UPDATE:Winnebago 4Q Loss Widens;'Worst May Be Over,' CEO Says
16 October 2009 - 3:31AM
Dow Jones News
Winnebago Industries Inc.'s (WGO) shares jumped as much as 16%
Thursday after the company's top executive said the
mobile-home-sales slump may be over.
"We feel we are at or near the bottom of this downward cycle and
that the worst may be over," Chief Executive Officer Robert Olson
said in a media call. "Judging from our sales-order backlog, we
believe dealer inventory has also bottomed now which we are
confident will increase dealer inventories in fiscal 2010."
The company's sales backlog was at 940 units or $86.6 million, a
146% increase over its orders in the third quarter. Winnebago is
also introducing new products in the 2010 fiscal year which include
the Winnebago Toure and Itasca.
"With the terrific 2010 product lineup, increased market share,
the growing backlog of orders and extreme low levels of inventory,
we are optimistic about continuing to grow our market share as the
year progress," Olson said.
Shares touched $16.44 before falling back. The stock recently
was at $15.11, up 5.2%.
Sarah Nielson, Winnebago's chief financial officer, said the
company will move from a "survival" mode to profitability, which
will include more cost-cutting if needed. She declined to confirm
whether the company will turn a profit in fiscal 2010.
"The six quarters we lived through were very, very painful, and
we don't plan on continuing that," she said. "We've been surviving,
but we need to move our focus from surviving to succeeding."
Winnebago has been streamlining and cutting inventories, which
were down 58% from the end of the prior fiscal year. It also has
been cutting jobs and closing production facilities while some
rivals have expired or filed for bankruptcy amid the downturn.
For the fourth quarter, Winnebago said its loss widened to $50.2
million, or $1.73 a share, compared with a prior-year loss of $12.7
million, or 44 cents a share. Revenue dropped 30% to $59.5 million.
Analysts, surveyed by Thomson Reuters, expected a loss of 24 cents
a share.
The mobile-home and recreational-vehicle industry has been
waiting for some signs over the past 18 months that consumers were
returning to showrooms. The deep U.S. economic recession has caused
shoppers to delay or skip their purchases. Access to credit has
also hurt consumers as banks tightened standards to counter their
growing losses.
Winnebago has also been hurt since it manufacturers and sells
motor homes with an average price of $80,000 to $100,000 rather
than the moderately priced trailers and other "towables" consumers
had been buying.
-By Jeff Bennett and Tess Stynes, Dow Jones Newswires;
248-204-5542; jeff.bennett@dowjones.com