with our recall obligations for both our products and for component parts supplied by vendors. We provide warranties on the products we sell.
Product recalls, customer satisfaction actions and complying with our recall obligations for both our products and for component parts supplied by vendors could adversely affect our financial condition and harm our reputation. We provide warranties on the products we sell.
For example, from calendar year 2020 through 2023, a number of our North American and European chassis suppliers have experienced supply constraints of key components that they require to manufacture chassis, including semiconductor chips, which limited their production of chassis.
For example, from calendar year 2020 through 2023, a number of our North American and European chassis suppliers experienced supply constraints of key components they required to manufacture chassis, including semiconductor chips, which limited their production of chassis. The reduced supply of chassis negatively impacted our production rates and sales of motorized RVs, particularly in Europe, during this period.
If the carrying value of a long-lived asset is considered impaired, a non-cash impairment charge is recorded for the amount by which the carrying value of the long-lived asset or reporting unit exceeds its fair value at the time of measurement.
A non-cash impairment charge is recorded for the amount by which the carrying value of the intangible or long-lived asset, asset group or reporting unit exceeds its fair value at the time of measurement. Our determination of future cash flows, future recoverability and fair value includes significant estimates and assumptions.
These warranties vary depending on the type of product and geographic location of the sale; however, in general, our warranties promise that we will repair, replace or adjust parts on our products that are not performing within acceptable standards or tolerances. These warranties extend to some, but not all, of our vendor-supplied raw materials and component parts as well.
These warranties vary depending on the type of product and geographic location of the sale; however, in general, our warranties promise, within certain specified time periods following a retail sale, that we will repair, replace or adjust parts on our products that are not performing within acceptable standards or tolerances.
Further, the outcome of future elections and the associated political party with power to enact legislation could make tax increases more likely and more severe. 22 Our effective income tax rate could also be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in statutory rates, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation.
Our effective income tax rate could also be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in statutory rates, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation.
Our U.S. operations are also subject to federal and numerous state consumer protection and unfair trade practice laws and regulations relating to the sale, transportation and marketing of motor vehicles, including so-called “lemon laws.” U.S. federal and state, as well as various European laws and regulations, impose upon vehicle operators’ various restrictions on the weight, length and width of motor vehicles that may be operated in certain jurisdictions or on certain roadways.
U.S. federal and state, as well as various European laws and regulations, impose upon vehicle operators’ various restrictions on the weight, length and width of motor vehicles that may be operated in certain jurisdictions or on certain roadways. Certain jurisdictions also prohibit the sale of vehicles exceeding length restrictions.
Sales to FreedomRoads, LLC accounted for approximately 13.0% of our consolidated net sales for fiscal 2023. During recent years, FreedomRoads, LLC has acquired a number of formerly independent RV dealerships. The leverage to negotiate better terms with us arising from FreedomRoads, LLC’s acquisitions or the loss of independent dealers could have a material adverse effect on our business.
The loss of our largest independent dealer or an increase in independent dealer consolidations could have a material negative effect on our business. Sales to FreedomRoads, LLC accounted for approximately 14.0% of our consolidated net sales for fiscal 2024. During recent years, FreedomRoads, LLC has acquired a number of formerly independent RV dealerships.
In connection with our use of information systems, we obtain, create and maintain confidential and personal information. Additionally, we rely upon information systems in our marketing and communication efforts. Due to our reliance on our information systems, we have established various levels of security as well as backup and disaster recovery procedures.
Due to our reliance on our information systems, we have established various levels of security as well as backup and disaster recovery procedures.
We depend on the capability of these independent dealers to develop and implement effective retail sales plans to create demand among retail consumers for the products that the dealers purchase from us. If our independent dealers are not successful in these endeavors, then we may be unable to maintain or grow our revenues and meet our financial expectations.
We operate two dealerships in Europe. We depend on the capability of these independent dealers to develop and implement effective retail sales plans to create demand among retail consumers for the products that the dealers purchase from us.
The United States or other governmental authorities may adjust tax rates, impose new income taxes or indirect taxes, or revise interpretations of existing tax rules and regulations.
The United States or other governmental authorities may adjust tax rates, impose new income taxes or indirect taxes, or revise interpretations of existing tax rules and regulations. Further, the outcome of future elections and the associated political party with power to enact legislation could make tax increases more likely and more severe.
In addition to the obligations under these repurchase agreements, we may also be required to repurchase inventory relative to dealer terminations in certain states in accordance with state laws or regulatory requirements.
In addition to the obligations under these repurchase agreements, we may also be required to repurchase inventory relative to dealer terminations in certain states in accordance with state laws or regulatory requirements. 22 The difference between the gross repurchase price and the price at which the repurchased product can then be resold, which is typically at a discount to the original sale price, is an expense to us.
Such conditions could reoccur in the future and would have a negative impact on our results of operations. In addition, certain raw materials and component parts are sourced from countries where we do not currently have operations.
Such conditions could reoccur in the future and would have a negative impact on our results of operations.
Competition and business conditions may limit the amount or timing of cost increases that can be passed on to our customers in the form of increased sales prices.
Competition and business conditions may limit the amount or timing of cost increases that can be passed on to our customers in the form of increased sales prices. Conversely, as raw material costs decline, we may not be able to maintain selling prices consistent with higher-cost raw materials in our inventory, which could adversely affect our operating results.
Our business depends on the performance of independent, non-franchise authorized dealers and independent transportation carriers. We distribute all of our North American and the majority of our European products through a system of independent, non-franchise authorized dealers, many of whom sell products from competing manufacturers.
We distribute all of our North American and the majority of our European products through a system of independent, non-franchise authorized dealers, many of whom sell products from competing manufacturers. As of July 31, 2024, we distributed our products to approximately 2,400 independent dealerships in the United States and approximately 1,100 independent dealerships in Europe.
The geographic coverage of our independent dealers and their individual business conditions can affect the ability of our independent dealers to sell our products to consumers. If our independent dealers are unsuccessful, they may exit or be forced to exit the business or, in some cases, we may seek to terminate relationships with certain dealerships.
If our independent dealers are unsuccessful, they may exit or be forced to exit the business or, in some cases, we may seek to terminate relationships with certain dealerships. As a result, we could face adverse consequences related to the termination of independent dealer relationships.
Work stoppages or strikes organized by such third-party unions have in the past and could again in the future have a material adverse impact on our business. If a work stoppage occurs, it could delay the manufacture, sale and distribution of our products and have a material adverse effect on our business, operating results or financial condition.
If a work stoppage occurs, it could delay the manufacture, sale and distribution of our products and have a material adverse effect on our business, operating results or financial condition. 18 Our business depends on the performance of independent, non-franchise authorized dealers and independent transportation carriers.
Our determination of future cash flows, future recoverability and fair value of our long-lived assets includes significant estimates and assumptions. Changes in those estimates or assumptions or lower-than-anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material.
Changes in those estimates or assumptions or lower-than-anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material. Any such charge could adversely affect our operating results and financial condition. Our business is affected by the availability and terms of financing to independent dealers and retail purchasers.
Conversely, as raw material costs decline, we may not be able to maintain selling prices consistent with higher-cost raw materials in our inventory, which could adversely affect our operating results. 15 We rely on a small number of suppliers for certain key components, including chassis, and we may not be able to source these key components from alternative suppliers.
We rely on a small number of suppliers for certain key components, including chassis, and we may not be able to source these key components from alternative suppliers.
An increase in actual warranty claim costs as compared to our estimates could result in increased warranty liabilities and expense which could have an adverse impact on our earnings.
An increase in actual warranty claim costs as compared to our estimates could result in increased warranty liabilities and expense which could have an adverse impact on our earnings. 15 Government safety standards require manufacturers to remedy issues related to vehicle safety through safety recall campaigns, and we regularly engage in voluntary recalls when we determine our products may have a safety issue.
Our long-term success and competitiveness depends on our ability to timely, effectively and accurately predict or identify and respond to changing consumer preferences, including an anticipated continued shift in consumer desire for connected recreational vehicles with a focus on ease of use and a high-quality customer experience. 14 To successfully execute our long-term strategy, we believe we must continue to develop and successfully market our existing products as well as new products, including lightweight motorized and towable recreational vehicles, electric recreational vehicles with sufficient user range capability and innovative services that enrich the end users’ RV experience.
Our ability to successfully maintain our market position or grow through investments in the areas of electrification, connectivity and digital services depends on many factors, including advancements in technology, regulatory changes, infrastructure development (e.g., a widespread vehicle charging network) and other factors that are difficult to predict. 13 To successfully execute our long-term strategy, we believe we must continue to develop and successfully market our existing products as well as new products, including lightweight motorized and towable recreational vehicles, electric recreational vehicles with sufficient user range capability and innovative services that enrich the end users’ RV experience.
