SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
- ----
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the quarterly period ended February 26, 2000
-----------------------------------
OR
- ----
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission file number 1-6403
------
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0803978
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 152, Forest City, Iowa 50436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 582-3535
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___.
There were 21,560,992 shares of $.50 par value common stock outstanding on April
6, 2000.
<PAGE>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO REPORT ON FORM 10-Q
<TABLE>
<CAPTION>
Page Number
-----------
PART I. FINANCIAL INFORMATION:
<S> <C>
Consolidated Balance Sheets (Interim period information unaudited) 1 & 2
Unaudited Consolidated Statements of Income 3
Unaudited Consolidated Statements of Cash Flows 4
Unaudited Condensed Notes to Consolidated Financial Statements 5 & 6
Management's Discussion and Analysis of Financial Condition and Results 7 - 9
of Operations
PART II. OTHER INFORMATION 10 - 12
</TABLE>
<PAGE>
Part I Financial Information
Item 1.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Dollars in thousands
FEBRUARY 26, AUGUST 28,
ASSETS 2000 1999
- -------------------------------------------------------- ------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 43,498 $ 48,160
Receivables, less allowance for doubtful
accounts ($1,033 and $960, respectively) 32,562 33,342
Dealer financing receivables, less allowance
for doubtful accounts ($105 and $73, respectively) 31,204 24,573
Inventories 82,509 87,031
Prepaid expenses 17,586 3,593
Deferred income taxes 6,982 6,982
------------ ------------
Total current assets 214,341 203,681
------------ ------------
PROPERTY AND EQUIPMENT, at cost
Land 1,137 1,150
Buildings 43,362 41,136
Machinery and equipment 78,242 73,839
Transportation equipment 5,317 5,345
------------ ------------
128,058 121,470
Less accumulated depreciation 85,859 83,099
------------ ------------
Total property and equipment, net 42,199 38,371
------------ ------------
LONG-TERM NOTES RECEIVABLE, less allowances
($294 and $262, respectively) 713 787
------------ ------------
INVESTMENT IN LIFE INSURANCE 20,355 19,749
------------ ------------
DEFERRED INCOME TAXES, NET 18,654 18,654
------------ ------------
OTHER ASSETS 6,629 4,647
------------ ------------
TOTAL ASSETS $ 302,891 $ 285,889
============ ============
</TABLE>
See Unaudited Condensed Notes to Consolidated Financial Statements
1
<PAGE>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Dollars in thousands
FEBRUARY 26, AUGUST 28,
LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999
- ------------------------------------------------------- ------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable, trade $ 26,582 $ 38,604
Income tax payable 22,809 10,201
Accrued expenses:
Insurance 5,310 3,962
Product warranties 7,794 6,407
Accrued compensation 11,710 13,204
Promotional 5,284 2,629
Other 5,637 4,954
------------ ------------
Total current liabilities 85,126 79,961
------------ ------------
POSTRETIREMENT HEALTH CARE AND DEFERRED
COMPENSATION BENEFITS 59,792 56,544
------------ ------------
STOCKHOLDERS' EQUITY
Capital stock, common, par value $.50; authorized
60,000,000 shares: issued 25,876,000 and 25,874,000
shares, respectively 12,938 12,937
Additional paid-in capital 21,980 21,907
Reinvested earnings 173,524 151,482
------------ ------------
208,442 186,326
Less treasury stock, at cost 50,469 36,942
------------ ------------
Total stockholders' equity 157,973 149,384
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 302,891 $ 285,889
============ ============
</TABLE>
See Unaudited Condensed Notes to Consolidated Financial Statements
2
<PAGE>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
================================================================================
<TABLE>
<CAPTION>
IN THOUSANDS EXCEPT PER SHARE DATA
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------------------- --------------------------------
February 26, February 27, February 26, February 27,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $ 187,144 $ 154,132 $ 369,695 $ 311,796
Cost of goods sold 156,352 129,763 308,030 262,551
------------ ------------ ------------ ------------
Gross profit 30,792 24,369 61,665 49,245
------------ ------------ ------------ ------------
Operating expenses:
Selling and delivery 5,641 5,494 11,901 10,596
General and administrative 8,148 4,289 14,701 9,983
------------ ------------ ------------ ------------
Total operating expenses 13,789 9,783 26,602 20,579
------------ ------------ ------------ ------------
Operating income 17,003 14,586 35,063 28,666
Financial income 905 565 1,558 1,146
------------ ------------ ------------ ------------
Pre-tax income 17,908 15,151 36,621 29,812
Provision for taxes 6,057 5,197 12,389 10,209
------------ ------------ ------------ ------------
Net income $ 11,851 $ 9,954 $ 24,232 $ 19,603
============ ============ ============ ============
Earnings per common share (Note 7):
Basic $ .54 $ .45 $ 1.10 $ .88
Diluted $ .54 $ .45 $ 1.08 $ .88
Weighted average common shares outstanding (Note 7):
Basic 21,765 22,145 21,946 22,184
Diluted 22,134 22,317 22,339 22,387
</TABLE>
See Unaudited Condensed Notes to Consolidated Financial Statements.
