Winnebago Industries Inc. has a market cap of $279 million; its shares were traded at around $9.59 with and P/S ratio of 1.4. WGO is in the portfolios of Lee Ainslie of Maverick Capital, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Charles Brandes of Brandes Investment, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:compared to $59.1 million, or 116.3 percent of net revenues for the comparable period a year ago. Variable costs (material, labor, variable overhead, delivery, and warranty) increased $65.1 million as a result of the increased number of motor homes sold. As a percent of net revenues, however, variable costs decreased to 84.2 percent of net revenues for the third quarter of Fiscal 2010 from 95.1 percent for the third quarter of Fiscal 2009. This decrease in percentage is due to reduced material and labor costs and improved labor efficiencies, both resulting from production volume increases. Fixed overhead (manufacturing support labor, depreciation and facility costs) and research and development-related costs increased $804,000 for the third quarter of Fiscal 2010. As a percent of net revenues, however, fixed overhead costs decreased to 8.6 percent for the third quarter of Fiscal 2010 from 21.2 percent of net revenues for the third quarter of Fiscal 2009. The decrease in percentage was due to greater absorption of fixed costs resulting from higher production volume. Due to the significant reduction of inventory levels, there was a positive benefit to cost of goods sold in the third quarters ended May 29, 2010 and May 30, 2009 of $431,000 and $3.6 million, respectively from the liquidation of LIFO inventory values. When all factors described previously are considered, gross profit was 7.2 percent of net revenues for the third quarter of Fiscal 2010 compared to a gross deficit of 16.3 percent during the third quarter of Fiscal 2009.
General and administrative expenses decreased $170,000, or 5.0 percent, during the third quarter of Fiscal 2010 and, as a percentage of net revenues were 2.4 percent and 6.7 percent for the third quarters of Fiscal 2010 and Fiscal 2009, respectively. The decrease in dollars was due to reductions of $405,000 in legal expenses and $68,000 less expense associated with our idled facilities, partially offset by an increase of $370,000 in product liability expense.
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