Winnebago(WGO) - 2025 Q4 - Annual Results

Executive Summary & Highlights Fourth Quarter Fiscal 2025 Financial Summary Winnebago Industries reported a solid fourth quarter for Fiscal 2025, with net revenues increasing by 7.8% to $777.3 million, driven by favorable product mix and targeted price increases. The company achieved significant improvements in profitability, with adjusted earnings per diluted share up 153.6% and adjusted EBITDA up 33.1% year-over-year. Operating cash flow was strong at $181.4 million, and the net leverage ratio improved to 3.1x Fourth Quarter Fiscal 2025 Financial Summary | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | | :----------------------- | :------------------ | :------------------ | :--------- | | Net revenues | $777.3 | $720.9 | 7.8% | | Gross profit | $99.2 | $94.2 | 5.2% | | Gross margin | 12.8% | 13.1% | (30 bps) | | Net income | $13.7 | ($29.1) | NM | | Diluted EPS | $0.49 | ($1.01) | NM | | Adjusted diluted EPS | $0.71 | $0.28 | 153.6% | | Adjusted EBITDA | $38.2 | $28.7 | 33.1% | | Net cash flow from operations | $181.4 | N/A | N/A | | Net leverage ratio | 3.1x | N/A | Improved | Full Year Fiscal 2025 Financial Summary For the full Fiscal Year 2025, Winnebago Industries reported net revenues of $2,798.2 million, a decrease of 5.9% from Fiscal 2024. Gross profit and adjusted EBITDA also saw declines. However, net income increased significantly to $25.7 million, and net cash flow from operations remained positive at $128.9 million Full Year Fiscal 2025 Financial Summary | Metric | FY25 (Millions) | FY24 (Millions) | Change (%) | | :----------------------- | :--------------- | :--------------- | :--------- | | Net revenues | $2,798.2 | $2,973.5 | (5.9)% | | Gross profit | $365.1 | $433.5 | (15.8)% | | Gross margin | 13.0% | 14.6% | (160 bps) | | Net income | $25.7 | $13.0 | 97.7% | | Diluted EPS | $0.91 | $0.44 | 106.8% | | Adjusted diluted EPS | $1.67 | $3.40 | (50.9)% | | Adjusted EBITDA | $121.9 | $190.6 | (36.0)% | | Net cash flow from operations | $128.9 | N/A | N/A | CEO Commentary CEO Michael Happe highlighted the company's solid Q4 performance despite a challenging environment, attributing success to a diversified product portfolio, improved profitability, market share gains, and strong operating cash flow. He noted positive progress in the Winnebago-branded businesses' turnaround and emphasized disciplined inventory management and new product innovation, particularly in RVs and the Grand Design motorized strategy - The company's diversified product portfolio helped offset operating margin pressure from the Winnebago-branded businesses' turnaround, which is proceeding positively[6] - Management remains disciplined in managing production schedules and inventory levels, aligning shipments with retail demand to maintain inventory health and brand strength[8] - Winnebago debuted exciting new products across its three RV brands at September's RV Open House, showcasing progress in the refreshed Winnebago-branded RV lineup and the Grand Design motorized strategy[9] Financial Results Overview Fourth Quarter Fiscal 2025 Results In Q4 FY25, net revenues increased by 7.8% to $777.3 million, primarily due to favorable product mix and targeted price increases. Gross profit margin slightly decreased by 30 basis points to 12.8% due to transformation costs. Operating expenses significantly decreased by 29.5%, leading to an operating income of $20.1 million compared to a loss in the prior year. Net income turned positive, and adjusted diluted EPS surged by 153.6% Fourth Quarter Fiscal 2025 Results | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Net revenues | $777.3 | $720.9 | 7.8% | | Gross profit | $99.2 | $94.2 | 5.2% | | Gross profit margin | 12.8% | 13.1% | (30 bps) | | Operating expenses | $79.1 | $112.0 | (29.5)% | | Operating income (loss) | $20.1 | ($17.8) | NM | | Net income (loss) | $13.7 | ($29.1) | NM | | Reported diluted EPS | $0.49 | ($1.01) | NM | | Adjusted diluted EPS | $0.71 | $0.28 | 153.6% | | Consolidated Adjusted EBITDA | $38.2 | $28.7 | 33.1% | - Operating expenses decreased primarily due to prior year goodwill impairment and cost reduction initiatives in Fiscal 2025, offsetting