================================================================================
3
<PAGE>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Dollars in thousands TWENTY-SIX WEEKS ENDED
---------------------------------
February 26, February 27,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 24,232 $ 19,603
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 3,144 2,754
Other 177 296
Change in assets and liabilities:
Increase in receivable and other assets (13,381) (19,045)
Decrease (increase) in inventories 4,522 (4,423)
(Decrease) increase in accounts payable and accrued expenses (7,443) 2,068
Increase in income taxes payable 12,608 9,071
Increase in postretirement benefits 2,966 2,592
Other - - - (238)
------------ ------------
Net cash provided by operating activities 26,825 12,678
------------ ------------
Cash flows used by investing activities:
Purchases of property and equipment (7,147) (6,216)
Investments in dealer receivables (53,635) (50,104)
Collections of dealer receivables 46,978 33,292
Other (2,040) 2,560
------------ ------------
Net cash used by investing activities (15,844) (20,468)
------------ ------------
Cash flows used by financing activities and capital transactions:
Payments for purchase of common stock (14,490) (8,975)
Payment of cash dividends (2,189) (2,221)
Other 1,036 816
------------ ------------
Net cash used by financing activities and
capital transactions (15,643) (10,380)
------------ ------------
Net decrease in cash and cash equivalents (4,662) (18,170)
Cash and cash equivalents - beginning of period 48,160 53,859
------------ ------------
Cash and cash equivalents - end of period $ 43,498 $ 35,689
============ ============
</TABLE>
See Unaudited Condensed Notes to Consolidated Financial Statements.
4
<PAGE>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, consisting of
normal recurring accruals, necessary to present fairly the consolidated
financial position as of February 26, 2000, the consolidated results of
operations for the 26 and 13 weeks ended February 26, 2000 and February
27, 1999, and the consolidated cash flows for the 26 weeks ended February
26, 2000 and February 27, 1999. The results of operations for the 26
weeks ended February 26, 2000, are not necessarily indicative of the
results to be expected for the full year. The balance sheet data as of
August 28, 1999 was derived from audited financial statements, but does
not include all disclosures contained in the Company's Annual Report to
Shareholders for the year ended August 28, 1999. The interim consolidated
financial statements should be read in conjunction with the audited
financial statements and notes thereto appearing in the Company's Annual
Report to Shareholders for the year ended August 28, 1999.
2. Inventories are valued at the lower of cost or market, with cost being
determined under the last-in, first-out (LIFO) method and market defined
as net realizable value.
