2. Forward Looking Statements
2
This presentation includes certain statements that are “forward looking” statements within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These forward looking statements are made based on management’s
current expectations and beliefs regarding future and anticipated developments and their
effects upon Thor Industries, Inc., and inherently involve uncertainties and risks. These
forward looking statements are not a guarantee of future performance. There can be no
assurance that actual results will not differ from our expectations. Factors which could
cause materially different results include, among others, price fluctuations, material or
chassis supply restrictions, legislative and regulatory developments, the costs of
compliance with increased governmental regulation, legal issues, the potential impact of
increased tax burdens on our dealers and retail consumers, lower consumer confidence
and the level of discretionary consumer spending, interest rate fluctuations, restrictive
lending practices, recent management changes, the success of new product introductions,
the pace of acquisitions, the impact of the divestiture of the Company's bus businesses,
asset impairment charges, cost structure improvements, competition and general
economic, market and political conditions and the other risks and uncertainties discussed
more fully in ITEM 1A. of our Annual Report on Form 10-K for the year ended July 31,
2013. We disclaim any obligation or undertaking to disseminate any updates or revisions to
any forward looking statements contained in this presentation or to reflect any change in
our expectations after the date of this presentation or any change in events, conditions or
circumstances on which any statement is based, except as required by law.
3. Who is THOR
The sole owner of operating subsidiaries that represent one of the world’s largest
manufacturers of recreation vehicles
• Founded in 1980 by Wade Thompson & Peter Orthwein with the acquisition
of Airstream, Inc.
• #1 in overall RV
34.5% of market*
• #2 in Travel Trailers
33.0% of market*
• #1 in Fifth Wheels
50.6% of market*
• #2 in Motorhomes
23.9% of market**
Approximately 8,300 employees***
107 facilities in 4 US states***
3
On July 31, 2013, Thor announced the sale of its bus business to Allied Specialty
Vehicles for $100 million in cash subject to customary closing conditions. This sale
closed on October 21, 2013
6.5 million square feet under roof***
Source: *Statistical Surveys, Inc., YTD U.S. and Canada units YTD August 2013 **Motorhomes
includes Class A, B and C *** as of July 31, 2013 (continuing operations)
4. THOR’s Product Range
Travel Trailers
FY2013 Sales*
Fifth Wheels
Motorized
RV's
$591,542
18%
Specialty Trailers
Motor Homes
Towable
RV's
$2,650,253
82%
*Fiscal year ended July 31, 2013,
continuing operations
($ in thousands)
4
6. Why Invest in THOR
Sustainable Business Model
• Successfully weathered a severe downturn
• Increased capital investments position Thor for growth and margin improvement over
the long term
6
Disciplined, Profitable Growth
• Profitable every year since 1980
• All time record $3.2 billion sales FY2013, up 23% from FY2012
• $2.6 billion sales in FY2012, up 13% from $2.3 billion sales in FY2011
• FY2013 net income from continuing operations of $151.7 million, up 36% from FY2012
• FY2013 EPS from continuing operations of $2.86, up 38% from $2.07 in FY2012,
FY2013 EPS of $2.88, up 27% from $2.26 in FY2012
Solid Balance Sheet
• Cash and cash equivalents of $236.6 million on July 31, 2013
• Operations historically generate significant cash
• Solid history of dividends, increased from $0.18 to $0.23 at the beginning of FY14
7. What Makes THOR Different
Proven business model:
• Entrepreneurial and decentralized
• No ivory tower: approximately 8,300 employees, only 40 in corporate staff*
• Decision-making driven by the customer
• Big, but nimble
• Best management team in the business, as proven by sustained performance
An innovator in each of its business segments
Significant RV market leadership:
• Best positioned in towable RVs, historically fastest growing area
• #2 in Motorhomes, poised for continued growth
• Well positioned as a leading innovator in the RV market to meet the demands of
dealers and consumers
Strong balance sheet to support growth and shareholder returns
* as of July 31, 2013 (continuing operations)
7
8. THOR’s Competitive Advantages
Strong market share in all RV reportable segments
• Provides scale and purchasing power
• Low cost producer
Balance sheet supports acquisitions and organic growth
