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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended April 30, 2024.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____ to ____.
COMMISSION FILE NUMBER 001-09235
THOR_LOGO_Green_Dark%20Grey.jpg
THOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware93-0768752
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
601 E. Beardsley Ave., Elkhart, IN
46514-3305
(Address of principal executive offices)(Zip Code)
(574) 970-7460
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each classTrading Symbol(s)on which registered
Common stock (Par value $0.10 Per Share)THONew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes        No    

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes        No    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer                         Accelerated filer            
Non-accelerated filer                         Smaller reporting company    
Emerging growth company    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes        No    
As of May 31, 2024, 53,197,791 shares of the registrant’s common stock, par value $0.10 per share, were outstanding.




PART I – FINANCIAL INFORMATION (Unless otherwise indicated, amounts in thousands except share and per share data.)
ITEM 1. FINANCIAL STATEMENTS

THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

April 30, 2024July 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$371,819 $441,232 
Accounts receivable, trade, net642,571 543,865 
Accounts receivable, other, net187,439 99,354 
Inventories, net1,578,147 1,653,070 
Prepaid income taxes, expenses and other90,273 56,059 
Total current assets2,870,249 2,793,580 
 Property, plant and equipment, net1,379,541 1,387,808 
Other assets:
Goodwill1,777,335 1,800,422 
Amortizable intangible assets, net889,373 996,979 
Deferred income tax assets, net12,096 5,770 
Equity investments132,270 126,909 
Other157,333 149,362 
Total other assets2,968,407 3,079,442 
TOTAL ASSETS
$7,218,197 $7,260,830 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$802,000 $736,275 
Current portion of long-term debt35,491 11,368 
Short-term financial obligations67,957 49,433 
Accrued liabilities:
Compensation and related items
191,122 189,324 
Product warranties
320,457 345,197 
Income and other taxes
86,515 100,631 
Promotions and rebates
152,960 163,410 
Product, property and related liabilities23,789 54,720 
Other
58,804 66,124 
Total current liabilities1,739,095 1,716,482 
Long-term debt, net1,209,054 1,291,311 
Deferred income tax liabilities, net64,544 75,668 
Unrecognized tax benefits12,135 14,835 
Other liabilities185,022 179,136 
Total long-term liabilities1,470,755 1,560,950 
Contingent liabilities and commitments
 
Stockholders’ equity:
Preferred stock – authorized 1,000,000 shares; none outstanding
  
Common stock – par value of $.10 per share; authorized 250,000,000 shares; issued 66,859,738 and 66,344,340 shares, respectively
6,686 6,634 
Additional paid-in capital568,905 539,032 
Retained earnings4,190,126 4,091,563 
Accumulated other comprehensive loss, net of tax(110,541)(68,547)
Less: Treasury shares of 13,661,947 and 13,030,030, respectively, at cost
(651,946)(592,667)
Stockholders’ equity attributable to THOR Industries, Inc.4,003,230 3,976,015 
Non-controlling interests 5,117 7,383 
Total stockholders’ equity4,008,347 3,983,398 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$7,218,197 $7,260,830 

See Notes to the Condensed Consolidated Financial Statements.



2


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended April 30,Nine Months Ended April 30,
2024202320242023
Net sales
$2,801,113 $2,928,820 $7,509,241 $8,383,539 
Cost of products sold2,379,261 2,496,183 6,458,610 7,181,491 
Gross profit421,852 432,637 1,050,631 1,202,048 
Selling, general and administrative expenses226,515 210,044 664,536 660,411 
Amortization of intangible assets
32,316 35,113 97,124 105,531 
Interest expense, net21,830 26,362 70,256 74,802 
Other income (expense), net1,159 (5,667)3,111 6,136 
Income before income taxes142,350 155,451 221,826 367,440 
Income tax provision28,773 35,722 47,890 84,482 
Net income 113,577 119,729 173,936 282,958 
Less: Net loss attributable to non-controlling interests(934)(990)(1,357)(1,026)
Net income attributable to THOR Industries, Inc.$114,511 $120,719 $175,293 $283,984 
Weighted-average common shares outstanding:
Basic53,310,318 53,425,379 53,309,546 53,534,746 
Diluted53,722,154 53,820,400 53,742,146 53,854,542 
Earnings per common share:
Basic$2.15 $2.26 $3.29 $5.30 
Diluted$2.13 $2.24 $3.26 $5.27 
Comprehensive income:
Net income $113,577 $119,729 $173,936 $282,958 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment(17,773)21,592 (42,792)106,640 
Unrealized gain (loss) on derivatives, net of tax (452) (309)
Other loss, net of tax  (111)(39)
Total other comprehensive income (loss), net of tax(17,773)21,140 (42,903)106,292 
Total Comprehensive income 95,804 140,869 131,033 389,250 
Less: Comprehensive loss attributable to non-controlling interests(1,060)(968)(2,266)(1,413)
Comprehensive income attributable to THOR Industries, Inc.$96,864 $141,837 $133,299 $390,663 



















See Notes to the Condensed Consolidated Financial Statements.



3


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended April 30,
20242023
Cash flows from operating activities:
Net income$173,936 $282,958 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation106,424 97,295 
Amortization of intangible assets97,124 105,531 
Amortization of debt issuance costs and extinguishment charges14,900 8,569 
Deferred income tax benefit(18,722)(9,052)
Gain on disposition of property, plant and equipment(9,927)(374)
Stock-based compensation expense29,049 26,607 
Changes in assets and liabilities:
Accounts receivable, net(191,483)143,591 
Inventories, net26,103 (87,841)
Prepaid income taxes, expenses and other(29,237)2,119 
Accounts payable79,752 (63,642)
Accrued liabilities(81,339)(35,388)
Long-term liabilities and other10,952 3,747 
Net cash provided by operating activities207,532 474,120 
Cash flows from investing activities:
Purchases of property, plant and equipment (106,069)(150,466)
Proceeds from dispositions of property, plant and equipment 24,682 4,179 
Business acquisitions, net of cash acquired(3,814)(6,184)
Other(17,688)(19,091)
Net cash used in investing activities(102,889)(171,562)
Cash flows from financing activities:
Borrowings on term-loan credit facilities186,723  
Payments on term-loan credit facilities(227,626)(102,355)
Borrowings on revolving asset-based credit facilities113,502  
Payments on revolving asset-based credit facilities(111,555)(50,000)
Payments on other debt(7,361)(8,155)
Payments of debt issuance costs(10,480) 
Cash dividends paid(76,730)(71,978)
Payments on finance lease obligations(557)(905)
Purchases of treasury shares(43,034)(42,007)
Payments related to vesting of stock-based awards(16,245)(6,765)
Short-term financial obligations and other, net20,036 16,097 
Net cash used in financing activities(173,327)(266,068)
Effect of exchange rate changes on cash and cash equivalents(729)5,183 
Net increase (decrease) in cash and cash equivalents(69,413)41,673 
Cash and cash equivalents, beginning of period441,232 311,553 
Cash and cash equivalents, end of period$371,819 $353,226 
Supplemental cash flow information:
Income taxes paid$111,269 $118,602 
Interest paid$70,198 $75,877 
Non-cash investing and financing transactions:
Capital expenditures in accounts payable$2,273 $4,874 



See Notes to the Condensed Consolidated Financial Statements.



4


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2024 AND 2023 (UNAUDITED)
Three Months Ended April 30, 2024
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at February 1, 202466,859,738 $6,686 $560,365 $4,101,210 $(92,894)13,535,193 $(638,949)$3,936,418 $6,177 $3,942,595 
Net income (loss)— — — 114,511 — — — 114,511 (934)113,577 
Purchases of treasury shares— — — — — 126,754 (12,997)(12,997)— (12,997)
Restricted stock unit activity— — (811)— — — — (811)— (811)
Dividends $0.48 per common share
— — — (25,595)— — — (25,595)— (25,595)
Stock-based compensation expense— — 9,351 — — — — 9,351 — 9,351 
Other comprehensive income (loss)— — — — (17,647)— — (17,647)(126)(17,773)
Balance at April 30, 2024
66,859,738 $6,686 $568,905 $4,190,126 $(110,541)13,661,947 $(651,946)$4,003,230 $5,117 $4,008,347 
Nine Months Ended April 30, 2024
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at August 1, 202366,344,340 $6,634 $539,032 $4,091,563 $(68,547)13,030,030 $(592,667)$3,976,015 $7,383 $3,983,398 
Net income (loss)— — — 175,293 — — — 175,293 (1,357)173,936 
Purchases of treasury shares— — — — — 454,630 (43,034)(43,034)— (43,034)
Restricted stock unit activity515,398 52 824 — — 177,287 (16,245)(15,369)— (15,369)
Dividends $1.44 per common share
— — — (76,730)— — — (76,730)— (76,730)
Stock-based compensation expense— — 29,049 — — — — 29,049 — 29,049 
Other comprehensive income (loss)— — — — (41,994)— — (41,994)(909)(42,903)
Balance at April 30, 2024
66,859,738 $6,686 $568,905 $4,190,126 $(110,541)13,661,947 $(651,946)$4,003,230 $5,117 $4,008,347 




See Notes to the Condensed Consolidated Financial Statements.



