THOR INDUSTRIES INC - Quarter Report: 2007 January (Form 10-Q)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED January 31, 2007 COMMISSION FILE NUMBER 1-9235
THOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 93-0768752 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
419 West Pike Street, Jackson Center, OH | 45334-0629 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (937) 596-6849
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes o No þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer þ
Accelerated filer o Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
Class | Outstanding at 5/31/2007 | |
Common stock, par value $.10 per share |
55,767,304 shares |
Explanatory Note
(All amounts presented in thousands)
In this Form 10-Q for the quarter ended January 31, 2007, Thor Industries, Inc. (we or the
Company) is restating its condensed consolidated financial statements for the three and six
months ended January 31, 2006. The effects of this restatement are reflected in the comparative
amounts included in this Form 10-Q. We have restated our previously issued financial statements as
of July 31, 2006 and 2005, and for each of the years in the three-year period ended July 31, 2006,
and the financial results in each of the quarterly periods in 2006 and 2005, and on June 11, 2007
filed an amendment to our Annual Report on Form 10-K/A for the year ended July 31, 2006. We have
also restated our condensed consolidated financial statements as of October 31, 2006 and for the
three months ended October 31, 2006 and 2005, and on June 12, 2007 filed an amendment to our
Quarterly Report on Form 10-Q/A for the quarter ended October 31, 2006.
On January 29, 2007, we announced that the Audit Committee of our Board of Directors (the Audit
Committee) initiated an independent investigation regarding certain accounting issues at our
Dutchmen Manufacturing, Inc. operating subsidiary (Dutchmen), primarily involving inventory,
accounts receivable, accounts payable, and cost of products sold. We promptly and voluntarily
informed the Securities and Exchange Commission (the SEC) of the Audit Committees investigation,
and have been responding to SEC staff requests for additional information in connection with the
staffs investigation. The Audit Committee, assisted by independent outside legal counsel and
accounting experts, thoroughly investigated the accounting issues raised at Dutchmen. The Audit
Committee and its advisors also reviewed the internal controls at Dutchmen and other subsidiaries.
On April 9, 2007, we announced that on April 4, 2007 our Board of Directors, acting upon the
recommendation of the Audit Committee and management, concluded that our previously issued
consolidated financial statements relating to the fiscal years 2004, 2005 and 2006 and the three
months ended October 31, 2006 contained in our filings with the SEC, including related reports of
our independent registered public accounting firm, Deloitte & Touche LLP, and press releases,
should no longer be relied upon.
The condensed consolidated financial statements and related financial information for the three and
six months ended January 31, 2007 included in this Form 10-Q should be read only in conjunction
with the information contained in our Annual Report on Form 10-K/A for the year ended July 31,
2006. See Note 2 to our condensed consolidated financial statements included in this Form 10-Q for
further discussion.
The Audit Committees investigation confirmed the Companys determination that income before income
taxes recorded by Dutchmen was overstated in the amount of approximately $26,000 in the aggregate
from fiscal year 2004 to the second quarter of fiscal year 2007, as a result of misconduct by
Dutchmens former Vice President of Finance, the senior financial officer of Dutchmen in which he
intentionally understated the cost of products sold. Dutchmens Vice President of Finance
manipulated accounts reflecting inventory, accounts receivable, accounts payable, and cost of
products sold, by entering and approving his own inaccurate journal entries as well as reconciling
the related accounts, and prepared fraudulent supporting documentation, with the net effect of
overstating Dutchmens income before income taxes by approximately $26,000 during the relevant
period. The Audit Committees investigation found no evidence to conclude that anyone else, at
Dutchmen or elsewhere in the Company, knew of or participated in this misconduct or that there was
theft or misappropriation of company assets. The Audit Committees investigation also identified
issues with respect to internal controls at Dutchmen, certain of the Companys other operating
subsidiaries, and the Companys corporate finance and accounting office. The Companys conclusions
regarding internal controls issues are more fully detailed in Item 9A of our Annual Report on Form
10-K/A for the year ended July 31, 2006.
The Companys decision to restate its previously issued financial statements follows the Companys
evaluation, considering the results from the Audit Committees investigation, of accounting
practices
1
employed at Dutchmen during the periods restated. The effect of the restatement reported
in this Quarterly Report on Form 10-Q is a reduction to income before income taxes of $3,111, or
$1,969 in net income, for the three months ended January 31, 2006 and a reduction to income before
income taxes of $6,258, or $3,961 in net income, for the six months ended January 31, 2006. The
restated financial statements as of July 31, 2006 and 2005, and for each of the years in the
three-year period ended July 31, 2006, and the financial results in each of the quarterly periods
in 2006 and 2005, are reported in our Annual Report on Form 10-K/A for the year ended July 31,
2006. The restated financial statements as of October 31, 2006 and for the three months ended
October 31, 2006 and 2005 are reported in our Quarterly Report on Form 10-Q/A for the quarter ended
October 31, 2006.
The effects of these restatements are reflected in the financial statements and other supplemental
data, including the unaudited quarterly data for fiscal years 2005 and 2006 and selected financial
data for the fiscal years 2004, 2005 and 2006, included in our Annual Report on Form 10-K/A for the
year ended July 31, 2006, our Quarterly Report on Form 10-Q/A for the quarter ended October 31,
2006 and this Form 10-Q. We have not amended and do not intend to amend any of our previously
filed Annual Reports on Form 10-K for the periods affected by the restatement or adjustments other
than our Annual Report on Form 10-K/A for the year ended July 31, 2006 or any of our previously
filed Quarterly Reports on Form 10-Q other than our Quarterly Report on Form 10-Q/A for the quarter
ended October 31, 2006.
We did not timely file our Quarterly Report on Form 10-Q for the quarter ended January 31, 2007 by
the prescribed due date of March 12, 2007 because, at that time, the Audit Committees
investigation was ongoing. In addition, we did not timely file our Quarterly Report on Form 10-Q
for the quarter ended April 30, 2007 by the prescribed due date of June 11, 2007. We expect to
file our Quarterly Report on Form 10-Q for the quarter ended April 30, 2007 as soon as practicable
after the filing of this report.
As a result of our failure to file quarterly reports on a timely basis, we are no longer eligible
to use Form S-3 to register our securities with the SEC until all required reports under the
Securities Exchange Act of 1934 have been timely filed for the 12 months prior to the filing of the
registration statement for those securities.
The restatement, and the reasons for and events leading to the restatement, are also described in
Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations and
Note 2 to our condensed consolidated financial statements contained elsewhere in this report.
2
PART I Financial Information
Unless otherwise indicated, all amounts presented in thousands except units, share and per
share data.