investments in the Grand Design motorhome business[12] Full Year Fiscal 2025 Results For the full Fiscal Year 2025, net revenues decreased by 5.9% to $2.8 billion, mainly due to lower average selling prices and unit volume. Gross profit margin declined by 160 basis points to 13.0% due to deleverage and higher warranty experience. Operating income decreased by 42.9%. While reported net income and EPS increased significantly, adjusted diluted EPS decreased by 50.9%, and consolidated adjusted EBITDA fell by 36.0% Full Year Fiscal 2025 Results | Metric | FY25 (Millions) | FY24 (Millions) | Change (%) | | :-------------------------- | :--------------- | :--------------- | :--------- | | Net revenues | $2,798.2 | $2,973.5 | (5.9)% | | Gross profit | $365.1 | $433.5 | (15.8)% | | Gross profit margin | 13.0% | 14.6% | (160 bps) | | Operating expenses | $307.9 | $333.3 | (7.6)% | | Operating income | $57.2 | $100.2 | (42.9)% | | Net income | $25.7 | $13.0 | 97.7% | | Reported diluted EPS | $0.91 | $0.44 | 106.8% | | Adjusted diluted EPS | $1.67 | $3.40 | (50.9)% | | Consolidated Adjusted EBITDA | $121.9 | $190.6 | (36.0)% | - The decrease in full-year operating expenses was primarily due to prior year goodwill impairment and current year cost reduction initiatives, partially offset by investments in Grand Design motorhome and Barletta marine businesses[17] Segment Performance Towable RV Segment The Towable RV segment experienced a 3.4% decrease in Q4 FY25 net revenues to $306.3 million, primarily due to a shift to lower price-point models and lower unit volume. However, operating income increased by 38.3% to $21.4 million, and operating income margin improved by 210 basis points to 7.0% due to targeted price increases and transformation efforts. For the full year, net revenues decreased by 7.5%, and operating income declined by 29.5%, with margin decreasing by 180 basis points Towable RV Segment Performance | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | FY25 (Millions) | FY24 (Millions) | Change (%) | | :-------------------- | :------------------ | :------------------ | :--------- | :--------------- | :--------------- | :--------- | | Net revenues | $306.3 | $317.0 | (3.4)% | $1,220.2 | $1,318.8 | (7.5)% | | Operating income | $21.4 | $15.5 | 38.3% | $72.7 | $103.1 | (29.5)% | | Operating income margin | 7.0% | 4.9% | 210 bps | 6.0% | 7.8% | (180) bps | - Q4 operating income margin increased due to targeted price increases and operating efficiencies from Winnebago towables business transformation efforts, partially offset by higher warranty experience and deleverage[20] - Full year operating income margin decreased primarily due to deleverage, including that associated with product mix, and higher warranty experience[22] Motorhome RV Segment The Motorhome RV segment saw a 17.3% increase in Q4 FY25 net revenues to $361.2 million, driven by higher unit volume and favorable product mix. However, the segment reported an operating loss of $0.3 million, with operating income margin decreasing by 230 basis points to (0.1)%, primarily due to transformation costs and higher discounts. For the full year, net revenues decreased by 9.4%, and the segment incurred an operating loss of $7.3 million Motorhome RV Segment Performance | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | FY25 (Millions) | FY24 (Millions) | Change (%) | | :-------------------- | :------------------ | :------------------ | :--------- | :--------------- | :--------------- | :--------- | | Net revenues | $361.2 | $308.0 | 17.3% | $1,159.7 | $1,279.8 | (9.4)% | | Operating income (loss) | ($0.3) | $6.9 | NM | ($7.3) | $52.9 | NM | | Operating income margin | (0.1)% | 2.2% | (230) bps | (0.6)% | 4.1% | (470) bps | - Q4 operating income margin decreased primarily due to costs associated with the transformation of the Winnebago motorhome business and higher discounts and allowances, partially offset by leverage and lower warranty expense[25] - Full year net revenues decreased due to lower unit volume and higher discounts related to the Winnebago motorhome business, partially offset by the introduction of the Grand Design motorhome business and product mix[26] Marine Segment The Marine