5


THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2024 AND 2023 (UNAUDITED)
Three Months Ended April 30, 2023
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at February 1, 202366,334,072 $6,633 $517,510 $3,928,361 $(96,046)12,815,099 $(575,675)$3,780,783 $7,347 $3,788,130 
Net income (loss)— — — 120,719 — — — 120,719 (990)119,729 
Purchases of treasury shares— — — — — 210,799 (16,600)(16,600)— (16,600)
Restricted stock unit activity— — 18 — — — — 18 — 18 
Dividends $0.45 per common share
— — — (23,813)— — — (23,813)— (23,813)
Stock-based compensation expense— — 9,672 — — — — 9,672 — 9,672 
Other comprehensive income (loss)— — — — 21,118 — — 21,118 22 21,140 
Balance at April 30, 2023
66,334,072 $6,633 $527,200 $4,025,267 $(74,928)13,025,898 $(592,275)$3,891,897 $6,379 $3,898,276 
Nine Months Ended April 30, 2023
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at August 1, 202266,059,403 $6,606 $497,946 $3,813,261 $(181,607)12,382,441 $(543,344)$3,592,862 $7,792 $3,600,654 
Net income (loss)— — — 283,984 — — — 283,984 (1,026)282,958 
Purchases of treasury shares— — — — — 549,532 (42,007)(42,007)— (42,007)
Restricted stock unit activity274,669 27 2,647 — — 93,925 (6,924)(4,250)— (4,250)
Dividends $1.35 per common share
— — — (71,978)— — — (71,978)— (71,978)
Stock-based compensation expense— — 26,607 — — — — 26,607 — 26,607 
Other comprehensive income (loss)— — — — 106,679 — — 106,679 (387)106,292 
Balance at April 30, 2023
66,334,072 $6,633 $527,200 $4,025,267 $(74,928)13,025,898 $(592,275)$3,891,897 $6,379 $3,898,276 





See Notes to the Condensed Consolidated Financial Statements.



6


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(All U.S. Dollar and Euro amounts presented in thousands except share and per share data or except as otherwise specified)

1.    Nature of Operations and Accounting Policies

Nature of Operations

THOR Industries, Inc. was founded in 1980 and is the sole owner of operating subsidiaries (collectively, the “Company” or “THOR”), that, combined, represent the world's largest manufacturer of recreational vehicles (“RVs”). The Company manufactures a wide variety of RVs in the United States and Europe and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe. Unless the context requires or indicates otherwise, all references to “THOR,” the “Company,” “we,” “our” and “us” refer to THOR Industries, Inc. and its subsidiaries.

The July 31, 2023 amounts are derived from the annual audited financial statements of THOR. The interim financial statements are unaudited. In the opinion of management, all adjustments (which consist of normal, recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented have been made. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023. Due to seasonality within the recreational vehicle industry, the impact of supply chain disruptions primarily in Europe, inflation and shifting consumer demand on our industry, among other factors, annualizing the results of operations for the nine months ended April 30, 2024 would not necessarily be indicative of the results expected for the full fiscal year.

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2023-07 (“ASU 2023-07”) “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which requires additional disclosures about significant segment expenses regularly provided to the Chief Operating Decision Maker. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, or the annual report for fiscal 2025 for the Company, and interim periods within fiscal years beginning after December 15, 2024, or interim periods starting in fiscal 2026 for the Company. Early adoption is permitted. We are currently evaluating the impact of ASU 2023-07 on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain income tax disclosures. Under this ASU, entities must disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for financial statements for annual periods beginning after December 15, 2024. This ASU is effective for the Company in its fiscal year 2026 beginning on August 1, 2025. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on the consolidated financial statements.
7



2.    Business Segments

The Company has three reportable segments, all related to recreational vehicles: (1) North American Towable Recreational Vehicles, (2) North American Motorized Recreational Vehicles and (3) European Recreational Vehicles. The operations of the Company's Airxcel and Postle subsidiaries are included in “Other”. Net sales included in Other relate primarily to the sale of specialized component parts and aluminum extrusions. Intercompany eliminations adjust for Airxcel and Postle sales to the Company’s North American Towable and North American Motorized segments, which are consummated at established transfer prices generally consistent with the selling prices of products to third parties.

The following tables reflect certain financial information by reportable segment:

Three Months Ended April 30,Nine Months Ended April 30,
NET SALES:2024202320242023
Recreational vehicles
North American Towable$1,071,393$1,124,410$2,747,815$3,271,967
North American Motorized646,948795,9401,928,5312,658,042
Total North America1,718,3411,920,3504,676,3465,930,009
European931,061866,7512,421,5562,017,991
Total recreational vehicles2,649,4022,787,1017,097,9027,948,000
Other216,227201,164581,682598,671
Intercompany eliminations(64,516)(59,445)(170,343)(163,132)
Total$2,801,113$2,928,820$7,509,241$8,383,539

Three Months Ended April 30,Nine Months Ended April 30,
INCOME (LOSS) BEFORE INCOME TAXES:2024202320242023
Recreational vehicles
North American Towable$68,409$77,583$118,319$181,471
North American Motorized33,17248,18696,684234,163
Total North America101,581125,769215,003415,634
European77,38272,401144,20677,948
Total recreational vehicles178,963198,170359,209493,582
Other, net18,83116,97035,65030,004
Corporate(55,444)(59,689)(173,033)(156,146)
Total$142,350$155,451$221,826$367,440

TOTAL ASSETS:April 30, 2024July 31, 2023
Recreational vehicles
North American Towable$1,412,923$1,429,899
North American Motorized1,180,7071,268,109
Total North America2,593,6302,698,008
European2,983,5482,898,175
Total recreational vehicles5,577,1785,596,183
Other1,045,5121,048,076
Corporate595,507616,571
Total$7,218,197$7,260,830




8


DEPRECIATION AND INTANGIBLE ASSET AMORTIZATION EXPENSE:Three Months Ended April 30,Nine Months Ended April 30,
2024202320242023
Recreational vehicles
North American Towable$13,555$15,188$41,107$45,653
North American Motorized8,5568,11426,34724,447
Total North America22,11123,30267,45470,100
European31,51729,84093,05085,855
Total recreational vehicles53,62853,142160,504155,955
Other
13,86514,56341,15945,549
Corporate
6584461,8851,322
Total$68,151$68,151$203,548$202,826

Three Months Ended April 30,Nine Months Ended April 30,
CAPITAL ACQUISITIONS:2024202320242023
Recreational vehicles
North American Towable$3,726$14,367$15,099$52,361
North American Motorized2,6424,91815,50334,248
Total North America6,36819,28530,60286,609
European13,26815,88944,14436,960
Total recreational vehicles19,63635,17474,746123,569
Other
5,76213,14420,29725,913
Corporate
9458547,8521,125
Total$26,343$49,172$102,895$150,607

3.    Earnings Per Common Share

The following table reflects the weighted-average common shares used to compute basic and diluted earnings per common share as included on the Condensed Consolidated Statements of Income and Comprehensive Income:

Three Months Ended April 30,Nine Months Ended April 30,
2024202320242023
Weighted-average common shares outstanding for basic earnings per share
53,310,318 53,425,379 53,309,546 53,534,746 
Unvested restricted and performance stock units 411,836 395,021 432,600 319,796 
Weighted-average common shares outstanding assuming dilution
53,722,154 53,820,400 53,742,146 53,854,542 

For the three months ended April 30, 2024 and 2023, the Company had 43,000 and 113,964 unvested restricted stock units and performance stock units outstanding, respectively, which were excluded from this calculation as their effect would have been antidilutive. For the nine months ended April 30, 2024 and 2023, the Company had 34,125 and 162,565 unvested restricted stock units and performance stock units outstanding, respectively, which were excluded from this calculation as their effect would have been antidilutive.




9


4.    Derivatives and Hedging

The total amounts presented in the Condensed Consolidated Statements of Income and Comprehensive Income due to changes in the fair value of the derivative instruments are as follows:

Three Months Ended April 30,
20242023
Gain (Loss) on Derivatives Designated as Cash Flow Hedges
Gain (Loss) recognized in Other Comprehensive Income, net of tax
Interest rate swap agreements (1)
$ $(452)
Total gain (loss)$ $(452)

(1)Other comprehensive income (loss), net of tax, before reclassification from accumulated other comprehensive income (“AOCI”) was $0 and $16 for the three months ended April 30, 2024 and 2023, respectively.

