Thor investor presentation 11.30.2015 final

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<ul><li><p></p><p>INVESTOR PRESENTATION MARCH 7, 2016</p></li><li><p>2</p><p>FORWARD LOOKING STATEMENTS</p><p>This presentation includes certain statements that are forward looking statements within the meaning of the </p><p>U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, </p><p>and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are </p><p>made based on managements current expectations and beliefs regarding future and anticipated </p><p>developments and their effects upon Thor Industries, Inc., and inherently involve uncertainties and risks. </p><p>These forward looking statements are not a guarantee of future performance. There can be no assurance that </p><p>actual results will not differ from our expectations. Factors which could cause materially different results </p><p>include, among others, raw material and commodity price fluctuations, material or chassis supply restrictions, </p><p>legislative and regulatory developments, the costs of compliance with increased governmental regulation, </p><p>legal issues, the potential impact of increased tax burdens on our dealers and retail consumers, lower </p><p>consumer confidence and the level of discretionary consumer spending, interest rate fluctuations and the </p><p>potential economic impact of rising interest rates, restrictive lending practices, management changes, the </p><p>success of new product introductions, the pace of obtaining and producing at new production facilities, loss or </p><p>reduction of sales to key dealers, the pace of acquisitions, the potential loss of existing customers of </p><p>acquisitions, the integration of new acquisitions, the availability of delivery personnel, asset impairment </p><p>charges, cost structure changes, competition, impact of potential losses under repurchase obligations, the </p><p>potential impact of the strengthening of the U.S. dollar on international demand, general economic, market </p><p>and political conditions and the other risks and uncertainties discussed more fully in ITEM 1A of our Annual </p><p>Report on Form 10-K for the year ended July 31, 2015 and Part II, Item 1A of our quarterly report on Form 10-</p><p>Q for the period ending January 31, 2016. We disclaim any obligation or undertaking to disseminate any </p><p>updates or revisions to any forward looking statements contained in this presentation or to reflect any change </p><p>in our expectations after the date of this presentation or any change in events, conditions or circumstances on </p><p>which any statement is based, except as required by law.</p></li><li><p>3</p><p>THOR AT A GLANCE</p><p>Founded in 1980 by Wade Thompson &amp; Peter Orthwein with </p><p>the acquisition of Airstream, Inc.</p><p>One of the worlds largest manufacturers of recreational </p><p>vehicles representing a broad range of major brands</p><p>Two major business segments include: </p><p> Towable RVs such as travel trailers, fifth wheels and specialty trailers </p><p> Motorized RVs which include Class A, B and C motorhomes </p><p>Operations in 148 facilities* located in Indiana, Michigan, </p><p>Ohio and Oregon </p><p>Products sold through independent retail distributors </p><p>primarily in the U.S. and Canada</p><p>Historically strong cash flow and solid balance sheet</p><p>Approximately 10,450 employees*</p><p>Listed on the NYSE under ticker THO</p><p>$1,849 </p><p>$2,340 $2,640 </p><p>$3,242 $3,525 </p><p>$4,007 </p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Net Sales </p><p>(continuing operations, $ millions)</p><p>$1.72 $1.66 $2.07 </p><p>$2.86 $3.29 </p><p>$3.79 </p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Diluted EPS </p><p>(continuing operations)</p><p>*as of July 31, 2105</p></li><li><p>4</p><p>THORS RV PRODUCT RANGE</p><p>Travel Trailers </p><p>(hitch to the bumper of the </p><p>tow vehicle)</p><p>Fifth Wheels</p><p>(hitch to a specially mounted </p><p>hitch in the bed of a pickup </p><p>truck)</p><p>Specialty Trailers</p><p>(includes camping trailers, </p><p>truck campers and horse </p><p>trailers with living quarters)</p><p>Towable RV's</p><p>$3,096.4 77%</p><p>Motorized RV's</p><p>$870.8 22%</p><p>Other$39.6 1%</p><p>FY2015 Sales*</p><p>Towable RV Segment Products</p><p>Class A Motorhomes</p><p>(fully enclosed, bus style </p><p>motorhome)</p><p>Class B and C Motorhomes</p><p>(B van motorhomes, C </p><p>living area built on van or </p><p>pickup chassis)</p><p>Motorized RV Segment Products</p><p>*Fiscal Year ended July 31, </p><p>2015, in millions</p></li><li><p>5</p><p>CONSISTENT GROWTH IN </p><p>EARNINGS</p><p>$1.72 $1.66 </p><p>$2.07 </p><p>$2.86 </p><p>$3.29 </p><p>$3.79 </p><p>$0.00</p><p>$0.50</p><p>$1.00</p><p>$1.50</p><p>$2.00</p><p>$2.50</p><p>$3.00</p><p>$3.50</p><p>$4.00</p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Diluted EPS, Continuing Ops.