Post Earnings Coverage as Thor Reports Record Earnings and Revenue Numbers

LONDON, UK / ACCESSWIRE / September 28, 2016 / Active Wall St. announces its post-earnings coverage on Thor Industries Inc. (NYSE: THO). The company reported announced its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full fiscal 2016 (FY16) on September 26, 2016. The ELKHART, Indiana, headquartered company reported its strongest year in its history, with solid revenue and earnings growth. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended on July 31st, 2016, Thor reported record net income from continuing operations of $82.8 million, or $1.57 per diluted share. Diluted earnings per share from continuing operations for Q4 FY16 increased 19.8% from the previous year, surpassing analysts’ consensus estimate of $1.37 per share.

Q4 FY16 revenues rose 21.7% on y-o-y basis to $1.29 billion beating analysts’ consensus estimates of $1.28 billion. The improvement in top-line was attributed to strong industry growth and the acquisition of Jayco announced in July 2016, for approximately $576 million in cash. Q4 FY16 gross profit margin expanded to 17.3% from 16.2% in the year-ago quarter, led by higher volumes and favorable changes in product mix.

FY 2016 Numbers

For FY16, Thor’s net income from continuing operations of record was $258.0 million, up 27.7% from $202.0 million in FY15. Earnings per share for FY 2016 came in at $4.91, up 29.6% from $3.79 earned in FY15 and ahead of Wall Street’s expectations of $4.79 per share. The company generated a record $4.58 billion in revenue for FY16, up 14.4% from $4.01 billion last year. Gross profit margins increased to 15.9% in FY16 from 13.9% in the previous year, driven by improved volumes, favorable changes in product mix and improvements in material costs.

Operating Metrics

Consolidated RV backlog on July 31, 2016 was $1.20 billion, up 108.5% from $574.0 million on July 31, 2015. Total dealer inventory increased 39.6% to approximately 94,500 units on July 31, 2016, from approximately 67,700 units on July 31, 2015. The inclusion of Jayco accounted for nearly all of the dealer inventory increase (approximately 25,300 of the 26,800 unit increase came from Jayco).

Segment Results

During Q4 FY16, sales of Towable RVs increased 19.8% on y-o-y basis to $961.1 million from $802.2 million in the prior-year’s period, driven by rising sales of lower-priced travel trailers and the inclusion of one month of Jayco’s revenues. Towable RV backlog increased $431.1 million, or 141.8%, to $735.1 million, compared to $304.0 million at the end of FY 2015, reflecting the inclusion of Jayco’s $223.4 million backlog as well as continued momentum in the sale of towable products.

Motorized RV sales were $292.7 million for Q4 FY16, up 35.3% from $216.4 million in the prior-year’s comparable period. The increase in motorized RV sales was a result of continued strong growth in the more moderately priced gas Class A and Class C motorhomes combined with the inclusion of one month of Jayco’s motorized revenues. Motorized RV backlog increased $191.8 million, or 71.0%, to $461.8 million from $270.0 million a year earlier, reflecting the inclusion of Jayco’s $122.5 million motorized backlog as well as strong, continued demand for smaller gas Class A and Class C motorhomes.

Cash

As of July 31, 2016, Thor had cash and cash equivalents of $209.90 million, up from $183.48 million as of July 31, 2015. Long-term debt at the end of Q4 FY16 was $360 million. There was no long-term debt as of July 31, 2015.

Outlook

Thor is projecting that strength in the RV market and shift toward more moderately priced towable products as well as the inclusion of full-year results of Jayco will lead to double-digit revenue growth in FY17. However, the gross margin in FY17 is predicted to decrease with the inclusion of low-margin product sales of Jayco, while it should add to full-year earnings per share.

Stock Performance

The stock closed the trading session at $85.66, climbing 3.53% from its previous closing price of $82.74, on Tuesday. A total volume of 3.33 million shares have exchanged hands, which was higher than the 3-month average volume of 600.57 thousand shares. Thor Industries’ stock price advanced 6.75% in the last month, 38.14% in the past three months, and 35.08% in the previous six months. Furthermore, since the start of the year, shares of the company has surged 53.99%. The stock is trading at a PE ratio of 18.46 and has a dividend yield of 1.40%.

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