Nine Months Ended April 30,
20242023
Gain (Loss) on Derivatives Designated as Cash Flow Hedges
Gain (Loss) recognized in Other Comprehensive Income, net of tax
Interest rate swap agreements (2)
$ $(367)
Total gain (loss)$ $(367)

(2)Other comprehensive income (loss), net of tax, before reclassification from AOCI was $0 and $734 for the nine months ended April 30, 2024 and 2023, respectively.

Three Months Ended April 30,
20242023
 Interest Interest
SalesExpenseSalesExpense
Gain (Loss) Reclassified from AOCI, Net of Tax
Interest rate swap agreements$ $ $  $468 
Gain (Loss) on Derivatives Not Designated as Hedging Instruments
Gain (loss) recognized in income, net of tax
Foreign currency forward contracts(278) 690  
Interest rate swap agreements 45  11 
Total gain (loss)$(278)$45 $690 $479 




10


Nine Months Ended April 30,
20242023
 Interest Interest
SalesExpenseSalesExpense
Gain (Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts$ $ $(58)$ 
Interest rate swap agreements   1,101 
Gain (Loss) on Derivatives Not Designated as Hedging Instruments
Gain (loss) recognized in income, net of tax
Foreign currency forward contracts(353) 2,636  
Commodities swap agreements  (2,229) 
Interest rate swap agreements (94) 182 
Total gain (loss)$(353)$(94)$349 $1,283 

As of April 30, 2024 and July 31, 2023 there were no derivative instruments designated as cash flow hedges. The Company has certain other derivative instruments which have not been designated as hedges. These other derivative instruments had a notional amount totaling approximately $49,681 and a fair value liability of $1,287 as of April 30, 2024. These other derivative instruments had a notional amount totaling approximately $25,248 and a fair value liability of $932 as of July 31, 2023. For these derivative instruments, changes in fair value are recognized in earnings.

Net Investment Hedges

The foreign currency transaction gains and losses on the Euro-denominated portion of the term loan, which is designated and effective as a hedge of the Company’s net investment in its Euro-denominated functional currency subsidiaries, are included as a component of the foreign currency translation adjustment. A gain, net of tax, was included in the foreign currency translation adjustment of $2,984 for the three months ended April 30, 2024 and a gain of $10,156 was included for the nine months ended April 30, 2024. Losses, net of tax, included in the foreign currency translation adjustments were $4,901 for the three months ended April 30, 2023 and $25,813 for the nine months ended April 30, 2023.

There were no amounts reclassified out of AOCI pertaining to the net investment hedge during the three and nine-month periods ended April 30, 2024 and April 30, 2023, respectively.

5.    Inventories

Major classifications of inventories are as follows:

April 30, 2024July 31, 2023
Finished goods – RV$272,428 $164,456 
Finished goods – other87,423 93,476 
Work in process322,181 313,006 
Raw materials452,493 563,614 
Chassis598,226 681,122 
Subtotal
1,732,751 1,815,674 
Excess of FIFO costs over LIFO costs(154,604)(162,604)
Total inventories, net$1,578,147 $1,653,070 

Of the $1,732,751 and $1,815,674 of inventories at April 30, 2024 and July 31, 2023, $1,292,488 and $1,224,069, respectively, were valued on the first-in, first-out (“FIFO”) method, and $440,263 and $591,605, respectively, were valued on the last-in, first-out (“LIFO”) method.




11


6.    Property, Plant and Equipment

Property, plant and equipment consists of the following:

April 30, 2024July 31, 2023
Land$145,878 $147,633 
Buildings and improvements1,055,126 1,038,394 
Machinery and equipment703,876 672,499 
Rental vehicles122,317 99,360 
Lease right-of-use assets – operating43,780 47,969 
Lease right-of-use assets – finance4,959 5,518 
Total cost2,075,936 2,011,373 
Less: Accumulated depreciation(696,395)(623,565)
Property, plant and equipment, net$1,379,541 $1,387,808 

See Note 15 to the Condensed Consolidated Financial Statements for further information regarding the lease right-of-use assets.

7.    Intangible Assets and Goodwill

The components of Amortizable intangible assets, net are as follows:

April 30, 2024July 31, 2023
Accumulated
Accumulated
CostAmortizationCost
Amortization
Dealer networks/customer relationships
$1,102,818 $586,834 $1,112,273 $526,327 
Trademarks
352,175 108,774 355,560 96,087 
Design technology and other intangibles
253,988124,000258,868107,483
Non-compete agreements
1,4001,4001,4001,225
Total amortizable intangible assets
$1,710,381 $821,008 $1,728,101 $731,122 

Estimated future amortization expense is as follows:

For the remainder of the fiscal year ending July 31, 2024$32,217
For the fiscal year ending July 31, 2025117,211
For the fiscal year ending July 31, 2026105,987
For the fiscal year ending July 31, 202797,308
For the fiscal year ending July 31, 202889,963
For the fiscal year ending July 31, 2029 and thereafter446,687
$889,373





12


Changes in the carrying amount of Goodwill by reportable segment for the nine months ended April 30, 2024 are summarized as follows:

North American TowableNorth American MotorizedEuropeanOtherTotal
Net balance as of August 1, 2023$337,883 $65,064 $965,758 $431,717 $1,800,422 
Fiscal 2024 activity:
Goodwill acquired   3,635 3,635 
Foreign currency translation   (26,722) (26,722)
Net balance as of April 30, 2024
$337,883 $65,064 $939,036 $435,352 $1,777,335 

Changes in the carrying amount of Goodwill by reportable segment for the nine months ended April 30, 2023 are summarized as follows:

North American TowableNorth American MotorizedEuropeanOtherTotal
Net balance as of August 1, 2022$344,975 $53,875 $893,383 $511,918 $1,804,151 
Fiscal 2023 activity:
Goodwill acquired4,097    4,097 
Measurement period adjustments   4,682 4,682 
Foreign currency translation  68,696  68,696 
Deconsolidation of Roadpass Digital   (84,883)(84,883)
Net balance as of April 30, 2023
$349,072 $53,875 $962,079 $431,717 $1,796,743 

8.    Equity Investments

As discussed in Note 8 to the Company’s Consolidated Financial Statements included in the Fiscal 2023 Form 10-K, effective December 30, 2022, the Company formed a joint venture with TechNexus Holdings LLC (“TechNexus”), whereby the Company transferred TH2Connect, LLC d/b/a Roadpass Digital and its associated legal entities to TN-RP Holdings, LLC (“TN-RP”), following which the Company and TechNexus own 100% of the Class A-RP units and Class C-RP units, respectively, issued by TN-RP.

TN-RP is a variable interest entity (“VIE”), in which both the Company and TechNexus each have a variable interest. The Company’s equity interest, which entitles the Company to a share of future distributions from TN-RP, represents a variable interest. The Company has significant influence due to its Class A-RP unit ownership interest, non-majority seats on the TN-RP advisory board and certain protective rights, and therefore the Company’s investment in TN-RP is accounted for under the equity method of accounting and reported as a component of Equity investments in the Condensed Consolidated Balance Sheets. Similarly, the Company holds an additional investment that is also a VIE over which the Company has significant influence. This is also reported as a component of Equity investments in the Condensed Consolidated Balance Sheets.

The Company had the following aggregate investment and maximum exposure to loss related to these VIEs:

April 30, 2024July 31, 2023
Carrying amount of investments$132,270 $126,909 
Maximum exposure to loss$148,039 $161,459 

The Company’s share of gains and losses accounted for under the equity method of accounting are included in Other income, net in the Condensed Consolidated Statements of Income and Comprehensive Income. The losses recognized in the three and nine months ended April 30, 2024 were $2,890 and $12,327, respectively, and the losses recognized in the three and nine months ended April 30, 2023 were $4,646 and $6,045, respectively.




13


9.    Concentration of Risk

One dealer, FreedomRoads, LLC, accounted for 14% of the Company’s consolidated net sales for the three-month period ended April 30, 2024 and 11% of the Company’s consolidated net sales for the three-month period ended April 30, 2023, and accounted for 14% of the Company’s consolidated net sales for the nine-month period ended April 30, 2024 and 13% for the nine-month period ended April 30, 2023. The majority of the sales to this dealer are reported within the North American Towable and North American Motorized segments. This dealer also accounted for 16% of the Company’s consolidated trade accounts receivable at April 30, 2024 and 13% at July 31, 2023. The loss of this dealer could have a material adverse effect on the Company’s business.

10.    Fair Value Measurements

The financial assets and liabilities that are accounted for at fair value on a recurring basis at April 30, 2024 and July 31, 2023 are as follows:
Input LevelApril 30, 2024July 31, 2023
Cash equivalentsLevel 1$202,961$286,984
Deferred compensation plan mutual fund assetsLevel 1$37,538$40,220
Equity investmentsLevel 1$1,286$4,105
Foreign currency forward contract liabilityLevel 2$251$
Interest rate swap liabilityLevel 2$1,036$932

Cash equivalents represent investments in short-term money market instruments that are direct obligations of the U.S. Treasury and/or repurchase agreements backed by U.S. Treasury obligations. These investments are reported as a component of Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Deferred compensation plan assets accounted for at fair value are investments in securities (primarily mutual funds) traded in an active market held for the benefit of certain employees of the Company as part of a deferred compensation plan, which are reported within Other assets in the Condensed Consolidated Balance Sheets. Additional plan investments in corporate-owned life insurance are recorded at their cash surrender value, not fair value, and therefore are not included above.