ITEM 1. Financial Statements
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, 2007 | July 31, 2006 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 91,335 | $ | 196,136 | ||||
Investments short term |
118,712 | 68,237 | ||||||
Accounts receivable: |
||||||||
Trade |
180,824 | 188,104 | ||||||
Other |
5,485 | 5,639 | ||||||
Inventories |
189,514 | 183,169 | ||||||
Prepaid expenses |
12,310 | 6,533 | ||||||
Deferred income taxes |
18,368 | 4,898 | ||||||
Total current assets |
616,548 | 652,716 | ||||||
Property: |
||||||||
Land |
21,434 | 21,323 | ||||||
Buildings and improvements |
134,129 | 131,649 | ||||||
Machinery and equipment |
59,338 | 55,656 | ||||||
Total cost |
214,901 | 208,628 | ||||||
Accumulated depreciation |
56,896 | 51,163 | ||||||
Property, net |
158,005 | 157,465 | ||||||
Investment in Joint ventures |
2,657 | 2,737 | ||||||
Other assets: |
||||||||
Goodwill |
165,663 | 165,663 | ||||||
Non-compete agreements |
2,387 | 2,841 | ||||||
Trademarks |
13,900 | 13,900 | ||||||
Other |
11,183 | 9,403 | ||||||
Total other assets |
193,133 | 191,807 | ||||||
TOTAL ASSETS |
$ | 970,343 | $ | 1,004,725 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 123,554 | $ | 145,609 | ||||
Accrued liabilities: |
||||||||
Taxes |
24,734 | 18,709 | ||||||
Compensation and related items |
31,227 | 37,161 | ||||||
Product warranties |
59,061 | 59,795 | ||||||
Promotions and rebates |
10,546 | 12,953 | ||||||
Product/property liability and related liabilities |
11,840 | 10,423 | ||||||
Other |
9,100 | 7,315 | ||||||
Total current liabilities |
270,062 | 291,965 | ||||||
Deferred income taxes and other liabilities |
14,725 | 12,911 | ||||||
Contingent liabilities and commitments |
| | ||||||
Stockholders equity: |
||||||||
Common stock authorized 250,000,000 shares;
issued 57,210,404 shares @ 1/31/07 and 57,100,286
shares @ 7/31/06; par value of $.10 per share |
5,721 | 5,710 | ||||||
Additional paid-in capital |
88,992 | 86,538 | ||||||
Accumulated other comprehensive income |
1,311 | 1,772 | ||||||
Retained earnings |
649,655 | 664,322 | ||||||
Less Treasury shares of 1,441,600 @ 1/31/07 &
1,401,200 @ 7/31/06 |
(60,123 | ) | (58,493 | ) | ||||
Total stockholders equity |
685,556 | 699,849 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 970,343 | $ | 1,004,725 | ||||
See notes to condensed consolidated financial statements
3
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED INCOME
FOR THE THREE & SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
STATEMENTS OF CONDENSED CONSOLIDATED INCOME
FOR THE THREE & SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
Three Months Ended January 31 | Six Months Ended January 31 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(As restated, | (As restated, | |||||||||||||||
see Note 2) | see Note 2) | |||||||||||||||
Net sales |
$ | 584,049 | $ | 642,047 | $ | 1,311,765 | $ | 1,403,370 | ||||||||
Cost of products sold |
522,880 | 555,195 | 1,161,428 | 1,208,023 | ||||||||||||
Gross profit |
61,169 | 86,852 | 150,337 | 195,347 | ||||||||||||
Selling, general and
administrative expenses |
37,424 | 41,237 | 80,869 | 85,573 | ||||||||||||
Interest income |
2,346 | 2,038 | 5,256 | 3,718 | ||||||||||||
Interest expense |
164 | 223 | 351 | 570 | ||||||||||||
Other income |
315 | 127 | 865 | 926 | ||||||||||||
Income before income taxes |
26,242 | 47,557 | 75,238 | 113,848 | ||||||||||||
Provision for income taxes |
7,990 | 17,652 | 26,389 | 42,570 | ||||||||||||
Net income |
$ | 18,252 | $ | 29,905 | $ | 48,849 | $ | 71,278 | ||||||||
Average common shares outstanding: |
||||||||||||||||
Basic |
55,654,744 | 56,593,434 | 55,634,023 | 56,580,913 | ||||||||||||
Diluted |
55,927,479 | 56,982,007 | 55,909,970 | 56,942,738 | ||||||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ | .33 | $ | .53 | $ | .88 | $ | 1.26 | ||||||||
Diluted |
$ | .33 | $ | .52 | $ | .87 | $ | 1.25 | ||||||||
Regular dividends declared per common share: |
$ | .07 | $ | .05 | $ | .14 | $ | .05 | ||||||||
Special dividends declared per common share: |
$ | | $ | | $ | 1.00 | $ | | ||||||||
Regular dividends paid per common share: |
$ | .07 | $ | .05 | $ | .14 | $ | .10 | ||||||||
Special dividends paid per common share: |
$ | | $ | | $ | 1.00 | $ | .25 |
See notes to condensed consolidated financial statements
4
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
2007 | 2006 | |||||||
(As restated, | ||||||||
see Note 2) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 48,849 | $ | 71,278 | ||||
Adjustments to reconcile net income to net cash (used in)
provided by operating activities: |
||||||||
Depreciation |
6,393 | 6,968 | ||||||
Amortization |
454 | 475 | ||||||
Deferred income taxes |
(7,699 | ) | (12,396 | ) | ||||
Loss on disposition of assets |
86 | 12 | ||||||
Loss on disposition of trading investments |
104 | 255 | ||||||
Unrealized loss on trading investments |
| 15 | ||||||
Stock based compensation |
319 | 540 | ||||||
Changes in non cash assets and liabilities, net of effect
from acquisitions: |
||||||||
Purchases of trading investments |
| (152,062 | ) | |||||
Proceeds from disposition of trading investments |
68,133 | 84,274 | ||||||
Accounts receivable |
7,434 | (29,159 | ) | |||||
Inventories |
(6,345 | ) | (26,445 | ) | ||||
Prepaids and other |
(13,537 | ) | (5,514 | ) | ||||
Accounts payable |
(22,221 | ) | 9,139 | |||||
Accrued liabilities |
152 | 36,901 | ||||||
Other liabilities |
1,838 | 1,314 | ||||||
Net cash (used in) provided by operating activities |
83,960 | (14,405 | ) | |||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant & equipment |
(7,101 | ) | (14,244 | ) | ||||
Proceeds from disposition of assets |
224 | 49 | ||||||
Purchase of available for sale investments |
(202,320 | ) | | |||||
Proceeds from sale of available for sale investments |
83,897 | | ||||||
Net cash used in investing activities |
(125,300 | ) | (14,195 | ) | ||||
Cash flows from financing activities: |
||||||||
Cash dividends |
(63,516 | ) | (19,834 | ) | ||||
Purchase of common stock held as treasury shares |
(1,630 | ) | | |||||
Proceeds from issuance of common stock |
2,146 | 1,256 | ||||||
Net cash used in financing activities |
(63,000 | ) | (18,578 | ) | ||||
Effect of exchange rate changes on cash |
(461 | ) | 840 | |||||
Net decrease in cash and equivalents |
(104,801 | ) | (46,338 | ) | ||||
Cash and equivalents, beginning of period |
196,136 | 163,596 | ||||||
Cash and equivalents, end of period |
$ | 91,335 | $ | 117,258 | ||||
Supplemental cash flow information: |
||||||||
Income taxes paid |
$ | 25,846 | $ | 23,343 | ||||
Interest paid |
351 | 570 | ||||||
Non cash transactions: |
||||||||
Capital expenditures in accounts payable |
$ | 166 | $ | 894 |
See notes to condensed consolidated financial statements
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. | The July 31, 2006 amounts are derived from the annual audited financial statements, as restated. The interim financial statements are unaudited. In the opinion of management, all adjustments (which consist of normal recurring adjustments) necessary to present fairly the financial position, results of operations and change in cash flows for the interim periods presented have been made. These financial statements should be read in conjunction with the Companys Annual Report on Form 10-K/A for the year ended July 31, 2006. The results of operations for the six months ended January 31, 2007 are not necessarily indicative of the results for the full year. | |
2. | Restatement of Financial Statements | |
On January 29, 2007, we announced that the Audit Committee of our Board of Directors (the Audit Committee) initiated an independent investigation regarding certain accounting issues at our Dutchmen Manufacturing, Inc. operating subsidiary (Dutchmen). The Vice President of Finance at Dutchmen was intentionally understating the cost of products sold during the periods restated, primarily by overstating inventory and accounts receivable and understating accounts payable. We promptly and voluntarily informed the SEC of the Audit Committees investigation, and have been responding to SEC staff requests for additional information in connection with the staffs investigation. The Audit Committee, assisted by independent outside legal counsel and accounting experts, thoroughly investigated the accounting issues raised at Dutchmen. The Audit Committee and its advisors also reviewed the internal controls at Dutchmen and other subsidiaries. | ||
The Audit Committees investigation confirmed the Companys determination that the income before income taxes recorded by Dutchmen was overstated during the periods that we subsequently restated, as a result of misconduct by Dutchmens former Vice President of Finance, the senior financial officer of Dutchmen. | ||
The Company has restated its previously issued financial statements as of July 31, 2006, in conjunction with the Companys Annual Report on Form 10-K/A, and for the three and six month periods ended January 31, 2006. The restatement followed the Companys evaluation, considering the results from the Audit Committees investigation, of accounting practices employed at Dutchmen during these periods. | ||