In the event of future economic, political or health crises, we may experience an adverse effect on our financial condition and on our operational performance. The industry in which we operate is highly competitive both in North America and in Europe and our requirements as a public company may put us at a competitive disadvantage.
The industry in which we operate is highly competitive both in North America and in Europe and our requirements as a public company may put us at a competitive disadvantage. The RV industry is generally characterized by relatively low barriers to entry, which results in a highly competitive business environment.
Additional unionization of our North American facilities could result in higher costs and increased risk of work stoppages. 18 We also are, directly or indirectly, dependent upon companies with unionized work forces, such as parts suppliers, chassis suppliers and trucking and freight companies.
We also are, directly or indirectly, dependent upon companies with unionized work forces, such as parts suppliers, chassis suppliers and trucking and freight companies. Work stoppages or strikes organized by such third-party unions have in the past and could again in the future have a material adverse impact on our business.
Government safety standards require manufacturers to remedy issues related to vehicle safety through safety recall campaigns, and we regularly engage in voluntary recalls when we determine our products may have a safety issue. Issues subject to recall include both materials and workmanship from our companies as well as component parts supplied by vendors.
Issues subject to recall include both materials and workmanship from our companies as well as component parts supplied by vendors.
Two major floor plan financial institutions held approximately 51% of our products’ portion of our independent dealers’ total floored dollars outstanding at July 31, 2023. In the event that either of these lending institutions limit or discontinue dealer financing, we could experience a material adverse effect on our results of operations.
Two major floor plan financial institutions held approximately 50% of our products’ portion of our independent dealers’ total floored dollars outstanding at July 31, 2024.
The Company’s debt arrangements, maturity dates and provisions in our debt agreements may make us more sensitive to the effects of economic downturns.
In the event that either of these lending institutions limit or discontinue dealer financing, we could experience a material adverse effect on our results of operations. 23 The Company’s debt arrangements and provisions in our debt agreements may make us more sensitive to the effects of economic downturns.
The RV industry is generally characterized by relatively low barriers to entry, which results in a highly competitive business environment. According to Stat Surveys and CIVD, respectively, there are approximately 80 RV manufacturers in the U.S. and Canada and approximately 30 RV manufacturers across Europe.
According to Stat Surveys and CIVD, respectively, there are approximately 80 RV manufacturers in the U.S. and Canada and approximately 30 RV manufacturers across Europe. Competition within the industry is based upon price, design, value, quality, service, brand awareness and reputation, as well as other factors.
Any such charge could adversely affect our operating results and financial condition. Our business is affected by the availability and terms of financing to independent dealers and retail purchasers. Generally, independent recreational vehicle dealers finance their purchases of inventory with financing provided by lending institutions.
Generally, independent recreational vehicle dealers finance their purchases of inventory with financing provided by lending institutions.
Additionally, changes in policy, regulations or the imposition of additional regulations could have a material adverse effect on our business.
Additionally, changes in policy, regulations or the imposition of additional regulations could have a material adverse effect on our business. 21 Our U.S. operations are also subject to federal and numerous state consumer protection and unfair trade practice laws and regulations relating to the sale, transportation and marketing of motor vehicles, including so-called “lemon laws”.
Competition within the industry is based upon price, design, value, quality, service, brand awareness and reputation, as well as other factors. Competitive pressures have, from time to time, resulted in a reduction of our profit margins and/or a reduction in our market share. Sustained increases in these competitive pressures could have a material adverse effect on our results of operations.
Sustained increases in these competitive pressures could have a material adverse effect on our results of operations.
Removed
Our business is structured to quickly align production rates and cost structure to meet rapidly changing market conditions.
Added
Competitive pressures have, from time to time, resulted in a reduction of our profit margins and/or a reduction in our market share. In periods of economic downturn, these competitive pressures can increase as RV manufacturers compete for a share of a smaller RV market.
Removed
For example, in fiscal 2023, ongoing supply chain constraints of component parts other than chassis, primarily within our European operations, had a negative impact on our business and our consolidated financial results and financial position, and we expect supply constraints of certain of these other components to continue through at least the first half of fiscal 2024.
Added
For example, we have experienced supply shortages and delivery delays of non-chassis raw material components in Europe. This negatively impacted the efficiency of our production in fiscal 2024 and resulted in an elevated level of work in process inventory on hand compared to historical norms.
Removed
The reduced supply of chassis negatively impacted our production rates and sales of motorized RVs, particularly in Europe, during this period.
Added
Such conditions could reoccur in Europe in the future and could have negative impacts on net sales and financial results due to not completing units on the production line and carrying higher volumes of incomplete units than historical norms.
Removed
Implications related to our non-U.S. sales have negatively impacted our financial operating results in the past and are likely to reoccur in the future at varying levels.
Added
Government regulations aimed at reducing emissions and increasing fuel efficiency that impact our motorized chassis suppliers could negatively impact their production capacity and cost structure which could in turn negatively impact the supply of motorized chassis and/or result in increased input costs for our products.
Removed
Our long-term viability and financial success is dependent upon our ability to attract and retain an experienced and skilled workforce, including within our management teams, while also maintaining a flexible and competitive compensation and benefit cost structure.
Added
Government regulations could also accelerate the transition to electric vehicles, which may impact our product offerings and increase the cost of motorized chassis.
Removed
As of July 31, 2023, we distributed our products to approximately 2,400 independent dealerships in the United States and approximately 1,100 independent dealerships in Europe. We operate two dealerships in Europe.
Added
Such rise in cost could outweigh the perceived benefits to consumers, negatively affecting our sales mix and pricing, resulting in decreased sales and/or margins. 14 In addition, certain raw materials and component parts are sourced from countries where we do not currently have operations.
Removed
As an example, the network of carriers and their ability to deliver units to certain locations was negatively impacted by the COVID-19 pandemic due to driver concerns, border crossing restrictions and vaccination requirements.
Added
Our motorized chassis suppliers may need to substantially modify their product offerings to comply with regulations related to emissions, fuel economy, autonomous driving technology, environmental and other regulations which could result in increased costs and/or a lack of adequate motorized chassis supply to us, which in turn may result in higher wholesale product input costs and decreased margins, which would have an adverse impact on our financial condition or results of operations.
Removed
The methods and technologies used to obtain unauthorized access to our information systems are constantly changing as are laws and regulations concerning data protection and privacy.
Added
The leverage to negotiate better terms with us arising from FreedomRoads, LLC’s acquisitions or the loss of independent dealers could have a material adverse effect on our business.