</p><p>$91.2 $91.6</p><p>$111.4</p><p>$151.7</p><p>$175.5</p><p>$202.0</p><p>$0</p><p>$50</p><p>$100</p><p>$150</p><p>$200</p><p>$250</p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Net Income, Continuing Ops., $ Millions</p></li><li><p>6</p><p>REGULAR QUARTERLY </p><p>DIVIDENDSFiscal years ended July 31, </p><p>$0.10 </p><p>$0.15 </p><p>$0.18 </p><p>$0.23 </p><p>$0.27 </p><p>$0.30 </p><p>FY11 FY12 FY13 FY14 FY15 FY16</p><p>*In addition to regular quarterly dividends, Thor paid special dividends of $1.50 in FY13 and $1.00 in </p><p>FY14. The declaration of future dividends and the establishment of the per share amounts, record </p><p>dates and payment dates for any such future dividends are subject to the determination of the Board, </p><p>and will be dependent upon future earnings, cash flows and other factors.</p></li><li><p>7</p><p>THOR OPERATING ENTITIES </p><p>STRONG BRANDS</p></li><li><p>8</p><p>STRATEGIC VISION FOR </p><p>GROWTHAt Thor we strive to provide RV consumers with superior products and </p><p>services through innovative solutions which enhance the enjoyment of the RV </p><p>lifestyle</p><p>Our decentralized operating structure and independent operating subsidiaries </p><p>foster an entrepreneurial spirit and an unending focus on the needs of the </p><p>users of our products resulting in our drive to lead the industry with </p><p>innovation, product quality and customer service</p><p>Our focus requires that we make decisions based on the long-term success of </p><p>our Company:</p><p> While we strive to lead the industry in market share, we will not strive for market share at </p><p>the expense of quality or without regard to bottom-line impact</p><p> Growth is important, but this is a business of relationships, and we realize that the key to </p><p>long-term sustainable sales growth rests in the strength of our relationships with </p><p>consumers, dealers and suppliers</p><p> Our relationship with shareholders is important profits are a key driver to our long-term </p><p>success</p><p> The path to long-term success is seldom straight, so our leaders manage in a way that </p><p>moves us closer to our goals, even though it might impact our results in the short term</p></li><li><p>9</p><p>THOR COMPETITIVE ADVANTAGES</p><p>Primary focus on assembly: Vertical integration only where it makes sense Flexibility performance in any market condition Low overhead costs High return on assets employed</p><p>Strong market share in the primary RV categories Travel Trailers, Fifth Wheels and </p><p>Motorized (#1 in motorized, #2 in towables)* Provides scale and purchasing power Low cost, high volume producer generates improved margin</p><p>Solid balance sheet</p><p>Meaningful increases in production capacity during FY14 and FY15</p><p>Diversified lineup of innovative product offerings</p><p>Strong relationships with wholesale financing providers</p><p>Excellent relationships with dealers, lenders and consumers based on financial strength </p><p>to provide warranty and honor repurchase agreements</p><p>*Source: Statistical Surveys, Inc., U.S. and Canada, year-to-date through December, 2015.