segment demonstrated strong growth in Q4 FY25, with net revenues increasing by 17.9% to $94.9 million, driven by higher unit volume and targeted price increases. The segment achieved an operating income of $6.7 million, a significant improvement from a loss in the prior year, with operating income margin surging by 4,080 basis points to 7.1%. For the full year, net revenues increased by 13.0%, and operating income turned positive at $27.7 million Marine Segment Performance | Metric | Q4 FY25 (Millions) | Q4 FY24 (Millions) | Change (%) | FY25 (Millions) | FY24 (Millions) | Change (%) | | :-------------------- | :------------------ | :------------------ | :--------- | :--------------- | :--------------- | :--------- | | Net revenues | $94.9 | $80.5 | 17.9% | $367.8 | $325.5 | 13.0% | | Operating income (loss) | $6.7 | ($27.1) | NM | $27.7 | ($13.5) | NM | | Operating income margin | 7.1% | (33.7)% | 4,080 bps | 7.5% | (4.2)% | 1,170 bps | - Q4 operating income margin increased primarily due to prior year goodwill impairment, leverage, and targeted price increases[27] - Full year operating income margin increased due to prior year goodwill impairment, targeted price increases, and volume leverage[32] Financial Position & Capital Allocation Balance Sheet and Cash Flow Winnebago Industries significantly improved its balance sheet and cash flow position in Q4 FY25. Cash and cash equivalents increased to $174.0 million from $10.5 million in the prior quarter. Total outstanding debt was $540.5 million, and working capital improved to $465.1 million. The net leverage ratio improved to 3.1x at quarter-end from 4.8x in the previous quarter, reflecting disciplined management and stronger operating efficiency Balance Sheet and Cash Flow Highlights (Q4 FY25) | Metric | Amount (Millions) | | :----------------------- | :---------------- | | Cash and cash equivalents | $174.0 | | Total outstanding debt | $540.5 | | Working capital | $465.1 | | Cash flow from operations | $181.4 | | Net leverage ratio | 3.1x | - Cash and cash equivalents increased significantly from $10.5 million at the end of Q3 FY25 to $174.0 million at the end of Q4 FY25[28] - The net leverage ratio improved from 4.8x at the end of Q3 FY25 to 3.1x at the end of Q4 FY25[28] Quarterly Cash Dividend and Share Repurchases The Board of Directors approved a 3% increase in the quarterly cash dividend to $0.35 per share, paid on September 24, 2025 - The company's Board of Directors approved a 3% increase in the quarterly cash dividend to $0.35 per share on August 14, 2025[29] Business Outlook & Financial Guidance Winnebago Industries provided financial guidance for Fiscal 2026, anticipating consolidated net revenues between $2.75 billion and $2.95 billion, reported EPS of $1.25 to $1.95, and adjusted EPS of $2.00 to $2.70. The company also projected North American RV wholesale shipments for calendar years 2025 and 2026. The outlook considers prevailing RV sector trends, competitive dynamics, consumer preferences, and macroeconomic factors, with the CEO expressing confidence in strengthening margins and operational efficiency North American RV Wholesale Shipments Guidance | Year | Range (Units) | | :--- | :------------ | | 2025 | 320,000 to 340,000 | | 2026 | 315,000 to 345,000 | Fiscal 2026 Financial Guidance | Metric | Range | | :-------------------- | :-------------------- | | Consolidated net revenues | $2.75 billion to $2.95 billion | | Reported diluted EPS | $1.25 to $1.95 | | Adjusted diluted EPS | $2.00 to $2.70 | - The company's outlook takes into account prevailing trends in the RV sector, including tariff structure, competitive dynamics, shifts in consumer preferences, and key macroeconomic factors[30] - CEO Michael Happe expressed confidence that decisive actions underway will strengthen margins, enhance operational efficiency, and create long-term value for shareholders, despite a full return to mid-cycle demand across the industry taking time[30] Company Information & Disclosures Q4 FY 2025 Conference Call Winnebago Industries scheduled a conference call for 9:00 a.m. Central Time on October 22, 2025, to discuss its fourth quarter and full year Fiscal 2025 earnings results. A live