Winnebago Industries, Inc.

Welcome to the Winnebago Industry Second Quarter Fiscal 2026 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 call is being recorded. I would now like to hand the call over to Joanne Ondala, Vice President, Treasury and Investor Relations. Ms. Ondala, please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss our fiscal 2026 second quarter 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 release with our second quarter results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along with our prepared remarks is also available in the investor section of our website under quarterly results. Turning to slide 2, certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities law. 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 filing, 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. Please turn to slide three. Hosting today's call are Michael Happi, 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 second quarter performance, as well as a forward view of the market. Brian will discuss the associated drivers of our financial results and our fiscal year 2026 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions. And with that, please turn to slide four as I hand the call over to Mike.

Thank you, Joanne, and good morning, everyone. Winnebago Industries delivered a solid second quarter, reflecting focused execution on our overarching enterprise strategies and our fiscal year 2026 first half objectives. Despite a challenging market environment, our teams performed with discipline, protecting profitability, managing controllable costs, and advancing the product and operational priorities that matter most to our long-term competitive positions in the RV and marine industries. Across our portfolio of premium differentiated brands, we have built a broad and durable outdoor recreation platform that spans multiple customer segments, price points, and lifestyle use cases. That breadth is increasingly valuable in a more selective demand environment and positions us well to compete for profitable share as demand conditions improve in the future. We are introducing meaningful new products across our business lineups, especially recently in the motorhome RV segment within the traditional C category. With technological differentiations, and targeted focus on affordability and value accessibility to our premium brands. We are also being deliberate about where we invest and grow. Our emphasis on driving share in higher value segments such as Class A diesel, Class C diesel, and the growing Super C category reflects our strategic focus on retail dollar and profit reach through resilient premium categories. that discipline is evident in our results. Even as unit share has fluctuated in certain industry segments, our RV retail dollar share has remained resilient. On the Winnebago branded motorhome business, we have made considerable progress in the restoration of this flagship line through the first half of fiscal 2026. The team is on its plan through the first six months with much more traction planned in the back half of the year. While several initiatives are still in initial stages and are expected to build and become more apparent over coming quarters, the prospects for this business in the future are definitely improving. The progress there really reflects the same Winnebago Industries enterprise strategies we are applying every day across our portfolio. empowering best talent, building relevant premium brands and winning products, elevating the total customer experience, expanding digital capabilities and connections, and driving portfolio synergy and excellence. On the towable RV side, our wholesale share reflects deliberate efforts to reinvigorate our Winnebago towables business with recent new products and revitalized several critical Grand Design products, attacking the meat of the market. We have leaned into models like Access within the Winnebago brand and Grand Design's Transcend line, gaining important shelf space in supportive dealer showrooms, while also moderating some highly promotional product segments to support inventory health and overall channel stability. We will discuss our marine businesses in a few minutes, but I would like to highlight a brand that does not receive enough attention at times, and that is Lithionics, our mobile portable power line. This 2023 acquired platform continues to be an increasingly vital part of what differentiates our enterprise profile. Focused on delivering professional grade, safe, portable, reliable battery power solutions, Lithionics strengthens our competitive differentiation today and supports future profitable growth as we expand the technology beyond RV into marine and work vehicle applications. Our overall financial performance through the first half of fiscal 2026 reflects the strides we have made to deleverage our balance sheet, strengthen cash flow, and reduce controllable costs. We have urgency in these areas to position ourselves as soon as possible to accelerate our capital allocation priorities for the future benefit of this company. Our teams have done an excellent job since last April of 2025 managing tariff headwinds and intentionally improving SG&A leverage. Brian Hughes will walk through those numbers in more detail shortly. Turning to slide five, retail activity across the second quarter remained aligned with a seasonally slower retail period of the year, but also reflected a challenged near-term consumer sentiment environment, with comps lower than the same period a year ago. Additionally, retail both at the dealers but also at certain consumer retail shows through the January-February months were impacted by adverse weather events in key regions. Dealers continue