2Q17 Overview and Q&A
Forward Looking Statements
This document includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor Industries, Inc., and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations, raw material or chassis supply restrictions, legislative, regulatory and tax policy developments, the impact of rising interest rates on our operating results, the costs of compliance with increased governmental regulation, legal and compliance issues including those that may arise in conjunction with recent transactions, the potential impact of increased tax burdens on our dealers and retail consumers, lower consumer confidence and the level of discretionary consumer spending, interest rate fluctuations and the potential economic impact of rising interest rates on the general economy, restrictive lending practices, management changes, the success of new product introductions, the pace of obtaining and producing at new production facilities, the pace of acquisitions, the potential loss of existing customers of acquisitions, the integration of new acquisitions, our ability to retain key management personnel of acquired companies, the loss or reduction of sales to key dealers, the availability of delivery personnel, asset impairment charges, cost structure changes, competition, the impact of potential losses under repurchase agreements, the potential impact of the strengthening U.S. dollar on international demand, general economic, market and political conditions and the other risks and uncertainties discussed more fully in ITEM 1A of our Annual Report on Form 10-K for the year ended July 31, 2016 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ending January 31, 2017.
We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this listing of questions and answers or to reflect any change in our expectations after the date of this listing or any change in events, conditions or circumstances on which any statement is based, except as required by law.
- We posted our 12th- consecutive quarter of record revenue record net income from continuing operations.
- We posted strong growth in revenues, both organically and from acquisitions, in the second quarter with double-digit organic growth in both segments - towables and motorized. We continue to expect that Jayco will positively impact Thor’s earnings in fiscal 2017, with additional opportunities to enhance its operations over the next several years.
- We are optimistic about Thor’s future prospects, as we continue to see new consumers entering the market and experiencing the RV lifestyle. The strong attendance, consumer enthusiasm and robust sales of our products in the early retail shows give us confidence that Thor and the industry will experience continued growth in the coming year.
- Our priorities for the use of future cash generated from operations include continuing to support and grow our core businesses, both organically and through acquisition; maintaining or growing our regular dividends; reducing our indebtedness; and considering strategic share repurchases or special dividends. In the first half of fiscal 2017:
- The Board increased our quarterly dividend by 10% to $0.33 per share
- We reduced our debt facility by $35 million year to date
- We invested over $50 million in a number of capital expenditure projects during the first six months of fiscal 2017
- We continue to expand production capacity with a number of projects in process or planned for the second half of fiscal 2017 – estimated to total an additional $80 million of capital investments, bringing expected total capital investment to approximately $130 million for fiscal 2017.