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
and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended October 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 recreational 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
50.8% of market*
• #2 in Motorhomes
23.5% 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. The sale was completed as of October 20, 2013,
subject to final closing adjustments in accordance with the Stock Purchase
Agreement.
6.5 million square feet under roof***
Source: *Statistical Surveys, Inc., YTD U.S. and Canada units YTD September 2013 **Motorhomes
includes Class A, B and C *** as of July 31, 2013 (continuing operations)
4. THOR’s Product Range
Towable Segment:
Travel Trailers
FY2013 Sales*
Towable Segment:
Fifth Wheels
Motorized
RV's
$591,542
18%
Towable Segment:
Specialty Trailers
Motorized Segment:
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 $295.0 million on October 31, 2013
• Operations historically generate significant cash
• Solid history of regular quarterly 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 79.6% 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 has been softening as preliminary results fell to 72.0 in
November 2013 from 73.2 in October and 82.7 a year ago as concerns over
the government and weak job prospects weighed on lower-income
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 September 2013
9
** Source: University of Michigan Preliminary Consumer Sentiment Index for November 2013
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
Low interest rates
Great demographic trends
Renewed focus on family
vacations
Will shorten trips to reduce
fuel usage
Backlog: October 31 ($ millions)
RV
2012
% change
Towables
$420
$370
+14%
Motorized
$313
$147
+114%
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 October 31, 2013 up 4.9% compared with
October 31, 2012, in line with 5.1% RV sales growth in the fiscal first
quarter
Lenders still comfortable with current dealer inventory turns and
current credit line utilization, year-over-year turns have increased
resulting in reduction in average age of Thor units on dealers’ lots
Dealer Inventory: October 31 (units)
2013
RV
14
2012
% change
53,716
51,206
+4.9%
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%)
254,896 units
(+13.9%)
Industry
Wholesale
Shipments**
242,300 units
(+46.2%)
252,407 units
(+4.1%)
285,749 units
(+13.2%)
248,623 units
(+12.4%)
* Statistical Surveys, inc., includes US and Canada. 2010, 2011 & 2012 Full Year Actual, 2013 YTD through
September
** RVIA wholesale shipments for full years 2010, 2011 and 2012, 2013 YTD through September
15
16. Acquisition of Bison Coach
16
On October 31, 2013 Thor acquired the net assets of specialty trailer manufacturer
Bison Coach based in Milford, Indiana for $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
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
17. Acquisition of Livin’ Lite
17
On August 30, 2013 Thor acquired the net assets of innovative RV manufacturer Livin’
Lite based in Wakarusa, Indiana for aggregate cash consideration of $16.8 million
Livin’ Lite’s products are complementary to existing product lines, with light-weight
aluminum construction targeting a niche market within the overall Towable 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 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
Nearly one million square feet of production space and 35 paint booths on 150 acres
19
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
Initial production line for Class A diesel and high-end gas began operations in mid-October
with a second line planned for the second quarter of fiscal 2014
20. Sale of the Bus Business
20
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 was
completed as of October 20, 2013, subject to final closing adjustments in accordance
with the Stock Purchase Agreement
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
Divesting the bus business will allow Thor to focus on maintaining and growing the
Company’s leadership position in the core RV business
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, quarterly report filed on Form
10-Q for the period ended October 31, 2013 and have been excluded from this
presentation
21. Comments on 1st Quarter 2014 Results
Net income from continuing operations for the first quarter was $36.4 million, up 27% from
$28.7 million in the prior-year first quarter. Diluted earnings per share (EPS) from continuing
operations for the first quarter was $0.68, up 26% from $0.54 in the first quarter last year
Including discontinued operations from the Bus business, net income was $41.1 million, up 33%
from $31.0 million in the first quarter of fiscal 2013. Diluted EPS including discontinued
operations was $0.77, up 33% from $0.58 in the first quarter last year
Towable RV sales were $622.9 million, down 3% from $639.2 million in the prior-year period.
Income before tax was $45.6 million, up 7% from $42.7 million in the first quarter last year.