Equity investments represent stock investments that are publicly traded in an active market and are reported within Other assets in the Condensed Consolidated Balance Sheets.

The fair value of foreign currency forward contracts is estimated by discounting the difference between the contractual forward price and the current available forward price for the residual maturity of the contract using observable market rates.

The fair value of interest rate swaps is determined by discounting the estimated future cash flows based on the applicable observable yield curves.




14


11.    Product Warranties

The Company generally provides retail customers of its products with a one-year or two-year warranty covering defects in material or workmanship, with longer warranties on certain structural components.

Changes in our product warranty liability during the indicated periods are as follows:

Three Months Ended April 30,Nine Months Ended April 30,
2024202320242023
Beginning balance$319,614$326,665$345,197$317,908
Provision84,32794,971225,240256,752
Payments(82,853)(82,719)(248,379)(238,363)
Foreign currency translation(631)781(1,601)3,401
Ending balance$320,457$339,698$320,457$339,698

12.    Long-Term Debt

The components of long-term debt are as follows:

April 30, 2024July 31, 2023
Term loan$703,694 $758,094 
Senior unsecured notes500,000 500,000 
Unsecured notes 26,795 27,558 
Other debt33,306 41,753 
Total long-term debt1,263,795 1,327,405 
Debt issuance costs, net of amortization(19,250)(24,726)
Total long-term debt, net of debt issuance costs1,244,545 1,302,679 
Less: Current portion of long-term debt(35,491)(11,368)
Total long-term debt, net, less current portion$1,209,054 $1,291,311 

As discussed in Note 13 to the Company’s Consolidated Financial Statements included in the Fiscal 2023 Form 10-K, the Company is a party to a term loan (“term loan”) agreement, which consists of a U.S. dollar-denominated term loan tranche and a Euro-denominated term loan tranche, and a $1,000,000 revolving asset-based credit facility (“ABL”).

On November 15, 2023, the Company entered into amendments to both its term loan and ABL agreements to extend maturities and lower the applicable margins used to determine the interest rate on the U.S. dollar-denominated term loan tranche. Pursuant to the term loan amendments, the applicable margin used to determine the interest rate on U.S. dollar-denominated loans was reduced by 0.25% so that the applicable margin for Alternate Base Rate ("ABR")-based loans is 1.75% and 2.75% for Secured Overnight Financing Rate (“SOFR”)-based loans. The SOFR credit spread adjustment applicable to U.S. dollar-denominated SOFR-based loans was eliminated. The applicable margin for Euro-denominated EURIBOR-based loans was unchanged. The maturity date for the term loan was extended from February 1, 2026 to November 15, 2030. Covenants and other material provisions of the term loan agreement remain materially unchanged. Following the amendments, the principal amounts outstanding under the term loan agreement were $450,000 on the U.S. dollar-denominated term loan tranche and 330,000 Euro on the Euro-denominated term loan tranche. Under the provisions of the amended term loan, both the U.S. and Euro tranches require annual principal payments of 1.0% of the new term loan balance, payable quarterly in 0.25% installments starting on May 1, 2024. As of April 30, 2024, the Company had made sufficient payments on the U.S term loan tranche to satisfy all future annual principal payment requirements on the U.S. term loan over the term of the loan. Pursuant to the ABL amendment, the maturity date for loans under the ABL agreement was extended from September 1, 2026 to November 15, 2028. Maximum availability under the ABL remains at $1,000,000 and there were no borrowings outstanding as of the November 15, 2023 amendment date. The applicable margin, covenants and other material provisions of the ABL remain materially unchanged.




15


The November 15, 2023 debt amendments noted above were evaluated on a creditor-by-creditor basis pursuant to the requirements in ASC 470-50 related to syndicated loan arrangements. Extinguishment accounting was applied to the creditors that were deemed to have a substantial difference in terms based on an analysis of the present values of cash flows before and after the amendments. As a result of this analysis, the Company recorded expense of $14,741 in the second quarter of fiscal 2024. $7,566 of this $14,741 expense is classified as interest expense in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income and primarily represents extinguishment charges, while the remaining $7,175 is classified as administrative expense and primarily represents third-party costs attributed to the modified loans. In addition, during the second quarter of fiscal 2024 the Company capitalized qualifying financing-related costs of $10,480 related to these amendments which will be amortized over the remaining term of the amended agreements subject to acceleration for early term loan principal payments.

As of April 30, 2024, the outstanding U.S. term loan tranche balance of $350,000 was subject to a SOFR-based rate totaling 8.069%. As of July 31, 2023, the outstanding U.S. term loan tranche balance of $271,900 was subject to a SOFR-based rate totaling 8.433%. The interest rate on the April 30, 2024 outstanding Euro term loan tranche balance of $353,694 was 6.855%, and the interest rate on the July 31, 2023 outstanding Euro term loan tranche of $486,194 was 6.625%.

As of April 30, 2024 and July 31, 2023, there were no outstanding ABL borrowings. The Company may, generally at its option, pay any borrowings under the ABL, in whole or in part, at any time and from time to time, without penalty or premium.

Availability under the ABL agreement is subject to a borrowing base based on a percentage of applicable eligible receivables and eligible inventory. The unused availability under the ABL is generally available to the Company for general operating purposes and, based on April 30, 2024 eligible receivables and inventory balances, net of amounts drawn, totaled approximately $998,000.

As discussed in Note 13 to the Company’s Consolidated Financial Statements included in the Fiscal 2023 Form 10-K, on October 14, 2021, the Company issued an aggregate principal amount of $500,000 of 4.000% Senior Unsecured Notes (“Senior Unsecured Notes”) that will mature on October 15, 2029 unless redeemed or repurchased earlier. Interest on the Senior Unsecured Notes is payable in semi-annual installments on April 15 and October 15 of each year.

The unsecured notes of 25,000 Euro ($26,795) relate to long-term debt of our European segment. There are two series, 20,000 Euro ($21,436) with an interest rate of 1.945% maturing in March 2025, and 5,000 Euro ($5,359) with an interest rate of 2.534% maturing in March 2028. Other debt relates primarily to real estate loans with varying maturity dates through September 2032 and interest rates ranging from 2.38% to 2.87%.

Total contractual gross debt maturities are as follows:

 For the remainder of the fiscal year ending July 31, 2024$4,605
For the fiscal year ending July 31, 202535,730
For the fiscal year ending July 31, 20266,628
For the fiscal year ending July 31, 20276,163
For the fiscal year ending July 31, 202811,586
For the fiscal year ending July 31, 2029 and thereafter1,199,083
$1,263,795

For the three and nine months ended April 30, 2024, interest expense on total long-term debt was $24,366 and $78,113, respectively, which includes amortization of capitalized debt issuance costs in both periods, and the debt extinguishment charges noted above in the nine months ended April 30, 2024, totaling $3,036 and $14,900, respectively. For the three and nine months ended April 30, 2023, interest expense on total long-term debt was $24,994 and $69,237, respectively, which includes amortization of debt issuance costs of $2,872 and $8,569, respectively.





16


The fair value of the Company’s Senior Unsecured Notes at April 30, 2024 and July 31, 2023 was $433,600 and $430,650, respectively. The fair value of all other debt held by the Company approximates carrying value. The fair values of the Company’s long-term debt are primarily estimated using Level 2 inputs as defined by ASC 820, based on quoted prices in markets that are not active.

Subsequent to April 30, 2024, the Company made a payment of $27,110 against the principal balance of its Euro term loan. This payment was sufficient to satisfy all future annual principal payment requirements on the Euro term loan.

13.    Provision for Income Taxes

The overall effective income tax rate for the three months ended April 30, 2024 was 20.2%, and the effective income tax rate for the nine months ended April 30, 2024 was 21.6%. These rates were both favorably impacted by the terms of the resolution of certain matters discussed in Note 14 to the Condensed Consolidated Financial Statements, as the Company expects certain payments made related to these matters to be deductible for tax purposes.

The overall effective income tax rate for the three months ended April 30, 2023 was 23.0%, and the effective income tax rate for the nine months ended April 30, 2023 was 23.0%. These rates were both favorably impacted by certain foreign rate differences and mix of earnings between foreign and domestic operations which include certain interest income not subject to corporate income tax.

Within the next 12 months, the Company does not anticipate any material changes in its unrecognized tax benefits recorded as of April 30, 2024.