The following tables show the previously reported, restatement adjustment and restated amounts for those accounts in the Statements of Condensed Consolidated Income for the three months ended January 31, 2006 and the six months ended January 31, 2006 and the Statement of Condensed Consolidated Cash Flows for the six months ended January 31, 2006, affected by the restatements. |
Previously | Restatement | |||||||||||
reported | adjustment | Restated | ||||||||||
Statement of Condensed Consolidated Income |
||||||||||||
Three months ended January 31, 2006 |
||||||||||||
Cost of products sold |
$ | 552,084 | $ | 3,111 | $ | 555,195 | ||||||
Gross profit |
89,963 | (3,111 | ) | 86,852 | ||||||||
Income before income taxes |
50,668 | (3,111 | ) | 47,557 | ||||||||
Provision for income taxes |
18,794 | (1,142 | ) | 17,652 | ||||||||
Net income |
31,874 | (1,969 | ) | 29,905 | ||||||||
Earnings per common share |
||||||||||||
Three months ended January 31, 2006 |
||||||||||||
Basic |
$ | .56 | $ | (.03 | ) | $ | .53 | |||||
Diluted |
$ | .56 | $ | (.04 | ) | $ | .52 |
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Previously | Restatement | |||||||||||
reported | adjustment | Restated | ||||||||||
Statement of Condensed Consolidated Income |
||||||||||||
Six months ended January 31, 2006 |
||||||||||||
Cost of products sold |
$ | 1,201,765 | $ | 6,258 | $ | 1,208,023 | ||||||
Gross profit |
201,605 | (6,258 | ) | 195,347 | ||||||||
Income before income taxes |
120,106 | (6,258 | ) | 113,848 | ||||||||
Provision for income taxes |
44,867 | (2,297 | ) | 42,570 | ||||||||
Net income |
75,239 | (3,961 | ) | 71,278 |
Statement of Condensed Consolidated Cash Flows
Six months ended January 31, 2006
Six months ended January 31, 2006
Previously | Restatement | |||||||||||
reported | adjustment | Restated | ||||||||||
Cash flows from operating activities |
||||||||||||
Net income |
$ | 75,239 | $ | (3,961 | ) | $ | 71,278 | |||||
Accounts receivable |
(32,284 | ) | 3,125 | (29,159 | ) | |||||||
Inventories |
(29,089 | ) | 2,644 | (26,445 | ) | |||||||
Accounts payable |
8,650 | 489 | 9,139 | |||||||||
Accrued liabilities |
39,198 | (2,297 | ) | 36,901 | ||||||||
Earnings per common share |
||||||||||||
Six months ended January 31, 2006 |
||||||||||||
Basic |
$ | 1.33 | $ | (.07 | ) | $ | 1.26 | |||||
Diluted |
$ | 1.32 | $ | (.07 | ) | $ | 1.25 |
3. | Major classifications of inventories are: |
January 31, 2007 | July 31, 2006 | |||||||
Raw materials |
$ | 89,826 | $ | 99,807 | ||||
Chassis |
49,495 | 39,772 | ||||||
Work in process |
50,837 | 51,208 | ||||||
Finished goods |
23,827 | 13,416 | ||||||
Total |
213,985 | 204,203 | ||||||
Less excess of FIFO costs
over LIFO costs |
24,471 | 21,034 | ||||||
Total inventories |
$ | 189,514 | $ | 183,169 | ||||
4. | Earnings Per Share |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Weighted average shares
outstanding for basic
earnings per share |
55,654,744 | 56,593,434 | 55,634,023 | 56,580,913 | ||||||||||||
Stock options and
restricted stock |
272,735 | 388,573 | 275,947 | 361,825 | ||||||||||||
Total For diluted shares |
55,927,479 | 56,982,007 | 55,909,970 | 56,942,738 | ||||||||||||
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. | Comprehensive Income |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Net income |
$ | 18,252 | $ | 29,905 | $ | 48,849 | $ | 71,278 | ||||||||
Foreign currency
translation adjustment |
(562 | ) | 430 | (461 | ) | 840 | ||||||||||
Comprehensive income |
$ | 17,690 | $ | 30,335 | $ | 48,388 | $ | 72,118 | ||||||||
6. | Segment Information | |
The Company has three reportable segments: 1.) towable recreation vehicles, 2.) motorized recreation vehicles, and 3.) buses. The towable recreation vehicle segment consists of product lines from the following operating companies that have been aggregated: Airstream, Breckenridge, CrossRoads, Dutchmen, General Coach Hensall and Oliver, Keystone, Komfort, and Thor California. The motorized recreation vehicle segment consists of product lines from the following operating companies that have been aggregated: Airstream, Damon, Four Winds and Oliver. The bus segment consists of the following operating companies that have been aggregated: Champion Bus, ElDorado California, ElDorado Kansas and Goshen Coach. During the quarter ended January 31, 2006, the Company made the decision not to produce a planned motorized product line. The impairment charge associated with the decision was $1,360 and is included in cost of products sold. |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Net Sales: |
||||||||||||||||
Recreation vehicles: |
||||||||||||||||
Towables |
$ | 373,940 | $ | 457,861 | $ | 873,895 | $ | 991,097 | ||||||||
Motorized |
116,694 | 113,841 | 252,617 | 262,935 | ||||||||||||
Total recreation vehicles |
490,634 | 571,702 | 1,126,512 | 1,254,032 | ||||||||||||
Buses |
93,415 | 70,345 | 185,253 | 149,338 | ||||||||||||
Total |
$ | 584,049 | $ | 642,047 | $ | 1,311,765 | $ | 1,403,370 | ||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Income Before Income Taxes: |
||||||||||||||||
Recreation vehicles: |
||||||||||||||||
Towables |
$ | 21,804 | $ | 46,891 | $ | 62,204 | $ | 105,168 | ||||||||
Motorized |
3,468 | 2,171 | 9,536 | 10,537 | ||||||||||||
Total recreation vehicles |
25,272 | 49,062 | 71,740 | 115,705 | ||||||||||||
Buses |
3,154 | 1,985 | 6,174 | 3,979 | ||||||||||||
Corporate |
(2,184 | ) | (3,490 | ) | (2,676 | ) | (5,836 | ) | ||||||||
Total |
$ | 26,242 | $ | 47,557 | $ | 75,238 | $ | 113,848 | ||||||||
8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 2007 | July 31, 2006 | |||||||
Identifiable Assets: |
||||||||
Recreation vehicles: |
||||||||
Towables |
$ | 472,589 | $ | 483,324 | ||||
Motorized |
147,370 | 150,058 | ||||||
Total recreation vehicles |
619,959 | 633,382 | ||||||
Buses |
110,338 | 103,861 | ||||||
Corporate |
240,046 | 267,482 | ||||||
Total |
$ | 970,343 | $ | 1,004,725 | ||||
7. | Treasury Shares | |
In the first quarter of fiscal 2007, the Company purchased 40,400 shares and held them as treasury stock at a cost of $1,630, an average cost of $40.33 per share. | ||
8. | Investments Short Term | |
Effective August 1, 2006, the Company began classifying all short term investment purchases as available-for-sale. This change was based on the Companys decision to change its investment strategy from one of generating profits on short term differences in price to one of preserving capital. | ||
At January 31, 2007, all Investments short term are comprised of auction rate securities that are classified as available-for-sale and are reported at fair value in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. The Company purchases its auction rate securities at par, which either mature or reset at par, and generally there are no unrealized or realized gains or losses to report. Cost is determined on the specific identification basis. Interest income is accrued as earned. All of the available-for-sale securities held at January 31, 2007 mature within one year. | ||
As of July 31, 2006, the Company held short-term debt and equity investments classified as trading securities. These trading securities were all sold or matured during the three months ended October 31, 2006 and were recorded as trading securities activity. Realized and unrealized gains and losses on trading securities are included in earnings. Dividend and interest income were recognized when earned. | ||
9. | Goodwill and Other Intangible Assets | |
The components of other intangible assets are as follows: |
January 31, 2007 | July 31, 2006 | |||||||||||||||
Accumulated | Accumulated | |||||||||||||||
Cost | Amortization | Cost | Amortization | |||||||||||||
Amortized Intangible Assets: |
||||||||||||||||
Non-compete agreements |
$ | 15,889 | $ | 13,502 | $ | 15,889 | $ | 13,048 |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Non-compete Agreements: |
||||||||||||||||
Amortization Expense |
$ | 217 | $ | 238 | $ | 454 | $ | 475 |
Non-compete agreements are amortized on a straight-line basis. |
9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Amortization Expense: |
For the year ending July 2007 |
$ | 887 | ||
For the year ending July 2008 |
$ | 828 | ||
For the year ending July 2009 |
$ | 492 | ||
For the year ending July 2010 |
$ | 337 | ||
For the year ending July 2011 |
$ | 239 |
There was no change in the carrying amount of goodwill and trademarks for the six month period ended January 31, 2007. | ||
As of January 31, 2007, Goodwill and Trademarks by segments totaled as follows: |
Goodwill | Trademarks | |||||||
Recreation Vehicles: |
||||||||
Towables |
$ | 143,795 | $ | 10,237 | ||||
Motorized |
17,252 | 2,600 | ||||||
Total Recreation Vehicles |
161,047 | 12,837 | ||||||
Bus |
4,616 | 1,063 | ||||||
Total |
$ | 165,663 | $ | 13,900 | ||||
10. | Warranty | |
Thor provides customers of our products with a warranty covering defects in material or workmanship for periods generally ranging from one to two years, with longer warranties on certain structural components. We record a liability based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Factors we use in estimating the warranty liability include a history of units sold, existing dealer inventory, average cost incurred and a profile of the distribution of warranty expenditures over the warranty period. A significant increase in dealer shop rates, the cost of parts or the frequency of claims could have a material adverse impact on our operating results for the period or periods in which such claims or additional costs materialize. Management believes that the warranty reserve is adequate; however, actual claims incurred could differ from estimates, requiring adjustments to the reserves. Warranty reserves are reviewed and adjusted as necessary on a quarterly basis. |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Beginning Balance |
