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Winnebago reports $8.6 million loss


Despite a net loss of $8.6 million in its fiscal third quarter, Winnebago Industries Inc. said it is positioned well to weather the economic downturn.

The company’s revenues were $50.8 million in the quarter ended May 30, compared with $139.7 million in the year-ago period as shipments fell 61.9 percent during the quarter. However, Winnebago Chairman, CEO and President Bob Olson pointed out that the recreational vehicle manufacturer performed better than the industry as a whole, whose shipments declined 76.6 percent for the first two months of its quarter, and that it gained market share.

The company reported a net loss of 29 cents per share in its third quarter, compared with net income of $3 million, or 10 cents per share, in fiscal third quarter 2008. It had an operating loss of $14.8 million compared with an operating loss of $6.9 million a year ago.

The company’s earnings were affected by lower motor home deliveries, low absorption of fixed costs, higher production inefficiencies due to lower production volumes, significant increases of wholesale and retail promotions and a higher mix of lower-priced Class C and B motor home deliveries.

To counter this trend, Winnebago has reduced its inventory by 50 percent from a year ago and recently announced it will shut down its fiberglass manufacturing plant in Hampton. Its sales order backlog is down more than 60 percent from last year, but rose 14 percent since the end of its fiscal second quarter.

“While market conditions remain very challenging,” Olson said, “we were able to generate $14.7 million of cash from operations during our third quarter as a result of aggressive management of our working capital. …

“We continue to believe we are in a strong financial position with sufficient cash, no long-term debt and with the benefit of a respected brand name known for its quality products.”

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