Winnebago Industries Inc. Reports Operating Results (10-Q)
Winnebago Industries Inc. has a market cap of $450.1 million; its shares were traded at around $15.46 with a P/E ratio of 30.3 and P/S ratio of 1. WGO is in the portfolios of Lee Ainslie of Maverick Capital, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Charles Brandes of Brandes Investment, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations:/td>Cost of products sold was $112.5 million, or 90.9 percent of net revenues for the first quarter of Fiscal 2011 compared to $80.5 million, or 99.4 percent of net revenues for the comparable period a year ago due to the following:
Non-operating income increased $385,000, or 165.2 percent, during the first quarter of Fiscal 2011. This difference is primarily due to a decrease in our line of credit costs of $387,000 as a termination fee of $375,000 was paid last year to Wells Fargo to terminate the credit and security agreement with them.
Net income was $3.8 million, or $0.13 per diluted share, for the first quarter of Fiscal 2011 compared to a net loss of $1.3 million, or $0.05 per diluted share, for the first quarter of Fiscal 2010. See Note 12.
/td>We also have in place a $20.0 million revolving credit facility, as described in further detail in Note 7, which allows us to borrow up to $12.5 million without financial covenant restrictions if there is adequate asset coverage. We had sufficient asset coverage in accounts receivable and inventory as of November 27, 2010 to access the entire $12.5 million. The facility also includes a framework to expand the size of the facility up to $50.0 million, based on mutually agreeable covenants to be determined at the time of expansion. This potential additional borrowing capacity may be beneficial to us if inventory levels need to substantially increase rapidly as a result of product demand.
Working capital at November 27, 2010 and August 28, 2010 was $104.5 million and $91.3 million, respectively, an increase of $13.2 million. We currently expect cash on hand, funds generated from operations (if any) and the availability under the credit facility to be sufficient to cover both short-term and long-term operation requirements. We anticipate capital expenditures during the balance of Fiscal 2011 of approximately $2.3 million, primarily for manufacturing equipment and facilities which will be funded with cash on hand.
Cash provided by operating activities was $2.2 million for the quarter ended November 27, 2010 compared to cash used in operating activities of $5.9 million for the quarter ended November 28, 2009. The combination of net income of $3.8 million in the current fiscal year and an improvement in non-cash charges (e.g., depreciation, stock-based compensation) provided $5.0 million of operating cash compared to a usage of $490,000 in the prior year period. In Fiscal 2011, changes in assets and liabilities (primarily accounts payable and accrued expenses) was a usage of $2.8 million of operating cash. Cash use in the first quarter of Fiscal 2010 was for increased inventories due to a ramp up of production and to support the quarter's net loss.
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