$ | 60,923 | $ | 56,112 | $ | 59,795 | $ | 55,118 | ||||||||
Provision |
15,243 | 11,886 | 33,194 | 27,853 | ||||||||||||
Payments |
17,105 | 14,116 | 33,928 | 29,089 | ||||||||||||
Ending Balance |
$ | 59,061 | $ | 53,882 | $ | 59,061 | $ | 53,882 | ||||||||
11. | Commercial Commitments | |
Our principal commercial commitments at January 31, 2007 are summarized in the following chart: |
Total | Term of | |||||||
Commitment | Amount Committed | Guarantee | ||||||
Guarantee on dealer financing |
$ | 3,504 | less than 1 year | |||||
Standby repurchase obligation
on dealer financing |
$ | 912,276 | less than 1 year |
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company records repurchase and guarantee reserves based on prior experience and known current events. The combined repurchase and recourse reserve balances are approximately $2,241 and $1,563 as of January 31, 2007 and July 31, 2006, respectively. |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
January 31, 2007 | January 31, 2006 | January 31, 2007 | January 31, 2006 | |||||||||||||
Cost of units repurchased |
$ | 6,128 | $ | 753 | $ | 8,089 | $ | 2,103 | ||||||||
Realization on units resold |
5,474 | 534 | 7,017 | 1,806 | ||||||||||||
Losses due to repurchase |
$ | 654 | $ | 219 | $ | 1,072 | $ | 297 | ||||||||
12. | Subsequent Events | |
In April 2007, the Company reached an agreement in principle to settle a tax dispute with the State of Indiana regarding filing positions taken on its Indiana state income tax returns. It is anticipated that when the agreement is finalized, tax reserves of approximately $6,000 will be reversed by the Company, decreasing the provision for income taxes. |
11
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
($ in thousands)
Executive Overview
We were founded in 1980 and have grown to be the largest manufacturer of Recreation Vehicles
(RVs) and a major manufacturer of commercial buses in North America. Our position in the travel
trailer and fifth wheel segment of the industry (towables), gives us a market share of
approximately 32%. In the motorized segment of the industry we have a market share of
approximately 13%. Our market share in small and mid-size buses is approximately 40%. We entered
the 40-foot bus market with a new facility in Southern California designed for that product as well
as our existing 30-foot and 35-foot buses.
Our growth has been internal and by acquisition. Our strategy has been to increase our
profitability in North America in the recreation vehicle industry and in the bus business through
product innovation, service to our customers, manufacturing quality products, improving our
facilities and acquisitions. We have not entered unrelated businesses and have no plans to do so
in the future.
We rely on internally generated cash flows from operations to finance our growth, although we may
borrow to make an acquisition if we believe the incremental cash flows will provide for rapid
payback. We invested significant capital to modernize and expand our plant facilities and have
expended approximately $31,008 for that purpose in fiscal 2006.
Our business model includes decentralized operating units and we compensate operating management
primarily with cash based upon profitability of the unit which they manage. Our corporate staff
provides financial management, centralized purchasing services, insurance, legal and human
resources, risk management, and internal audit functions. Senior corporate management interacts
regularly with operating management to assure that corporate objectives are understood clearly and
are monitored appropriately.
Our RV products are sold to dealers who, in turn, retail those products. Our buses are sold
through dealers to municipalities and private purchasers such as rental car companies and hotels.
We do not finance dealers. In support of our RV dealer financing needs, however, we enter into
agreements with providers of inventory financing whereby we repurchase new inventory (on agreed
terms) located at dealer facilities should the lender foreclose. In another dealer support
activity, we have a 50-50 joint venture with G.E. Consumer Finance, Thor Credit Corporation, that
offers retail financing to customers of the dealer in their purchase of Thor and other
manufacturers products.
Restatement
As further described in the Explanatory Note on page 1 of this report, Note 2 to our condensed
consolidated financial statements contained elsewhere in this report and our Annual Report on Form
10-K/A for the year ended July 31, 2006, we have restated our financial statements as of July 31,
2006 and 2005, and for each of the years in the three-year period ended July 31, 2006, and the
financial results in each of the quarterly periods in 2006 and 2005, and the financial statements
as of October 31, 2006 and for the three months ended October 31, 2006 and 2005. The restatement
follows the Companys evaluation, considering the results from the independent investigation of the
Audit Committee of our Board of Directors, of accounting practices employed at our Dutchmen
Manufacturing, Inc. operating subsidiary (Dutchmen) during these periods. The effect of the
restatement reported in this Quarterly Report on Form 10-Q is a reduction to income before income
taxes of $3,111, or $1,969 in net income, for the three months ended January 31, 2006 and a
reduction to income before income taxes of $6,258, or $3,961 in net income, for the six months
ended
January 31, 2006. The restated financial statements as of July 31, 2006 and 2005, and for each of
the years in the three-year period ended July 31, 2006, and the financial results in each of the
quarterly periods in
12
2006 and 2005, are reported in our Annual Report on Form 10-K/A for the year
ended July 31, 2006. The restated financial statements as of October 31, 2006 and for the three
months ended October 31, 2006 and 2005 are reported in our Quarterly Report on Form 10-Q/A for the
quarter ended October 31, 2006. The accompanying managements discussion and analysis of financial
condition and results of operations gives effect to the restatement described in Note 2 to our
condensed consolidated financial statements contained elsewhere in this report.
We have incurred material expenses in 2007 as a direct result of the Audit Committees
investigation and the Companys review of the accounting practices at Dutchmen and certain of our
other operating subsidiaries. These costs primarily relate to professional services for legal,
accounting and tax guidance. In addition, we have incurred costs related to the preparation, review
and audit of our restated consolidated financial statements. We expect that we will continue to
incur costs associated with these matters.
Information on our accounting controls and procedures, including our internal controls, is
described in Item 4 Controls and Procedures.
Trends and Business Outlook
The most important determinant of demand for Recreation Vehicles is demographics. The baby boomer
population is now reaching retirement age and retirees are a large market for our products. The
baby boomer retiree population in the United States is expected to grow five times as fast as the
total United States population. We believe a primary indicator of the strength of the recreation
vehicle industry is retail RV sales, which we closely monitor to determine industry trends. For
the three months ended March 31, 2007, Statistical Surveys, Inc. reported that travel trailers and
fifth wheel unit sales were down 1.6% and that motorhome sales were down 10.0%, compared to the
three months ended March 31, 2006. Higher interest rates and fuel prices appear to affect the
motorized segment more severely. According to Statistical Surveys, Inc., our travel trailer and
fifth wheel market share for the three months ended March 31, 2007 was 31.9%, down from 32.1% for
the three months ended March 31, 2006. In motorhomes, our market share increased to 13.2% for the
three months ended March 31, 2007, up from 13.0% for the three months ended March 31, 2006.
Government entities are primary users of our buses. Demand in this segment is subject to
fluctuations in government spending on transit. In addition, hotel and rental car companies are
also major users of our small and mid-size buses and therefore airline travel is an important
indicator for this market. The majority of our buses have a 5-year useful life, so many of the
buses are being replaced. Management estimates that industry unit sales of small and mid-sized
buses are up 14.7% in the three months ended March 31, 2007 compared to the three months ended
March 31, 2006.
Economic or industry-wide factors affecting our recreation vehicle business include raw material
costs of commodities used in the manufacture of our product. Material cost is the primary factor
determining our cost of products sold. Additional increases in raw material costs would impact our
profit margins negatively if we were unable to raise prices for our products by corresponding
amounts.
13
Three Months Ended January 31, 2007 vs.
