SECOND QUARTER OF FISCAL 2024 FINANCIAL RESULTS

www.thorindustries.com

FORWARD-LOOKING STATEMENTS

This presentation includes certain statements that are "forward-looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, 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 are made based on management's current expectations and beliefs regarding future and anticipated developments and their effects upon THOR, and inherently involve uncertainties and risks. These forward-looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results include, among others: the impact of inflation on the cost of our

products as well as on general consumer demand; the effect of raw material and commodity price fluctuations, and/or raw material, commodity or chassis supply

constraints; the impact of war, military conflict, terrorism and/or cyber-attacks, including state-sponsored or ransom attacks; the impact of sudden or significant adverse changes in the cost and/or availability of energy or fuel, including those caused by geopolitical events, on our costs of operation, on raw material prices, on our suppliers, on our independent dealers or on retail customers; the dependence on a small group of suppliers for certain components used in production, including chassis; interest rates and interest rate fluctuations and their potential impact on the general economy and, specifically, on our profitability and on our independent dealers and consumers; the ability to ramp production up or down quickly in response to rapid changes in demand while also managing costs and market share; the level and magnitude of warranty and recall claims incurred; the ability of our suppliers to financially support any defects in their products; legislative, regulatory and tax law (including recent and pending tax-lawchanges implementing new, widely adopted "Pillar II" tax principles) and/or policy developments including their potential impact on our independent dealers, retail customers or on our suppliers; the costs of compliance with governmental regulation; the impact of an adverse outcome or conclusion related to current or future litigation or regulatory investigations; public perception of and the costs related to environmental, social and governance matters; legal and compliance issues including those that may arise in conjunction with recently completed transactions; lower consumer confidence and the level of discretionary consumer spending; the impact of exchange rate fluctuations; restrictive lending practices which could negatively impact our independent dealers and/or retail consumers; management changes; the success of new and existing products and services; the ability to maintain strong brands and develop innovative products that meet consumer demands; the ability to efficiently utilize existing production facilities; changes in consumer preferences; the risks associated with acquisitions, including: the pace and successful closing of an acquisition, the integration and financial impact thereof, the level of achievement of anticipated operating synergies from acquisitions, the potential for unknown or understated liabilities related to acquisitions, the potential loss of existing customers of acquisitions and our ability to retain key management personnel of acquired companies; a shortage of necessary personnel for production and increasing labor costs and related employee benefits to attract and retain production personnel in times of high demand; the loss or reduction of sales to key independent dealers, and stocking level decisions of our independent dealers; disruption of the delivery of units to independent dealers or the disruption of delivery of raw materials, including chassis, to our facilities; increasing costs for freight and transportation; the ability to protect our information technology systems from data breaches, cyber-attacks and/or network disruptions; asset impairment charges; competition; the impact of losses under repurchase agreements; the impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market, public health and political conditions in the various countries in which our products are produced and/or sold; the impact of changing emissions and other related climate change regulations in the various jurisdictions in which our products are produced, used and/or sold; changes to our investment and capital allocation strategies or other facets of our strategic plan; and changes in market liquidity conditions, credit ratings and other factors that may impact our access to future funding and the cost of debt.

These and other risks and uncertainties are discussed more fully in our Quarterly Report on Form 10-Q for the quarter ended January 31, 2024 and in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2023.

We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

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SECOND QUARTER FISCAL 2024 SUMMARY

NET SALES

GROSS MARGIN

DILUTED EPS (2)

$2.21B

12.3%

$0.13

(5.9)% (1)

+20 bps (1)

(74.0)% (1)

NET SALES BY SEGMENT

SECOND QUARTER FISCAL 2024 HIGHLIGHTS

▪

Financial performance reflects efforts to slow output

to align wholesale shipments with retail demand and

support independent dealers in managing inventory

levels

Segment

Net Sales

Net Sales

Change (1)

▪

European segment continues to deliver solid year-

over-year top and bottom-line

growth driven by

North American

$731.0M

(11.9)%

strong operating performance

Towable

North American

$570.4M

(22.8)%

▪

Positioning

operating companies

and independent

Motorized

dealers for successful spring selling season

▪ Channel inventory appropriately positioned

European

$782.3M

+20.9%

▪ Model

year 2024 lineup aimed at meeting

current demand

▪ Continued dealer focus on inventory

management in the face of higher interest

rates and inflationary pressures

  1. As compared to the second quarter of fiscal 2023
  2. Attributable to THOR Industries, Inc.

3

SECOND QUARTER FISCAL 2024 RECAP

NET SALES

$2.21 BILLION

(5.9)% (1)

