15 2015 Annual Report

Airstream 2015 ANNUAL REPORT Bison Coach CrossRoads RV Cruiser15 RV Dutchmen DRV Heartland RV Keystone RV KZ RV Livin’ Lite RV Postle Aluminum Thor Motor Coach Airstream manufactures and sells premium quality travel trailers and motorhomes. Airstream travel trailers are distinguished by their rounded shape and bright aluminum finish and, in our opinion, constitute the most recognized product in the recreational vehicle industry. Airstream manufactures and sells travel trailers under the trade names Airstream International, Classic Limited, Sport, Flying Cloud, Land Yacht and Eddie Bauer. Airstream also sells the Interstate and Autobahn Class B motorhomes. Airstream Bison Coach is an industry leader in producing specialty trailers with spacious living areas available in a wide variety of sizes. Bison produces an innovative line of equine trailers with Living Quarters (LQ), constructed of light-weight aluminum and aluminum over steel construction. Bison is a pioneer in equine LQ trailers, and they are one of only two competitors that construct their own living quarters, an important point of differentiation in the industry which results in improved quality, innovative design and greater speed to market. Bison sells equestrian recreational vehicle products under trade names such as Premiere, Silverado, Ranger, Laredo, Trail Boss and Trail Hand. bison coach bison At CrossRoads RV we build quality towable fifth-wheel and travel trailer recreational vehicles that provide exceptional value to conscientious consumers. Our brands include Sequoia, Cameo, Carriage, Sunset Trail, Cruiser, Zinger, Z-1, ReZerve, Rushmore, Elevation, Redwood and Hampton. CrossRoads RV is where imaginative ideas for traveling lifestyles become reality. crossroads rv crossroads Originally founded in 1988, Howe, Indiana-based Cruiser RV is an industry leader in the production of light-weight travel trailers that can be towed by a wide variety of today’s smaller vehicles. Travel Trailer brands include Enterra, Fun Finder, Radiance, Shadow Cruiser and ViewFinder Signature, as well as the Stryker brand of toy haulers. Cruiser RV, which has manufacturing operations in Howe and LaGrange, Indiana, joined the Thor family of companies through its acquisition by Heartland Recreational Vehicles in January 2015, following a long history of family ownership. cruiser rv cruiser Dutchmen is based in Goshen, Indiana, and was founded in 1988. Dutchmen produces many widely recognized brands of recreational vehicles, including Aerolite, Aspen Trail, Coleman, Denali, Dutchmen, Kodiak, Razorback, Rubicon and Voltage. dutchmEn Founded in 2003, Howe, Indiana-based DRV is an industry leader in the production of high-end fifth wheels with residential quality and features. An innovative company with the ability to customize products to meet customer needs, DRV is a true retail-customer- oriented company with a strong base of loyal, repeat buyers. DRV’s brand offerings include Mobile Suites, Mobile Suites Estates, Elite Suites and Tradition. DRV joined the Thor family of companies through its acquisition by Heartland Recreational Vehicles in January 2015. drv DEAR FELLOW SHAREHOLDERS: strategy has served our Shareholders well. Through a well-developed process of intense scrutiny that identifies risks and mitigation strategies, Our Company’s Fiscal Year 2015 marked a year of historic success. Thor ensures alignment with Thor culture and philosophy, and fully vets the surpassed last year’s record sales from continuing operations by 14% and, acquisition’s ability to be accretive to our earnings, we are confident in our for the first time, exceeded $4 billion in total annual sales. We also ability to continue implementing this essential element of our corporate surpassed our prior record earnings per share from continuing operations, strategy. earning $3.79 per diluted share. During the year we remained true to our commitment to return value to our Shareholders by increasing our regular Beyond acquisitions, we continued to invest in the organic growth of our RV dividend by 11% and repurchasing 1 million shares, or 2% of our stock. By business with a number of meaningful capital investments in our towable the conclusion of our Fiscal Year 2015, we had returned over $1 billion to business. Keystone constructed a new plant south of its main Goshen, you, our Shareholders, over the life of our Company. Indiana complex that will be used to produce both new entry-level travel trailers as well as destination trailers. Heartland invested in several plant Financial highlights of Fiscal Year 2015 included: expansions and updated the factory service center on its complex. We built a new lamination facility at KZ, which will allow it to expand production of Record sales from