Inventories are composed of the following (dollars in thousands):
<TABLE>
<CAPTION>
February 26, August 28,
2000 1999
------------------- ------------------
<S> <C> <C>
Finished goods................ $ 30,486 $ 25,622
Work in process............... 23,731 24,822
Raw materials................. 47,546 55,076
------------------ -----------------
101,763 105,520
LIFO
reserve....................... (19,254) (18,489)
------------------ -----------------
$ 82,509 $ 87,031
================== =================
</TABLE>
3. Since March 1992, the Company has had a financing and security agreement
with Bank of America Specialty Group (formerly NationsBank Specialty
Lending Unit). Terms of the agreement limit borrowings to the lesser of
$30,000,000 or 75 percent of eligible inventory (fully manufactured
recreation vehicles and motor home chassis and related components).
Borrowings are secured by the Company's receivables and inventory.
Borrowings under the agreement bear interest at the prime rate, as
defined in the agreement, plus 50 basis points. The line of credit is
available and continues during successive one-year periods unless either
party provides at least 90-days' notice prior to the end of the one-year
period to the other party that they wish to terminate the line of credit.
The agreement also contains certain restrictive covenants including
maintenance of minimum net worth, working capital and current ratio. As
of February 26, 2000, the Company was in compliance with these financial
covenants. There were no outstanding borrowings under the line of credit
at February 26, 2000 or August 28, 1999.
4. It is customary practice for companies in the recreation vehicle industry
to enter into repurchase agreements with lending institutions which have
provided wholesale floor plan financing to dealers. The Company's
agreements provide for the repurchase of its products from the financing
institution in the event of repossession upon a dealer's default. The
Company was contingently liable for approximately $224,421,000 and
$168,552,000 under repurchase agreements with lending institutions as of
February 26, 2000 and August 28, 1999, respectively. Included in these
contingent liabilities as of February 26, 2000 and August 28, 1999 are
approximately $11,353,000 and $7,480,000, respectively, of certain dealer
receivables subject to recourse agreements with Bank of America Specialty
Group (formerly NationsBank Specialty Lending Unit) and Conseco Finance
Servicing Group (formerly Green Tree Financial).
5. For the periods indicated, the Company paid cash for the following
(dollars in thousands):
TWENTY-SIX WEEKS ENDED
--------------------------------------------
February 26, February 27,
2000 1999
-------------------- -------------------
Interest $ 129 $ 91
Income taxes 13,205 11,670
5
<PAGE>
6. On March 9, 2000, the Company completed the repurchase of outstanding
shares of its common stock authorized by the Board of Directors on June
17, 1999. Under this repurchase program, 820,675 shares were repurchased
for an aggregate consideration of approximately $15,000,000. On March 15,
2000, the Board of Directors authorized the repurchase of outstanding
shares of the Company's common stock for an aggregate purchase price of
up to $15,000,000. Between December 30, 1997 and March 9, 2000, the
Company repurchased 4,494,098 shares of its outstanding common stock.
7. The following table reflects the calculation of basic and diluted
earnings per share for the 13 and 26 weeks ended February 26, 2000 and
February 27, 1999:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------------------------- -------------------------------------
FEBRUARY 26, FEBRUARY 27, FEBRUARY 26, FEBRUARY 27,
IN THOUSANDS EXCEPT PER SHARE DATA 2000 1999 2000 1999
----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
EARNINGS PER SHARE - BASIC:
Net income $ 11,851 $ 9,954 $ 24,232 $ 19,603
----------------- ----------------- ----------------- ----------------
Weighted average shares outstanding 21,765 22,145 21,946 22,184
----------------- ----------------- ----------------- ----------------
Earnings per share - basic $ .54 $ .45 $ 1.10 $ .88
----------------- ----------------- ----------------- ----------------
EARNINGS PER SHARE - ASSUMING DILUTION:
Net income $ 11,851 $ 9,954 $ 24,232 $ 19,603
----------------- ----------------- ----------------- ----------------
Weighted average shares outstanding 21,765 22,145 21,946 22,184
Dilutive impact of options outstanding 369 172 393 203
----------------- ----------------- ----------------- ----------------
Weighted average shares & potential
dilutive shares outstanding 22,134 22,317 22,339 22,387
----------------- ----------------- ----------------- ----------------
Earnings per share - assuming dilution $ .54 $ .45 $ 1.08 $ .88
----------------- ----------------- ----------------- ----------------
</TABLE>
There were options to purchase 14,000 shares of common stock outstanding
at a price of $15.1875 per share during the 13 weeks ended February 27,
1999. These options were not included in the computation of diluted
earnings per share because the options' exercise price was greater than
the average market price of the common shares.
