Winnebago Industries, Inc.

Welcome to Winnebago Industries Q4 and fiscal 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Raymond Posadas, Vice President of Investment Relations and Market Intelligence. Please go ahead, sir.

Thank you, Tawanda. Good morning, everyone, and thank you for joining us to discuss our fiscal 2025 fourth quarter and full year earnings results. This call is being broadcast live on our website at investor.wgo.net, and the replay of the call will be available on our website later today. The news released with our fourth quarter and fiscal 2025 results was issued and posted to our website earlier this morning. Please note that the earnings slide back that follows along with our prepared remarks is also available on the investor section of our website on the quarterly results. Turning to slide two, 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. and a number of factors, many of which are beyond the company's control, could cause the actual results to differ materially from these statements. These factors are identified in our SEC filings, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures are available in our earnings press release. One additional housekeeping item. Beginning with our Q4 and full year 2025 results, we are transitioning our segment profitability measure from adjusted EBITDA to operating income. To assist with modeling, our investor supplement provides a table detailing segment quarterly operating income along with depreciation and amortization for fiscal 2025 and 2024. It should be noted that operating income at the segment level excludes both interest expense and tax expense, which is held at the corporate level. Please turn to slide three. Joining me on today's call are Michael Happy, President and Chief Executive Officer of Winnebago Industries, and Brian Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our Q4 performance. Brian will then discuss the associated drivers of our financial results, in addition to sharing our forward view of the market and our fiscal year 2026 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to slide four as I hand the call over to Mike.

Thanks, Ray, and good morning, everyone. On our Q3 call in June, I spoke with you about the importance of staying focused on the areas of the business within our control. As I reflect on our fourth quarter performance, the entire Winnebago Industries team has reasons to be proud. We ended a challenging fiscal year with a strong fourth quarter. that reflects the resilience of our team and the strength of our diversified portfolio. Our results also demonstrate the progress of the strategic actions we've taken to begin transforming our Winnebago-branded RV businesses, complementing our healthy stable of industry-leading brands. These initiatives and others across the enterprise enabled us to return to positive operating cash flow in the quarter. improve working capital, and meaningfully reduce our net leverage ratio. We generated adjusted diluted earnings per share of 71 cents on net revenues of $777.3 million. Momentum across brands and product lines more than offset operating margin pressure from the ongoing turnaround at our Winnebago branded businesses. Our improved Q4 performance enabled us to achieve the high end of our revised 2025 financial guidance. Driving our growth in Q4 were standout motorized RV products like Newmar's Class A Summit Air and Grand Design's Lineage Series M, which is rapidly gaining momentum in the Class C diesel category. On the towable side, the affordable Grand Design Transcend series is resonating with new consumers to the RV lifestyle. We also continue to see a strong performance in our marine segment from multiple Barletta products, including the Aria, which have become the definition of affordable luxury in the aluminum pontoon segment. Turning to key RV trends on slide five, Following a brief uptick earlier in the summer, RV retail registrations declined in August. On a trailing three-month basis, retail demand remained stable and dealer inventories continued to improve. This environment is contributing to a healthier channel, even as monthly results remain variable. From a wholesale perspective, total RV shipments declined low single digits in August. The industry continues to demonstrate discipline with manufacturers closely aligning shipments with retail demand. As we move through the remainder of calendar 2025, we expect dealers to remain selective in restocking, supporting channel stability in the off season. We now expect wholesale RV shipments in the range of 320 to 340,000 units for calendar 2025, or a median of 330,000 units. For calendar 2026, we are estimating wholesale RV shipments of 315,000 to 345,000 units. Our production strategy centers on disciplined planning and execution, enabling us to align output with market conditions. Our inventory turn rate of 1.9 times at the end of Q4 reflects seasonal dynamics and dealer demand. While we're targeting a higher turns over time to support operational efficiency and steady growth, we recognize that dealer behavior and market conditions ultimately drive those turns. Our strategy remains focused on maintaining a prudent, demand-driven approach. On slide six, our continued momentum in our core RV market segments underscores our strategic focus, product innovation, and deep customer engagement. Shown on this slide are some of our current success stories that our team here has every right to be very proud of. Newmar's Dutch Star continues to be the number one brand in the Class A diesel category, a position it has held since 2021. In Class B, three Winnebago brands, Solus, Travato, and Revel, have led all models in that category for the past five consecutive years. We also continue to win in Class C diesel. The Winnebago Echo is currently the number one selling brand in this class. And while not shown on the slide, the Winnebago View is the second selling brand in that class. Additionally, in just its first full year on the market, the Lineage Series M has become the number three brand in the Class C diesel market for the August trailing three and trailing six-month periods. And a recent ad is the emerging Grand Design Transcend, which advanced three spots versus last year to the number eight position of the highly competitive travel trailer category. joining the Grand Design Imagine in the top 10. And finally, the Grand Design Momentum holds the number one position in both the fifth wheel and travel trailer toy hauler segments. Moving to the marine segment on slide seven, Barletta and Chris Craft have done an exceptional job managing inventory, building dealer relationships, and creating an outstanding boating experience for consumers. This discipline and customer-centric approach has enabled both brands to maintain strong performance despite significant industry headwinds. For the trailing 12 months ended August 31st, Barletta increased its market share 20 basis points to 9%. The brand's dealer network called model year 26 the best top to bottom product launch in Barletta's history, including new features, design elements and technology updates. Now, turning to slide eight. In order to deliver a successful fiscal year 2026, we are focused on executional drivers that directly contribute volume, share and profitability. We expect our Winnebago branded motorhomes business to benefit from new product introductions like the recently launched Class C SunFlyer alongside stronger dealer partnerships and improved operational efficiency. We are positioning the Winnebago branded travel trailer business for growth as well through innovative products, a revitalized dealer channel and operational leverage. In addition, We expect to see the Grand Design Motorhomes business continue to capture share as a result of new products, continued dealer momentum, and strong growing brand loyalty. Grand Design towables will drive share gains and profitability through continued quality enhancements and product innovations like its new foundation, the brand's first destination trailer. Numar and Barletta will contribute selective share gains and profit stability through sharper price points and competitive new offerings. We are also focused on a multitude of operational initiatives across manufacturing optimization, vertical integration, capacity utilization, sourcing coordination, quality improvement, and working capital management. all of which will further strengthen profitability and cash flow in fiscal year 26. I'll now turn the call over to Brian Hughes for the financial review.