Meaningful, strategic capacity
Diversified lineup of innovative product offerings
Preferred partnership in retail/wholesale financing
8
Focus on assembly - not heavy manufacturing
• Limited vertical integration – only where it makes sense
• Flexibility – performance in any market condition
• Low overhead costs
• High return on assets employed
Strength to pay warranty and honor repurchase agreements, important to dealers and
consumers
9. RV Industry Conditions
Currently a competitive environment, though improved from year ago
• Top three RV competitors account for 79.9% of industry units*
• “Flight to quality” – consumers, dealers, lenders all seek to do
business with strong companies like Thor
Industry better balanced today
Pricing & promotional environment remains competitive, but improved over
prior year
Consumer confidence better than last year, but fell to 73.2 in October 2013
from 77.5 in September and 82.6 a year ago as the government shut down
and continued soft economic conditions weighed on consumers**
Wholesale and Retail lenders are prudent - applying “healthy discipline”
RV buyers seek the “power of choice” – want variety in brands and models
*Source: Statistical Surveys, Inc., U.S. and Canada YTD August 2013
** Source: University of Michigan Preliminary Consumer Sentiment Index for October 2013
9
13. RV: State of Balance
Dealers
•
•
•
•
•
Continued optimism
Right-sized towable inventory
Lean motorized inventory
Access to wholesale credit
Financial health
Consumers
•
•
•
•
•
Better access to retail credit
Confidence better than prior
year
Low interest rates
Great demographic trends
Will shorten trips to reduce
fuel usage
Backlog: October 31 ($ millions)
RV
2012
% change
Towables
$420
$370
+14%
Motorized
$313
$147
+113%
TOTAL
13
2013
$733
$517
+42%
14. THOR RV Dealer Inventory
Total Dealer inventory remains appropriate for current conditions,
towable inventory is stable, motorized inventory is somewhat light
Dealer inventory at July 31, 2013 up 16.9% compared with July 31,
2012, in line with 18.7% RV sales growth in the fiscal fourth quarter
Lenders still comfortable with current dealer inventory turns and
current credit line utilization, recently turns have increased resulting
in reduction in average age of Thor units on dealers’ lots
Dealer Inventory: July 31 (units)
2013
RV
14
2012
% change
57,473
49,166
+16.9%
15. The RV Market Ahead
Dealer inventories remain appropriate for consumer demand on towables, motorized
inventory is relatively low
Retail demand has driven rebound in towables, rebound in motorized still in early
stage
Wholesale & Retail units should be fairly balanced going forward
Calendar Year
2010
2011
2012
2013 YTD
Industry Retail
Registrations*
226,776 units
(+10.6%)
246,180 units
(+8.6%)
262,803 units
(+6.8%)
229,138 units
(+12.9%)
Industry
Wholesale
Shipments**
242,300 units
(+46.2%)
252,407 units
(+4.1%)
285,749 units
(+13.2%)
226,125 units
(+11.8%)
* Statistical Surveys, inc., includes US and Canada. 2010, 2011 & 2012 Full Year Actual, 2013 YTD through August
** RVIA wholesale shipments for full years 2010, 2011 and 2012, 2013 YTD through August
15
16. Acquisition of Bison Coach
On October 31, 2013 Thor acquired the net assets of specialty trailer manufacturer
Bison Coach based in Milford, Indiana for approximately $16.7 million in cash, subject to
post-closing adjustments
Bison’s products include an innovative line of equine trailers with Living Quarters (LQ),
constructed of light-weight aluminum and aluminum over steel construction
16
Bison is a leader in equine LQ trailers, and they are one of only two competitors that
construct their own living quarters, an area where Thor can leverage its RV expertise
The equine trailer market is about 21,000 units for annual sales of approximately $375
million, a market where Thor currently has no penetration
17. Acquisition of Livin’ Lite
17
On August 30, 2013 Thor acquired the assets of innovative RV manufacturer Livin’ Lite
based in Wakarusa, Indiana for approximately $18 million in cash, subject to working
capital adjustments
Livin’ Lite’s products are complementary to existing product lines, with light-weight
aluminum construction targeting a niche market within the overall RV market
Livin’ Lite also provides an entry into two markets that Thor subsidiaries have not
participated in – folding camping trailers and truck campers
Lightweight products are typically sold at a modest premium compared to traditional
products, with opportunities for growth through licensing agreements with Jeep and
others
18. RV Open House