Towable RV income before tax increased to 7.3% of revenues from 6.7% a year ago, as a result
of specific actions taken to improve operating efficiencies
Motorized RV sales were $177.1 million, up 45% from $122.2 million in the prior-year first
quarter. Income before tax was $13.4 million, up 60% from $8.4 million last year. As a percent of
revenues, motorized RV income before tax rose to 7.6% of revenues from 6.9% a year ago,
driven by improved volumes and enhanced operating efficiencies
21
Consolidated sales for the first quarter of fiscal 2014 were $800.0 million, up 5% from $761.4
million in the first quarter last year, based on strong growth in motorized recreational vehicle
(RV) sales offsetting a small decrease in towable RV sales
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 $313.4 million
22. THOR - Key Takeaways
Profitable every year since inception
Successfully weathered a severe downturn
Increased capital investments position Thor for growth and margin improvement over
the long term
#1 overall RV market share in North America*
Rock-solid balance sheet. Significant cash on hand and historic cash generation
Diversified and innovative products
Strong consumer, dealer and lender relationships
Experienced team
* Statistical Surveys, Inc., YTD U.S. and Canada units YTD September 2013
22
24. Corporate Integrity
No golden parachutes
No ‘pro forma’ earnings. We report net income, not adjusted earnings to cover up
performance
24
Consistent focus on shareholder value
Simple compensation philosophy:
• Mainly cash compensation, without a cap, based on pre-tax income – a true pay
for performance philosophy
• Shift focus from stock options to restricted stock units
25. THOR’s RV Competitive Advantage
U.S. and Canada Retail Registrations (units)
THOR*
Forest River**
Jayco
Winnebago
K-Z Inc.
Fleetwood***
Subtotal
All Others
Grand Total
YTD 9/30/13
Total
Share %
87,846
34.5%
85,251
33.4%
29,912
11.7%
6,924
2.7%
6,775
2.7%
5,158
2.0%
221,866
87.0%
33,030
13.0%
254,896
100.0%
Y/E 12/31/12
Total
Share %
91,960
35.0%
81,871
31.2%
30,913
11.8%
7,053
2.7%
7,210
2.7%
5,839
2.2%
224,846
85.6%
37,957
14.4%
262,803
100.0%
Source: Statistical Surveys, Inc., U.S. and Canada YTD September 2013
* Thor includes Livin’ Lite and Bison Coach
** Forest River includes Palomino, Coachmen, Prime Time, Shasta and Dynamax
*** Fleetwood includes Monaco and Navistar RV
25
Y/E 12/31/11
Total
Share %
85,636
34.8%
74,035
30.1%
29,333
11.9%
5,549
2.3%
6,778
2.8%
6,168
2.5%
207,499
84.3%
38,681
15.7%
246,180
100.0%
Y/E 12/31/10
Total
Share %
78,903
34.8%
64,005
28.2%
25,785
11.4%
5,808
2.6%
6,368
2.8%
6,913
3.0%
187,782
82.8%
38,994
17.2%
226,776
100.0%
26. Sales, continuing operations ($ millions)
Fiscal years ended July 31, Year-to-Date through October 31
$3,242
$2,640
$2,340
$1,849
$1,115
$761
2009
26
2010
2011
2012
2013
$800
2013 YTD
2014 YTD
27. Net Income, continuing operations ($ millions)
Fiscal years ended July 31, Year-to-Date through October 31
$151.7
$111.4
$91.2
$91.6
$36.4
$28.7
$2.5
2009
27
2010
2011
2012
2013
2013 YTD
2014 YTD
28. Diluted EPS, Continuing Operations
Fiscal years ended July 31, Year-to-Date through October 31
$2.86
$2.07
$1.72
$1.66
0.54
0.68
$0.04
2009
28
2010
2011
2012
2013
2013 YTD
2014 YTD
29. 1st 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 % Change
2014
5.1%
761.4
800.0
14.0%
92.3
105.2
12.1%
13.1%
3.5%
46.7
48.3
6.1%
6.0%
n/a
0.0
0.7
0.0%
0.1%
1.4
1.8
23.3%
44.2
54.4
5.8%
6.8%
15.5
18.0
26.8%
28.7
36.4
25.9%
$ 0.68 $ 0.54
Order Backlog
369.9
419.8
Towables
146.8
313.4
Motorized
516.7
733.2
Total
*Amounts in millions except per share data
29
13.5%
113.6%
41.9%
Net Sales by segment:
• Towables -2.6%, motorized +44.9%
Income before tax by segment:
• Towables 7.3%, up from 6.7%
• Actions to improve operating
efficiency
• Motorized 7.6%, up from 6.9%
• Volume leverage, improved
operating efficiency
• EPS from continuing operations of
$0.68 up from $0.54 in first quarter
of 2013