</p></li><li><p>10</p><p>INVESTING IN THE FUTURE -</p><p>CAPACITY</p><p>$12,767 </p><p>$33,698 </p><p>$10,442 </p><p>$24,190 </p><p>$30,438 </p><p>$43,055 </p><p>$0</p><p>$10,000</p><p>$20,000</p><p>$30,000</p><p>$40,000</p><p>$50,000</p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Th</p><p>ou</p><p>sa</p><p>nd</p><p>s</p><p>Capital Acquisitions</p><p>$19,756 </p><p>$99,562 </p><p>$170 $10,718 </p><p>$86,092 </p><p>$194,486 </p><p>$0</p><p>$50,000</p><p>$100,000</p><p>$150,000</p><p>$200,000</p><p>$250,000</p><p>FY10 FY11 FY12 FY13 FY14 FY15</p><p>Th</p><p>ou</p><p>sa</p><p>nd</p><p>s</p><p>Business Acquisitions</p></li><li><p>11</p><p>CORPORATE INTEGRITY</p><p>No golden parachutes</p><p>No pro forma earnings. We report net income, </p><p>not adjusted earnings to cover up performance</p><p>Consistent focus on shareholder value</p><p>Simple compensation philosophy:</p><p> Mainly cash compensation based on pre-tax income a true pay-</p><p>for-performance philosophy</p><p> Restricted stock units also awarded based on performance to </p><p>provide broader, long-term focus on overall Company results </p></li><li><p>12</p><p>RV INDUSTRY CONDITIONS </p><p>REMAIN POSITIVE</p><p>Although consumer confidence has softened somewhat since the beginning of 2016, it </p><p>remains at the highest levels since the recession. Final results fell to 91.7 in February from </p><p>92.0 in January. This compares with 95.4 a year ago.* </p><p>Consumer sentiment was boosted by expectations of improving wages and continued </p><p>modest inflation, as the consumers outlook for their personal financial situation reached its </p><p>best level in ten years. Consumers are expecting a somewhat slower expansion with </p><p>some concern about how the slowdown in GDP growth will affect employment growth.*</p><p>Recreation Vehicle Industry Association (RVIA) forecast in March 2016 that calendar 2016 </p><p>wholesale shipments for all RV categories should increase to 381,800 units, or an increase </p><p>of 2.0% over calendar year 2015.**</p><p>Pricing and promotional environment remains competitive, but generally improved over </p><p>prior year.</p><p>Domestic travel offers fewer risks than international travel at a more compelling value.</p><p>Lower fuel prices make RV travel increasingly attractive for consumers.</p><p>*Source: University of Michigan final Consumer Sentiment Index for February 2016</p><p>**Source: RVIA Roadsigns Spring 2016</p></li><li><p>13</p><p>CONSUMER TRENDS: </p><p>GROWING RV POPULARITY</p><p>Leisure travel such as camping continues to be popular </p><p>Approximately 46.2 million households in North America are active campers, but only 9.7 </p><p>million, or 21% of them, are RV campers. </p><p>The remaining campers primarily use tents or cabins, which makes them a solid target </p><p>market for the RV industry (58% of RV owners started as tent campers).</p><p>Favorable demographics </p><p>Baby boomers (a prime RV target market for many years) represent 24% of the population </p><p>and a target market as they reach retirement age and have more time for travel.</p><p>Generation X and Millennials offer future opportunities as they seek more active outdoor </p><p>experiences with their families.</p><p>Increasingly diverse potential customer base Hispanic, African American, Asian and </p><p>other ethnicities grew from 12% in 2012 to 23% in 2014.</p><p>Younger campers (25-34 age) are a growing market from 18% in 2012 to 23% in 2014.</p><p>New applications broader usage</p><p>Growth in use at extreme sporting events, youth sports leagues and tournaments, dog and </p><p>craft shows, and collegiate sports activities for alumni and fans.</p><p>*Source: Kampgrounds of America (KOA) 2015 North American Camping Report</p></li><li><p>14</p><p>POSTLE ALUMINUM ACQUISITION ENSURES </p><p>SUPPLY OF KEY MATERIAL COMPONENT</p><p>On May 1, 2015 Thor acquired Postle Aluminum, based in </p><p>Elkhart, Indiana, for approximately $144 million in cash, net </p><p>of cash acquired. </p><p>Postle generated sales of approximately $220 million in </p><p>calendar 2014 and we expect the acquisition to be accretive </p><p>to earnings. </p><p>Approximately 30% of total sales are to Thor subsidiaries and </p><p>approximately 75% of total sales were to the RV industry. </p><p>The remaining sales are to the specialty truck and trailer, </p><p>cargo, marine and fencing industries.</p><p>Postle produces a variety of aluminum extrusions, </p><p>specialized components and powder coating and painting </p><p>services.</p><p>The current management team will continue to lead the </p><p>company as a separate Thor subsidiary.</p></li><li><p>15</p><p>SECOND QUARTER REFLECTS </p><p>STRONG PERFORMANCE</p><p>Three Months Ended January 31,</p><p>2016 2015 % Chg.