Thor Industries (NYSE: THO) earnings release for the 4th quarter of their 2020 fiscal year
Category: Stock Market and Thor Industries (THO)
Date: 5 October 2020 Stock Price of Thor Industries: $99.92 We take a look at the 4th quarter earnings release of their 2020 fiscal year of Thor Industries the world's largest manufacturer of recreational vehicles (RVs). The group reported net sales of $2.324 billion for the quarter and net income for the quarter came in at $119.168 million.
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This year's financial results are a testament to our ability to successfully manage through uncertainty, along with the proven agility and flexibility of our business model - Colleen Zuhl, Thor's Senior Vice President and Chief Financial Officer."
About Thor Industries (THO)
Thor Industries, Inc. was founded on August 29, 1980, when Wade F. B. Thompson and Peter B. Orthwein acquired Airstream, the most recognized name in the industry. Despite its venerable image, Airstream had not fared well during the economic downturn of the late 1970s. By focusing on improving quality while reducing costs, Airstream returned to profitability in its very first year under the new Thor management. Thor is the sole owner of operating subsidiaries that, combined, represent the world’s largest manufacturer of recreational vehicles (RVs').
The group sells towable RVs and motorized RV's in markets such as North America and Europe.
The group sells towable RVs and motorized RV's in markets such as North America and Europe.
Overview of Thor Industries' 4th quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise
- Net sales: $2.324 billion (down from $2.311 billion from the same quarter of the previous year)
- Sales increased by 0.5% over the last 12 months
- Net income $119.729 million (up from $92.055 million for the same quarter of the previous year)
- Diluted earnings per share: $2.14 (up from $1.67 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 55.576 million (up from 55.211 million for the same quarter of the previous year)
- Cash and cash equivalents: $541.363 million
- Cash and cash equivalents per share: $9.74
- Cash and cash equivalents makes up 9.7% of Thor Industries' market capital
- Cash and cash equivalents makes up 9.4% of Thor Industries' total assets
- Inventories: $716 million
- Inventories makes up 12.4% of Thor Industries' total assets
- Accounts receivable: $814.227 million
- Accounts receivable makes up 14.1% of Thor Industries' total assets
- Stockholders equity in Thor Industries: $2.345 billion
- Stockholders equity per share for Thor Industries: $42.19
- Thor Industries is trading at 2.36 times its stockholders equity per share, which is outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For comparison the average price to book value of companies in the S&P 500 is 3.7.
Thor Industries' management commentary on their 4th quarter 2020 earnings report
ELKHART, Ind., Sept. 28, 2020 /PRNewswire/ -- Thor Industries, Inc. (NYSE: THO) today announced results for the fourth quarter and full year of fiscal 2020, which ended July 31, 2020.
"I am pleased to report that Thor's net sales increased significantly with each passing month in the fourth quarter of fiscal 2020 as we emerged from the COVID-19 induced production furlough that started in our third fiscal quarter. Our fourth quarter results prove that our employees and management teams around the world are experienced and agile, and that our highly variable business model facilitated a rebound from a virtual production standstill in May to full production by July," said Bob Martin, President and CEO of Thor Industries.
"We saw increasing retail demand over the course of the quarter, driving dealer inventories to historically low levels by year end and our year-end backlog to a record high. As I have noted before, the long-term outlook for our business remains excellent. Now, with the increasing interest in the RV lifestyle from a new group of consumers, the short-to-medium-term outlook is also robust. This current demand for RVs, coupled with the need to replenish dealer inventories that are at all-time lows, positions us for continued success well into calendar 2021. We also believe that the influx of new RV buyers will lead to many becoming long-term RV enthusiasts down the road. Historically, long-term RVers trade in and trade up for a new RV every 3 to 5 years, which further positions us for success well into the future," added Martin.
"I am pleased to report that Thor's net sales increased significantly with each passing month in the fourth quarter of fiscal 2020 as we emerged from the COVID-19 induced production furlough that started in our third fiscal quarter. Our fourth quarter results prove that our employees and management teams around the world are experienced and agile, and that our highly variable business model facilitated a rebound from a virtual production standstill in May to full production by July," said Bob Martin, President and CEO of Thor Industries.