broadcast and accompanying presentation slides are available via the Investor Relations page of the Company's website, with an archived replay available for 90 days - A conference call to discuss Q4 and full year Fiscal 2025 earnings results was scheduled for 9:00 a.m. Central Time on October 22, 2025[31] - Access to the live broadcast and presentation slides is available via the Investor Relations page of the Company's website (http://investor.wgo.net), with an archived replay for 90 days[31] About Winnebago Industries Winnebago Industries, Inc. is a leading North American manufacturer of outdoor lifestyle products, including motorhomes, travel trailers, fifth-wheel products, and various powerboats, under brands like Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta. The company is committed to sustainable innovation and vertical integration, with manufacturing facilities across several states - Winnebago Industries is a leading North American manufacturer of outdoor lifestyle products under the Winnebago, Grand Design, Chris-Craft, Newmar, and Barletta brands[33] - The company produces motorhomes, travel trailers, fifth-wheel products, outboard and sterndrive powerboats, pontoons, and commercial community outreach vehicles[33] - Winnebago Industries is committed to advancing sustainable innovation and leveraging vertical integration in key component areas, with facilities in Iowa, Indiana, Minnesota, and Florida[33] Forward-Looking Statements This section serves as a cautionary statement regarding forward-looking statements, including the Fiscal 2026 financial guidance. It highlights that such statements are inherently uncertain and subject to various risks and uncertainties, such as general economic conditions, financing availability, competition, supply chain issues, and regulatory changes, which could cause actual results to differ materially. The company disclaims any obligation to update these statements - Forward-looking statements, including Fiscal 2026 financial guidance, are inherently uncertain and involve potential risks and uncertainties[34] - Factors that could cause actual results to differ materially include general economic uncertainty, financing availability, competition, ability to innovate, inventory management, cyclicality, supplier relationships, material costs, and governmental regulation[34] - The company disclaims any obligation to disseminate updates or revisions to any forward-looking statements, except as required by law[34] Contacts & Footnotes This section provides contact information for investor relations and media inquiries. It also includes footnotes clarifying data sources, such as Statistical Surveys Inc. for market share data, and details regarding the exclusion of intangible amortization from Fiscal 2026 adjusted EPS guidance - Investor inquiries can be directed to Ray Posadas at ir@winnebagoind.com, and media inquiries to Dan Sullivan at media@winnebagoind.com[35] - Footnote (1) indicates that market share data is sourced from Statistical Surveys Inc. for the trailing 12 months ended August 31, 2025, and August 31, 2024[36] - Footnote (2) clarifies that Fiscal 2026 adjusted EPS guidance excludes the pretax impact of intangible amortization of approximately $22 million[36] Consolidated Financial Statements Condensed Consolidated Statements of Income The condensed consolidated statements of income show Winnebago Industries' financial performance for the three months and full year ended August 30, 2025, compared to the prior year. Key figures include net revenues, gross profit, operating income (loss), and net income (loss), along with corresponding percentages of net revenues and earnings per share Condensed Consolidated Statements of Income (Unaudited) | (in millions, except per share data) | Three Months Ended Aug 30, 2025 | Three Months Ended Aug 31, 2024 | Year Ended Aug 30, 2025 | Year Ended Aug 31, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :---------------------- | :---------------------- | | Net revenues | $777.3 | $720.9 | $2,798.2 | $2,973.5 | | Gross profit | $99.2 | $94.2 | $365.1 | $433.5 | | Operating income (loss) | $20.1 | ($17.8) | $57.2 | $100.2 | | Net income (loss) | $13.7 | ($29.1) | $25.7 | $13.0 | | Diluted EPS | $0.49 | ($1.01) | $0.91 | $0.44 | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets present the company's financial position as of August 30, 2025, and August 31, 2024. It details assets, liabilities, and shareholders' equity, showing changes in cash, inventories, total assets, and total liabilities year-over-year Condensed Consolidated Balance Sheets (Unaudited) | (in millions) | Aug 30, 2025 | Aug 31, 2024 | | :---------------------------- | :----------- | :----------- | | Cash and cash equivalents | $174.0 | $330.9 | | Inventories, net | $396.4 | $438.7 | | Total current assets | $792.2 | $988.7 | | Total assets | $2,154.4 | $2,384.2 | | Total current liabilities | $327.1 | $404.7 | | Long-term debt, net | $540.5 | $637.1 | | Total liabilities | $929.7 | $1,110.9 | | Shareholders' equity | $1,224.7 | $1,273.3 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows outline the cash generated from or used in operating, investing, and financing activities for the years ended August 30, 2025, and August 31, 2024. Net cash provided by operating activities decreased, while net cash used in financing activities significantly increased, leading to a net decrease in cash and cash equivalents for FY25 Condensed Consolidated Statements of Cash Flows (Unaudited) | (in millions) | Year Ended Aug 30, 2025 | Year Ended Aug 31, 2024 | | :-------------------------------- | :---------------------- | :---------------------- | | Net cash provided by operating activities | $128.9 | $143.9 | | Net cash used in investing activities | ($34.8) | ($45.9) | | Net cash used in financing activities | ($251.0) | ($77.0) | | Net (decrease) increase in cash and cash equivalents | ($156.9) | $21.0 | | Cash and cash equivalents at end of period | $174.0 | $330.9 | Supplemental Disclosure This section provides supplemental non-cash and cash flow information, including income taxes paid, interest paid, capital expenditures in accounts payable, dividends declared but not yet paid, and increases in operating and financing lease assets in exchange for lease liabilities Supplemental Disclosure (Year Ended) | (in millions) | Aug 30, 2025 | Aug 31, 2024 | | :------------ | :----------- | :----------- | | Income taxes paid, net | $2.5 | $14.4 | | Interest paid | $29.5 | $29.0 | | Capital expenditures in accounts payable | $0.4 | $4.6 | | Dividends declared not yet paid | $11.0 | $10.9 | | Increase in operating lease assets | $2.7 | $9.8 | | Increase in financing lease assets | $0.2 | $1.8 | Supplemental Segment Information Towable RV Supplemental Data Detailed supplemental data for the Towable RV segment shows a Q4 FY25 net revenue decrease of 3.4% and a full-year decrease of 7.5%. Despite this, Q4 operating income increased by 38.3% due to improved margins. Unit deliveries for travel trailers slightly increased in Q4 and full year, while fifth-wheel deliveries decreased. Dealer inventory for Towable RVs increased by 1.6% year-over-year Towable RV Segment - Unit Deliveries & Dealer Inventory | Metric | Q4 FY25 Units | Q4 FY24 Units | Q4 Change (%) | FY25 Units | FY24 Units | FY Change (%) | | :---------------- | :------------ | :------------ | :------------ | :--------- | :--------- | :------------ | | Travel trailer | 5,680 | 5,649 | 0.5% | 21,714 | 21,636 | 0.4% | | Fifth wheel | 2,153 | 2,534 | (15.0)% | 9,455 | 10,403 | (9.1)% | | Total Towable RV | 7,833 | 8,183 | (4.3)% | 31,169 | 32,039 | (2.7)% | | Dealer Inventory | 16,200 | 15,940 | 1.6% | N/A | N/A | N/A | Motorhome RV Supplemental Data The Motorhome RV segment's supplemental data indicates a 17.3% increase in Q4 FY25 net revenues, with unit deliveries for all classes (A, B, C) showing growth. However, the segment reported an operating loss for both Q4 and the full year. Full-year net revenues decreased by 9.4%, and total unit deliveries declined by 15.0%. Dealer inventory for Motorhome RVs decreased by 9.4% year-over-year Motorhome RV Segment - Unit Deliveries & Dealer Inventory | Metric | Q4 FY25 Units | Q4 FY24 Units | Q4 Change (%) | FY25 Units | FY24 Units | FY Change (%) | | :---------------- | :------------ | :------------ | :------------ | :--------- | :--------- | :------------ | | Class A | 403 | 356 | 13.2% | 1,211 | 1,625 | (25.5)% | | Class B | 524 | 463 | 13.2% | 1,682 | 2,278 | (26.2)% | | Class C | 818 | 726 | 12.7% | 2,849 | 2,854 | (0.2)% | | Total Motorhome RV | 1,745 | 1,545 | 12.9% | 5,742 | 6,757 | (15.0)% | | Dealer Inventory | 3,562 | 3,933 | (9.4)% | N/A | N/A | N/A | Marine Supplemental Data Supplemental data for the Marine segment shows a strong 17.9% increase in Q4 FY25 net revenues and a 13.0% increase for the full year. Unit deliveries for boats increased by 11.7% in both Q4 and the full year. The segment successfully turned around its operating income from a loss in the prior year to a positive figure in both periods. Dealer inventory for Marine units increased by 4.8% year-over-year Marine Segment - Unit Deliveries & Dealer Inventory | Metric | Q4 FY25 Units | Q4 FY24 Units | Q4 Change (%) | FY25 Units | FY24 Units | FY Change (%) | | :---------- | :------------ | :------------ | :------------ | :--------- | :--------- | :------------ | | Boats | 1,164 | 1,042 | 11.7% | 4,635 | 4,149 | 11.7% | | Dealer Inventory | 2,687 | 2,564 | 4.8% | N/A | N/A | N/A | Non-GAAP Reconciliations Adjusted Diluted Earnings Per Share Reconciliation This section provides a reconciliation of GAAP diluted earnings per share to Adjusted diluted earnings per share for the three months and full year ended August 30, 2025, and August 31, 2024. Adjustments include acquisition-related costs, amortization, goodwill impairment, and other non-recurring items to provide a clearer view of core operating performance Adjusted Diluted Earnings Per Share Reconciliation | | Three Months Ended | | | Year Ended | | | :-------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | | Aug 30, 2025 | Aug 31, 2024 | Aug 30, 2025 | Aug 31, 2024 | | Diluted earnings (loss) per share | $0.49 | ($1.01) | $0.91 | $0.44 | | Amortization | 0.19 | 0.21 | 0.78 | 0.78 | | Restructuring and related costs | 0.10 | — | 0.10 | — | | Goodwill impairment | — | 1.05 | — | 1.03 | | Adjusted diluted earnings per share | $0.71 | $0.28 | $1.67 | $3.40 | EBITDA and Adjusted EBITDA Reconciliation This section reconciles net income to consolidated EBITDA and Adjusted EBITDA for the three months and full year ended August 30, 2025, and August 31, 2024. Adjustments include interest expense, income taxes, depreciation, amortization, and other non-recurring items like goodwill impairment and loss on note repurchase, to present comparable results from period to period EBITDA and Adjusted EBITDA Reconciliation | (in millions) | Three Months Ended | | | Year Ended | | | :-------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | | Aug 30, 2025 | Aug 31, 2024 | Aug 30, 2025 | Aug 31, 2024 | | Net income (loss) | $13.7 | ($29.1) | $25.7 | $13.0 | | EBITDA | $35.1 | ($3.8) | $116.6 | $118.1 | | Goodwill impairment | — | 30.3 | — | 30.3 | | Loss on note repurchase | — | — | 2.0 | 32.7 | | Restructuring and related costs | 2.9 | — | 2.9 | — | | Adjusted EBITDA | $38.2 | $28.7 | $121.9 | $190.6 | Non-GAAP Measures Explanation This section defines non-GAAP financial measures such as Adjusted diluted earnings per share, EBITDA, and Adjusted EBITDA, explaining that they are provided to supplement GAAP measures by illustrating the effect of non-recurring transactions and improving comparability. Management uses these measures for evaluating performance, budgeting, assessing acquisitions, and ensuring compliance with debt covenants, believing they offer meaningful insights into core operating results - Non-GAAP financial measures like Adjusted diluted EPS, EBITDA, and Adjusted EBITDA are provided to supplement GAAP measures, illustrating the effect of non-recurring transactions and improving comparability[55] - Adjusted diluted EPS is defined as diluted EPS adjusted for after-tax items impacting comparability, while Adjusted EBITDA is net income before interest, taxes, depreciation, amortization, and other pretax adjustments[55] - Management uses these non-GAAP measures to evaluate historical and prospective financial performance, measure operational profitability, assess performance relative to competitors, evaluate acquisitions, and ensure compliance with debt terms[56]