Removed
The difference between the gross repurchase price and the price at which the repurchased product can then be resold, which is typically at a discount to the original sale price, is an expense to us.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table describes the location, number and size of our principal manufacturing plants and other materially important physical properties as of July 31, 2023: Locations – Applicable Segment(s) Owned or Leased No. of Buildings Approximate Building Area Square Feet United States: Indiana – North American Towable Segment Owned 88 6,470,000 Indiana – North American Towable Segment Leased 3 267,000 Indiana – North American Towable and Motorized Segments Owned 40 2,856,000 Indiana – North American Motorized Segment Owned 18 1,200,000 Indiana – Corporate, North American Towable and Motorized Segments Owned 24 1,465,000 Indiana – Corporate, North American Towable and Motorized Segments Leased 1 1,000 Indiana – Other Owned 4 341,000 Indiana – Other Leased 9 779,000 Indiana Subtotal 187 13,379,000 Ohio – North American Towable and Motorized Segments Owned 13 1,336,000 Alabama – North American Motorized Segment Owned 29 1,120,000 Alabama – North American Motorized Segment Leased 4 32,000 Mississippi – North American Motorized Segment Owned 8 240,000 Mississippi – North American Motorized Segment Leased 6 330,000 Michigan – North American Towable Segment Leased 1 88,000 Michigan – Other Owned 1 10,000 Michigan – Other Leased 5 300,000 Idaho – North American Towable Segment Owned 5 661,000 Oregon – North American Towable Segment Owned 5 371,000 Other United States – Other Owned 3 486,000 Other United States – Other Leased 5 183,000 Other Subtotal 85 5,157,000 United States Subtotal 272 18,536,000 Europe: Germany – European Segment Owned 82 3,941,000 Germany – European Segment Leased 39 1,457,000 Italy – European Segment Owned 3 568,000 Italy – European Segment Leased 6 256,000 Italy – Other Leased 1 118,000 France – European Segment Owned 6 330,000 Poland – European Segment Owned 1 328,000 United Kingdom – European Segment Owned 1 269,000 Europe Subtotal 139 7,267,000 Total 411 25,803,000 25
Biggest changeThe following table describes the location, number and size of our principal manufacturing plants and other materially important physical properties as of July 31, 2024: Locations – Applicable Segment(s) Owned or Leased No. of Buildings Approximate Building Area Square Feet United States: Indiana – North American Towable Segment Owned 83 5,999,000 Indiana – North American Towable Segment Leased 1 124,000 Indiana – North American Towable and Motorized Segments Owned 40 2,856,000 Indiana – North American Motorized Segment Owned 18 1,200,000 Indiana – Corporate, North American Towable and Motorized Segments Owned 25 1,490,000 Indiana – Corporate, North American Towable and Motorized Segments Leased 1 1,000 Indiana – Other Owned 4 341,000 Indiana – Other Leased 14 1,148,000 Indiana Subtotal 186 13,159,000 Ohio – North American Towable and Motorized Segments Owned 13 1,336,000 Alabama – North American Motorized Segment Owned 28 1,100,000 Alabama – North American Motorized Segment Leased 3 29,000 Mississippi – North American Motorized Segment Owned 8 240,000 Mississippi – North American Motorized Segment Leased 3 162,000 Michigan – North American Towable Segment Owned 1 148,000 Michigan – North American Towable Segment Leased 1 88,000 Michigan – Other Owned 1 10,000 Michigan – Other Leased 4 270,000 Idaho – North American Towable Segment Owned 5 661,000 Oregon – North American Towable Segment Owned 5 371,000 Other United States – Other Owned 3 611,000 Other United States – Other Leased 5 183,000 Other Subtotal 80 5,209,000 United States Subtotal 266 18,368,000 Europe: Germany – European Segment Owned 83 4,065,000 Germany – European Segment Leased 33 1,283,000 Italy – European Segment Owned 3 493,000 Italy – European Segment Leased 6 256,000 Italy – Other Leased 2 119,000 France – European Segment Owned 6 313,000 Poland – European Segment Owned 1 318,000 United Kingdom – European Segment Owned 1 326,000 Europe Subtotal 135 7,173,000 Total 401 25,541,000 26
ITEM 2. PROPERTIES As of July 31, 2023, worldwide we owned or leased approximately 25,803,000 square feet of total manufacturing plant and office space. We believe that our present facilities, consisting primarily of steel clad, steel or wood frame and masonry construction, and the machinery and equipment contained in these facilities, are generally well maintained and in good condition.
ITEM 2. PROPERTIES As of July 31, 2024, worldwide we owned or leased approximately 25,541,000 square feet of total manufacturing plant and office space. We believe that our present facilities, consisting primarily of steel clad, steel or wood frame and masonry construction, and the machinery and equipment contained in these facilities, are generally well maintained and in good condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+0 added−0 removed5 unchanged
Biggest changeThe Company does not believe there will be a material adverse impact to our future results of operations and cash flows due to these matters.
Biggest changeThe Company fully cooperated with the investigation, which was fully resolved, and related payments were made by the end of fiscal 2024 in an amount not materially different from the adjusted amounts previously accrued. The Company does not believe there will be a material adverse impact to our future results of operations and cash flows due to these matters.
During fiscal 2022 and fiscal 2023, the accrual was adjusted quarterly based on developments involving the recall, including our expectations regarding the extent of vendor reimbursements and the estimated total cost of the recall.
During fiscal 2022 through fiscal 2024, the accrual was adjusted quarterly based on developments involving the recall, including our expectations regarding the extent of vendor reimbursements and the estimated total cost of the recall.
In addition, we accrued expenses during fiscal 2022 based on developments related to an ongoing investigation by certain German-based authorities regarding the adequacy of historical disclosures of vehicle weight in advertisements and other Company-provided marketing literature in Germany. The Company is fully cooperating with the investigation.
In addition, we accrued expenses during fiscal 2022 based on developments related to an ongoing investigation by certain German-based authorities regarding the adequacy of historical disclosures of vehicle weight in advertisements and other Company-provided marketing literature in Germany. Throughout fiscal 2023 and fiscal 2024, this accrual was adjusted quarterly, if necessary, based on developments involving this matter.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+10 added−0 removed2 unchanged
Biggest changeThe declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board of Directors, and will be dependent upon future earnings, cash flows and other factors, in addition to compliance with any then-existing financing facilities.
Biggest changeThe declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board of Directors, and will be dependent upon future earnings, cash flows and other factors, in addition to compliance with any then-existing financing facilities. 28 Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended July 31, 2024, the Company used $25,353 to purchase shares of common stock under its share repurchase authorizations.
Dividends In fiscal 2023, we paid a $0.45 per share dividend for each fiscal quarter. In fiscal 2022, we paid a $0.43 per share dividend for each fiscal quarter. The Company’s Board of Directors currently intends to continue regular quarterly cash dividend payments in the future.
Dividends In fiscal 2024, we paid a $0.48 per share dividend for each fiscal quarter. In fiscal 2023, we paid a $0.45 per share dividend for each fiscal quarter. The Company’s Board of Directors currently intends to continue regular quarterly cash dividend payments in the future.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s Common Stock, par value $0.10 per share (the “Common Stock”), is traded on the New York Stock Exchange (“NYSE”) under the symbol “THO.” Holders As of September 15, 2023, the number of holders of record of the Common Stock was 139.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s Common Stock, par value $0.10 per share (the “Common Stock”), is traded on the New York Stock Exchange (“NYSE”) under the symbol “THO.” Holders As of September 16, 2024, the number of holders of record of the Common Stock was 136.
Equity Compensation Plan Information – see Item 12. 27
Equity Compensation Plan Information – see Item 12. 29
Added
The Company’s total remaining authorization for common stock repurchases was $422,820 at July 31, 2024.
Added
A summary of the Company’s share repurchases during the three months ended July 31, 2024 is set forth below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs 5/1/24 – 5/31/24 — $ — — $ 448,173 6/1/24 – 6/30/24 266,367 $ 95.18 266,367 $ 422,820 7/1/24 – 7/31/24 — $ — — $ 422,820 266,367 266,367 (1) On December 21, 2021, the Company’s Board of Directors authorized Company management to utilize up to $250,000 to repurchase shares of the Company’s common stock through December 21, 2024.
Added
On June 24, 2022, the Board authorized Company management to utilize up to an additional $448,321 to repurchase shares of the Company’s common stock through July 31, 2025.
Added
Under the two share repurchase authorizations, the Company is authorized to repurchase, on a discretionary basis and from time-to-time, outstanding shares of its common stock in the open market, in privately negotiated transactions or by other means.
Added
The timing and amount of share repurchases will be determined at the discretion of the Company’s management team based upon the market price of the stock, management’s evaluation of general market and economic conditions, cash availability and other factors.
Added
The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under this program.
Added
During the three months ended July 31, 2024, the Company purchased 266,367 shares of its common stock, at various times in the open market, at a weighted-average price of $95.18 and held them as treasury shares at an aggregate purchase price of $25,353, entirely from the June 24, 2022 authorization.
Added
During the twelve months ended July 31, 2024, the Company purchased 720,997 shares of its common stock, at various times in the open market, at a weighted-average price of $94.85 and held them as treasury shares at an aggregate purchase price of $68,387, with 453,194 shares, or $42,886, coming from the December 21, 2021 authorization and 267,803 shares, or $25,501, coming from the June 24, 2022 authorization.
Added
Since the inception of the initial December 21, 2021 authorization, the Company has purchased 3,214,772 shares of its common stock, at various times in the open market, at a weighted-average price of $85.70 and held them as treasury shares at an aggregate purchase price of $275,501.
Added
As of July 31, 2024, there are no remaining shares of the Company’s common stock that may be repurchased under the December 21, 2021 authorization. As of July 31, 2024, the remaining amount of the Company’s common stock that may be repurchased under the June 24, 2022 authorization expiring on July 31, 2025 is $422,820.