8. The Company defines its operations into two business segments:
Recreational vehicles and other manufactured products and dealer
financing. Recreation vehicles and other manufactured products includes
all data relative to the manufacturing and selling of the Company's Class
A, B and C motor home products as well as sales of component products for
other manufacturers and recreation vehicle related parts and service
revenue. Dealer financing includes floorplan unit financing for the
Company's dealers whom have limited floorplan financing resources.
Management focuses on operating income as a segment's measure of profit
or loss when evaluating a segment's financial performance. Operating
income is before interest expense, interest income, and income taxes. A
variety of balance sheet ratios are used by management to measure the
business. Identifiable assets are those assets used in the operations of
each industry segment. General corporate assets consist of cash and cash
equivalents, deferred income taxes and other corporate assets not related
to the two business segments. General corporate income and expenses
include administrative costs. Inter-segment sales and expenses are not
significant.
For the 26 weeks ended February 26, 2000 and February 27, 1999, the
Company's segment information is as follows:
<TABLE>
<CAPTION>
RECREATION VEHICLES &
OTHER MANUFACTURED DEALER GENERAL
(DOLLARS IN THOUSANDS) PRODUCTS FINANCING CORPORATE TOTAL
------------------------------------------------- ----------------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
26 WEEKS ENDED FEBRUARY 26, 2000
Net revenues $ 367,900 $ 1,795 $ - - - $ 369,695
Operating income (loss) 33,808 1,739 (484) 35,063
Identifiable assets 183,520 32,466 86,905 302,891
26 WEEKS ENDED FEBRUARY 27, 1999
Net revenues $ 310,389 $ 1,407 $ - - - $ 311,796
Operating income (loss) 26,359 2,397 (90) 28,666
Identifiable assets 149,375 30,710 73,740 253,825
</TABLE>
6
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended February 26, 2000 Compared to Thirteen Weeks Ended February
27, 1999
Net revenues for manufactured products for the 13 weeks ended February 26, 2000
were $186,219,000, an increase of $32,913,000 or 21.5 percent from the 13-week
period ended February 27, 1999. Motor home shipments (Class A and C) during the
second quarter of fiscal 2000 were 2,592 units, an increase of 307 units, or
13.4 percent, compared to the second quarter of fiscal 1999. As a result of the
Company's shipments of more units with slideout features and a greater number of
higher priced diesel-powered Class A vehicles, the percentage increase in net
revenues for manufactured products in the second quarter of fiscal 2000 was
greater than the percentage increase in motor home shipments for that period.
Even though there have been recent increases in fuel costs and interest rates,
the Company remains guardedly optimistic about continued sales growth due to
excellent traffic at early spring RV shows and current retail sales levels.
Order backlog for the Company's Class A and Class C motor homes was
approximately 2,500 orders and 3,300 orders at February 26, 2000 and February
27, 1999, respectively. The Company includes in its backlog all accepted
purchase orders from dealers shippable within the next six months. Orders in
backlog can be canceled at the option of the purchaser at any time without
penalty and, therefore, backlog may not necessarily be a measure of future
sales.
Net revenues for dealer financing of Winnebago Acceptance Corporation (WAC) were
$925,000 for the 13 weeks ended February 26, 2000, an increase of $99,000 or
12.0 percent from the 13-week period ended February 27, 1999. Increased revenues
for dealer financing reflect an increase in interest rates charged and to a
lesser extent an increase in average dealer receivable balances when comparing
the second quarter of fiscal 2000 to the comparable period of fiscal 1999.
