Winnebago overcomes weather challenges to post profit

2014-03-27T11:30:00Z 2014-03-27T21:22:28Z Winnebago overcomes weather challenges to post profitRAE YOST For The Globe Gazette Mason City Globe Gazette
March 27, 2014 11:30 am  • 

FOREST CITY | Although the severe winter had an effect on Winnebago Industries during the second quarter of fiscal year 2014, the company was able to overcome it, Winnebago's Chief Executive Officer Randy Potts said Thursday.

Despite inefficiencies created by severe weather, the company posted revenues of $228.8 million, an operating income of $14 million and a net income of $9.6 million for the second quarter that ended on March 1.

When compared to the same quarter of fiscal year 2013, revenues increased by 29.2 percent, operating income increased by 58.2 percent and net income increased by 52.6 percent.

"I just can't imagine any other group pulling it off quite as well as this team did," Potter said of the company's more than 2,000 employees.

The winter caused the motor home company to close several days, to operate shifts without people who couldn't get to work and to adjust work days, Potts said.

It also caused problems with deliveries, increased utilities and created general inefficiencies, said Sarah Nielsen, the company's chief financial officer.

The ability to overcome challenges from severe weather contributed to the bottom line but so did increased sales of motor homes, Nielsen said when the company announced its fiscal quarter results Thursday morning.

The motor homes that are now in dealer lots or will soon be at dealer lots are ready for a strong selling season, Potts said.

"The overall economy is growing. I don't think it's robust growth but it's growing," Potts said. Interest rates are reasonable and fuel costs are relative stable.

"There are a lot of things to be positive about and not many things to be negative about," Potts said.

Nielsen and Potts said the company continues to get positive response to new models, particularly those aimed at a mid-range price.

Potts said Winnebago will  announce several new products at an April 14-16 dealers days even in Las Vegas.

"To me personally, this is the most exciting model we've launched that I've ever been associated with," Potts said of a new model of motor home. He declined to give any details other than to say it would be at an "attractive price."

This will also be the first year of a large contract with Apollo Motorhome Holidays, a recreational vehicle rental company.

Nielsen said Winnebago will supply Apollo with motor homes used in the U.S. by foreign tourists. As part of the contract, Winnebago will buy back two-thirds of the fleet after the tourist seasond.

Those motor homes will then be resold from sites across the U.S., she said. 

The second quarter of fiscal year 2014 saw the highest revenues posted by the company since the fourth quarter of fiscal year 2007.

Potts said that's a significant mark but it's only one piece of the company's overall financial health.

The company's towable division based in Elkhardt, Ind., posted a profit for the first time since Winnebago bought SunnyBrook several years ago.

The profit was $50,000, Nielsen said, a significant improvement over the roughly $850,000 that was a loss in the same quarter for fiscal year 2013, she said.

Rae Yost is editor of the Forest City Summit and Britt News Tribune, also Lee Enterprises newspapers.

Copyright 2015 Mason City Globe Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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