UNIT

SHIPMENTS

39,476

+4.0% (1)

GROSS

MARGIN

12.3%

+20 bps (1)

DILUTED EPS (2)

$0.13

(74.0)% (1)

NET SALES

($ millions)

NA Motorized

$570.4

25.8%

European

NA Towable

$782.3

35.4%

$731.0

33.1%

Other $123.7

5.7%

NORTH AMERICAN INDEPENDENT DEALER

INVENTORY OF THOR PRODUCTS

121,300

115,200

112,000

87,800

78,100

(3)

(3)

1/31/23 (3)

1/31/24 (3)

1/31/20

1/31/21

1/31/22

Inventory Units

  1. Includes units of Tiffin products subsequent to the December 2020 acquisition of the Tiffin Group

RV BACKLOG OF

$4.66 BILLION (23.1)% (1)

$17,726.9

$3,051.5

$10,814.2

$4,232.5

$2,644.2

$2,916.4

$6,056.9

$4,655.2

$10,442.9

$2,874.4

$3,055.7

$2,746.3

$5,253.6

$1,142.0

$1,848.1

$1,072.7

$784.4

$1,153.0

$948.1

$836.2

1/31/20

1/31/21(4)

1/31/22 (4)

1/31/23 (4)

1/31/24 (4)

NA Towables NA Motorized European

  1. Includes Tiffin backlog subsequent to the December 2020 acquisition of the Tiffin Group
  1. As compared to the second quarter of fiscal 2023
  2. Attributable to THOR Industries, Inc.

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NORTH AMERICAN TOWABLE SEGMENT

($ in Millions)

Net Sales

YOY Change

Second Quarter

Fiscal 2024 $731.0 million

(11.9)%

Key Drivers

▪ Unit shipments increased 10.2% primarily due to

heightened demand for lower-cost travel trailer

units, which increased 13.9% over the prior-year

period

Gross Profit

$53.9 million

YOY Change

2.0%

Gross Profit Margin

7.4%

YOY Change

+100 bps

▪

Disciplined

wholesale

production

assisted

independent dealers in maintaining appropriate

channel inventory levels ahead of calendar 2024

selling season

▪

Overall net price per unit decreased 22.1%

primarily due to the combined impact of a shift in

product mix toward travel trailers and more

moderately-priced units

▪ Calendar year 2023 travel trailer and fifth wheel

market share of 41.8% (-20 bps y/y)

▪ Gross profit margin increase primarily driven by a

decrease in the material cost percentage, due to

the combined favorable impacts of product mix

changes and cost-saving initiatives, partially offset

by higher labor and manufacturing overhead

percentages

▪ Order backlog of $836.2 million

5

NORTH AMERICAN MOTORIZED SEGMENT

($ in Millions)

Net Sales

YOY Change

Second Quarter

Fiscal 2024 $570.4 million

(22.8)%

Key Drivers

▪ Unit shipments decreased 18.4% due to a

softening in current dealer and consumer

demand in comparison with the demand in the

prior-year quarter, which included independent

Gross Profit

$60.7 million

YOY Change

(43.4)%

Gross Profit Margin

10.6%

YOY Change

(390) bps

dealer restocking of certain motorized products

▪ Disciplined wholesale production assisted

independent dealers in maintaining appropriate

channel inventory levels ahead of calendar 2024

selling season

▪ Calendar year 2023 market share of 48.7%

(+30 bps y/y)

▪ Gross profit margin decrease primarily driven by

an increase in sales discounts and chassis costs

as well as an increase in manufacturing

overhead costs as a percentage of net sales due

to the reduction in net sales

▪ Order backlog of $1.07 billion

6

EUROPEAN SEGMENT

($ in Millions)