"We saw increasing retail demand over the course of the quarter, driving dealer inventories to historically low levels by year end and our year-end backlog to a record high. As I have noted before, the long-term outlook for our business remains excellent. Now, with the increasing interest in the RV lifestyle from a new group of consumers, the short-to-medium-term outlook is also robust. This current demand for RVs, coupled with the need to replenish dealer inventories that are at all-time lows, positions us for continued success well into calendar 2021. We also believe that the influx of new RV buyers will lead to many becoming long-term RV enthusiasts down the road. Historically, long-term RVers trade in and trade up for a new RV every 3 to 5 years, which further positions us for success well into the future," added Martin.
"This year's financial results are a testament to our ability to successfully manage through uncertainty, along with the proven agility and flexibility of our business model," said Colleen Zuhl, Thor's Senior Vice President and Chief Financial Officer. "In an unprecedented year, with vastly changing operating conditions caused by the COVID-19 pandemic, we effectively managed our world-wide operations keeping the safety of our employees as the top priority while also generating a solid profit for our shareholders. With the full-year addition of EHG, we generated an annual record high cash flow from operations of $540.9 million for fiscal 2020, and, as planned, we continued to regularly pay down our EHG acquisition-related debt. During the fiscal year, we paid $275.0 million on the EHG acquisition-related debt, and life-to-date, we have paid approximately $678 million on the EHG acquisition-related debt since the acquisition of EHG.
"Our cash and cash equivalents totaled $538.5 million at the end of the year, and we currently have approximately $660 million available for borrowing on our ABL. Our priorities for cash remain consistent with our historical priorities, which are (1) reducing our debt obligations (2) paying and growing our dividend over time, and (3) funding our growth both organically and opportunistically through acquisitions. We may also consider strategic and opportunistic repurchases of shares and special dividends as determined by our Board of Directors," concluded Zuhl.
Year in Review
"Fiscal 2020 was both a challenging and rewarding year for Thor," said Bob Martin. "I am proud of our employees and our management teams around the world for continuing to prioritize employee safety above all else. Once again, our teams have demonstrated Thor's resilience and ability to manage through uncertainty. We have shown that when challenges arise, we come together to work collaboratively, we make decisions quickly with as much data as possible, and we adjust as conditions require. When we needed to ramp production back up based on increased demand for our products across the board, we did so quickly and effectively, while continuing to prioritize employee safety by maintaining compliance with our robust safety protocols. We supported one another and worked closely with our dealer and supply partners. We are proud to be providing end consumers with products that allow them to travel in the safety of a contained living space. I am also proud of the financial results we generated for our shareholders in spite of the many challenges we encountered. We delivered robust cash flow and profitability by managing our costs and our cash outlays during the initial phases of the COVID-19 pandemic when, for the first time in our history, we were required to shut down production at all of our domestic locations and almost all of our foreign facilities for what was an unknown period at first. In the end, we had a successful and profitable fiscal year and one that won't soon be forgotten."
Outlook for Fiscal Year 2021
"We are entering our fiscal year 2021 with a strong balance sheet, record backlogs and dealer inventories at historic lows. There is considerable interest in the RV lifestyle from first-time buyers, and we are seeing continued strength in the upgrade buyer as well. We are also seeing challenges and constraints in the supply chain as suppliers ramp up to meet the unexpectedly high level of demand from manufacturers. Managing through peaks and valleys of demand and supply constraints is part of the history of our business and is not new to our management teams. Today we are working closely with our supply chain partners to manage production and delivery of the components we need and, where necessary, seeking alternative supply solutions. We are committed to quickly resolving any temporary supply chain issues but recognize that in the short term we may experience impacts to our production schedules.
"Looking ahead, we expect a year of continued growth in fiscal 2021, and we concur with RVIA's recent RoadSigns most likely forecast of an approximate 19.5% increase in calendar 2021 shipments over their most likely estimate for calendar 2020 shipments.
"In closing, we continue to be very positive about both the short-term and long-term outlooks for our Company and our industry. I recently returned from my own family vacation in our new Thor Delano, and I have never seen a younger, more diverse group of RVers on the road as I did during our road trip through the Midwest this year. It was great to see the many new faces. The increased demand for RVs, driven by the safety and security of traveling in your own RV in these uncertain times, is an excellent sign for the future growth of our Company," said Bob Martin.