The Company files income tax returns in the U.S. federal jurisdiction and in many U.S. state and foreign jurisdictions. The Company is currently under exam by certain foreign jurisdictions for fiscal years ended 2016 through 2021. The Company believes it has adequately reserved for its exposure to additional payments for uncertain tax positions in its liability for unrecognized tax benefits.

14.    Contingent Liabilities, Commitments and Legal Matters

The Company’s total commercial commitments under standby repurchase obligations on global dealer inventory financing were $3,904,068 and $3,893,048 as of April 30, 2024 and July 31, 2023, respectively. The commitment term is generally up to 18 months.

The Company accounts for the guarantee under repurchase agreements of dealers’ financing by deferring a portion of the related product sale that represents the estimated fair value of the guarantee at inception. This deferred amount is included in the repurchase and guarantee reserve balances of $14,865 and $12,114 as of April 30, 2024 and July 31, 2023, respectively, which is included in Other current liabilities in the Condensed Consolidated Balance Sheets.

Losses incurred related to repurchase agreements that were settled during the three months ended April 30, 2024 were not material and totaled $6,487 for the nine months ended April 30, 2024, and losses during the three and nine months ended April 30, 2023 were not material. Estimating the timing and volume of any potential future repurchase demands, and the related losses to the Company, is difficult and subject to uncertainty. As of April 30, 2024, the Company is not aware of any specific information that would indicate future losses under these agreements would have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

The Company is also involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. Based on current conditions, management does not believe the ultimate disposition of any current legal proceedings or claims against the Company will have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.





17


A product recall was issued in late fiscal 2021 related to certain purchased parts utilized in certain of our products, and a reserve to cover anticipated costs was established at that time. Starting in fiscal 2022, the reserve has been adjusted quarterly based on developments involving the recall, including our expectations regarding the extent of vendor reimbursements and the estimated total cost of the recall. The Company has been, and will continue to be, reimbursed for a portion of the costs it will incur related to this recall. In addition, the Company accrued expenses during fiscal 2022 based on developments related to an investigation by certain German-based authorities regarding the adequacy of historical disclosures of vehicle weight in advertisements and other Company-provided literature in Germany. The Company has fully cooperated with the investigation. For the three months ended April 30, 2024, the Company’s adjustments related to these two matters were not material, and for the nine months ended April 30, 2024 the Company recognized income of $16,900 as a component of selling, general and administrative expense from adjustments related to these two matters. The German weight disclosure investigation was substantially resolved and paid in the third quarter of fiscal 2024 in an amount not materially different from the amount previously accrued. For the three and nine months ended April 30, 2023, the Company’s adjustments related to these two matters were not material. Based on current available information, the Company does not believe there will be a material adverse impact to our future results of operations and cash flows due to these matters.

15.    Leases

The Company has operating leases principally for land, buildings and equipment, and has various finance leases for certain land and buildings expiring through 2035.

Certain of the Company’s leases include options to extend or terminate the leases, and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.

The Company does not include significant restrictions or covenants in our lease agreements, and residual value guarantees are not generally included within our operating leases.

The components of lease costs for the three and nine-month periods ended April 30, 2024 and April 30, 2023 were as follows:

Three Months Ended April 30,Nine Months Ended April 30,
2024202320242023
Operating lease cost$7,980 $7,709 $23,619 $22,172 
Finance lease cost
Amortization of right-of-use assets186 186 559 559 
Interest on lease liabilities74 94 235 299 
Total lease cost$8,240 $7,989 $24,413 $23,030 

Other information related to leases was as follows:

Nine Months Ended April 30,
Supplemental Cash Flows Information20242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$23,555 $22,092 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$5,591 $13,388 



18


Supplemental Balance Sheet InformationApril 30, 2024July 31, 2023
Operating leases:
Operating lease right-of-use assets$43,780 $47,969 
Operating lease liabilities:
Other current liabilities$11,215 $11,238 
Other long-term liabilities32,791 36,775 
Total operating lease liabilities$44,006 $48,013 
Finance leases:
Finance lease right-of-use assets$4,959 $5,518 
Finance lease liabilities:
Other current liabilities$829 $754 
Other long-term liabilities2,090 2,722 
Total finance lease liabilities$2,919 $3,476 

April 30, 2024July 31, 2023
Weighted-average remaining lease term:
Operating leases9.1 years9.3 years
Finance leases3.1 years3.8 years
Weighted-average discount rate:
Operating leases4.9 %4.7 %
Finance leases9.7 %9.7 %

Future minimum payments required under operating and finance leases as of April 30, 2024 were as follows:

Operating LeasesFinance Leases
 For the remainder of the fiscal year ending July 31, 2024$4,744 $269 
For the fiscal year ending July 31, 202515,691 1,083 
For the fiscal year ending July 31, 202611,264 1,107 
For the fiscal year ending July 31, 20277,442 896 
For the fiscal year ending July 31, 2028 4,746 58 
For the fiscal year ending July 31, 2029 and thereafter16,455  
Total future lease payments60,342 3,413 
Less: Amount representing interest(16,336)(494)
Total reported lease liability$44,006 $2,919 




19


16.    Stockholders’ Equity

Stock-based Compensation

Total stock-based compensation expense recognized in the three-month periods ended April 30, 2024 and April 30, 2023 for stock-based awards totaled $9,351 and $9,672, respectively. Total stock-based compensation expense recognized in the nine-month periods ended April 30, 2024 and April 30, 2023 for stock-based awards totaled $29,049 and $26,607, respectively.

Share Repurchase Program

As discussed in Note 17 to the Company’s Consolidated Financial Statements included in the Fiscal 2023 Form 10-K, on December 21, 2021, the Company’s Board of Directors authorized Company management to utilize up to $250,000 to purchase shares of the Company’s common stock through December 21, 2024. On June 24, 2022, the Board authorized Company management to utilize up to an additional $448,321 to repurchase shares of the Company’s common stock through July 31, 2025.

During the three months ended April 30, 2024, the Company purchased 126,754 shares of its common stock, at various times in the open market, at a weighted-average price of $102.54 and held them as treasury shares at an aggregate purchase price of $12,997, with 125,318 shares, or $12,849, coming from the December 21, 2021 authorization and 1,436 shares, or $148, coming from the June 24, 2022 authorization.

During the nine months ended April 30, 2024, the Company purchased 454,630 shares of its common stock, at various times in the open market, at a weighted-average price of $94.66 and held them as treasury shares at an aggregate purchase price of $43,034, with 453,194 shares, or $42,886, coming from the December 21, 2021 authorization and 1,436 shares, or $148, coming from the June 24, 2022 authorization. Since the inception of the initial December 21, 2021 authorization, the Company has purchased 2,948,405 shares of its common stock, at various times in the open market, at a weighted-average price of $84.84 and held them as treasury shares at an aggregate purchase price of $250,148.

As of April 30, 2024, there are no remaining shares of the Company's common stock that may be repurchased under the December 21, 2021 authorization. As of April 30, 2024, the remaining amount of the Company’s common stock that may be repurchased under the June 24, 2022 authorization expiring on July 31, 2025 is $448,173.



20



17.    Revenue Recognition

The table below disaggregates revenue to the level that the Company believes best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors. Other RV-related revenues shown below in the European Recreational Vehicle segment include sales related to accessories and services, new and used vehicle sales at owned dealerships and RV rentals. Performance obligations for all material revenue streams are recognized at a point-in-time. Other sales relate primarily to component part sales to RV original equipment manufacturers and aftermarket sales through dealers and retailers, as well as aluminum extruded components.

Three Months Ended April 30,Nine Months Ended April 30,
NET SALES:2024202320242023
Recreational vehicles
North American Towable
Travel Trailers$720,194 $679,753 $1,811,215 $2,030,451 
Fifth Wheels351,199 444,657 936,600 1,241,516 
Total North American Towable1,071,393 1,124,410 2,747,815 3,271,967 
North American Motorized
Class A211,340 238,972 597,559 887,678 
Class C312,980 390,839 922,388 1,216,537 
Class B122,628 166,129 408,584 553,827 
Total North American Motorized646,948 795,940 1,928,531 2,658,042 
Total North America1,718,341 1,920,350 4,676,346 5,930,009 
European
Motorcaravan492,490 394,359 1,263,814 901,926 
Campervan289,450 282,415 755,783 648,717 
Caravan64,379 116,412 180,093 272,521 
Other RV-related84,742 73,565 221,866 194,827 
Total European931,061 866,751 2,421,556 2,017,991 
Total recreational vehicles2,649,402 2,787,101 7,097,902 7,948,000 
Other216,227 201,164 581,682 598,671 
Intercompany eliminations(64,516)(59,445)(170,343)(163,132)
Total$2,801,113 $2,928,820 $7,509,241 $8,383,539 




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18.    Accumulated Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) (“OCI”) and the changes in the Company’s accumulated other comprehensive income (loss) (“AOCI”) by component were as follows:

Three Months Ended April 30, 2024
Foreign Currency
Translation
Adjustment
Unrealized
Gain (Loss) on
Derivatives
OtherAOCI, net of tax, Attributable to THORNon-controlling InterestsTotal AOCI
Balance at beginning of period, net of tax$(93,147)$ $253 $(92,894)$(3,366)$(96,260)
OCI before reclassifications(17,647)  (17,647)(126)(17,773)
Income taxes associated with OCI before reclassifications (1)
      
Amounts reclassified from AOCI      
Income taxes associated with amounts reclassified from AOCI      
OCI, net of tax for the fiscal period(17,647)  (17,647)(126)(17,773)
Balance at end of period, net of tax$(110,794)$ $253 $(110,541)$(3,492)$(114,033)
Three Months Ended April 30, 2023
Foreign Currency
Translation
Adjustment
Unrealized
Gain (Loss) on
Derivatives
OtherAOCI, net of tax, Attributable to THORNon-controlling InterestsTotal AOCI
Balance at beginning of period, net of tax$(97,996)$818 $1,132 $(96,046)$(2,614)$(98,660)
OCI before reclassifications21,570 21  21,591 22 21,613 
Income taxes associated with OCI before reclassifications (1)
 (5) (5) (5)
Amounts reclassified from AOCI (615) (615) (615)
Income taxes associated with amounts reclassified from AOCI 147  147  147 
OCI, net of tax for the fiscal period21,570 (452) 21,118 22 21,140 
Balance at end of period, net of tax$(76,426)$366 $1,132 $(74,928)$(2,592)$(77,520)



22


Nine Months Ended April 30, 2024
Foreign Currency
Translation
Adjustment
Unrealized
Gain (Loss) on
Derivatives
OtherAOCI, net of tax, Attributable to THORNon-controlling InterestsTotal AOCI
Balance at beginning of period, net of tax$(68,911)$ $364 $(68,547)$(2,583)$(71,130)
OCI before reclassifications(41,883) (111)(41,994)(909)(42,903)
Income taxes associated with OCI before reclassifications (1)
      
Amounts reclassified from AOCI      
Income taxes associated with amounts reclassified from AOCI      
OCI, net of tax for the fiscal period(41,883) (111)(41,994)(909)(42,903)
Balance at end of period, net of tax$(110,794)$ $253 $(110,541)$(3,492)$(114,033)
Nine Months Ended April 30, 2023
Foreign Currency
Translation
Adjustment
Unrealized
Gain (Loss) on
Derivatives
OtherAOCI, net of tax, Attributable to THORNon-controlling InterestsTotal AOCI
Balance at beginning of period, net of tax$(183,453)$675 $1,171 $(181,607)$(2,205)$(183,812)
OCI before reclassifications107,027 966 (39)107,954 (387)107,567 
Income taxes associated with OCI before reclassifications (1)
 (232) (232) (232)
Amounts reclassified from AOCI (1,368) (1,368) (1,368)
Income taxes associated with amounts reclassified from AOCI 325  325  325 
OCI, net of tax for the fiscal period107,027 (309)(39)106,679 (387)106,292 
Balance at end of period, net of tax$(76,426)$366 $1,132 $(74,928)$(2,592)$(77,520)

(1)We do not recognize deferred taxes for a majority of the foreign currency translation gains and losses because we do not anticipate reversal in the foreseeable future.



23


19.    Weather Damage at Manufacturing Facilities

On March 14, 2024, a weather event that included large damaging hail occurred at and around the Company’s Jackson Center, OH facilities. The hail resulted in significant roof damage to the motorized production facility and significant damage to inventory that was stored outside, primarily motorized chassis, but also some work in process and finished goods inventory. The motorized manufacturing plant has generally been unable to produce units since the incident due to the lack of chassis, but it is expected to be back to a normal production schedule by the end of the fiscal year based on current expectations on the availability of replacement chassis.

The Company maintains insurance coverage, subject to a $1,000 self-insured retention, for the repair or replacement of covered assets that suffer loss, as well as coverage for business interruption, including lost profits. Inventory is a covered asset under the insurance policy, as is the production facility itself.

As of April 30, 2024, the Company recorded a receivable in the amount of $71,496 related to estimated damages incurred for which we deem the recovery of such losses from our insurance carriers to be probable. This total consists primarily of $65,900 for estimated losses attributed to the write off in book value of motorized chassis. This insurance recovery receivable is included in Accounts receivable, other, net on the Condensed Consolidated Balance Sheets, as we believe recovery will be realized within one year of the balance sheet date.

Given the expectation of recovery from insurance, the impact on our consolidated income before income taxes for the three months ended April 30, 2024 related to the losses incurred on the weather damages noted above was not material. As of the date of this report, the Company is still in the process of fully assessing damages and submitting relevant insurance claim information. As such, the Company did not receive any insurance proceeds relating to this event in the three months ended April 30, 2024.

Although our insurance covers business interruption, the Company did not recognize recovery for business interruption during the three-month period ended April 30, 2024 and will do so at the time of final settlement or when nonrefundable cash advances are made in subsequent periods.



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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated, all U.S. Dollar and Euro amounts are presented in thousands except share and per share data.

Forward-Looking Statements

This report 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 independent dealers and consumers and our profitability;
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-law changes 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;



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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 (including the Securities and Exchange Commission's ("SEC") final climate rules and litigation regarding its enforceabilty) 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 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 report 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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Executive Overview

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles (“RVs”) in the world based on units sold and revenue. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Statistical Surveys, Inc. (“Stat Surveys”), for the three months ended March 31, 2024, THOR’s combined U.S. and Canadian market share was approximately 40.2% for travel trailers and fifth wheels combined and approximately 47.9% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”) and based on unit registrations for Europe's original equipment manufacturer (“OEM”) reporting countries, our European market share for the three months ended March 31, 2024 was approximately 25.6% for motorcaravans and campervans combined and approximately 17.5% for caravans.

Our business model includes decentralized operating units, and our RV products are primarily sold to independent, non-franchise dealers who, in turn, retail those products. The Company also sells component parts to both RV and other original equipment manufacturers, including aluminum extruded components, and sells aftermarket component parts through dealers and retailers. Our growth has been achieved both organically and through acquisition, and our strategy is designed to increase our profitability by driving innovation, servicing our customers, manufacturing quality products, improving the efficiencies of our facilities and making strategic acquisitions.

We generally do not finance independent dealers directly, but we do provide repurchase agreements to the independent dealers’ floor plan lenders.

We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Ongoing supply chain challenges, particularly chassis sequence issues within our European operations, have and could continue to impact our business and our consolidated financial results and financial position. In addition, the impact of ongoing inflation on consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with significantly higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during the first three quarters of fiscal 2024 and are expected to continue to impact the remainder of calendar year 2024. These risks to our business are more fully described in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.

Recent Events

Refinancing of Credit Agreements

On November 15, 2023, the Company entered into amendments to both its term loan and ABL agreements to extend maturities and lower the applicable margins used to determine the interest rate on the U.S. dollar-denominated loan tranche. The maturity date for the term loan was extended from February 1, 2026 to November 15, 2030. Covenants and other material provisions of the term loan agreement remain materially unchanged. Following the amendments, the principal amounts outstanding under the term loan agreement were $450,000 on the U.S. dollar-denominated term loan tranche and 330,000 Euro on the Euro-denominated term loan tranche. Under the provisions of the amended term loan, both the U.S. and Euro tranches require annual principal payments of 1.0% of the new term loan balance, payable quarterly in 0.25% installments starting on May 1, 2024. As of April 30, 2024, the Company had made sufficient payments on the U.S term loan tranche to satisfy all annual principal payment requirements on the U.S. term loan over the term of the loan. Pursuant to the ABL amendment, the maturity date for loans under the ABL agreement was extended from September 1, 2026 to November 15, 2028. Maximum availability under the ABL remains at $1,000,000 and the applicable margin, covenants and other material provisions of the ABL remain materially unchanged. As a result of these amendments and associated maturity date extensions, the Company recognized total expense of $14,741 in the second quarter of fiscal 2024.





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Industry Outlook — North America

The Company monitors industry conditions in the North American RV market using a number of resources including its own performance tracking and modeling. The Company also considers monthly wholesale shipment data as reported by the RV Industry Association (“RVIA”), which is typically issued on a one-month lag and represents manufacturers’ North American RV production and delivery to dealers. In addition, we monitor monthly North American retail sales trends as reported by Stat Surveys, whose data is typically issued on a month-and-a-half lag. The Company believes that monthly RV retail sales data is important as consumer purchases impact future dealer orders and ultimately our production and net sales.

North American RV independent dealer inventory of our North American RV products as of April 30, 2024 decreased 22.2% to approximately 87,900 units, compared to approximately 113,000 units as of April 30, 2023. As of April 30, 2024, we believe North American dealer inventory levels for most products are generally at, or slightly higher than, the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs. We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels, due to a combination of factors such as retail activity, RV wholesale unit prices as well as interest rates and other carrying costs.