Gross profit, as a percent of net revenues, was 16.5 percent for the 13 weeks
ended February 26, 2000 compared to 15.8 percent for the 13 weeks ended February
27, 1999. The Company's gross profit percentage increased as a result of
increased volume of motor home production and shipments and a favorable product
mix change during the second quarter of fiscal 2000.
Selling and delivery expenses were $5,641,000 or 3.0 percent of net revenues
during the second quarter of fiscal 2000 compared to $5,494,000 or 3.6 percent
of net revenues during the second quarter of fiscal 1999. The increase in
dollars can be attributed primarily to increases in the Company's promotional
programs. Increased sales volume, during the 13 weeks ended February 26, 2000,
contributed to the decrease in percentage.
General and administrative expenses were $8,148,000 or 4.4 percent of net
revenues during the 13 weeks ended February 26, 2000 compared to $4,289,000 or
2.8 percent of net revenues during the 13 weeks ended February 27, 1999. The
increases in both dollars and percentages in general and administrative expenses
when comparing the two quarters were primarily due to increases in Company-wide
employee incentive programs and increases in the Company's legal costs recorded
during the thirteen weeks ended February 26, 2000. Also impacting the increase
between the two quarters was monies the Company received and recorded during the
second quarter of fiscal 1999 on a previously fully-reserved receivable.
The Company had net financial income of $905,000 for the second quarter of
fiscal 2000 compared to net financial income of $565,000 for the comparable
quarter of fiscal 1999. The increase in net financial income when comparing the
two periods was attributed primarily to an increase in net interest income.
For the second quarter of fiscal 2000, the Company had net income of
$11,851,000, or $.54 per diluted share, compared to the second quarter of fiscal
1999's net income of $9,954,000, or $.45 per diluted share. Net income and
earnings per diluted share increased by 19.1 percent and 20.0 percent,
respectively, when comparing the second quarter of fiscal 2000 to the second
quarter of fiscal 1999.
7
<PAGE>
Twenty-Six Weeks Ended February 26, 2000 Compared to Twenty-Six Weeks Ended
February 27, 1999
Net revenues for manufactured products for the 26 weeks ended February 26, 2000
were $367,900,000, an increase of $57,511,000, or 18.5 percent from the 26-week
period ended February 27, 1999. Motor home shipments (Class A and C) were 5,217
units, an increase of 466 units, or 9.8 percent, during the 26 weeks ended
February 26, 2000 when compared to the 26 weeks ended February 27, 1999. The
difference in percentages when comparing the percent increase in revenue for
manufactured products for the first half of fiscal 2000 to the percent increase
in unit shipments for the first half of fiscal 2000 was caused by the shipments
of more units with slideout features and greater number of higher priced
diesel-powered Class A vehicles. Industry demand for motorized recreation
vehicles remained strong during the 26 weeks ended February 26, 2000 and the
Company's 2000 products continue to be well received by dealers and retail
customers.
Net revenues for dealer financing of WAC were $1,795,000 for the 26 weeks ended
February 26, 2000, an increase of $388,000 or 27.6 percent from the 26 weeks
ended February 27, 1999. Increased revenues for dealer financing reflect an
increase in average dealer receivable balances and to a lesser extent, an
increase in interest rates charged when comparing the first half of fiscal 2000
to the comparable period of fiscal 1999.
Gross profit, as a percent of net revenues, was 16.7 percent for the 26 weeks
ended February 26, 2000 compared to 15.8 percent for the 26 weeks ended February
27, 1999. The Company's favorable product mix change and increased volume of
motor homes during the first 26 weeks of fiscal 2000 were the primary causes of
the improved gross margin percentage.
Selling and delivery expenses were $11,901,000 or 3.2 percent of net revenues
during the first half of fiscal 2000 compared to $10,596,000 or 3.4 percent of
net revenues during the first half of fiscal 1999. The increase in dollars can
be attributed primarily to increases in the Company's advertising and
promotional programs. Increased sales volume, during the 26 weeks ended February
26, 2000, contributed to the decrease in percentage.