"Our cash and cash equivalents totaled $538.5 million at the end of the year, and we currently have approximately $660 million available for borrowing on our ABL. Our priorities for cash remain consistent with our historical priorities, which are (1) reducing our debt obligations (2) paying and growing our dividend over time, and (3) funding our growth both organically and opportunistically through acquisitions. We may also consider strategic and opportunistic repurchases of shares and special dividends as determined by our Board of Directors," concluded Zuhl.
Year in Review
"Fiscal 2020 was both a challenging and rewarding year for Thor," said Bob Martin. "I am proud of our employees and our management teams around the world for continuing to prioritize employee safety above all else. Once again, our teams have demonstrated Thor's resilience and ability to manage through uncertainty. We have shown that when challenges arise, we come together to work collaboratively, we make decisions quickly with as much data as possible, and we adjust as conditions require. When we needed to ramp production back up based on increased demand for our products across the board, we did so quickly and effectively, while continuing to prioritize employee safety by maintaining compliance with our robust safety protocols. We supported one another and worked closely with our dealer and supply partners. We are proud to be providing end consumers with products that allow them to travel in the safety of a contained living space. I am also proud of the financial results we generated for our shareholders in spite of the many challenges we encountered. We delivered robust cash flow and profitability by managing our costs and our cash outlays during the initial phases of the COVID-19 pandemic when, for the first time in our history, we were required to shut down production at all of our domestic locations and almost all of our foreign facilities for what was an unknown period at first. In the end, we had a successful and profitable fiscal year and one that won't soon be forgotten."
Outlook for Fiscal Year 2021
"We are entering our fiscal year 2021 with a strong balance sheet, record backlogs and dealer inventories at historic lows. There is considerable interest in the RV lifestyle from first-time buyers, and we are seeing continued strength in the upgrade buyer as well. We are also seeing challenges and constraints in the supply chain as suppliers ramp up to meet the unexpectedly high level of demand from manufacturers. Managing through peaks and valleys of demand and supply constraints is part of the history of our business and is not new to our management teams. Today we are working closely with our supply chain partners to manage production and delivery of the components we need and, where necessary, seeking alternative supply solutions. We are committed to quickly resolving any temporary supply chain issues but recognize that in the short term we may experience impacts to our production schedules.
"Looking ahead, we expect a year of continued growth in fiscal 2021, and we concur with RVIA's recent RoadSigns most likely forecast of an approximate 19.5% increase in calendar 2021 shipments over their most likely estimate for calendar 2020 shipments.
"In closing, we continue to be very positive about both the short-term and long-term outlooks for our Company and our industry. I recently returned from my own family vacation in our new Thor Delano, and I have never seen a younger, more diverse group of RVers on the road as I did during our road trip through the Midwest this year. It was great to see the many new faces. The increased demand for RVs, driven by the safety and security of traveling in your own RV in these uncertain times, is an excellent sign for the future growth of our Company," said Bob Martin.
Thor Industries (NYSE: THO) stock price history
The image below, obtained from Google, shows the stock price history of Thor industries (NYSE: THO) over the last 5 years. And it's been a pretty average time for Thor industries (NYSE: THO) stockholders. 5 years ago the stock was trading at around $55 and its currently trading at $99.92. That's a strong return of 85.3% provided to Thor Industries stockholders over the last 5 years.
Thor industries (NYSE: THO) is also trading at a lot closer to its 52 week high of $121.33 than it is to its 52 week low of $32.30 which to us is a clear indication that the short term sentiment and momentum of Thor industries stock is very positive
Thor industries (NYSE: THO) is also trading at a lot closer to its 52 week high of $121.33 than it is to its 52 week low of $32.30 which to us is a clear indication that the short term sentiment and momentum of Thor industries stock is very positive
Thor Industries (THO) stock vs Winnebago (WGO) over the last 5 years
The image below shows the stock price performance of Thor Industries (THO) and Winnebago (WGO) over the last 5 years. While both are active in the RV sales sector and their stock price trends are similar, the stock price returns are very different. The summary below shows the stock price returns provided by both these firms over the last 5 years
- Winnebago: 158.5%
- Thor Industries: 85.3%
Recent coverage of Thor Industries
The extract below covers the latest regarding Thor Industries as obtained from MarketSentinel.com
Thor Industries, Inc. (NYSE:THO) has a beta value of 2.36 and has seen 1,139,363 shares traded in the last trading session. The company, currently valued at $5.52 Billion, closed the last trade at $99.92 per share which meant it gained $1.31 on the day or 1.33% during that session. The THO stock price is -21.43% off its 52-week high price of $121.33 and 67.67% above the 52-week low of $32.3. If we look at the company’s 10-day average daily trading volume, we find that it stood at 1.51 Million shares traded. The 3-month trading volume is 924.67 Million shares.
