Winnebago Industries, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 Fiscal 2022 Winnebago Industries Financial Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star then 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to turn the conference over to your speaker for today, Steve Stuber, Vice President, Investor Relations. You may begin.

Thank you, Tawanda. And good morning, everyone, and thank you for joining us today to discuss fiscal 2022 second quarter earnings results. I am joined on the call today by Michael Happe, President and Chief Executive Officer, and Brian Hughes, Senior Vice President and Chief Financial Officer. This call is being broadcast live on our website at investor.wgo.net, and a replay of the call will be available on our website later today. The news released with our second quarter results, along with the second quarter earnings supplement, were issued and posted to our website earlier this morning. Before we start, I'd like to remind you that certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities laws. The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain in a number of factors, many of which are beyond the company's control, could cause actual results to differ materially from these statements. These factors are identified in our SEC filings, which I encourage you to read. With that, I would now like to turn the call over to our President and CEO, Michael Happi. Mike?

thanks steve good morning everyone and thanks again for joining the call today as always we appreciate your interest in winnebago industries and taking the time to discuss our fiscal 22 second quarter results i'll start the call with an overview of our performance during the second quarter and what factors are driving those results then i will pass it over to brian hughes who will walk through our financial results in more detail before I make some closing remarks and we turn to your questions. Winnebago Industries built on our strong momentum and delivered robust results in the second quarter of fiscal 2022, capitalizing on sustained and elevated demand for our portfolio of premium products. We grew revenues by 39% year over year to $1.2 billion, matching the previous sales record set last quarter. Overall, our results were shaped by two key dynamics. First, sustained and powerful consumer demand drove higher unit sales compared to the prior year. And second, Winnebago Industries' successful execution of pricing actions to offset higher material and component costs. Also, the Barletta pontoon boat business, recently acquired this past August, contributed nine percentage points of growth and continues to exceed our expectations and gain market share in the pontoon boat market. I want to spend a minute talking about these drivers in more detail. It all begins with the consumer's continued strong affinity for the outdoor lifestyle, and in particular, Winnebago Industries premium brands. Through our interactions with our consumers and feedback we receive from our dealers, consumers clearly recognize our products as being differentiated. This differentiation is a result of our relentless focus on our golden threads of quality, service, and innovation. Robust consumer demand is a powerful undercurrent that we believe will continue to propel our company's growth through the current fiscal year and beyond. A recent RV industry association study confirmed that 51% of new RVers in the 2020 and 2021 time periods suggested that reasons surrounding COVID were certainly the impetus for purchasing an RV. We are confident, though, that many of these interest trends have become ingrained and that consumers will continue to invest in products that enable them to pursue their love for the outdoors. Compelling data supports our thesis. Our friends at the Campgrounds of America cited a 16% projected increase in households camping through November of 2021 versus the same period in 2020. Here are some other nuggets from the previously noted and recently released new RV owner survey conducted by the RVIA. Contrary to some theories speculating on possibly low retention of 2020 and 2021 first-time RV buyers, new purchasers are most likely to keep and use their current RV into 2022 and beyond, with 50% already seeking an upgrade via new parts or a different RV altogether. Six in 10 new millennial RVs, those who bought an RV for the first time in 2020 and 2021, already say they are likely to purchase another RV in the future. As it relates to the growing popularity of flexible work, amongst new RVers, 25% of millennials and 27% of Gen Xers stated that they used an RV for a place to stay while working as a reason for purchasing the RV. Importantly, Winnebago Industries is already capitalizing on these sustained demand drivers. Our second quarter total unit sales grew year over year, despite a tough comparison to the second quarter of fiscal 2021, which was nearing the height of the COVID-19 driven demand spike. Strong attendance at the recent Tampa RV show and the Miami Boat Show resulted in retail sales that exceeded our expectations. In fact, most of our retail shows this spring are seeing record sales for our brands. This foreshadows a solid spring selling season that is historically reflected in our second half results. The combined tailwinds of societal trends, Winnebago Industries' proven portfolio brand strength, and sharp execution spells great opportunity in the future for our business. We remain confident that there remains strong engagement in the outdoors by consumers, and Winnebago Industries is positioned to continue growing market share in both the RV and marine industries. On a trailing three-month basis through January, our RV market share was 14.3%, up a full 100 basis points from 13.3% for the same period in 2021. And in our marine segment, Barletta has now grown to be the fifth largest pontoon boat company by market share at 4.6% on a trailing three-month basis through December. And recent retail results show them approaching and breaking the 5% barrier. This is a meaningful improvement from just seven months ago when we completed the Barletta acquisition. Speaking of Barletta, I am pleased to report that its differentiated pontoon portfolio has continued to perform above our expectations and exceeded the calendar 2021 performance targets we set when we announced the acquisition. We see tremendous opportunity for Barletta in the pontoon market, which is one of the fastest growing boating segments, and we look forward to further leveraging their unique product innovation acknowledge quality, strong dealer network, and focus on service to sustain retail market share growth. The second major driver of our revenue results was pricing actions. The positive demand environment and the unique strength of our brands positioned Winnebago Industries well to take continued pricing actions to offset component and material cost inflation and preserve margin performance across our segments. Thanks to our sophisticated, strategic approach to sourcing, Winnebago Industries has been anticipating and preparing for the inflationary environment that we are experiencing today. We began taking pricing actions ahead of inflation in the second quarter of last year. As the spring selling season gets underway, we will continue to evaluate our pricing power as needed as a lever to offset higher materials and component costs. while still balancing and driving market share gains. This is a testament to the resiliency of the demand environment and the clear quality of our expanded product portfolio. Our strong top line performance was coupled with excellent operational efficiency internally. I tip my cap to the entire Winnebago Industries team for another quarter of net strong execution. which is especially appreciated these days as the supply chain remains volatile. We continue to work collaboratively with our suppliers to get materials on time so we can get products out the door as efficiently as possible for our customers and dealer partners, while not sacrificing quality and service. Our motorhome business this past quarter probably faced the most significant supply chain constraints, holding that segment back from optimal performance in this period. Our teammates' efforts, though, enabled us at a consolidated level to power through the supply chain constraints and inflationary pressures that we continue to experience at levels comparable to the first quarter. With our strong execution and pricing actions, Winnebago Industries delivered gross margin of 18.6% during the second quarter, equal to the great results last year. A focus on operational excellence will continue to be a critical component of our strategy going forward, creating organic and flexible capacity, driving productivity and margin improvement opportunities, and ensuring industry-leading product quality. Winnebago Industries' robust backlogs have increased versus last year and are significantly higher than the second quarter 2020 period due to continued strong in-consumer demand Keeping dealer inventories in all of our segments at acceptable levels throughout the fiscal 2022 year for our dealer partners is a key focus area for all of our teams. And I am fully confident they will continue to rise to the challenge to meet the high retail and wholesale demand levels in a disciplined manner. We are fortunate to have a world-class team of Winnebago Industries employees and strategic partners. Working together, we remain uniquely well-positioned to continue capturing outsized growth and delivering value to all our stakeholders as more families take to the great outdoors. With that, I will now turn the call over to our Chief Financial Officer, Brian Hughes, to review our fiscal 2022 second quarter financials in more detail. Brian?