to manage inventory cautiously, keeping ordering and stocking closely aligned with retail conditions. Wholesale activity has remained disciplined, with shipments also moderating throughout the seasonally slower period. The RV Industry Association's Spring Road Signs Outlook CALLS FOR MODEST INDUSTRY SHIPMENT GROWTH IN CALENDAR 2026, WITH TOTAL VOLUMES FORECAST TO INCREASE BY APPROXIMATELY 2% YEAR OVER YEAR. THAT OUTLOOK CONTINUES TO ASSUME A FIRST HALF OF CALENDAR YEAR 2026 WEIGHTED TOWARD SEASONAL SOFTNESS, WITH IMPROVEMENT EXPECTED IN THE BACK HALF OF THE YEAR AS RETAIL DEMAND STABILIZES. IT ALSO ASSUMES MIXED PERFORMANCE ACROSS SEGMENTS, including resilience in fifth wheels and a more gradual recovery in certain motorized categories. Our own internal RV wholesale planning remains intentionally more cautious than this outlook, with a focus on retail-driven ordering patterns and disciplined production pacing as conditions evolve. As we move into the critical spring and summer selling seasons, We expect retail activity to build, and we are well positioned to respond with product as dealers desire. Inventory management remains a priority. During the second quarter, RV inventory turns reached approximately 1.5 times. exhibiting normal seasonal shipping patterns, as well as increased dealer demand tied to recent Winnebago towables and Grand Design motorized product introductions. Dealers are supporting these new business strategies and building inventory positions where they believe in future retail share attainment opportunities. While overall inventory turns at the end of Q2 versus backward retail, were slightly lower than what we would like to see at this time of year. We are very much focused on continuing to be a good partner to our dealers going forward in pursuing a two times inventory turn goal at some point in calendar 2026 as seasonal retail accelerates. Turning to slide six. At the Florida RV Super Show in January, we showcased how our product portfolio is evolving around changing RV ownership and travel behaviors. Across Winnebago, Grand Design RV, and Newmar, the products we featured from Winnebago's SunFlyer Class C to Grand Design's Solitude Fifth Wheel and Lineage Motorhome platforms to our Newmar Freedom Air Luxury Sea introduction. All of these emphasize livability, ease of ownership, and differentiated features, serving both first-time buyers and experienced owners. Strategically, the unveiling of new products just mentioned reinforced the direction of our product roadmap, a deliberate focus on products that remain relevant across market conditions. support dealer inventory discipline, and contribute to brand strength over time. Our approach to innovation is intentional, emphasizing mix, execution, and returns. On slide seven, our Barletta Boats business continues to hold the number three position in U.S. aluminum pontoons, with a 9.1% retail unit market share over the trailing 12 months through January. The three-month SSI unit retail market share is running even higher in the lower double digits range. Barletta's brand positioning and product mix remains consistent, supporting even higher retail dollar share versus the number one and number two competitors. However, to serve an even wider audience across the recreational boating space, we have expanded the Barletta lineup with the introduction of the Sansa series of products. Starting at $49,995 for a tri-tune model, well equipped with a 150 horsepower engine, a cover, and in-floor storage, The SANSA extends the Barletta experience to new buyers looking for affordable access to premium brands while maintaining the trusted craftsmanship, comfort, and industry-leading customer service support that define Barletta great. Moving to slide eight, Barletta also captured its fourth consecutive Discover Boating Minneapolis Boat Show Innovation Award. recognizing our leadership in bringing industry-first ride stabilization technology to the pontoon segment through our partnership with Seakeeper Ride. This recognition underscores the team's sustained focus on meaningful innovation that elevates the on-water experience for our owners. That same commitment on customer-centered innovation is evident within our ChrisCraft brand as well. where we recently introduced the all-new Launch 27. The Launch 27 is a reimagined premium day boat that blends the brand's timeless design and unparalleled fit and finish with modern technology, enhanced comfort, and standard Seakeeper ride stabilization. In January, the Launch 27 earned a 2026 Innovation Award at the Discover Boating Miami Boat Show, highlighting its sleek hull design and advanced technology. Importantly, this award reinforces Chris Craft's leadership in thoughtful, owner-focused innovation. Product quality and innovation remain core to our strategy, and these Marine Awards validate that conviction. Both Barletta and Chris Craft have also been recognized with the National Marine Manufacturers Association's Customer Satisfaction Index Awards, reflecting consistently high owner satisfaction across our marine portfolio. Moving to slide nine. In January, we released our seventh annual Corporate Responsibility Report, outlining how we continue to integrate sustainability safety, and governance into the way we run the business. Two highlights from our most recent report. One, we have made meaningful improvements in workplace safety in the last decade, and again in fiscal 2025. And two, we have now reduced our absolute scope one and scope two emissions by about 15% versus our 2020 baseline. Both are clear indicators of disciplined execution embedded in our day-to-day operations across the organization. Now, let me turn the call over to Brian Hughes for the financial review.