General and administrative expenses were $14,701,000 or 4.0 percent of net
revenues during the 26 weeks ended February 26, 2000 compared to $9,983,000 or
3.2 percent of net revenues during the 26 weeks ended February 27, 1999.
Increases in Company-wide employee incentive programs and in the Company's legal
costs recorded during the first half of fiscal 2000 were the primary reasons for
the increases in both dollars and percentages in general and administrative
expenses when comparing the two periods. Also impacting the increase between the
two fiscal half years was monies the Company received and recorded during the 26
weeks ended February 27, 1999 on a previously fully-reserved receivable.
The Company had net financial income of $1,558,000 for the 26 weeks ended
February 26, 2000 compared to net financial income of $1,146,000 for the 26
weeks ended February 27, 1999. The increase in net financial income when
comparing the two periods was attributed primarily to an increase in net
interest income.
For the first half of fiscal 2000, the Company recorded net income of
$24,232,000, or $1.08 per diluted share, compared to the first half of fiscal
1999's net income of $19,603,000, or $.88 per diluted share. Net income and
earnings per diluted share increased by 23.6 percent and 22.7 percent,
respectively, when comparing the first half of fiscal 2000 to the first half of
fiscal 1999.
LIQUIDITY AND FINANCIAL CONDITION
The Company meets its working capital requirements, capital equipment
requirements and cash requirements of subsidiaries with funds generated
internally.
At February 26, 2000, working capital was $129,215,000, an increase of
$5,495,000 from the amount at August 28, 1999. The Company's principal uses of
cash during the 26 weeks ended February 26, 2000 were $53,635,000 of dealer
receivable investments and $14,490,000 for the purchase of shares of the
Company's Common Stock. The Company's principal sources of cash during the 26
weeks ended February 26, 2000 were income from operations and the collection of
$46,978,000 in dealer receivables. The Company's sources and uses of cash during
the 26 weeks ended February 26, 2000 are set forth in the unaudited consolidated
statement of cash flows for that period.
8
<PAGE>
Principal known demands at February 26, 2000 on the Company's liquid assets for
the remainder of fiscal 2000 include approximately $10,000,000 of capital
expenditures and funds for payment of cash dividends. On March 15, 2000, the
Board of Directors declared a cash dividend of $.10 per common share payable
July 10, 2000, to shareholders of record on June 9, 2000.
Management currently expects its cash on hand, funds from operations and
borrowings available under existing credit facilities to be sufficient to cover
both short-term and long-term operating requirements.
ACCOUNTING CHANGES
Recognition of Derivative Instruments and Hedging Activities
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was
issued in June 1998 and must be adopted by the Company no later than fiscal
2001. This statement requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure these instruments at fair
value. The Company has not completed the process of evaluating the effect of
SFAS No. 133 on its financial statements.
FORWARD LOOKING INFORMATION
Except for the historical information contained herein, certain of the matters
discussed in this report are "forward looking statements" as defined in the
Private Securities Litigation Reform Act of 1995, which involve risks and
uncertainties, including, but not limited to availability of chassis, slower
than anticipated sales of new or existing products, a significant increase in
interest rates, a general slowdown in the economy, or new product introductions
by competitors and other factors which may be disclosed throughout this Form
10-Q or in the Company's Annual Report on Form 10-K for the year ended August
28, 1999. Any forecasts and projections in this report are "forward looking
statements," and are based on management's current expectations of the Company's
near-term results, based on current information available pertaining to the
Company; actual results could differ materially.
YEAR 2000 (Y2K) COMPLIANCE
The Company experienced no disruption of its operation as a result of Year 2000
issues related to computer systems and manufacturing operations. The Company is
not aware that any of its major third party suppliers has experienced any Year
2000 problems which would have a material impact on the future operations or
financial results of the Company. The total cost of the Company's Year 2000
project was previously reported not to exceed $300,000 (all of which has been
expensed), and no additional costs have been incurred. The Company does not
expect any future disruptions related to Year 2000 issues either internally or
from third parties.