Net Sales

YOY Change

Second Quarter

Fiscal 2024 $782.3 million

20.9%

Key Drivers

▪ Net sales increase driven by a 3.9% increase in

unit shipments and a 17.0% increase in the overall

net price per unit due to the total combined impact

of changes in foreign currency, product mix and

Gross Profit

$119.3 million

YOY Change

30.5%

Gross Profit Margin

15.3%

YOY Change

+120 bps

price

▪ 2Q24 product mix included higher

concentration of sales of motorcaravans

and campervans on improved chassis

supply compared to prior-year period

▪ Favorable foreign currency exchange impact

of 4.1% on net sales compared to prior-

year period

▪ Gross profit margin improvement primarily driven

by net selling price increases, product mix changes

and a reduction in labor costs as a percentage of

net sales

▪ Independent dealer inventory levels of motorized

products generally restocked to appropriate levels

exiting 2Q24

▪ Strong order backlog of $2.75 billion

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STRONG FINANCIAL POSITION

OPERATING CASH FLOW

TOTAL LONG-TERM DEBT (1) ($ millions)

($ millions)

ABL

Other

$59.6

$62.6

$185.3

$91.3

Senior Unsecured

Total Long-

TLB

Term Debt

Notes

$1,429.8

$807.6

$500.0

$(44.2)

$(103.9)

2QFY23

FY23 YTD

2QFY24

FY24 YTD

Capital Expenditures ($ millions)

$45.1

$101.0

$40.7

$78.9

LIQUIDITY (2)

($ millions)

SELECTED FINANCIAL RATIOS (2) (3)

NET DEBT / TTM

1.5x

EBITDA

Cash equivalents

Available credit under ABL

Total Liquidity

$340.2

$938.0

$1,278.2

NET DEBT / TTM

1.4x

ADJUSTED EBITDA

  1. Total gross debt obligations as of January 31, 2024 inclusive of the current portion of long-term debt
  2. As of January 31, 2024
  3. See the Appendix to this presentation for reconciliation of non-GAAP measures to most directly comparable GAAP financial measures

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CAPITAL MANAGEMENT

PRIORITIES AND FISCAL 2024 ACTIONS

Invest in THOR's business

  • Capex spending of $78.9 million YTD

Pay THOR's dividend

  • Increased regular quarterly dividend to $0.48 in October 2023
  • Represents 14th consecutive year of dividend increases

Reduce the Company's debt obligations

  • On November 15, 2023, entered into amendments to our term-loan credit facility to extend maturity from Feb. 2026 to Nov. 2030 and reduce the applicable margin used to determine the interest rate on the USD portion of the Term Loan B by 0.25%
  • Concurrently amended our ABL agreement to extend the maturity from Sept. 2026 to Nov. 2028
  • Committed to long-term net debt leverage ratio target of less than 1.0x; currently at 1.5x

Repurchase shares on a strategic and opportunistic basis

  • Repurchased $30.0 million YTD
  • $461.2 million available to be repurchased as of January 31, 2024 under current authorizations

Support opportunistic strategic investments

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FULL-YEAR FISCAL 2024 GUIDANCE

OUTLOOK ASSUMPTIONS

$10.0 - $10.5B

(previously $10.5 - $11.0B)

14.0% - 14.5%

(previously 14.5% - 15.0%)

$5.00 - $5.50

(previously $6.25 - $7.25)

NET SALES

GROSS PROFIT MARGIN

DILUTED

EARNINGS PER SHARE

  • Full-yearfiscal 2024 outlook adjusted to reflect persisting macro pressures affecting North American independent dealers and consumers, resulting in reduced consolidated net sales and margin expectations as dealers are expected to maintain historically lean inventory levels
    • While this will impact our earnings results in fiscal 2024, we have strong confidence in our ability to deliver on our revised fiscal 2024 outlook
  • North American industry wholesale shipment range between 330,000 and 340,000 units for fiscal 2024, resulting in further destocking of channel inventory (previous range of between 350,000 and 365,000 units)
    • While lowering wholesale shipment expectations, 2H24 reflects unit shipment growth and improved profitability within North American Towable segment on a year-over-year basis
  • Continued strong financial performance in our European segment driven by sustained efforts of our management team, favorable price-cost realization and operational efficiencies
    • Will face tougher year-over-year comparisons in 2H24 as we lap restocking volumes in 2H23

OTHER FULL-YEAR MODELING ASSUMPTIONS

  • SG&A expense as a % of sales: >8.0%
  • Capital expenditures: $180.0 million
  • Amortization of intangible assets expense: $129.5 million
  • Tax rate: between 22% and 24%(1)

(1) Before consideration of any discrete tax items

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Thor Industries Inc. published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 11:44:08 UTC.