Earnings Highlights and Review: Thor Reported Record Breaking Quarter; Sales Up 58%, EPS Jumped 41.6%

Research Desk Line-up: REV Group Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 23, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Thor Industries, Inc. (NYSE: THO), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=THO, following the Company’s posting of its third quarter fiscal 2017 financial results on June 05, 2017. The recreation-vehicle manufacturer outperformed top- and bottom-line estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

Thor Industries announced record revenues of $2.02 billion for the third quarter ended April 30, 2017, compared to revenue of $1.28 billion for Q3 FY17. Analysts were expecting the Company to generate sales of $1.96 billion.

For Q3 FY17, Thor’s gross profit increased 45.5% to $293.8 million compared to $201.94 million in Q3 FY16. The Company’s gross profit margins decreased to 14.6% in the reported quarter compared to 15.7% in the prior year’s same period, due primarily to acquisition-related dilution and market-driven changes in product mix.

Thor reported announced record third-quarter net income of $111.3 million, or $2.11 per diluted share, for Q3 FY17 compared to $78.58 million, or $1.51 per diluted share, in Q3 FY16. The Company’s diluted earnings per share for the reported quarter increased 41.6% on a y-o-y basis. Thor’s earnings came in ahead of Wall Street’s expectations of $1.86 per share.

Thor stated that the strong growth in revenues and earnings was a combination of organic growth in both towable and motorized RVs, and the inclusion of the results from Jayco which was acquired on June 30, 2016. For Q3 FY17, Jayco contributed approximately $516.5 million in sales and $66.1 million in gross profit, while interest expenses and amortization of debt issuance costs were approximately $2.3 million for the quarter.

Segment Results

During Q3 FY17, Thor’s Towable RV sales surged 52.6% to $1.43 billion from $934.6 million in the prior year’s same period. Jayco contributed $362.9 million to towable sales for the reported quarter. The segment’s sales growth excluding the acquisition was 13.8%, driven primarily by continued strong demand for the Company’s affordably priced travel trailers.

For Q3 FY17, Thor’s Towable RV income before tax totaled $134.5 million, up 38.8% from $96.9 million in Q3 FY16, driven primarily by the increase in sales and improved selling, general, and administrative (SG&A) expense as a percent of revenues, partially offset by increased amortization expense and lower gross margins associated with Jayco; product mix changes; and labor costs.

Towable RV backlog soared 115.1% to $1.56 billion in Q3 FY17 compared to $727.5 million at the end of Q3 FY16, reflecting the inclusion of Jayco’s $445.9 million backlog as well as continued momentum and demand for the Company’s products.

During Q3 FY17, Thor’s Motorized RV segment generated sales of $549.9 million, up 78.7% from $307.6 million in Q3 FY16. The increase in motorized RV sales was attributed to robust growth in the Company’s moderately priced gas Class A and Class C motorhomes. The segment’s sales also benefited from the inclusion of Jayco’s motorized revenues of $153.7 million.

In the quarter under review, Motorized RV income before tax was $37.4 million, up 54.9% from $24.1 million in Q3 FY16, driven primarily by the growth in motorized sales and improved SG&A expense as a percent of revenues, partially offset by increased amortization expense and lower gross margins associated with Jayco, product mix changes and labor costs.

Motorized RV backlog surged 141.6% to $795.5 million from $329.3 million in Q3 FY16, reflecting the inclusion of Jayco’s $123.2 million motorized backlog as well as continued exceptional demand for the Company’s smaller gas Class A and Class C motorhomes.

Cash Matters

Thor’s operating cash flow increased 26.2% to $182.8 million for the first nine months of fiscal 2017. During the reported quarter, the Company invested approximately $28.5 million in capital projects, bringing its year-to-date investment in capital projects to $79.5 million. Total forecasted capital investments for the fiscal year remain at approximately $130 million as Thor expects to invest approximately $50 million in additional capital projects during the upcoming quarter.

Thor also made $30 million of principal payments on its revolving credit facility during Q3 FY17, bringing its payments to $65 million for the first nine months of FY17. As of April 30, 2017, the Company had $189.4 million of cash and $295.0 million was outstanding under the debt agreement.

Stock Performance

At the closing bell, on Thursday, June 22, 2017, Thor Industries’ stock was marginally up by 0.10%, ending the trading session at $107.14. A total volume of 588.05 thousand shares have exchanged hands. The Company’s stock price skyrocketed 9.95% in the last three months, 0.65% in the past six months, and 64.15% in the previous twelve months. Moreover, the stock gained 7.09% since the start of the year. The stock is trading at a PE ratio of 16.73 and has a dividend yield of 1.23%. The stock currently has a market cap of $5.66 billion.

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