Three Months Ended January 31, 2006
Three Months Ended | Three Months Ended | Change | ||||||||||||||||||||||
January 31, 2007 | January 31, 2006 | Amount | % | |||||||||||||||||||||
NET SALES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 373,940 | $ | 457,861 | $ | (83,921 | ) | (18.3 | ) | |||||||||||||||
Motorized |
116,694 | 113,841 | 2,853 | 2.5 | ||||||||||||||||||||
Total Recreation Vehicles |
490,634 | 571,702 | (81,068 | ) | (14.2 | ) | ||||||||||||||||||
Buses |
93,415 | 70,345 | 23,070 | 32.8 | ||||||||||||||||||||
Total |
$ | 584,049 | $ | 642,047 | $ | (57,998 | ) | (9.0 | ) | |||||||||||||||
# OF UNITS: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
17,436 | 24,042 | (6,606 | ) | (27.5 | ) | ||||||||||||||||||
Motorized |
1,521 | 1,486 | 35 | 2.4 | ||||||||||||||||||||
Total Recreation Vehicles |
18,957 | 25,528 | (6,571 | ) | (25.7 | ) | ||||||||||||||||||
Buses |
1,531 | 1,321 | 210 | 15.9 | ||||||||||||||||||||
Total |
20,488 | 26,849 | (6,361 | ) | (23.7 | ) | ||||||||||||||||||
% of | % of | |||||||||||||||||||||||
Segment | Segment | |||||||||||||||||||||||
Net Sales | Net Sales | |||||||||||||||||||||||
GROSS PROFIT: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 44,576 | 11.9 | $ | 73,647 | 16.1 | $ | (29,071 | ) | (39.5 | ) | |||||||||||||
Motorized |
9,854 | 8.4 | 7,876 | 6.9 | 1,978 | 25.1 | ||||||||||||||||||
Total Recreation Vehicles |
54,430 | 11.1 | 81,523 | 14.3 | (27,093 | ) | (33.2 | ) | ||||||||||||||||
Buses |
6,739 | 7.2 | 5,329 | 7.6 | 1,410 | 26.5 | ||||||||||||||||||
Total |
$ | 61,169 | 10.5 | $ | 86,852 | 13.5 | $ | (25,683 | ) | (29.6 | ) | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 22,954 | 6.1 | $ | 26,881 | 5.9 | $ | (3,927 | ) | (14.6 | ) | |||||||||||||
Motorized |
6,388 | 5.5 | 5,704 | 5.0 | 684 | 12.0 | ||||||||||||||||||
Total Recreation Vehicles |
29,342 | 6.0 | 32,585 | 5.7 | (3,243 | ) | (10.0 | ) | ||||||||||||||||
Buses |
3,510 | 3.8 | 3,154 | 4.5 | 356 | 11.3 | ||||||||||||||||||
Corporate |
4,572 | | 5,498 | | (926 | ) | (16.8 | ) | ||||||||||||||||
Total |
$ | 37,424 | 6.4 | $ | 41,237 | 6.4 | $ | (3,813 | ) | (9.2 | ) | |||||||||||||
INCOME BEFORE INCOME TAXES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 21,804 | 5.8 | $ | 46,891 | 10.2 | $ | (25,087 | ) | (53.5 | ) | |||||||||||||
Motorized |
3,468 | 3.0 | 2,171 | 1.9 | 1,297 | 59.7 | ||||||||||||||||||
Total Recreation Vehicles |
25,272 | 5.2 | 49,062 | 8.6 | (23,790 | ) | (48.5 | ) | ||||||||||||||||
Buses |
3,154 | 3.4 | 1,985 | 2.8 | 1,169 | 58.9 | ||||||||||||||||||
Corporate |
(2,184 | ) | | (3,490 | ) | | 1,306 | 37.4 | ||||||||||||||||
Total |
$ | 26,242 | 4.5 | $ | 47,557 | 7.4 | $ | (21,315 | ) | (44.8 | ) | |||||||||||||
14
ORDER BACKLOG
As of | As of | Change | ||||||||||||||
January 31, 2007 | January 31, 2006 | Amount | % | |||||||||||||
Recreation Vehicles |
||||||||||||||||
Towables |
$ | 238,658 | $ | 376,069 | $ | (137,411 | ) | (36.5 | ) | |||||||
Motorized |
99,756 | 122,416 | (22,660 | ) | (18.5 | ) | ||||||||||
Total Recreation Vehicles |
338,414 | 498,485 | (160,071 | ) | (32.1 | ) | ||||||||||
Buses |
206,820 | 173,697 | 33,123 | 19.1 | ||||||||||||
Total |
$ | 545,234 | $ | 672,182 | $ | (126,948 | ) | (18.9 | ) | |||||||
CONSOLIDATED
Net sales and gross profit for the three months ended January 31, 2007 were down 9.0% and 29.6%,
respectively, compared to the three months ended January 31, 2006. We estimate that in the three
months ended January 31, 2006 approximately $38,677, or 8.4%, of towable net sales were related to
hurricane relief units sold through our dealer network. There have been no sales of hurricane
relief units in fiscal 2007. Selling, general and administrative expenses for the three months
ended January 31, 2007 decreased 9.2% compared to the three months ended January 31, 2006. Income
before income taxes for the three months ended January 31, 2007 decreased 44.8% compared to the
three months ended January 31, 2006. The specifics on changes in net sales, gross profit, selling,
general and administrative expense and income before income taxes are addressed in the segment
reporting below.
Corporate costs in selling, general and administrative were $4,572 for the three months ended
January 31, 2007 compared to $5,498 for the three months ended January 31, 2006. This $926
decrease is primarily the result of reduced compensation, primarily bonuses and legal expenses.
Corporate interest income and other income was $2,330 for the three months ended January 31, 2007
compared to $2,008 for the three months ended January 31, 2006.
The overall effective tax rate for the three months ended January 31, 2007 was 30.4% compared to
37.1% for the three months ended January 31, 2006. The primary reason for the reduction of taxes
in 2007 was the Company recorded $1.9 million of tax benefit in the three months ended January 31,
2007 related to its research and development credits. This tax benefit was recorded because the
2006 Tax Relief and Health Care Act retroactively reinstated the research and development credit to
January 1, 2006 and the Company reached an agreement with the Internal Revenue Service regarding
the amount of research and development credit for fiscal years 2003 through 2005 which was
previously not recognized.
Segment Reporting
RECREATION VEHICLES
Analysis of Percentage Change in Net Sales Versus Prior Year
Average Price | ||||||||||||
Per Unit | Units | Net Change | ||||||||||
Recreation Vehicles |
||||||||||||
Towables |
9.2 | % | (27.5 | )% | (18.3 | )% | ||||||
Motorized |
.1 | % | 2.4 | % | 2.5 | % |
TOWABLE RECREATION VEHICLES
The decrease in towables net sales of 18.3% resulted primarily from reduced unit sales, primarily
hurricane relief units. We estimate that in the three months ended January 31, 2006 approximately
$38,677, or 8.4%, of towable net sales (approximately 2,880 units), were related to hurricane
relief units sold through our dealer network. There have been no sales of hurricane relief units
in fiscal 2007. The
15
overall industry decrease in towables for November and December of 2006 was
27.3% according to statistics published by the Recreation Vehicle Industry Association. Increases
in the average price per unit resulted from product mix and no hurricane unit sales in fiscal 2007.
Hurricane unit pricing in fiscal 2006 was substantially lower than the average price per unit of
other towables.
Towables gross profit percentage decreased to 11.9% of net sales for the three months ended January
31, 2007 from 16.1% of net sales for the three months ended January 31, 2006. The primary factor
for the decrease in gross profit percentage was the 18.3% decrease in net sales and increased
discount and allowances due to a soft market. Towable discounts and allowances increased by
approximately $5,000 in three months ended January 31, 2007 compared to the three months ended
January 31, 2006. Selling, general and administrative expenses were 6.1% of net sales for the
three months ended January 31, 2007 and 5.9% of net sales for the three months ended January 31,
2006.
Towables income before income taxes decreased to 5.8% of net sales for the three months ended
January 31, 2007 from 10.2% of net sales for the three months ended January 31, 2006. The primary
factor for this decrease was the reduction in unit sales and corresponding margins.
MOTORIZED RECREATION VEHICLES
The increase in motorized net sales of 2.5% resulted from a 2.4% increase in unit shipments. The
increase in units sold of approximately 2.4% outperformed the overall market increase in motorhomes
of 1.0% for the two month period November and December 2006 according to statistics published by
the Recreation Vehicle Industry Association. The increase in the average price per unit resulted
from the product mix.
Motorized gross profit percentage increased to 8.4% of net sales for the three months ended January
31, 2007 from 6.9% of net sales for the three months ended January 31, 2006. The primary factor
for the increase in gross profit percentage in 2007 was increased unit sales and a $1,360
impairment charge in the three months ended January 31, 2006 associated with the decision to not
produce a planned motorized product line. Selling, general and administrative expenses were 5.5%
of net sales for the three months ended January 31, 2007 and 5.0% of net sales for the three months
ended January 31, 2006.