Item 7. Management's Discussion & Analysis

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

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Biggest changeFISCAL 2022 FISCAL 2023 FISCAL 2022 Change Amount % Change NET SALES: Recreational vehicles North American Towable $ 4,202,628 $ 8,661,945 $ (4,459,317) (51.5) North American Motorized 3,314,170 3,979,647 (665,477) (16.7) Total North America 7,516,798 12,641,592 (5,124,794) (40.5) European 3,037,147 2,887,453 149,694 5.2 Total recreational vehicles 10,553,945 15,529,045 (4,975,100) (32.0) Other 777,639 1,225,824 (448,185) (36.6) Intercompany eliminations (209,979) (442,344) 232,365 52.5 Total $ 11,121,605 $ 16,312,525 $ (5,190,920) (31.8) # OF UNITS: Recreational vehicles North American Towable 106,504 238,634 (132,130) (55.4) North American Motorized 24,832 29,731 (4,899) (16.5) Total North America 131,336 268,365 (137,029) (51.1) European 55,679 60,192 (4,513) (7.5) Total 187,015 328,557 (141,542) (43.1) % of Segment Net Sales % of Segment Net Sales GROSS PROFIT: Recreational vehicles North American Towable $ 503,487 12.0 $ 1,512,298 17.5 $ (1,008,811) (66.7) North American Motorized 442,715 13.4 654,052 16.4 (211,337) (32.3) Total North America 946,202 12.6 2,166,350 17.1 (1,220,148) (56.3) European 505,344 16.6 409,987 14.2 95,357 23.3 Total recreational vehicles 1,451,546 13.8 2,576,337 16.6 (1,124,791) (43.7) Other, net 144,807 18.6 229,693 18.7 (84,886) (37.0) Total $ 1,596,353 14.4 $ 2,806,030 17.2 $ (1,209,677) (43.1) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Recreational vehicles North American Towable $ 243,616 5.8 $ 429,053 5.0 $ (185,437) (43.2) North American Motorized 175,509 5.3 206,613 5.2 (31,104) (15.1) Total North America 419,125 5.6 635,666 5.0 (216,541) (34.1) European 271,038 8.9 264,723 9.2 6,315 2.4 Total recreational vehicles 690,163 6.5 900,389 5.8 (210,226) (23.3) Other 65,955 8.5 75,731 6.2 (9,776) (12.9) Corporate 113,936 — 140,342 — (26,406) (18.8) Total $ 870,054 7.8 $ 1,116,462 6.8 $ (246,408) (22.1) 37 FISCAL 2023 % of Segment Net Sales FISCAL 2022 % of Segment Net Sales Change Amount % Change INCOME (LOSS) BEFORE INCOME TAXES: Recreational vehicles North American Towable $ 237,123 5.6 $ 1,050,536 12.1 $ (813,413) (77.4) North American Motorized 255,207 7.7 436,604 11.0 (181,397) (41.5) Total North America 492,330 6.5 1,487,140 11.8 (994,810) (66.9) European 179,625 5.9 87,116 3.0 92,509 106.2 Total recreational vehicles 671,955 6.4 1,574,256 10.1 (902,301) (57.3) Other, net 36,965 4.8 110,798 9.0 (73,833) (66.6) Corporate (209,567) — (225,190) — 15,623 6.9 Total $ 499,353 4.5 $ 1,459,864 8.9 $ (960,511) (65.8) As of July 31, 2023 As of July 31, 2022 Change Amount % Change ORDER BACKLOG: Recreational vehicles North American Towable $ 756,047 $ 2,571,009 $ (1,814,962) (70.6) North American Motorized 1,242,936 3,436,629 (2,193,693) (63.8) Total North America 1,998,983 6,007,638 (4,008,655) (66.7) European 3,549,660 2,753,602 796,058 28.9 Total $ 5,548,643 $ 8,761,240 $ (3,212,597) (36.7) CONSOLIDATED Consolidated net sales for fiscal 2023 decreased $5,190,920, or 31.8%, compared to fiscal 2022.
Biggest changeFISCAL 2023 FISCAL 2024 FISCAL 2023 Change Amount % Change NET SALES: Recreational vehicles North American Towable $ 3,679,671 $ 4,202,628 $ (522,957) (12.4) North American Motorized 2,445,850 3,314,170 (868,320) (26.2) Total North America 6,125,521 7,516,798 (1,391,277) (18.5) European 3,364,980 3,037,147 327,833 10.8 Total recreational vehicles 9,490,501 10,553,945 (1,063,444) (10.1) Other 781,927 777,639 4,288 0.6 Intercompany eliminations (229,020) (209,979) (19,041) (9.1) Total $ 10,043,408 $ 11,121,605 $ (1,078,197) (9.7) # OF UNITS: Recreational vehicles North American Towable 112,830 106,504 6,326 5.9 North American Motorized 18,761 24,832 (6,071) (24.4) Total North America 131,591 131,336 255 0.2 European 55,317 55,679 (362) (0.7) Total 186,908 187,015 (107) (0.1) % of Segment Net Sales % of Segment Net Sales GROSS PROFIT: Recreational vehicles North American Towable $ 427,386 11.6 $ 503,487 12.0 $ (76,101) (15.1) North American Motorized 277,840 11.4 442,715 13.4 (164,875) (37.2) Total North America 705,226 11.5 946,202 12.6 (240,976) (25.5) European 581,211 17.3 505,344 16.6 75,867 15.0 Total recreational vehicles 1,286,437 13.6 1,451,546 13.8 (165,109) (11.4) Other, net 165,525 21.2 144,807 18.6 20,718 14.3 Total $ 1,451,962 14.5 $ 1,596,353 14.4 $ (144,391) (9.0) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Recreational vehicles North American Towable $ 246,330 6.7 $ 243,616 5.8 $ 2,714 1.1 North American Motorized 136,398 5.6 175,509 5.3 (39,111) (22.3) Total North America 382,728 6.2 419,125 5.6 (36,397) (8.7) European 298,013 8.9 271,038 8.9 26,975 10.0 Total recreational vehicles 680,741 7.2 690,163 6.5 (9,422) (1.4) Other 75,108 9.6 65,955 8.5 9,153 13.9 Corporate 139,682 — 113,936 — 25,746 22.6 Total $ 895,531 8.9 $ 870,054 7.8 $ 25,477 2.9 37 FISCAL 2024 % of Segment Net Sales FISCAL 2023 % of Segment Net Sales Change Amount % Change INCOME (LOSS) BEFORE INCOME TAXES: Recreational vehicles North American Towable $ 169,232 4.6 $ 237,123 5.6 $ (67,891) (28.6) North American Motorized 126,496 5.2 255,207 7.7 (128,711) (50.4) Total North America 295,728 4.8 492,330 6.5 (196,602) (39.9) European 231,377 6.9 179,625 5.9 51,752 28.8 Total recreational vehicles 527,105 5.6 671,955 6.4 (144,850) (21.6) Other, net 45,299 5.8 36,965 4.8 8,334 22.5 Corporate (223,560) — (209,567) — (13,993) (6.7) Total $ 348,844 3.5 $ 499,353 4.5 $ (150,509) (30.1) As of July 31, 2024 As of July 31, 2023 Change Amount % Change ORDER BACKLOG: Recreational vehicles North American Towable $ 552,379 $ 756,047 $ (203,668) (26.9) North American Motorized 776,903 1,242,936 (466,033) (37.5) Total North America 1,329,282 1,998,983 (669,701) (33.5) European 1,950,793 3,549,660 (1,598,867) (45.0) Total $ 3,280,075 $ 5,548,643 $ (2,268,568) (40.9) CONSOLIDATED Consolidated net sales for fiscal 2024 decreased $1,078,197, or 9.7%, compared to fiscal 2023.
We may also consider strategic and opportunistic repurchases of shares of THOR stock under the share repurchase authorizations as discussed in Note 17 to the Consolidated Financial Statements, and special dividends based upon market and business conditions and excess cash availability, subject to potential customary limits and restrictions pursuant to our credit facilities, applicable legal limitations and determination by the Company's Board of Directors ("Board").
We may also consider strategic and opportunistic repurchases of shares of THOR stock under the share repurchase authorizations as discussed in Note 17 to the Consolidated Financial Statements, and special dividends based upon market and business conditions and excess cash availability, subject to potential customary limits and restrictions pursuant to our credit facilities, applicable legal limitations and determination by the Company’s Board of Directors (“Board”).
Despite the near-term challenges, we remain optimistic about future growth in North American retail sales in the long term, as there are many factors driving product demand. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle.
Despite the near-term challenges, we remain optimistic about future growth in North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in Item 8 of this Report. The discussion below is a comparison of the results of operations and changes in financial condition for the fiscal years ended July 31, 2023 and 2022.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in Item 8 of this Report. The discussion below is a comparison of the results of operations and changes in financial condition for the fiscal years ended July 31, 2024 and 2023.
In estimating the expiration of the standby repurchase obligations, we used inventory reports as of July 31, 2023 from our independent dealers’ primary lending institutions and made an assumption for obligations for inventory aged 0-12 months that it was financed evenly over the twelve-month period.
In estimating the expiration of the standby repurchase obligations, we used inventory reports as of July 31, 2024 from our independent dealers’ primary lending institutions and made an assumption for obligations for inventory aged 0-12 months that it was financed evenly over the twelve-month period.