Traffic was very strong with initial dealer attendance up more than 30% from 2012
18
On September 17-19, 2013, Thor held its annual dealer open house in Elkhart, Indiana
Broad variety of new products introduced for the 2014 model year, including the new
Vegas and Axis Class A motorhomes – built on a Ford E-series chassis that is available
and ideal for a smaller motorhome (under 27 feet) at a lower total cost (approx. $70,000)
19. Three-Year Strategic Plan
Thor’s management team recently developed a three-year strategic plan focused on
growth and margin improvement
The Strategic Plan was developed using a bottoms-up approach involving each of the
Company’s operating subsidiaries and management teams
Key elements of growth include product innovation and capacity expansion – targeting
mid- to high-single-digit growth
Key elements of margin expansion include improved product quality, value added
content and features, and volume leverage – targeting 200 basis points of gross margin
improvement over the planning horizon
RV Expansion
On June 3, 2013, Thor acquired the RV production facilities in Wakarusa, Indiana
formerly operated by Navistar to expand motorized production to meet current demand
and to vertically integrate RV paint operations
19
Nearly one million square feet of production space and 35 paint booths on 150 acres
Initial production line for Class A diesel and high-end gas began operations in midOctober with a second line planned for the second quarter of fiscal 2014
20. Sale of the Bus Business
On July 31, 2013 Thor announced an agreement to sell its bus business to Allied
Specialty Vehicles for $100 million in cash, subject to closing adjustments. The sale
closed on October 21, 2013
Thor’s bus business includes Champion Bus, Inc., General Coach America, Inc., Goshen
Coach, Inc., El Dorado National California, Inc., and El Dorado National Kansas, Inc.
which generated sales of $448 million for the fiscal year ended July 31, 2013
The Company does not anticipate any impairment to goodwill or intangible assets of the
bus business as a result of the sale
Divesting the bus business will allow Thor to focus on maintaining and growing the
Company’s leadership position in the core RV business
20
Results of the Bus segment are presented as discontinued operations in Thor’s annual
report filed on Form 10-K for the year ended July 31, 2013, and have been excluded
from this presentation
21. Comments on 1st Quarter 2014 Preliminary Sales
Towable RV revenue softened in the quarter to $625.7 million, down 2.1% from last year
as we took a disciplined approach to better balance production with demand
Ongoing strength in motorized RVs, as the market recovery continued to gain
momentum, motorized sales increased 44.8% to $176.9 million for the first quarter of
2014
Dealers remain optimistic, dealers and lenders comfortable with current inventory levels
overall, as towable inventory is appropriate for current demand, while motorized
inventory is somewhat less than ideal
21
Strong sales growth in motorized offset by somewhat softer towable sales resulting in a
5.4% increase in sales from continuing operations of $802.6 million
Increasing RV backlog, total backlog up 41.9% to $733.2 million. Towable backlog
increased 13.5% to $419.8 million while motorized backlog more than doubled to $313.4
million. Motorized backlog was impacted by continued gas Class A chassis supply
issues
22. Comments on 4th Quarter 2013 Results
Net income from continuing operations for the fourth quarter was $55.2 million, up 35% from
$40.9 million in the prior-year fourth quarter. Diluted earnings per share (EPS) from continuing
operations for the fourth quarter was $1.04, up 35% from $0.77 in the fourth quarter last year.
Including discontinued operations from the Bus business, net income was $58.2 million, up 31%
from $44.4 million in the fourth quarter of fiscal 2012. Diluted EPS including discontinued
operations was $1.09, up 30% from $0.84 in the fourth quarter last year.
Towable RV sales were $745.8 million, up 13% from $662.1 million in the prior-year period.
Income before tax was $76.4 million, up 41% from $54.2 million in the fourth quarter last year.
Towable RV income before tax increased to 10.2% of revenues from 8.2% a year ago, as a
result of increased volumes and specific actions taken to improve operating efficiencies.
22
Consolidated sales for the fourth quarter of fiscal 2013 were $914.0 million, up 19% from
$769.9 million in the fourth quarter last year, based on strong growth in motorized recreational
vehicle (RV) sales and more modest growth in towable RV sales.