Motorized income before income taxes was 3.0% of net sales for the three months ended January 31,
2007 and 1.9% of net sales for the three months ended January 31, 2006. The increase in motorized
income before income taxes for the three months ended January 31, 2007 compared to the three months
ended January 31, 2006 was, as noted above, increased unit sales and the $1,360 impairment charge
in 2006.
BUSES
Analysis of Percentage Change in Net Sales Versus Prior Year
Average Price Per Unit | Units | Net Change | ||||||||||
Buses |
17.0 | % | 15.9 | % | 32.8 | % |
The increase in buses net sales of 32.8% resulted from a combination of an increase in both average
price per unit and unit shipments. The increase in the average price per unit resulted primarily
from the product mix.
Buses gross profit percentage decreased to 7.2% of net sales for the three months ended January 31,
2007 from 7.6% of net sales for the three months ended January 31, 2006. The primary reason for
the
decrease in gross profit percentage was the more competitive pricing for our bus products compared
to the prior year period. Selling, general and administrative expenses were 3.8% of net sales for
the three months ended January 31, 2007 and 4.5% for the three months ended January 31, 2006. The
reduction
16
in selling, general and administrative expenses as a percentage of net sales is primarily
due to increased sales volume in the three months ended January 31, 2007.
Buses income before income taxes increased to 3.4% of net sales for the three months ended January
31, 2007 from 2.8% for the three months ended January 31, 2006 due to increased sales volume.
Six Months Ended January 31, 2007 vs.
Six Months Ended January 31, 2006
Six Months Ended | Six Months Ended | Change | ||||||||||||||||||||||
January 31, 2007 | January 31, 2006 | Amount | % | |||||||||||||||||||||
NET SALES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 873,895 | $ | 991,097 | $ | (117,202 | ) | (11.8 | ) | |||||||||||||||
Motorized |
252,617 | 262,935 | (10,318 | ) | (3.9 | ) | ||||||||||||||||||
Total Recreation Vehicles |
1,126,512 | 1,254,032 | (127,520 | ) | (10.2 | ) | ||||||||||||||||||
Buses |
185,253 | 149,338 | 35,915 | 24.0 | ||||||||||||||||||||
Total |
$ | 1,311,765 | $ | 1,403,370 | $ | (91,605 | ) | (6.5 | ) | |||||||||||||||
# OF UNITS: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
40,926 | 51,560 | (10,634 | ) | (20.6 | ) | ||||||||||||||||||
Motorized |
3,376 | 3,505 | (129 | ) | (3.7 | ) | ||||||||||||||||||
Total Recreation Vehicles |
44,302 | 55,065 | (10,763 | ) | (19.5 | ) | ||||||||||||||||||
Buses |
3,088 | 2,789 | 299 | 10.7 | ||||||||||||||||||||
Total |
47,390 | 57,854 | (10,464 | ) | (18.1 | ) | ||||||||||||||||||
% of | % of | |||||||||||||||||||||||
Segment | Segment | |||||||||||||||||||||||
Net Sales | Net Sales | |||||||||||||||||||||||
GROSS PROFIT: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 114,398 | 13.1 | $ | 161,264 | 16.3 | $ | (46,866 | ) | (29.1 | ) | |||||||||||||
Motorized |
22,493 | 8.9 | 23,177 | 8.8 | (684 | ) | (3.0 | ) | ||||||||||||||||
Total Recreation Vehicles |
136,891 | 12.2 | 184,441 | 14.7 | (47,550 | ) | (25.8 | ) | ||||||||||||||||
Buses |
13,446 | 7.3 | 10,906 | 7.3 | 2,540 | 23.3 | ||||||||||||||||||
Total |
$ | 150,337 | 11.5 | $ | 195,347 | 13.9 | $ | (45,010 | ) | (23.0 | ) | |||||||||||||
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 52,383 | 6.0 | $ | 56,253 | 5.7 | $ | (3,870 | ) | (6.9 | ) | |||||||||||||
Motorized |
12,944 | 5.1 | 12,637 | 4.8 | 307 | 2.4 | ||||||||||||||||||
Total Recreation Vehicles |
65,327 | 6.0 | 68,890 | 5.5 | (3,563 | ) | (5.2 | ) | ||||||||||||||||
Buses |
7,003 | 3.8 | 6,617 | 4.4 | 386 | 5.8 | ||||||||||||||||||
Corporate |
8,539 | | 10,066 | | (1,527 | ) | (15.2 | ) | ||||||||||||||||
Total |
$ | 80,869 | 6.2 | $ | 85,573 | 6.1 | $ | (4,704 | ) | (5.5 | ) | |||||||||||||
INCOME BEFORE INCOME TAXES: |
||||||||||||||||||||||||
Recreation Vehicles |
||||||||||||||||||||||||
Towables |
$ | 62,204 | 7.1 | $ | 105,168 | 10.6 | $ | (42,964 | ) | (40.9 | ) | |||||||||||||
Motorized |
9,536 | 3.8 | 10,537 | 4.0 | (1,001 | ) | (9.5 | ) | ||||||||||||||||
Total Recreation Vehicles |
71,740 | 6.4 | 115,705 | 9.2 | (43,965 | ) | (38.0 | ) | ||||||||||||||||
Buses |
6,174 | 3.3 | 3,979 | 2.7 | 2,195 | 55.2 | ||||||||||||||||||
Corporate |
(2,676 | ) | | (5,836 | ) | | 3,160 | 54.1 | ||||||||||||||||
Total |
$ | 75,238 | 5.7 | $ | 113,848 | 8.1 | $ | (38,610 | ) | (33.9 | ) | |||||||||||||
17
CONSOLIDATED
Net sales and gross profit for the six months ended January 31, 2007 were down 6.5% and 23.0%,
respectively, compared to the six months ended January 31, 2006. We estimate that for the six
months ended January 31, 2006 approximately $113,677, or 11.5%, of towable net sales were related
to hurricane relief units sold through our dealer network. There have been no sales of hurricane
relief units in fiscal 2007. Selling, general and administrative expenses decreased 5.5% compared
to six months ended January 31, 2006. The specifics on changes in net sales, gross profit,
selling, general and administrative expense and income before income taxes are addressed in the
segment reporting below.
Corporate costs in selling, general and administrative were $8,539 for the six months ended January
31, 2007 compared to $10,066 in the six months ended January 31, 2006. This $1,527 decrease is
primarily the result of reduced insurance and legal costs, compensation and bonus expense.
Corporate interest income and other income was $5,786 for the six months ended January 31, 2007
compared to $4,238 for the six months ended January 31, 2006.
The overall effective tax rate for the six months ended January 31, 2007 was 35.1% compared to
37.4% for the six months ended January 31, 2006. The primary reason for the reduction in taxes in
2007 was the Company recorded $1.9 million of tax benefit in the second quarter related to its
research and development credits. This tax benefit was recorded because the 2006 Tax Relief and
Health Care Act retroactively reinstated the research and development credit to January 1, 2006 and
the Company reached an agreement with the Internal Revenue Service regarding the amount of research
and development credit for fiscal years 2003 through 2005 which was previously not recognized.
Segment Reporting
RECREATION VEHICLES
Analysis of Percentage Change in Net Sales Versus Prior Year
Average Price | ||||||||||||
Per Unit | Units | Net Change | ||||||||||
Recreation Vehicles |
||||||||||||
Towables |
9.1 | % | (20.6 | )% | (11.8 | )% | ||||||
Motorized |
(.2 | )% | (3.7 | )% | (3.9 | )% |
TOWABLE RECREATION VEHICLES
The decrease in towables net sales of 11.8% resulted primarily from reduced unit sales, primarily
hurricane relief units. We estimate that in the six months ended January 31, 2006 approximately
$113,677, or 11.5%, of towable net sales (approximately 8,342 units), were related to hurricane
relief units sold through our dealer network. There have been no sales of hurricane relief units
in fiscal 2007. The overall market unit decrease in towables for August through December 2006 was
18.2% according to statistics published by the Recreation Vehicle Industry Association. Increases
in the average price per unit resulted from product mix and no hurricane unit sales in fiscal 2007.
Hurricane unit pricing in fiscal 2006 was substantially lower than the average price per unit of
other towables.
Towables gross profit percentage decreased to 13.1% of net sales for the six months ended January
31, 2007 from 16.3% of net sales for the six months ended January 31, 2006. The primary factor for
the decrease in gross profit percentage was the 11.8% decrease in net sales and increased discount
and allowances due to a soft market. Towable discounts and allowances increased by approximately
$14,473 in the six months ended January 31, 2007 compared to the six months ended January 31, 2006.
Selling, general and administrative expenses were 6.0% of net sales for the six months ended
January 31, 2007 and 5.7% of net sales for the six months ended January 31, 2006.