9
<PAGE>
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders
(a) The annual meeting of shareholders was held January 11, 2000.
(b) The breakdown of votes for the election of eight directors was
as follows*:
<TABLE>
<CAPTION>
VOTES CAST FOR AUTHORITY WITHHELD
---------------------- --------------------------
<S> <C> <C>
Gerald E. Boman (2002) 18,687,848 915,051
Jerry N. Currie (2002) 17,726,715 1,876,184
Fred G. Dohrmann (2001) 18,683,590 919,309
John V. Hanson (2003) 18,676,108 926,791
Bruce D. Hertzke (2003) 18,689,024 913,875
Gerald C. Kitch (2003) 18,698,885 904,014
Richard C. Scott (2001) 18,699,122 903,777
Frederick M. Zimmerman (2002) 18,701,209 901,690
</TABLE>
* There were no broker non-votes.
( ) Represents year of Annual Meeting that individual's term will
expire.
(c) The breakdown of votes to approve amendments to the Company's
Articles of Incorporation to 1) provide for the classification of
the Board of Directors into three classes; 2) provide that the
number of directors constituting the Board of Directors shall be
not more than fifteen (15) and not less than three (3), the
precise number to be determined by resolution of the Board of
Directors from time to time; 3) provide that Directors may be
removed only for cause; and 4) require a vote of 75 percent of the
outstanding shares of the Company to amend these provisions.
<TABLE>
<CAPTION>
VOTES CAST FOR VOTES CAST AGAINST VOTES ABSTAINED
------------------------- ------------------------- ------------------------
<S> <C> <C> <C>
11,981,563 4,714,699 2,906,637
(d) Approve an amendment to the Company's Articles of Incorporation to authorize the issuance of
Preferred Stock.
VOTES CAST FOR VOTES CAST AGAINST VOTES ABSTAINED
------------------------- ------------------------- ------------------------
12,108,884 4,561,968 2,932,047
(e) Vote on a shareholder proposal concerning cumulative voting.
VOTES CAST FOR VOTES CAST AGAINST VOTES ABSTAINED
------------------------- ------------------------- ------------------------
3,629,182 12,921,449 3,052,268
</TABLE>
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index on page 12.
(b) The Company did not file any reports on Form 8-K during the period
covered by this report.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<CAPTION>
WINNEBAGO INDUSTRIES, INC.
----------------------------------------------------
(Registrant)
<S> <C>
Date April 6, 2000 /s/ Bruce D. Hertzke
------------------------------ ----------------------------------------------------
Bruce D. Hertzke
Chairman of the Board, Chief Executive Officer,
and President
(Principal Executive Officer)
Date April 6, 2000 /s/ Edwin F. Barker
------------------------------ ----------------------------------------------------
Edwin F. Barker
Vice President - Chief Financial Officer
(Principal Financial Officer)
</TABLE>
11
<PAGE>
EXHIBIT INDEX
27. Financial Data Schedule.
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-26-2000
<PERIOD-END> FEB-26-2000
<CASH> 43,498
<SECURITIES> 0
<RECEIVABLES> 64,904
<ALLOWANCES> 1,138
<INVENTORY> 82,509
<CURRENT-ASSETS> 214,341
<PP&E> 128,058
<DEPRECIATION> 85,859
<TOTAL-ASSETS> 302,891
<CURRENT-LIABILITIES> 85,126
<BONDS> 0
0
0
<COMMON> 12,938
<OTHER-SE> 145,035
<TOTAL-LIABILITY-AND-EQUITY> 302,891
<SALES> 187,144
<TOTAL-REVENUES> 187,144
<CGS> 156,352
<TOTAL-COSTS> 156,352
<OTHER-EXPENSES> 13,789
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (905)
<INCOME-PRETAX> 17,908
<INCOME-TAX> 6,057
<INCOME-CONTINUING> 11,851
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,851
<EPS-BASIC> .54
<EPS-DILUTED> .54
</TABLE>