continuing operations of $4.0 billion, an lightweight laminated trailers. Airstream expanded its production plant by increase of 14% from $3.5 billion in Fiscal 2014 50%, increasing its ability to meet the burgeoning demand for its iconic Net income from continuing operations for the year was up 15% travel trailers. In all, we invested more than $42 million in capital to $202.0 million, compared to $175.5 million in Fiscal 2014 expenditures in Fiscal 2015. We expect to continue this accelerated level Diluted earnings per share from continuing operations were up of capital investment in the coming fiscal year, starting with our recently 15% to $3.79 versus $3.29 in Fiscal 2014 announced West Coast production facility for Heartland located in Nampa, Net income including discontinued operations was up 11% to Idaho. Many large western markets are gaining momentum and we need $199.4 million from $179.0 million in Fiscal 2014 this new facility to enable Heartland to provide dealers with lightweight travel trailers faster and at a better cost than we can provide from Indiana. Towable RV sales increased by 14% over Fiscal 2014; towable income before tax increased by 17% over Fiscal 2014 Our cash position remains strong with $183 million in cash and no long- Motorized RV sales increased by 8% over Fiscal 2014; term debt, excluding some capital leases that came with the Postle motorized income before tax increased by 17% over Fiscal 2014 acquisition, at the end of Fiscal Year 2015. Thor continues to be a solid dividend company as we maintained our quarterly dividend at $0.27 per The recreational vehicle industry continued to improve throughout the year, share throughout Fiscal Year 2015 and just recently announced an marking a historic sixth year of recovery. According to the Recreation increase to $0.30 per share in October 2015. Our current cash position Vehicle Industry Association (RVIA), wholesale shipments of towable and and historically strong operating cash flow is expected to enable the motorized RVs combined posted a 4% gain through July 31, 2015, Company to consider a number of strategic allocation alternatives, which compared to the same period the prior year. RVIA is currently forecasting will continue to be a major focus of our Board and management throughout wholesale shipments for all RV categories to grow nearly 5% in the 2015 Fiscal Year 2016. calendar year compared to 2014, reaching a total level just short of the high achieved in 2006, even as travel trailer shipments reached a new all-time We are pleased with the successful year our Company had in Fiscal 2015, high in calendar 2014. but we are mindful that continued success requires a long-term strategic vision to make the right investments. Our management team is committed We continue to strive to be innovators in the RV industry, offering new and to the future success of Thor as we continue to build high-quality, exciting products that meet the continually evolving demands of innovative products for our dealers and retail customers and, ultimately, consumers. We work to meet the needs of retail RV buyers through what deliver solid results to you, our Shareholders and co-owners. We are we believe is the industry’s best overall dealer network. Our focus on confident in the strategic direction of Thor and look forward to continued innovation, product quality, and partnering with the right dealers form the growth and achievement in Fiscal Year 2016. foundation for the future growth of our Company. Thank you for your continued support and confidence in the future of our Looking to our distribution channel, we believe that dealer inventory levels Company. remain appropriate and expect continued growth in our markets with overall industry growth in the mid-single-digits. We expect industry volumes to be driven by somewhat stronger growth in towables as compared to motorized, as new consumers entering the market drive growth in more affordable RVs. Dealers’ focus on effective inventory management designed to yield increased inventory turns has made our distribution healthier than it has been in quite some time. Peter B. Orthwein, Thor accomplished a number of significant strategic objectives in Fiscal Executive Chairman of the Board Year 2015 as we strove to build on our foundation for the long-term growth of our Company. We grew our business with a number of acquisitions made throughout the fiscal year. In January 2015, our Heartland subsidiary purchased towable recreational vehicle manufacturer Cruiser RV (CRV) and luxury fifth wheel recreational vehicle manufacturer DRV for final cash consideration of $47.5 million, net of cash acquired. On May 1, 2015, we closed on the purchase of Postle Aluminum, a supplier of aluminum Bob Martin, extrusions and specialized

Load more