(2) See Note 16 to the Consolidated Financial Statements for additional information. (3) Represent commitments to purchase specified quantities of raw materials at market prices. The dollar values above have been estimated based on July 31, 2023 market prices.
(2) See Note 16 to the Consolidated Financial Statements for additional information. (3) Represent commitments to purchase specified quantities of raw materials at market prices. The dollar values above have been estimated based on July 31, 2024 market prices.
These fairs have historically been well-attended events that allowed retail consumers the ability to see the newest products, features and designs and to talk with product experts in addition to being able to purchase or order an RV.
These fairs have historically been well-attended events that allow retail consumers the ability to see the newest products, features and designs and to talk with product experts in addition to being able to purchase or order an RV.
In addition to our attendance at various strategic trade fairs going forward, we have and will continue to strengthen and expand our digital activities to reach high potential target groups, generate leads and steer customers directly to dealerships.
In addition to our attendance at various strategic trade fairs, we have and will continue to strengthen and expand our digital activities to reach high potential target groups, generate leads and steer customers directly to dealerships.
With approximately 1,100 active independent dealers in Germany and throughout Europe that we do business with, we believe our European brands have one of the strongest and most professionally structured dealer and service networks in Europe.
With approximately 1,100 active independent dealers in Germany and throughout Europe with whom we do business, we believe our European brands have one of the strongest and most professionally structured dealer and service networks in Europe.
We believe our on-hand cash and cash equivalents and funds generated from operations will be sufficient to fund expected cash dividend payments and share repurchases for the foreseeable future. 45 Our current estimate of committed and internally approved capital spend for fiscal 2024 is $260,000, primarily for certain building projects and certain automation projects, as well as replacing and upgrading machinery, equipment and other assets throughout our facilities to be used in the ordinary course of business.
We believe our on-hand cash and cash equivalents and funds generated from operations will be sufficient to fund expected cash dividend payments and share repurchases for the foreseeable future. 45 Our current estimate of committed and internally approved capital spend for fiscal 2025 is $225,000, primarily for certain building projects and certain automation projects, as well as replacing and upgrading machinery, equipment and other assets throughout our facilities to be used in the ordinary course of business.
In addition, the impact of recent inflation on consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with significantly higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during fiscal 2023 and are expected to continue to impact the remainder of calendar year 2023.
In addition, the impact of recent inflation on consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with significantly higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during fiscal 2024, particularly in North America, and are expected to continue to impact the remainder of calendar year 2024.
We believe these factors will continue to affect retail sales in fiscal 2024. In addition, due to inflationary pressures, higher interest rates and other factors, we believe that in fiscal 2024 our independent dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis.
We believe these factors will continue to affect retail sales in our fiscal 2025. In addition, due to inflationary pressures, higher interest rates and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis.
See Note 3 to the Consolidated Financial Statements for capital acquisitions by segment. Ongoing supply chain constraints, particularly chassis constraints within our European operations, have and could continue to impact our business and our consolidated financial results and financial position.
See Note 3 to the Consolidated Financial Statements for capital acquisitions by segment. Ongoing supply chain constraints, particularly chassis delivery sequence issues within our European operations, have and could continue to impact our business and our consolidated financial results and financial position.
Unrecognized income tax benefits in the amount of $15,992 have been excluded from the table because we are unable to determine a reasonably reliable estimate of the timing of future payment. We have no other material off-balance sheet commitments.
Unrecognized income tax benefits in the amount of $12,405 have been excluded from the table because we are unable to determine a reasonably reliable estimate of the timing of future payment. We have no other material off-balance sheet commitments.
We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Capital acquisitions of $208,908 in fiscal 2023 were made primarily for purchases of land, production building additions and improvements and replacing machinery and equipment used in the ordinary course of business.
We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Capital acquisitions of $139,617 in fiscal 2024 were made primarily for purchases of land, production building additions and improvements and replacing machinery and equipment used in the ordinary course of business.
The change in net working capital provided additional operating cash of $317,294 during fiscal 2023, primarily due to decreases in accounts receivable due to lower sales levels and a reduction in inventory levels. For fiscal 2022, net income adjusted for non-cash operating items (primarily depreciation, amortization of intangibles, deferred income tax benefit and stock-based compensation) provided $1,405,990 of operating cash.
For fiscal 2023, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles, deferred income tax benefit and stock-based compensation) provided $664,339 of operating cash. The change in net working capital provided additional operating cash of $317,294 during fiscal 2023, primarily due to decreases in accounts receivable due to lower sales levels and a reduction in inventory levels.
According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2023 and 2022, our retail market share for travel trailers and fifth wheels combined was 42.4% and 41.8%, respectively.
According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2024 and 2023, our retail market share for travel trailers and fifth wheels combined was 40.4% and 42.4%, respectively.
We believe many of those who have been recently exposed to the industry for the first time will become future owners, and that those who became first-time owners since the COVID-19 pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities.
As a result, we believe many of those who have been recently exposed to the industry for the first time will become future owners, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities.
Trademarks and design technology assets are both valued on a Relief of Royalty method and are both amortized on a straight-line basis, using lives of 15 to 25 years for trademarks and 10 to 15 years for design technology assets, respectively. Amortizable intangible assets, net as of July 31, 2023 totaled $996,979.
Trademarks and design technology assets are both valued on a Relief of Royalty method and are both amortized on a straight-line basis, using lives of 15 to 25 years for trademarks and 10 to 15 years for design technology assets, respectively. Amortizable intangible assets, net as of July 31, 2024 totaled $861,133.
In addition to material supply constraints, labor shortages may also impact our European operations. Currently, we are experiencing a shortage of available skilled workers due to near full employment rates in the European countries where we have manufacturing sites. 36 RESULTS OF OPERATIONS FISCAL 2023 VS.
In addition to potential future material supply constraints, labor shortages may also impact our European operations. Currently, we are experiencing a shortage of available skilled workers due to near full employment rates in the European countries where the majority of our manufacturing sites are located. 36 RESULTS OF OPERATIONS FISCAL 2024 VS.
We record a liability, which totaled $345,197 at July 31, 2023, based on our best estimate of the amounts necessary to settle unpaid existing claims and estimated future claims on products sold as of the balance sheet date.
We record a liability, which totaled $311,627 at July 31, 2024, based on our best estimate of the amounts necessary to settle unpaid existing claims and estimated future claims on products sold as of the balance sheet date.
The Company increased its previous regular quarterly dividend of $0.41 per share to $0.43 per share in October 2021. 46 Principal Contractual Obligations and Commercial Commitments Our principal contractual obligations and commercial commitments at July 31, 2023 are summarized in the following charts.
The Company increased its previous regular quarterly dividend of $0.43 per share to $0.45 per share in October 2022. 46 Principal Contractual Obligations and Commercial Commitments Our principal contractual obligations and commercial commitments at July 31, 2024 are summarized in the following charts.
Where possible, to minimize the future impact of these supply chain constraints, we have identified a second-source supplier base for certain component parts, however, the overall scope of supply chain constraints within Europe and the engineering requirements required with an alternate component part, particularly the chassis our various units are built upon, has limited the impact of these alternative suppliers on reducing our near-term supply constraints.
Where possible, to minimize the future impact of supply chain constraints, we have identified a second-source supplier base for certain component parts, however, the engineering requirements required with an alternate component part, particularly the chassis our various units are built upon, limits the impact of these alternative suppliers on reducing any near-term supply constraints.
End-customer demand for RVs depends strongly on consumer confidence. Factors such as the rate of unemployment, the rate of inflation, private consumption and investments, growth in disposable income of consumers, changes in interest rates, the health of the housing market, changes in tax rates and regulatory restrictions and, more recently, travel safety considerations all influence retail sales.
End-customer demand for RVs depends strongly on consumer confidence. Factors such as the rate of unemployment, the rate of inflation, private consumption and investments, the level of disposable income of consumers, interest rates, the health of the housing market, tax rates and regulatory restrictions and, since the pandemic, travel safety considerations all influence retail sales.
We also believe consumers are likely to continue altering their future vacation and travel plans, opting for fewer vacations via air travel, cruise ships and hotels, and preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home.
We also believe many consumers are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home.
The total carrying value of goodwill as of July 31, 2023 is $1,800,422. See Note 7 to the Consolidated Financial Statements for a summary of changes in carrying value by fiscal year and reportable segment.
The total carrying value of goodwill as of July 31, 2024 is $1,786,973. See Note 7 to the Consolidated Financial Statements for a summary of changes in carrying value by fiscal year and reportable segment.