</p><p>Net Sales $975.1 $852.4 14.4%</p><p>Gross Profit 148.8 102.0 45.9%</p><p>% of Sales 15.3% 12.0%</p><p>SG&amp;A 67.4 54.3 24.1%</p><p>% of Sales 6.9% 6.4%</p><p>Income Before Tax (cont. ops.) $65.9 $44.1 49.3%</p><p>% of Sales 6.8% 5.2%</p><p>Income Taxes 20.6 13.9</p><p>Net Income (cont. ops.) $45.2 $30.3 49.2%</p><p>Diluted EPS (cont. ops.) $0.86 $0.57 50.9%</p><p>Amounts in millions, except per share data</p></li><li><p>16</p><p>QUARTER 2016 RESULTS FROM CONTINUING </p><p>OPERATIONS UP DOUBLE DIGITS</p><p>Bob Martin Thor President &amp; CEO:</p><p>Our second-quarter results reflect the success of our operating strategy, the popularity of Thors products and the breadth of our RV dealer </p><p>base. We drove improvements in cost management and operational efficiencies which, along with favorable product mix and lower material </p><p>costs, allowed us to achieve significant growth in margins and overall profits. Recent acquisitions and capital investments continued to be </p><p>accretive and contributed to Thors record second-quarter and first-half results. The retail market remains positive as evidenced by strong </p><p>attendance and sales at the early spring retail shows and Thors dealers continue to be optimistic about future sales. Our dealers success </p><p>and favorable outlook suggests the continuation of industry growth in most segments, and we are ramping up production at the new</p><p>western facility that is on track to begin producing and shipping units by the end of the fiscal third quarter.</p><p>Peter Orthwein Thor Executive Chairman: </p><p>We posted the strongest first half of any fiscal year in the history of our Company, driven by the outstanding performance of our team of </p><p>employees, management and dealers. We are optimistic about the future of Thor and plan to continue to build on the foundation of our </p><p>strategic growth plan based on acquisitions and capacity expansion to deliver solid returns to our shareholders.</p><p>$852.4 </p><p>$975.1 </p><p>FY15 FY16</p><p>Net Sales ($ millions)</p><p>+14%</p><p>$30.3 </p><p>$45.2 </p><p>FY15 FY16</p><p>Net Income (Continuing Ops.)</p><p>+49%$0.57 </p><p>$0.86 </p><p>FY15 FY16</p><p>Diluted EPS (Continuing Ops.)</p><p>+51%</p><p>$942.1 </p><p>$1,105.2 </p><p>FY15 FY16</p><p>RV Backlog ($ millions)</p><p>+17%</p><p>Note: Second quarter 2016 Results include three months of Cruiser and DRV Luxury Suites, acquired effective January 1, 2015 compared with one </p><p>month in the second quarter of 2015, and Postle acquired May 1, 2015.</p></li><li><p>17</p><p>KEY TAKEAWAYS</p><p>Profitable every year since our founding in 1980 35 years of </p><p>profitability</p><p>We are primarily assemblers, not manufacturers</p><p>Variable cost structure provides flexibility in cyclical industry</p><p>Known as innovators in the industry</p><p>Strong market share in all main RV product categories</p><p>Rock-solid balance sheet history of returning cash to </p><p>shareholders</p><p>Strong consumer, dealer and lender relationships</p><p>Experienced team</p></li><li><p></p><p>Appendix: Financial and Market Data</p></li><li><p>19</p><p>INVESTOR Q&amp;A: QUARTER AND YEAR-TO-</p><p>DATE OPERATING RESULTS</p><p>Sales for the quarter were up significantly from the prior year, which you reported then was a </p><p>very strong quarter. What were the drivers of the sales growth and do you anticipate the Q3 and </p><p>Q4 to realize similar growth rates?</p><p> Revenues in the quarter were driven by growth in our markets, recent acquisitions, positive weather </p><p>conditions and a shift in deliveries of certain motorized rental units earlier in the year. Continued </p><p>strength in the RV market and a healthy dealer channel should result in continued, more modest RV </p><p>revenue growth in the second half of the fiscal year.</p><p>What were the drivers of Q2 and year to date gross margin improvements? Is the improvement </p><p>sustainable?</p><p> Improvements in gross margins were due primarily to favorable changes in product mix, </p><p>improvements in material and warranty costs and improved operating efficiencies compared to the </p><p>prior year. Growth in gross profit margins will become more challenging as improvements in material </p><p>costs and warranty expenses that were realized in the second half of fiscal 2015 create difficult </p><p>comparisons for the second half of 2016. In addition, certain benefits...</p></li></ul>