Thor Industries(US:THO)2022-09-27 16:00Market Performance - THOR's North American RV market share is approximately 41.9% for travel trailers and fifth wheels combined, and approximately 49.4% for motorhomes as of June 30, 2022[203]. - North American RV dealer inventory increased 117.8% to approximately 127,000 units as of July 31, 2022, compared to 58,300 units in the previous year[220]. - THOR's North American RV backlog decreased by $7,291,329, or 54.8%, to $6,007,638 as of July 31, 2022, compared to $13,298,967 in the prior year[221]. - For the six months ended June 30, 2022, THOR's wholesale RV shipments increased by 7.9% to 141,399 units compared to 131,087 units in the same period of 2021[227]. - The RVIA forecasts a 16.9% decrease in total North American wholesale unit shipments for calendar year 2022, projecting approximately 498,800 units[222]. - Retail registrations for North American RVs decreased by 24.3% to 251,515 units for the six months ended June 30, 2022, compared to 332,166 units in the same period of 2021[225]. - North American retail unit registrations for towable units decreased by 25.4% from 123,244 in 2021 to 91,932 in 2022[228]. - Motorized units registrations in North America fell by 7.8%, from 14,308 in 2021 to 13,190 in 2022[228]. - Total North American RV registrations dropped by 23.6%, from 137,552 in 2021 to 105,122 in 2022[228]. - THOR's European RV backlog decreased by $805,495, or 22.6%, from $3,559,097 in 2021 to $2,753,602 in 2022[237]. - European motorcaravan and campervan registrations fell by 26.5%, from 23,880 in 2021 to 17,540 in 2022[241]. - Total European unit registrations decreased by 17.8%, from 109,138 in 2021 to 89,760 in 2022[239]. Financial Performance - Consolidated net sales for fiscal 2022 increased by $3,995,145, or 32.4%, compared to fiscal 2021, driven by increased consumer demand and inventory restocking by dealers[256]. - North American Towables net sales rose to $8,661,945, a 39.2% increase from $6,221,928 in fiscal 2021[254]. - Total North America recreational vehicle sales reached $12,641,592, reflecting a 42.2% increase from $8,891,319 in the previous year[254]. - Consolidated gross profit for fiscal 2022 increased by $911,057, or 48.1%, with a gross profit margin of 17.2% compared to 15.4% in fiscal 2021[258]. - Selling, general and administrative expenses rose by $246,546, or 28.3%, to $1,116,462, representing 6.8% of consolidated net sales[259]. - Income before income taxes for fiscal 2022 was $1,459,864, an increase of $615,283, or 72.9%, compared to $844,581 in fiscal 2021[262]. - The order backlog decreased to $8,761,240, down $8,096,824, or 48.0%, from $16,858,064 in the previous year[255]. - Approximately 18% of net sales for fiscal 2022 were transacted in currencies other than the U.S. dollar, with a negative impact of $230,223 from currency exchange rate changes[257]. - Corporate costs included in selling, general and administrative expenses increased by $22,770 to $140,342, a 19.4% rise compared to fiscal 2021[265]. - Amortization of intangible assets expense increased by $39,763, or 33.9%, to $156,946, primarily due to the acquisition of Airxcel[260]. Acquisitions and Investments - The company acquired Togo Group for $16,144 in cash, achieving 100% ownership as of July 31, 2022[207]. - Capital acquisitions totaled $240,561 in fiscal 2022, primarily for land, production building improvements, and machinery replacement[206]. - The company plans to commit $275,000 for capital expenditures in fiscal 2023, focusing on building projects and machinery upgrades[298]. - Net cash used in investing activities was $1,049,257, primarily due to $781,967 for business acquisitions and $242,357 for capital expenditures[303]. Supply Chain and Economic Factors - The company anticipates ongoing chassis supply limitations to continue impacting production and sales throughout fiscal 2023[248]. - Supply shortages and delivery delays of non-chassis raw materials have led to increased work in process inventory as of July 31, 2022[249]. - Economic factors such as inflation, interest rates, and supply chain constraints are expected to influence future retail sales in both North America and Europe[245]. Marketing and Customer Reach - The company plans to expand its retail customer reach through data-based and digital marketing strategies targeting new consumer segments in Europe[243]. Cash Flow and Obligations - Net cash provided by operating activities increased to $990,253 in fiscal 2022 from $526,482 in fiscal 2021[300]. - Cash and cash equivalents decreased to $311,553 as of July 31, 2022, from $445,852 a year earlier[294]. - Total contractual cash obligations amount to $1,967,208, with significant debt principal payments due in the coming years[307]. - The total amount of standby repurchase obligations is $4,308,524, with $2,539,672 due in less than one year and $1,768,852 due in 1-3 years[309]. Risk Management - The company holds $528,010 of debt denominated in Euros, with a hypothetical 10% change in the Euro/U.S. Dollar exchange rate potentially impacting the debt balance by $52,801[326]. - As of July 31, 2022, the company has approximately $273,325 in notional amounts hedged through interest rate swaps, which will decrease to zero by August 1, 2023[327]. - A one-percentage-point increase in interest rates could result in an estimated $10,656 reduction in income before income taxes over a one-year period[328]. - The company has foreign currency forward contracts with a notional value of $33,997 to exchange Pound Sterling into Euros, with a fair value liability of $80 as of July 31, 2022[325]. - The company does not use financial instruments for trading or speculative purposes, focusing instead on hedging transactions to mitigate market risks[324]. Goodwill and Warranty Liabilities - The carrying value of goodwill as of July 31, 2022, is $1,804,151, with the European reporting unit's fair value exceeding its carrying value by less than 10%[314][315]. - The warranty liability recorded as of July 31, 2022, totals $317,908, based on estimates of existing and future claims[321].