The consensus among analysts is that Thor Industries, Inc. (THO) is an Overweight stock at the moment, with a recommendation rating of 2.2. None of the analysts rate the stock as a Sell, while 1 rate it as Overweight. 4 out of 10 have rated it as a Hold, with 5 advising it as a Buy. None have rated the stock as Underweight. The expected earnings per share for the stock is $1.48.
Thor Industries, Inc. (NYSE:THO) trade information
Sporting 1.33% in the green today, the stock has traded in the green over the last five days, with the highest price hit on Friday, Oct 02 when the THO stock price touched $102.63 or saw a rise of 2.64%. Year-to-date, Thor Industries, Inc. shares have moved 34.5%, while the 5-day performance has seen it change 7.2%. Over the past 30 days, the shares of Thor Industries, Inc. (NYSE:THO) have changed 3.49%. Short interest in the company has seen 6.32 Million shares shorted with days to cover at 0.01.
Read the full article here
Thor Industries, Inc. (NYSE:THO) has a beta value of 2.36 and has seen 1,139,363 shares traded in the last trading session. The company, currently valued at $5.52 Billion, closed the last trade at $99.92 per share which meant it gained $1.31 on the day or 1.33% during that session. The THO stock price is -21.43% off its 52-week high price of $121.33 and 67.67% above the 52-week low of $32.3. If we look at the company’s 10-day average daily trading volume, we find that it stood at 1.51 Million shares traded. The 3-month trading volume is 924.67 Million shares.
The consensus among analysts is that Thor Industries, Inc. (THO) is an Overweight stock at the moment, with a recommendation rating of 2.2. None of the analysts rate the stock as a Sell, while 1 rate it as Overweight. 4 out of 10 have rated it as a Hold, with 5 advising it as a Buy. None have rated the stock as Underweight. The expected earnings per share for the stock is $1.48.
Thor Industries, Inc. (NYSE:THO) trade information
Sporting 1.33% in the green today, the stock has traded in the green over the last five days, with the highest price hit on Friday, Oct 02 when the THO stock price touched $102.63 or saw a rise of 2.64%. Year-to-date, Thor Industries, Inc. shares have moved 34.5%, while the 5-day performance has seen it change 7.2%. Over the past 30 days, the shares of Thor Industries, Inc. (NYSE:THO) have changed 3.49%. Short interest in the company has seen 6.32 Million shares shorted with days to cover at 0.01.
Read the full article here
Thor Industries (NYSE: THO) latest stock valuation
So what are Thor Industries stock worth based on the release of their latest earnings report and the outlook provided. Based on the earnings reported our valuation models provide a target (full value) price for Thor Industries of $69.70 a stock (up from our 3rd quarter valuation of Thor Industries).
We therefore believe that Thor Industries stock is overvalued at its current price of $99.92 and we would not recommend long term fundamental or value investors buy into the stock of Thor Industries at its current price of $99.92
We usually recommend that long term fundamental or value investors look to enter the stock at least 10% below our target (full value) price, which in this case is $69.70 in this case. A good entry into the stock of Thor Industries (THO) would therefore be at $62.70 or below. We expect that stock of Thor Industries to pull back strongly from current levels to levels closer to our target (full value) price in coming weeks and months.
We therefore believe that Thor Industries stock is overvalued at its current price of $99.92 and we would not recommend long term fundamental or value investors buy into the stock of Thor Industries at its current price of $99.92
We usually recommend that long term fundamental or value investors look to enter the stock at least 10% below our target (full value) price, which in this case is $69.70 in this case. A good entry into the stock of Thor Industries (THO) would therefore be at $62.70 or below. We expect that stock of Thor Industries to pull back strongly from current levels to levels closer to our target (full value) price in coming weeks and months.
Next earnings release of Thor Industries
It is expected that Thor Industries will release their 1st quarter 2021 earnings report in early January 2021