The decrease of $211,337 in North American Motorized gross profit for fiscal 2023 compared to fiscal 2022 was driven by the decrease in net sales, while the decrease in the gross profit percentage was due to the increase in the cost of products sold percentage noted above.
The decrease of $164,875 in North American Motorized gross profit for fiscal 2024 compared to fiscal 2023 was driven by the decrease in net sales, while the decrease in the gross profit percentage was due to the increase in the cost of products sold percentage noted above.
The comparison of, and changes between, the fiscal years ended July 31, 2022 and 2021 can be found within "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2022, as filed with the SEC on September 28, 2022.
The comparison of, and changes between, the fiscal years ended July 31, 2023 and 2022 can be found within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023, as filed with the SEC on September 25, 2023.
Total Amounts Committed Amount of Commitment Expiration Per Period Other Commercial Commitments Less Than One Year (1) 1-3 Years 4-5 Years Over 5 Years Standby repurchase obligations (1) $ 3,893,048 $ 2,442,581 $ 1,450,467 $ — $ — (1) The standby repurchase totals above do not consider any curtailments that lower the eventual repurchase obligation totals, and these obligations generally extend up to eighteen months from the date of sale of the related product to the dealer.
Total Amounts Committed Amount of Commitment Expiration Per Period Other Commercial Commitments Less Than One Year (1) 1-3 Years 4-5 Years Over 5 Years Standby repurchase obligations (1) $ 3,642,137 $ 2,210,005 $ 1,432,132 $ — $ — (1) The standby repurchase totals above do not consider any curtailments that lower the eventual repurchase obligation totals, and these obligations generally extend up to eighteen months from the date of sale of the related product to the dealer.
In Europe, according to the European Caravan Federation (“ECF”), EHG’s current market share for the six months ended June 30, 2023 based on units was approximately 20.6% for motorcaravans and campervans combined and approximately 18.5% for caravans.
In Europe, according to the European Caravan Federation (“ECF”), EHG’s current market share for the six months ended June 30, 2024 based on units was approximately 25.3% for motorcaravans and campervans combined and approximately 18.3% for caravans.
These risks to our business are more fully described in Part 1, Item 1A "Risk Factors" of this Report.
These risks to our business are more fully described in Part 1, Item 1A “Risk Factors” of this Report.
The decrease of $31,104 in North American Motorized selling, general and administrative expenses in fiscal 2023 compared to fiscal 2022 was primarily due to the decreases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $39,581.
The decrease of $39,111 in North American Motorized selling, general and administrative expenses in fiscal 2024 compared to fiscal 2023 was primarily due to the decreases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $40,330.
According to statistics published by RVIA, for the twelve months ended July 31, 2023, combined motorhome wholesale unit shipments decreased 10.3% compared to the same period last year. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2023 and 2022, our retail market share for motorhomes was 48.1% and 48.5%, respectively.
According to statistics published by RVIA, for the twelve months ended July 31, 2024, combined motorhome wholesale unit shipments decreased 24.2% compared to the same period last year. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2024 and 2023, our retail market share for motorhomes was 47.7% and 48.2%, respectively.
Financing Activities Net cash used in financing activities for fiscal 2023 was $635,685, including payments of $100,000 on the ABL facility and $402,355 on the term-loan credit facilities. Additionally, the Company made regular quarterly cash dividend payments of $0.45 per share for each quarter of fiscal 2023 totaling $95,969, and $42,007 was used for treasury share repurchases.
Additionally, the Company made regular quarterly cash dividend payments of $0.48 per share for each quarter of fiscal 2024 totaling $102,137, and $68,387 was used for treasury share repurchases. Net cash used in financing activities for fiscal 2023 was $635,685, including payments of $100,000 on the ABL facility and $402,355 on the term-loan credit facilities.
The increase of $95,357 in European Recreational Vehicle gross profit for fiscal 2023 compared to fiscal 2022 was due to the increase in European Recreational Vehicle net sales and the decrease in the cost of products sold percentage noted above.
The increase of $75,867 in European Recreational Vehicle gross profit for fiscal 2024 compared to fiscal 2023 was primarily due to the increase in European Recreational Vehicle net sales and the decrease in the cost of products sold percentage noted above.
To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. Consolidated gross profit for fiscal 2023 decreased $1,209,677, or 43.1%, compared to fiscal 2022.
To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. Consolidated gross profit for fiscal 2024 decreased $144,391, or 9.0%, compared to fiscal 2023.
In North America, according to Stat Surveys, for the six months ended June 30, 2023, THOR’s current combined U.S. and Canadian market share based on units was approximately 42.7% for travel trailers and fifth wheels combined and approximately 49.0% for motorhomes.
In North America, according to Stat Surveys, for the six months ended June 30, 2024, THOR’s current combined U.S. and Canadian market share based on units was approximately 40.2% for travel trailers and fifth wheels combined and approximately 47.2% for motorhomes.
Variable costs in manufacturing overhead decreased $13,709 in fiscal 2023 compared to fiscal 2022 as a result of the decrease in North American Motorized net sales.
Variable costs in manufacturing overhead decreased $39,251 in fiscal 2024 compared to fiscal 2023 as a result of the decrease in North American Motorized net sales.
Selling, general and administrative expenses were 7.8% of consolidated net sales for fiscal 2023 and 6.8% for fiscal 2022, with the increase in percentage primarily due to the decrease in consolidated net sales in fiscal 2023 compared to fiscal 2022.
Selling, general and administrative expenses were 8.9% of consolidated net sales for fiscal 2024 and 7.8% for fiscal 2023, with the increase in percentage due to the combination of the decrease in consolidated net sales in fiscal 2024 compared to fiscal 2023 and the increase in costs.
While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis, raw material components, our supply chain has been resilient enough to support our fiscal 2023 demand.
While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis raw material components, the supply chain is currently able to support our demand.
Our outlook for future growth in European RV retail sales depends upon the various economic and regulatory conditions in the respective countries in which we sell our products, and on our ability to manage through supply chain issues that have, and will continue to, limit the level to which we can increase output of our motorized products in the near term.
Our outlook for future European RV retail sales depends upon the various economic and regulatory conditions in the respective countries in which we sell our products, and on our ability to manage through supply chain issues that have, and are expected to continue to, impact the efficiency of our production of our motorized products in the near term.
The constant-currency increases in the overall net price per unit within the Motorcaravan product line of 18.8% and the Campervan product line of 26.7% were primarily due to the impact of selling price increases and product mix changes.
The constant-currency increases in the overall net price per unit within the Motorcaravan product line of 1.6% and the Caravan product line of 0.7% were primarily due to the impact of net selling price increases and product mix changes.
Operating Activities Net cash provided by operating activities for fiscal 2023 was $981,633 as compared to net cash provided by operating activities of $990,116 for fiscal 2022. For fiscal 2023, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles, deferred income tax benefit and stock-based compensation) provided $664,339 of operating cash.
Operating Activities Net cash provided by operating activities for fiscal 2024 was $545,548 as compared to net cash provided by operating activities of $981,633 for fiscal 2023. For fiscal 2024, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles, deferred income tax benefit and stock-based compensation) provided $564,153 of operating cash.
Total manufacturing overhead decreased $111,757 due to the decrease in sales but increased as a percentage of North American Towable net sales from 5.1% to 7.8%, as the decreased net sales levels resulted in higher overhead costs per unit sold.
Total manufacturing overhead decreased $28,136 in correlation with the decrease in sales but increased as a percentage of North American Towable net sales from 7.8% to 8.2%, as the decreased net sales levels resulted in higher overhead costs per unit sold.
Changes in any of these estimates can have a significant impact on the determination of fair value. Additionally, market data and factors outside the Company’s control, such as dealer and end consumer demand, could have a significant impact on estimated fair value. Changes in any of these estimates or other factors could potentially result in future material impairments.
Additionally, market data and factors outside the Company’s control, such as interest rates, dealer and end consumer demand, consumer preferences or unexpected competition could have a significant impact on estimated fair values. Changes in any of these estimates or other factors could potentially result in future material impairments in one or more of the Company’s reporting units.
The primary reason for the $92,509 increase in European Recreational Vehicle income before income taxes was the increase in European Recreational Vehicle net sales and the improvement in the cost of products sold percentage noted above.
The primary reason for the $51,752 increase in European Recreational Vehicle income before income taxes was the increase in European Recreational Vehicle net sales. The primary reasons for the increase in percentage was the decrease in the cost of products sold percentage noted above.
In the most likely scenario, towable and motorized unit shipments are projected to increase to an approximated annual total of 369,700 units, or 24.4% higher than the most likely scenario for calendar year 2023 wholesale shipments.