THOR’s North American RV backlog as of April 30, 2024 decreased $353,067, or 17.5%, to $1,667,131 compared to $2,020,198 as of April 30, 2023. The decrease in backlog is primarily a result of a reduction in orders from dealers, mainly for motorized products, which we believe is due to lower retail sales and dealer concerns over current interest costs and other carrying costs compared to the prior-year period.

North American Industry Wholesale Statistics

Key wholesale statistics for the North American RV industry, as reported by RVIA for the periods indicated, are as follows:

U.S. and Canada Wholesale Unit Shipments
Calendar Quarter Ended March 31,Increase%
20242023(Decrease)Change
North American Towable units75,525 65,208 10,317 15.8
North American Motorized units10,416 13,392 (2,976)(22.2)
Total85,941 78,600 7,341 9.3

In June 2024, RVIA issued a revised forecast for calendar year 2024 wholesale unit shipments. Under the RVIA’s most likely scenario, towable and motorized unit shipments are projected to be approximately 301,500 units and 42,500 units, respectively, for an annual total of approximately 344,000 units, up 9.8% from the 2023 calendar year wholesale shipments. The RVIA’s most likely forecast for calendar year 2024 of 344,000 total units could range from a lower estimate of approximately 328,900 total units to an upper estimate of approximately 359,100 total units.

As part of their June 2024 forecast, RVIA also released their initial estimates for calendar year 2025 wholesale unit shipments. In the most likely scenario, towable and motorized shipments are projected to increase to an approximated annual total of 391,400 units, or 13.8% higher than the most likely scenario for calendar year 2024 wholesale shipments. This calendar year 2025 most likely forecast could range from a lower estimate of approximately 374,200 units to an upper estimate of approximately 408,600 units.





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North American Industry Retail Statistics

Key retail statistics for the North American RV industry, as reported by Stat Surveys for the periods indicated, are as follows:

U.S. and Canada Retail Unit Registrations
Calendar Quarter Ended March 31,Increase%
20242023(Decrease)Change
North American Towable units64,47173,734(9,263)(12.6)
North American Motorized units9,41710,985(1,568)(14.3)
Total73,88884,719(10,831)(12.8)

Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various states or provinces.

While we anticipate that near-term demand will be influenced by many factors, including consumer confidence and the level of consumer spending on discretionary products, we believe future retail demand over the longer term will exceed historical, pre-pandemic levels. We believe interest remains high due to an ongoing interest in the RV lifestyle as consumers continue to value the perceived benefits offered by the RV lifestyle, which provides people with the ability to connect with loved ones and nature as well as the potential to get away for short, frequent breaks or longer adventures.

Company North American Wholesale Statistics

The Company’s North American wholesale RV shipments, for the calendar quarters ended March 31, 2024 and 2023 to correspond to the North American industry wholesale periods noted above, were as follows:

U.S. and Canada Wholesale Unit Shipments
Calendar Quarter Ended March 31,Increase%
20242023(Decrease)Change
North American Towable units29,693 24,707 4,986 20.2
North American Motorized units4,831 5,855 (1,024)(17.5)
Total34,52430,5623,96213.0

Company North American Retail Statistics

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the calendar quarters ended March 31, 2024 and 2023 to correspond to the North American industry retail periods noted above, were as follows:

U.S. and Canada Retail Unit Registrations
 Calendar Quarter Ended March 31,Increase%
20242023(Decrease)Change
North American Towable units25,337 30,266 (4,929)(16.3)
North American Motorized units4,515 5,267 (752)(14.3)
Total29,852 35,533 (5,681)(16.0)

Note: Data reported by Stat Surveys is based on official state and provincial records. This information is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various states or provinces.





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North American Outlook

Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the rate of unemployment, the rate of inflation, the level of consumer confidence, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices. We believe these factors will continue to affect retail sales in calendar year 2024. In addition, due to inflationary pressures, higher interest rates and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis. It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the remainder of calendar year 2024 will continue to be negatively impacted by these factors.
Despite the near-term challenges, we remain optimistic about future growth in North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the ongoing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The growth in industry-wide RV sales during late 2020 through early 2023 resulted in exposing a wider range of consumers to the RV lifestyle. As a result, we believe many of those who have been recently exposed to the industry for the first time will become future owners, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities. We also believe many consumers are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home. In addition, we believe that the availability of camping and RV parking facilities will be an important factor in the future growth of the industry and view both the significant recent investments and the future committed investments by campground owners, states and the federal government in camping facilities and accessibility to state and federal parks and forests to be positive long-term factors.

Economic and industry-wide factors that have historically affected, and which we believe will continue to affect, our operating results include the costs of commodities, the availability of critical supply components and labor costs incurred in the production of our products. Material and labor costs are the primary factors determining our cost of products sold, and any future increases in raw material or labor costs will impact our profit margins negatively if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. Historically, we have generally been able to offset net cost increases over time through these measures.

It is extremely difficult to predict when or whether future supply chain issues related to chassis or other components used in the production of RVs will arise. Modifying available chassis for certain motorized products to use for other products is not a viable alternative, particularly in the short term, due to engineering requirements. The North American recreational vehicle industry has, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays or other production issues and work stoppages at the chassis manufacturers.

While the North American RV industry has at times faced supply shortages or delivery delays of other, non-chassis raw material components, the supply chain is currently able to support our demand. If any of these factors were to impact our suppliers' ability to fully supply our needs for key components, our costs of such components and our production output could be adversely affected.





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Industry Outlook — Europe

The Company monitors industry conditions in the European RV market using a number of resources including its own performance tracking and modeling. The Company also considers retail trends in the European RV market as reported by the European Caravan Federation (“ECF”) and its members. On a monthly basis, the Company receives original equipment manufacturer ("OEM")-specific reports for most of the individual member countries that make up the ECF through the Caravaning Industrie Verband e.V. (“CIVD”). The timing of these reports may vary, but typically they are issued on a one-to-two-month lag. While most countries provide OEM-specific information, the United Kingdom, which made up 22.3% and 9.6% of the caravan and motorcaravan (including campervans) European market for the three months ended March 31, 2024, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Within Europe, over 90% of our sales are made to dealers within 10 different European countries. The market conditions, as well as the operating status of our independent dealers within each country, vary based on the various local economic and other conditions. It is inherently difficult to generalize about the operating conditions within the entire European region.

Independent dealer inventory of our European RV products as of April 30, 2024 was approximately 24,700 units. Independent RV dealer inventory levels of our European products are generally in line with historic seasonal levels in the various countries we serve. Within Germany, which accounts for approximately 60% of our European product sales, independent dealer inventory levels are also generally in line with historical norms. Comparable independent dealer inventory unit information was not available as of April 30, 2023.

THOR’s European RV backlog as of April 30, 2024 decreased $1,539,205, or 44.3%, to $1,935,119 compared to $3,474,324 as of April 30, 2023, primarily due to improved chassis supply availability as chassis constraints in the prior year resulted in significantly elevated backlogs as of April 30, 2023.

European Industry Retail Statistics

Key retail statistics for the European RV industry, as reported by the ECF for the periods indicated, are as follows:

European Unit Registrations
Motorcaravan and Campervan (2)
Caravan
Calendar Quarter Ended March 31,%Calendar Quarter Ended March 31,%
 20242023Change20242023Change
OEM Reporting Countries (1)
35,317 33,504 5.410,705 11,431 (6.4)
Non-OEM Reporting Countries (1)
4,982 4,359 14.33,840 4,140 (7.2)
Total40,299 37,863 6.414,545 15,571 (6.6)

(1)Industry retail registration statistics have been compiled from individual countries' reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the “OEM Reporting Countries.” The “Non-OEM Reporting Countries” are primarily the United Kingdom and others. Total European unit registrations are reported quarterly by the ECF.
(2)The ECF reports motorcaravans and campervans together.
Note: Data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various countries. (The "Non-OEM Reporting Countries" either do not report OEM-specific data to the ECF or do not have it available for the entire time period covered).





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Company European Retail Statistics (1)

European Unit Registrations (1)
Calendar Quarter Ended March 31,Increase%
20242023(Decrease)Change
Motorcaravan and Campervan9,049 6,694 2,355 35.2 
Caravan1,874 2,057 (183)(8.9)
Total OEM-Reporting Countries10,923 8,751 2,172 24.8 

(1)Company retail registration statistics have been compiled from individual countries reporting of retail sales, and include the following countries: Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others, collectively the “OEM Reporting Countries.”
Note: Data from the ECF is subject to adjustment, is continuously updated and is often impacted by delays in reporting by various countries.

European Outlook

Our European operations offer a full lineup of leisure vehicles including caravans and motorized products including urban vehicles, campervans and small-to-large motorcaravans. Our product offerings are not limited to vehicles only but also include accessories and services, including vehicle rentals. We address European retail customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions. With the help of data-based and digital marketing, we intend to continue expanding our retail customer reach to new and younger consumer segments.