Towables income before income taxes decreased to 7.1% of net sales for the six months ended January
31, 2007 from 10.6% of net sales for the six months ended January 31, 2006. The primary factors
for this decrease were the reduction in unit sales and corresponding margins.
18
MOTORIZED RECREATION VEHICLES
The decrease in motorized net sales of 3.9% resulted from a 3.7% decrease in unit shipments. The
decrease in units sold of 3.7% outperformed the overall market unit decrease in motorhomes of 3.9%
for August through December 2006 according to statistics published by the Recreation Vehicle
Industry Association. The decrease in the average price per unit resulted from the product mix.
Motorized gross profit percentage increased to 8.9% of net sales in the six months ended January
31, 2007 from 8.8% of net sales for the six months ended January 31, 2006. Selling, general and
administrative expenses were 5.1% of net sales for the six months ended January 31, 2007 and 4.8%
of net sales for the six months ended January 31, 2006.
Motorized income before income taxes was 3.8% of net sales for the six months ended January 31,
2007 and 4.0% of net sales for the six months ended January 31, 2006.
BUSES
Analysis of Percentage Change in Net Sales Versus Prior Year
Average Price Per Unit | Units | Net Change | ||||||||||
Buses |
13.3 | % | 10.7 | % | 24.0 | % |
The increase in buses net sales of 24.0% resulted from a combination of an increase in both average
price per unit and unit shipments and unit mix. The increase in the average price per unit
resulted primarily from the product mix.
Buses gross profit percentage was 7.3% of net sales for the six months ended January 31, 2007 and
the six months ended January 31, 2006. Selling, general and administrative expenses were 3.8% of
net sales for the six months ended January 31, 2007 and 4.4% for the six months ended January 31,
2006.
Buses income before income taxes increased to 3.3% of net sales for the six months ended January
31, 2007 from 2.7% for the six months ended January 31, 2006 due to increased sales volume.
Financial Condition and Liquidity
As of January 31, 2007, we had $210,047 in cash, cash equivalents and short-term investments,
compared to $264,373 on July 31, 2006. Effective August 1, 2006, the Company began classifying
all short-term investment purchases as available-for-sale. This change was based on the Companys
decision to change its investment strategy from one of generating profits on short term differences
in price to one of preserving capital. This change should create less volatility and a more
predictable return on our short term investments as income will be generated from interest income
instead of appreciation or depreciation on our investments. This change will also have the effect
of moving the purchases and proceeds from the sale of our investments out of the operating
activities category and into the investing activities category on our cash flow statement, more
clearly reflecting our true operating cash flow. It should have an insignificant effect on overall
cash flow.
Working capital at January 31, 2007 was $346,486 compared to $360,751 at July 31, 2006. We have no
long-term debt. We currently have a $30,000 revolving line of credit which bears interest at
negotiated rates below prime and expires on November 30, 2007. There were no borrowings on this
line of credit during the six months ended January 31, 2007. The loan agreement executed in
connection with the line of credit contains certain covenants, including restrictions on additional
indebtedness, and requires us to maintain certain financial ratios. We believe that internally
generated funds and the line of credit will be sufficient to meet our current needs and any
additional capital requirements for the foreseeable future.
19
Capital expenditures of approximately
$7,267 for the six months ended January 31, 2007 were primarily for planned expansions and
improvements of our recreation vehicle segments.
The
Company anticipates additional capital expenditures in the third and
fourth quarters of fiscal 2007 of approximately $4,700.
These expenditures will be made primarily to expand our RV companies and to replace machinery and
equipment to be used in the ordinary course of business.
Critical Accounting Principles
The consolidated financial statements of Thor are prepared in conformity with accounting principles
generally accepted in the United States. The preparation of these financial statements requires
the use of estimates, judgments, and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the periods presented. We believe that of our accounting policies, the following
may involve a higher degree of judgments, estimates, and complexity:
Impairment of Goodwill, Trademarks and Long-Lived Assets
We at least annually review the carrying value of goodwill and trademarks with indefinite useful
lives. Long-lived assets, identifiable intangibles that are amortized, goodwill and trademarks with
indefinite useful lives are also reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable from future cash
flows. If the carrying value of a long-lived asset is considered impaired, an impairment charge is
recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.
Management believes that the estimates of future cash flows and fair values are reasonable;
however, changes in estimates of such cash flows and fair values could affect the evaluations.
Insurance Reserves
Generally, we are self-insured for workers compensation and group medical insurance. Under these
plans, liabilities are recognized for claims incurred, including those incurred but not reported,
and changes in the reserves. The liability for workers compensation claims is determined by a
third party
administrator using various state statutes and reserve requirements. Group medical reserves are
funded
through a trust and are estimated using historical claims experience. We have a self-insured
retention
for products liability and personal injury matters of $5,000 per occurrence. We have established a
reserve on our balance sheet for such occurrences based on historical data and actuarial
information. We maintain excess liability insurance aggregating $25,000 with outside insurance
carriers to minimize our risks related to catastrophic claims in excess of all our self-insured
positions. Any material change in the aforementioned factors could have an adverse impact on our
operating results.
Warranty
We provide customers of our products with a warranty covering defects in material or workmanship
for periods generally ranging from one to two years, with longer warranties on certain structural
components. We record a liability based on our best estimate of the amounts necessary to settle
future
and existing claims on products sold as of the balance sheet date. Factors we use in estimating
the warranty liability include a history of units sold, existing dealer inventory, average cost
incurred and a profile of the distribution of warranty expenditures over the warranty period. A
significant increase in dealer shop rates, the cost of parts or the frequency of claims could have
a material adverse impact on our operating results for the period or periods in which such claims
or additional costs materialize. Management believes that the warranty reserve is adequate;
however, actual claims incurred could differ from estimates, requiring adjustments to the reserves.
Warranty reserves are reviewed and adjusted as necessary on a quarterly basis.
20
Income Taxes
The Company accounts for income taxes under the provisions of SFAS No. 109, Accounting for Income
Taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable
or refundable for the current year and deferred tax liabilities and assets for the future tax
consequences of events that have been recognized in the Companys financial statements or tax
returns. Judgment is required in assessing the future tax consequences of events that have been
recognized in the companys financial statements or tax returns. Fluctuations in the actual
outcome of these future tax consequences could materially impact the Companys financial position
or its results of operations.
Revenue Recognition
Revenue from the sale of recreation vehicles and buses are recorded when all of the following
conditions have been met:
1) | An order for a product has been received from a dealer; | ||
2) | Written or oral approval for payment has been received from the dealers flooring institution; | ||
3) | A common carrier signs the delivery ticket accepting responsibility for the product as agent for the dealer; and | ||
4) | The product is removed from the Companys property for delivery to the dealer who placed the order. |
Certain shipments are sold to customers under cash on delivery (COD) terms. The Company
recognizes revenue on COD sales upon payment and delivery. Most sales are made by dealers
financing their purchases under flooring arrangements with banks or finance companies. Products
are not sold on consignment, dealers do not have the right to return products, and dealers are
typically responsible for interest costs to floorplan lenders. On average, the Company receives
payments from floorplan lenders on products sold to dealers within 15 days of the invoice date.
Repurchase Commitments
It is customary practice for companies in the recreational vehicle industry to enter into
repurchase agreements with financing institutions to provide financing to their dealers.
Generally, these agreements provide for the repurchase of products from the financing institution
in the event of a dealers default. The risk of loss under these agreements is spread over
numerous dealers and further reduced by the resale value of the units which the Company would be
required to repurchase. Losses under these agreements have not been significant in the periods
presented in the consolidated financial statements, and management believes that any future losses
under these agreements will not have a significant effect on the Companys consolidated financial
position or results of operations. The Company records repurchase and guarantee reserves based on
prior experience and known current events.
Forward Looking Statements
This report includes certain statements that are forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934 as amended. These forward looking statements involve uncertainties and risks. There
can be no assurance that actual results will not differ from the Companys expectations. Factors
which could cause materially different results include, among others, the Companys ability to
become current in its filings with the SEC, additional issues that may arise in connection with the
findings of the Audit Committees investigation and the SECs requests for additional information,
fuel prices, fuel availability, interest rate increases, increased material costs, the success of
new product introductions, the pace of acquisitions, cost structure improvements, competition and
general economic conditions and the other risks and uncertainties discussed more fully in Item 1A
of our Annual Report on Form 10-K/A for the year ended July 31, 2006. The Company disclaims any
obligation or undertaking to disseminate any updates or revisions to any change in expectation of
the Company after the date
21
hereof or any change in events, conditions or circumstances on which any
statement is based except as required by law.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in foreign currency related to its operations in
Canada. However, because of the size of Canadian operations, a hypothetical 10% change in the
Canadian dollar as compared to the U.S. dollar would not have a significant impact on the Companys
financial position or results of operations. The Company is also exposed to market risks related
to interest rates because of its investments in corporate debt securities. A hypothetical 10%
change in interest rates would not have a significant impact on the Companys financial position or
results of operations.