In the most likely scenario, towable and motorized unit shipments are projected to increase to an approximated annual total of 346,100 units, or 6.8% higher than the most likely scenario for calendar year 2024 wholesale shipments.
It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the early portion of fiscal 2024 will continue to be negatively impacted by these factors, especially when compared to our strong fiscal 2022 and fiscal 2021 results.
It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the remainder of calendar year 2024 will continue to be negatively impacted by these factors.
Liquidity and Capital Resources As of July 31, 2023, we had $441,232 in cash and cash equivalents, of which $338,703 is held in the United States and the equivalent of $102,529, predominantly in Euros, is held in Europe, compared to $311,553 on July 31, 2022, of which $256,492 was held in the United States and the equivalent of $55,061, predominantly in Euros, was held in Europe.
Liquidity and Capital Resources As of July 31, 2024, we had $501,316 in cash and cash equivalents, of which $373,031 is held in the United States and the equivalent of $128,285, predominantly in Euros, is held in Europe, compared to $441,232 on July 31, 2023, of which $338,703 was held in the United States and the equivalent of $102,529, predominantly in Euros, was held in Europe.
Based on the increasing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The recent multi-year growth in industry-wide RV sales has also resulted in exposing a wider range of consumers to the RV lifestyle.
Based on the ongoing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The growth in industry-wide RV sales during late calendar year 2020 through early calendar year 2023 resulted in exposing a wider range of consumers to the RV lifestyle.
The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the heightened demand in the prior fiscal year, which included independent dealers significantly restocking their inventory unit stock levels.
The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior fiscal year, which included independent dealer restocking of certain motorized products.
North American Outlook Historically, RV industry sales have been impacted by a number of economic conditions faced by our independent dealers, and ultimately retail consumers, such as the rate of unemployment, the rate of inflation, the level of consumer confidence, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices.
This information is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various states or provinces. 33 North American Outlook Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the rate of unemployment, the rate of inflation, the level of consumer confidence, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices.
Company European Retail Statistics European Unit Registrations (1) Six Months Ended June 30, Increase % 2023 2022 (Decrease) Change Motorcaravan and Campervan 15,792 17,795 (2,003) (11.3) Caravan 5,142 5,978 (836) (14.0) Total OEM-Reporting Countries 20,934 23,773 (2,839) (11.9) (1) Company retail registration statistics have been compiled from individual countries' reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the “OEM Reporting Countries.” Note: Data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various countries.
Company European Retail Statistics European Unit Registrations (1) Six Months Ended June 30, Increase % 2024 2023 (Decrease) Change Motorcaravan and Campervan 20,941 15,868 5,073 32.0 Caravan 4,909 5,156 (247) (4.8) Total OEM-Reporting Countries 25,850 21,024 4,826 23.0 (1) Company retail registration statistics have been compiled from individual countries' reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the “OEM Reporting Countries.” Note: Data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various countries.
Within Europe, over 90% of our sales are made to dealers within 10 different European countries. The market conditions, as well as the operating status of our independent dealers within each country, vary based on the various local economic and other conditions. It is inherently difficult to generalize about the operating conditions within the entire European region.
Industry wholesale shipment data for the European RV market is not available. 34 Within Europe, over 90% of our sales are made to dealers within 10 different European countries. The market conditions, as well as the operating status of our independent dealers within each country, vary based on the various local economic and other conditions.
This calendar year 2024 most likely forecast could range from a lower estimate of approximately 363,700 total units to an upper estimate of approximately 375,700 units.
This calendar year 2025 most likely forecast could range from a lower estimate of approximately 329,900 total units to an upper estimate of approximately 362,300 units.
The decrease of $181,397 in North American Motorized income before income taxes for fiscal 2023 compared to fiscal 2022 was primarily due to the decrease in North American Motorized net sales, and the primary reason for the 3.3% decrease in North American Motorized income before income taxes percentage was the increase in the cost of products sold percentage noted above. 43 European Recreational Vehicles Analysis of Change in Net Sales for Fiscal 2023 vs.
The decrease of $128,711 in North American Motorized income before income taxes for fiscal 2024 compared to fiscal 2023 was primarily due to the decrease in North American Motorized net sales, and the primary reasons for the decrease in the percentage of North American Motorized net sales were the increases in the cost of products sold and selling, general and administrative expense percentages noted above. 43 European Recreational Vehicles Analysis of Change in Net Sales for Fiscal 2024 vs.
These estimates are also subject to significant management judgment, including the determination of many factors such as sales growth rates, gross margin patterns, cost growth rates, terminal value assumptions and discount rates developed using market observable inputs and consideration of risk regarding future performance, as well as market multiples derived from selected guideline public companies.
Fair values are determined using discounted cash flow models, and these estimates are subject to significant management judgment, including the determination of many factors and inputs such as, but not limited to, sales growth rates, gross margin patterns, cost growth rates, terminal value assumptions and discount rates developed using market observable inputs and consideration of risk regarding future performance.
The decrease of $813,413 in North American Towable income before income taxes for fiscal 2023 compared to fiscal 2022 was primarily due to the decrease in North American Towable net sales, and the primary reason for the 6.5% decrease in percentage was the increase in the cost of products sold percentage noted above. 41 North American Motorized Recreational Vehicles Analysis of Change in Net Sales for Fiscal 2023 vs.
The decrease of $67,891 in North American Towable income before income taxes for fiscal 2024 compared to fiscal 2023 was primarily due to the decrease in North American Towable net sales, and the primary reasons for the decrease in the percentage of North American Towable net sales were the increases in the cost of products sold and selling, general and administrative expense percentages noted above. 41 North American Motorized Recreational Vehicles Analysis of Change in Net Sales for Fiscal 2024 vs.
Material, labor, freight-out and warranty costs as a combined percentage of motorized net sales was 80.9% for fiscal 2023 compared to 78.6% for fiscal 2022, with the increase primarily due to an increase in the material cost percentage, primarily due to chassis cost increases, and an increase in the warranty cost percentage.
Material, labor, freight-out and warranty costs as a combined percentage of motorized net sales was 82.4% for fiscal 2024 compared to 80.9% for fiscal 2023, with the increase mainly due to an increase in the material cost percentage, primarily due to higher sales discounting, which effectively decreases net selling prices and correspondingly increases the material cost percentage, as well as increased chassis costs.
During fiscal 2023, particularly in the second half of fiscal 2023, retail sales began to slow, and carrying costs for dealers increased significantly due to inflationary cost increases and the rapid increase in interest rates during that period. These factors, among others, combined to cause dealers to reduce the number of units they carried as of July 31, 2023.
During fiscal 2023, particularly in the second half of fiscal 2023, retail sales began to slow, and carrying costs for dealers increased significantly due to inflationary cost increases and the rapid increase in floor plan interest rates during that period.
The RVIA most likely forecast for calendar year 2023 could range from a lower estimate of approximately 287,200 total units to an upper estimate of approximately 307,000 units. As part of their August 2023 forecast, RVIA also released their initial estimates for calendar year 2024 wholesale unit shipments.
The RVIA most likely forecast for calendar year 2024 could range from a lower estimate of approximately 311,600 total units to an upper estimate of approximately 336,600 units. As part of their September 2024 forecast, RVIA also issued a downward revision of their initial June 2024 estimates for calendar year 2025 wholesale unit shipments.
Our long-term outlook for future growth in European RV retail sales remains positive as more people discover RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose vehicle to escape urban life and explore outdoor activities and nature. 35 Prior to the COVID-19 pandemic, we and our independent European dealers marketed our European recreational vehicles through numerous RV fairs at the country and regional levels which occurred throughout the calendar year.
Our long-term outlook for future growth in European RV retail sales remains positive as more people discover RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose vehicle to escape urban life and explore outdoor activities and nature.
Under a most likely scenario, towable and motorized unit shipments are projected to decrease to approximately 249,300 and 47,800, respectively, for an annual total of approximately 297,100 units, down 39.8% from the 2022 calendar year wholesale shipments.
Under a most likely scenario, towable and motorized unit shipments are projected to increase to approximately 289,800 and 34,300, respectively, for an annual total of approximately 324,100 units, up 3.5% from the 2023 calendar year wholesale shipments.
The combined material, labor, freight-out and warranty costs as a combined percentage of gross North American Towable net sales before the effects of discounting decreased, due to a decrease in the material cost percentage from the combined favorable impacts of product mix changes, net selling price increases, cost-saving initiatives and the North American Towable LIFO liquidation of $8,300 in fiscal 2023, partially offset by an increase in the warranty cost percentage.
Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales were 80.2% for both fiscal 2024 and fiscal 2023, as a decrease in the material cost percentage driven by the combined favorable impacts of selective net selling price increases, stable material costs and cost-saving initiatives was offset by an increase in the labor cost percentage due to product mix changes and a modest increase in the warranty cost percentage.
However, independent RV dealer inventory levels of our European products are generally below historic levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product sales, independent dealer inventory levels are currently below historical norms. Independent dealer inventory of our European RV products as of July 31, 2023 was approximately 21,200 units.
Independent RV dealer inventory levels of our European products are generally in line with historic seasonal levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product sales, independent dealer inventory levels are also generally in line with historic norms.
As of July 31, 2023, we believe North American dealer inventory levels for most towable products are generally higher than the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs.
These factors, among others, combined to cause dealers to reduce the number of units they carried as of July 31, 2024. As of July 31, 2024, we believe North American dealer inventory levels for most products are generally at, or slightly higher than, the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs.
Total manufacturing overhead increased $19,621 and increased as a percentage of European Recreational Vehicle net sales from 9.8% to 10.0% primarily due to an increase in manufacturing overhead wages and benefits.
Total manufacturing overhead increased $41,822 with the increase in European Recreational Vehicle net sales and increased as a percentage of European Recreational Vehicle net sales from 10.0% to 10.2% primarily due to small increases in manufacturing overhead wages and benefits and depreciation expense as a percentage of European Recreational Vehicle net sales.
The decrease of $185,437 in North American Towable selling, general and administrative expenses for fiscal 2023 compared to fiscal 2022 includes the impact of the decrease in North American Towable net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $184,177.
The increase of $2,714 in North American Towable selling, general and administrative expenses for fiscal 2024 compared to fiscal 2023 includes the impact of the decreases in North American Towable net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $6,310. Sales-related travel, advertising and promotional costs also decreased $2,160.
The changes in material, labor, freight-out and warranty costs comprised $34,716 of the 54,337 increase.
The changes in material, labor, freight-out and warranty costs comprised $210,144 of the $251,966 increase.
The components of the $129,679 increase in cash and cash equivalents are described in more detail below, but the increase was primarily attributable to cash provided by operations of $981,633 less cash used in financing activities of $635,685 and cash used in investing activities of $222,483.
The components of the $60,084 increase in cash and cash equivalents are described in more detail below, but the increase was primarily attributable to cash provided by operations of $545,548 less cash used in financing activities of $337,677 and cash used in investing activities of $146,812.
According to statistics published by RVIA, for the twelve months ended July 31, 2023, combined travel trailer and fifth wheel wholesale unit shipments decreased 51.0% compared to the same period last year.
The increase in unit shipments is primarily due to the recent demand for the lower cost travel trailer units as compared to the prior year. According to statistics published by RVIA, for the twelve months ended July 31, 2024, combined travel trailer and fifth wheel wholesale unit shipments increased 8.0% compared to the same period last year.
The determination of whether a triggering event has occurred is subject to significant management judgment, including at which point or fiscal quarter a triggering event has occurred when the relevant adverse factors persist over extended periods. Should a triggering event be deemed to occur, and for each of the annual goodwill impairment assessments, management is required to estimate fair value.
The determination of whether a triggering event has occurred is subject to significant management judgment, including at which point or fiscal quarter a triggering event has occurred when the relevant adverse factors persist over extended periods. The Company completed its annual goodwill impairment test as of May 31, 2024, and no impairment was identified.
Material, labor, freight-out and warranty costs as a combined percentage of European Recreational Vehicle net sales decreased to 73.4% for fiscal 2023 compared to 76.0% for fiscal 2022, with the decrease primarily due to a decrease in the material cost percentage due to net selling price increases and product mix changes. The labor cost percentages also improved.
Material, labor, freight-out and warranty costs as a combined percentage of European Recreational Vehicle net sales decreased to 72.5% for fiscal 2024 compared to 73.4% for fiscal 2023 primarily due to a decrease in the labor cost percentage from product mix changes, mainly the increased concentration of motorcaravans which carry a lower direct labor percentage relative to their sales price.
The increase in European Recreational Vehicle net sales of $149,694 includes a decrease of $116,142, or 4.0% of net sales, due to the decrease in foreign exchange rates in fiscal 2023 compared to fiscal 2022. Sales on a constant-currency basis increased by 9.2%.
The increase in European Recreational Vehicle net sales of $327,833 includes an increase of $66,670, or 2.2% of the 10.8% increase, due to the increase in foreign exchange rates in fiscal 2024 compared to fiscal 2023. Sales on a constant-currency basis increased by 8.6%.
The decrease of $1,008,811 in North American Towable gross profit for fiscal 2023 compared to fiscal 2022 was driven by the decrease in net sales and the decrease in the gross profit percentage was due to the increase in the cost of products sold percentage noted above.
Variable costs in manufacturing overhead decreased $28,487 in fiscal 2024 compared to fiscal 2023 as a result of the decrease in North American Towable net sales. 40 The decrease of $76,101 in North American Towable gross profit for fiscal 2024 compared to fiscal 2023 was driven by the decrease in net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.
The increase in the overall selling, general and administrative expense as a percentage of North American Towable net sales was primarily due to the decrease in North American Towable net sales.
This decrease was partially offset by an increase in professional fees and settlement and RV repurchase costs of $5,690. The increase in the overall selling, general and administrative expense as a percentage of North American Motorized net sales was primarily due to the decrease in North American Motorized net sales.
We address European retail customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions. With the help of data-based and digital marketing, we intend to continue expanding our retail customer reach to new and younger consumer segments.
We address European retail customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions.
Payments of $332,907 were also made on the term-loan credit facilities. Additionally, the Company made regular quarterly cash dividend payments of $0.43 per share for each quarter of fiscal 2022 totaling $94,944, and $165,107 was used for treasury share repurchases. The Company increased its previous regular quarterly dividend of $0.43 per share to $0.45 per share in October 2022.
Additionally, the Company made regular quarterly cash dividend payments of $0.45 per share for each quarter of fiscal 2023 totaling $95,969, and $42,007 was used for treasury share repurchases. The Company increased its previous regular quarterly dividend of $0.45 per share to $0.48 per share in October 2023.
In addition, the unused availability under our revolving asset-based credit facility is generally available to the Company for general operating purposes, and approximated $940,000 at July 31, 2023.
We strive to maintain adequate cash balances to ensure we have sufficient resources to respond to opportunities and changing business conditions. In addition, the unused availability under our revolving asset-based credit facility is generally available to the Company for general operating purposes and approximated $814,000 at July 31, 2024.
Consolidated gross profit was 14.4% of consolidated net sales for fiscal 2023 and 17.2% for fiscal 2022. The decreases in consolidated gross profit and the consolidated gross profit percentage in fiscal 2023 compared to fiscal 2022 were both primarily due to the impact of the decrease in consolidated net sales, which resulted in less absorption of fixed costs.
Consolidated gross profit was 14.5% of consolidated net sales for fiscal 2024 and 14.4% for fiscal 2023. The decrease in consolidated gross profit in fiscal 2024 compared to fiscal 2023 was primarily due to the impact of the decrease in consolidated net sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeINTEREST RATE RISK – Based on our assumption of the Company’s floating-rate debt levels over the next 12 months, a one-percentage-point increase in interest rates (approximately 13.3% of our weighted-average interest rate at July 31, 2023) would result in an estimated $7,626 reduction in income before income taxes over a one-year period. 50
Biggest changeINTEREST RATE RISK – Based on our assumption of the Company’s floating-rate debt levels over the next 12 months, a one-percentage-point increase in interest rates (approximately 14.1% of our weighted-average interest rate at July 31, 2024) would result in an estimated $6,026 reduction in income before income taxes over a one-year period. 50
The Company has used foreign currency forward contracts to manage certain foreign exchange rate exposure related to anticipated sales transactions in Pound Sterling with financial instruments whose maturity date, along with the realized gain or loss, occurs on or near the execution of the anticipated transaction. The Company also holds $555,506 of debt denominated in Euros at July 31, 2023.
The Company has used foreign currency forward contracts to manage certain foreign exchange rate exposure related to anticipated sales transactions in Pound Sterling with financial instruments whose maturity date, along with the realized gain or loss, occurs on or near the execution of the anticipated transaction. The Company also holds $386,279 of debt denominated in Euros at July 31, 2024.
A hypothetical 10% change in the Euro/U.S. Dollar exchange rate would change our July 31, 2023 debt balance by an estimated $55,551.
A hypothetical 10% change in the Euro/U.S. dollar exchange rate would change our July 31, 2024 debt balance by an estimated $38,628.

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