Motorized RV sales were $168.2 million, up 56% from $107.8 million in the prior-year fourth
quarter. Income before tax was $13.5 million, up 85% from $7.3 million last year. As a percent of
revenues, motorized RV income before tax rose to 8.0% of revenues from 6.8% a year ago,
driven by improved product mix, volumes and enhanced operating efficiencies.
23. THOR - Key Takeaways
Profitable every year since inception
Successfully weathered a severe downturn
Increased capital investments position Thor for growth and margin improvement over
the long term
#1 overall RV market share in North America*
Rock-solid balance sheet. Significant cash on hand and historic cash generation
Diversified and innovative products
Strong consumer, dealer and lender relationships
Experienced Team
* Statistical Surveys, Inc., YTD U.S. and Canada units YTD August 2013
23
25. Corporate Integrity
No golden parachutes
No ‘pro forma’ earnings. We report net income, not adjusted earnings to cover up
performance
25
Consistent focus on shareholder value
Simple compensation philosophy:
• Mainly cash compensation, without a cap, based on pre-tax income – a true pay
for performance philosophy
• Shift focus from stock options to restricted stock units
26. THOR’s RV Competitive Advantage
U.S. Retail Registrations (units)
THOR*
Forest River**
Jayco
Winnebago
K-Z Inc.
Fleetwood***
Subtotal
All Others
Grand Total
YTD 8/31/13
Total
Share %
78,975
34.5%
76,980
33.6%
27,007
11.8%
6,037
2.6%
6,093
2.7%
4,582
2.0%
199,674
87.1%
29,464
12.9%
229,138
100.0%
Y/E 12/31/12
Total
Share %
91,960
35.0%
81,871
31.2%
30,913
11.8%
7,053
2.7%
7,210
2.7%
5,839
2.2%
224,846
85.6%
37,957
14.4%
262,803
100.0%
Source: Statistical Surveys, Inc., U.S. and Canada YTD August 2013
* Thor includes Livin’ Lite and Bison Coach
** Forest River includes Palomino, Coachmen, Prime Time, Shasta and Dynamax
*** Fleetwood includes Monaco and Navistar RV
26
Y/E 12/31/11
Total
Share %
85,636
34.8%
74,035
30.1%
29,333
11.9%
5,549
2.3%
6,778
2.8%
6,168
2.5%
207,499
84.3%
38,681
15.7%
246,180
100.0%
Y/E 12/31/10
Total
Share %
78,903
34.8%
64,005
28.2%
25,785
11.4%
5,808
2.6%
6,368
2.8%
6,913
3.0%
187,782
82.8%
38,994
17.2%
226,776
100.0%
27. Sales, continuing operations ($ millions)
Fiscal years ended July 31, Year-to-Date through October 31
$3,242
$2,640
$2,340
$1,849
$1,115
761.4
2009
27
2010
2011
2012
2013
802.6
2013 YTD
2014 YTD
28. Net Income ($ millions)
Fiscal years ended July 31, continuing operations
$151.7
$111.4
$91.2
$91.6
2010
2011
$2.5
2009
28
2012
2013
30. 4th Quarter Financial Summary
Net Sales
Gross Profit
% of Sales
SG&A
% of Sales
Impairment charges
% of Sales
All Other
Income Before Tax
% of Sales
Income Taxes
Net Income (cont. ops.)
Diluted EPS (cont. ops.)
2013
2012 % Change
914.0
769.9
18.7%
140.2
102.3
37.0%
15.3%
13.3%
53.7
42.4
26.9%
5.9%
5.5%
2.0
0.0
n/a
0.2%
0.0%
1.7
1.7
82.8
58.2
42.3%
9.1%
7.6%
27.6
17.3
55.2
40.9
35.0%
$ 1.04 $ 0.77
35.1%
Order Backlog
Towables
228.4
224.6
Motorized
213.1
110.8
Total
441.5
335.4
*Amounts in thousands except per share data
30
1.7%
92.4%
31.7%
Net Sales by segment:
• Towables +12.6%, motorized
+56.0%
Income before tax by segment:
• Towables 10.2%, up from 8.2%
• Towable results include $2
million asset impairment
charge
• Volume leverage and actions
to improve operating efficiency
• Motorized 8.0%, up from 6.8%
• Volume leverage
• EPS from continuing operations of
$1.04 up from $0.77 in fourth
quarter of 2012