ITEM 4. Controls and Procedures
As further described in the Explanatory Note on page 1 of this report, Note 2 to our condensed
consolidated financial statements contained elsewhere in this report and our Annual Report on Form
10-K/A for the year ended July 31, 2006, we have restated our financial statements as of July 31,
2006 and 2005, and for each of the years in the three-year period ended July 31, 2006, and the
financial results in each of the quarterly periods in 2006 and 2005, and the financial statements
as of October 31, 2006 and for the three months ended October 31, 2006 and 2005. The restatement
follows the Companys evaluation, considering the results from the independent investigation of the
Audit Committee of our Board of Directors, of accounting practices employed at our Dutchmen
Manufacturing, Inc. operating subsidiary (Dutchmen) during these periods.
As more fully described in our Annual Report on Form 10-K/A for the year ended July 31, 2006, as of
July 31, 2006, as a result of the findings of the independent investigation and the restatement of
the Companys financial statements, management re-evaluated our internal control over financial
reporting and identified a material weakness in our internal controls related to segregation of
duties and found that our disclosure controls and procedures, as such term is defined under
Securities Exchange Act Rule 13a-15(e), were not effective due to the material weakness.
As disclosed in our Annual Report on Form 10-K/A, management identified the following material
weakness in the Companys internal control over financial reporting as of July 31, 2006:
Segregation of Duties. In January 2007, management was informed by the President of Dutchmen of
facts that led it to discover that there was a lack of segregation of duties at Dutchmen. It is
Company policy to segregate duties among different people to reduce the risk of error or
inappropriate action. Despite certain efforts by the Company to improve internal controls at
Dutchmen, Dutchmens Vice President of Finance was able to perform functions that were or should
have been specifically assigned to other employees of Dutchmen, including Dutchmens controller and
internal auditor/accountant. Specifically, Dutchmens Vice President of Finance, through various
means, was
entering, approving and reconciling entries into various accounts, such as inventory, accounts
receivable, accounts payable and cost of products sold, which duties should have been segregated,
and continued to do so after the Company caused additional finance staff to be hired at Dutchmen.
Dutchmens Vice President of Finance also entered inaccurate accounting entries and prepared
fraudulent supporting documentation and had excessive access rights to various aspects of
Dutchmens accounting and information systems. Dutchmens internal policies did not sufficiently
segregate duties for making or approving entries in key accounts and account reconciliations, and
the Company lacked sufficient compensating internal controls to prevent or detect the acts
described above. This material weakness caused the financial results reported by Dutchmen to the
Companys corporate finance and accounting group to be materially inaccurate and to be incorporated
into the Companys consolidated financial statements and the Companys required SEC filings. In
addition, certain of the Companys other operating subsidiaries also had functions that should have
been but were not segregated, there were employees who had inappropriate levels of access to
various aspects of the accounting and information systems at certain
22
operating subsidiaries, and
the Companys corporate level monitoring of certain operating subsidiaries reconciliations was
insufficient.
In connection with the preparation of the Companys Quarterly Report on Form 10-Q for the quarter
ended January 31, 2007, management, with the participation of the Companys Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of the Companys disclosure controls and
procedures as of the end of the period covered by this Quarterly Report. As described above, a
material weakness was identified in our internal control over financial reporting regarding
segregation of duties as of July 31, 2006. The Public Company Accounting Oversight Boards
Auditing Standard No. 2 defines a material weakness as a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented or detected.
Based upon managements evaluation, conducted under Exchange Act Rule 13a-15, our Chief Executive
Officer and Chief Financial Officer, concluded that the Companys disclosure controls and
procedures were not effective as of January 31, 2007 because the material weakness described above
continued to persist as of such date.
The Companys management, including the Chief Executive Officer and the Chief Financial Officer,
does not expect that the Companys disclosure controls and procedures will prevent all error and
all fraud. A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can be faulty, and
that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be no assurance that
any design will succeed in achieving its stated goals under all potential future conditions; over
time, controls may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Management evaluated whether there was a change in the Companys internal control over financial
reporting during the three months ended January 31, 2007 and through the date of this report that
has materially affected, or is reasonably likely to materially affect, the Companys internal
control over financial reporting. Based on managements evaluation, management believes that there
was no such change during the three months ended January 31, 2007 and through the date of this
report.
However, since January 31, 2007, the Company has taken or intends to take the following actions to
remediate the material weakness described above:
| The Company has terminated the employment of the Dutchmen Vice President of Finance and has hired a new Vice President of Finance at Dutchmen; | ||
| The Company has eliminated the excessive accounting and information system access rights found to be available to the Dutchmen Vice President of Finance; | ||
| Since discovery of the activities of the former Dutchmen Vice President of Finance, the Company has assigned a member of its internal audit department to Dutchmen to assist in implementing full segregation of duties in Dutchmens accounting function; |
23
| The Company is modifying the duties of accounting personnel to improve segregation of duties and modifying certain information access rights at certain of its other operating subsidiaries; | ||
| The Company is providing additional training on fraud risk and awareness and assisting management and other key personnel to understand the lessons learned through the Dutchmen review; | ||
| To improve the Companys oversight of internal controls at its subsidiaries, the Companys Board of Directors has hired a professional services firm to lead and coordinate ongoing compliance efforts under Sarbanes-Oxley section 404 and partner with the internal audit function of the Company; | ||
| More frequent and in-depth periodic, unannounced internal audits of controls will be conducted at the subsidiary level; | ||
| The Company has enhanced its corporate level monitoring of the operating subsidiaries accounts receivable, accounts payable and cash reconciliations, including verification that financial information submitted by the operating subsidiaries agrees with the financial information recorded in the operating subsidiaries information systems; and | ||
| The Company has modified its reporting relationships so that heads of subsidiary accounting departments report directly to the Chief Financial Officer of the Company as opposed to subsidiary level presidents. |
24
PART II Other Information
ITEM 1. LEGAL PROCEEDINGS
The SEC is reviewing the facts and circumstances giving rise to the restatement of our previously
issued financial statements as of July 31, 2006 and 2005, and for each of the years in the
three-year period ended July 31, 2006, and the financial results in each of the quarterly periods
in 2006 and 2005, and our financial statements as of and for the three months ended October 31,
2006. We intend to cooperate fully with the SEC. The investigation by the SEC staff could result
in the SEC seeking various penalties and relief, including, without limitation, civil injunctive
relief and/or civil monetary penalties or administrative relief. The nature of the relief or
remedies the SEC may seek, if any, cannot be predicted at this time.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) ISSUER PURCHASES OF EQUITY SECURITIES
(c) Total Number | (d) Maximum Number | |||||||||||||||
of Shares | (or Approximate | |||||||||||||||
(a) Total | (b) | (or Units) | Dollar Value) | |||||||||||||
Number | Average | Purchased as | of Shares (or Units) | |||||||||||||
of Shares | Price Paid | Part of Publicly | that May Yet Be | |||||||||||||
(or Units) | Per Share | Announced Plans | Purchased Under the | |||||||||||||
Period | Purchased | (or Unit) | or Programs (1) | Plans or Programs | ||||||||||||
November 2006 |
| | | 1,947,200 | ||||||||||||
December 2006 |
| | | 1,947,200 | ||||||||||||
January 2007 |
| | | 1,947,200 |
(1) | On June 26, 2006 our Board of Directors authorized the repurchase of 2,000,000 shares extending over a 24-month period before expiring. At January 31, 2007, 1,947,200 shares of common stock remained authorized for repurchase under the repurchase program. |
ITEM
6. Exhibits
Exhibit | Description | |
31.1
|
Chief Executive Officers Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2
|
Chief Financial Officers Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1
|
Chief Executive Officers Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act 2002. | |
32.2
|
Chief Financial Officers Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act 2002. |
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
THOR INDUSTRIES, INC. (Registrant) |
||||
DATE: June 19, 2007 | By: | /s/ Wade F. B. Thompson | ||
Wade F. B. Thompson | ||||
Chairman of the Board, President and Chief Executive Officer |
||||
DATE: June 19, 2007 | By: | /s/ Walter L. Bennett | ||
Walter L. Bennett | ||||
Executive Vice President, Secretary and Chief Financial Officer |
26