The impact of current macroeconomic factors on our business, including inflation and interest rates, supply chain constraints, environmental and sustainability regulations and geopolitical events, is uncertain. Our outlook for future European RV retail sales depends upon the various economic and regulatory conditions in the respective countries in which we sell our products, and on our ability to manage through supply chain issues that have, and are expected to continue to, impact the efficiency of our production of our motorized products in the near term. End-customer demand for RVs depends strongly on consumer confidence. Factors such as the rate of unemployment, the rate of inflation, private consumption and investments, the level of disposable income of consumers, interest rates, the health of the housing market, tax rates and regulatory restrictions and, since the pandemic, travel safety considerations all influence retail sales. Our long-term outlook for future growth in European RV retail sales remains positive as more people discover RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose vehicle to escape urban life and explore outdoor activities and nature.

We and our independent European dealers market our European recreational vehicles through multiple avenues including at numerous RV fairs at the country and regional levels which occur throughout the calendar year. These fairs have historically been well-attended events that allow retail consumers the ability to see the newest products, features and designs and to talk with product experts in addition to being able to purchase or order an RV. The most recent 2023 Caravan Salon show in late August 2023 experienced near-record attendance, demonstrating the high level of interest in the RV lifestyle despite the current macroeconomic uncertainties facing many consumers. In addition to our attendance at various strategic trade fairs, we have and will continue to strengthen and expand our digital activities to reach high potential target groups, generate leads and steer customers directly to dealerships. With approximately 1,100 active independent dealers in Germany and throughout Europe with whom we do business, we believe our European brands have one of the strongest and most professionally structured dealer and service networks in Europe.

Economic or industry-wide factors affecting our European RV operating results include the availability and costs of commodities and component parts and the labor used in the manufacture of our products. Material and labor costs are the primary factors determining our cost of products sold and any future increases in these costs will impact our profit margins negatively if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts.





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Throughout fiscal 2023, we experienced delays in the receipt of, and significant reductions in the volume of, chassis from our European chassis suppliers, limiting our ability to further increase production of our motorized products. While overall chassis supply has improved, we anticipate disruptions in the sequence of delivery of chassis to continue through the majority of calendar year 2024. The sequence of chassis supply inhibits our ability to efficiently and consistently maintain our planned production levels. Uncertainties related to changing emission standards may also impact the availability of chassis used in our production of certain European motorized RVs and could also impact consumer buying patterns.

In Europe, we also continue to experience cost increases, supply shortages and delivery delays of other, non-chassis raw material components which negatively impacted the efficiency of our production in the current fiscal year, which resulted in the continuation of an elevated level of work in process inventory on hand compared to historical norms. We believe these shortages and delays will continue to result in production inefficiencies and a continuation of the elevated level of work in process inventory in the near term, which will have a negative impact on our European operating results as well as on our consolidated results due to the negative impact of carrying excess inventory levels and the negative impact of completing units off the production line.

Where possible, to minimize the future impact of supply chain constraints, we have identified a second-source supplier base for certain component parts, however, the engineering requirements required with an alternate component part, particularly the chassis our various units are built upon, limits the impact of these alternative suppliers on reducing any near-term supply constraints.

In addition to potential material supply constraints, labor shortages may also impact our European operations. Currently, we are experiencing a shortage of available skilled workers due to near full employment rates in the European countries where the majority of our manufacturing sites are located.



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Three Months Ended April 30, 2024 Compared to the Three Months Ended April 30, 2023

NET SALES:Three Months Ended
April 30, 2024
Three Months Ended
April 30, 2023
Change
Amount
%
Change
Recreational vehicles
North American Towable$1,071,393 $1,124,410 $(53,017)(4.7)
North American Motorized646,948 795,940 (148,992)(18.7)
Total North America1,718,341 1,920,350 (202,009)(10.5)
European931,061 866,751 64,310 7.4
Total recreational vehicles2,649,402 2,787,101 (137,699)(4.9)
Other216,227 201,164 15,063 7.5
Intercompany eliminations(64,516)(59,445)(5,071)(8.5)
Total$2,801,113 $2,928,820 $(127,707)(4.4)

# OF UNITS:
Recreational vehicles
North American Towable34,193 29,716 4,477 15.1
North American Motorized4,964 6,203 (1,239)(20.0)
Total North America39,157 35,919 3,238 9.0
European15,363 15,593 (230)(1.5)
Total54,520 51,512 3,008 5.8

GROSS PROFIT:% of
Segment
Net Sales
% of
Segment
Net Sales
Change
Amount
%
Change
Recreational vehicles
North American Towable$138,103 12.9$143,988 12.8$(5,885)(4.1)
North American Motorized71,753 11.193,307 11.7(21,554)(23.1)
Total North America209,856 12.2237,295 12.4(27,439)(11.6)
European162,915 17.5151,780 17.511,135 7.3
Total recreational vehicles372,771 14.1389,075 14.0(16,304)(4.2)
Other, net49,081 22.743,562 21.75,519 12.7
Total$421,852 15.1$432,637 14.8$(10,785)(2.5)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Recreational vehicles
North American Towable$64,895 6.1$60,180 5.4$4,715 7.8
North American Motorized34,489 5.341,880 5.3(7,391)(17.6)
Total North America99,384 5.8102,060 5.3(2,676)(2.6)
European72,167 7.865,065 7.57,102 10.9
Total recreational vehicles171,551 6.5167,125 6.04,426 2.6
Other19,731 9.115,217 7.64,514 29.7
Corporate35,233 27,702 7,531 27.2
Total$226,515 8.1$210,044 7.2$16,471 7.8



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INCOME (LOSS) BEFORE INCOME TAXES:Three Months Ended
April 30, 2024
% of
Segment
Net Sales
Three Months Ended
April 30, 2023
% of
Segment
Net Sales
Change
Amount
%
Change
Recreational vehicles
North American Towable$68,409 6.4$77,583 6.9$(9,174)(11.8)
North American Motorized33,172 5.148,186 6.1(15,014)(31.2)
Total North America101,581 5.9125,769 6.5(24,188)(19.2)
European77,382 8.372,401 8.44,981 6.9
Total recreational vehicles178,963 6.8198,170 7.1(19,207)(9.7)
Other, net18,831 8.716,970 8.41,861 11.0
Corporate(55,444)(59,689)4,245 7.1
Total$142,350 5.1$155,451 5.3$(13,101)(8.4)


ORDER BACKLOG:
As of
April 30, 2024
As of
April 30, 2023
Change
Amount
%
Change
Recreational vehicles
North American Towable$741,302 $757,127 $(15,825)(2.1)
North American Motorized925,829 1,263,071 (337,242)(26.7)
Total North America1,667,131 2,020,198 (353,067)(17.5)
European1,935,119 3,474,324 (1,539,205)(44.3)
Total$3,602,250 $5,494,522 $(1,892,272)(34.4)

CONSOLIDATED

Consolidated net sales for the three months ended April 30, 2024 decreased $127,707, or 4.4%, compared to the three months ended April 30, 2023. The decrease in consolidated net sales is primarily due to lower dealer and consumer demand in comparison to the prior-year period, primarily in the North American motorized market. Approximately 33.2% of the Company’s consolidated net sales for the quarter ended April 30, 2024 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The decrease in consolidated net sales includes a nominal increase from the change in currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period.

Consolidated gross profit for the three months ended April 30, 2024 decreased $10,785, or 2.5%, compared to the three months ended April 30, 2023. Consolidated gross profit was 15.1% of consolidated net sales for the three months ended April 30, 2024 and 14.8% for the three months ended April 30, 2023. The decrease in consolidated gross profit was primarily due to the impact of the decrease in consolidated net sales while the slight increase in the consolidated gross profit percentage is due to the favorable impacts of selling price increases, stable material costs and cost-saving initiatives in the current-year quarter compared to the prior-year quarter.

Selling, general and administrative expenses for the three months ended April 30, 2024 increased $16,471, or 7.8%, compared to the three months ended April 30, 2023, primarily due to modest increases in deferred compensation, research and development and settlement costs.

The decrease of $13,101, or 8.4%, in income before income taxes for the three months ended April 30, 2024 as compared to the three months ended April 30, 2023 was primarily driven by the decrease in consolidated net sales and the increase in consolidated selling, general and administrative expenses noted above.

The overall effective income tax rate for the three months ended April 30, 2024 was 20.2% compared with 23.0% for the three months ended April 30, 2023. The primary reason for the decrease relates to the favorable impact of the terms of the resolution of certain matters discussed in Note 14 to the Condensed Consolidated Financial Statements during the three months ended April 30, 2024, as the Company expects certain payments made related to these matters to be deductible for tax purposes.



35


Additional information concerning the changes in net sales, gross profit, selling, general and administrative expenses and income before income taxes are addressed below and in the segment reporting that follows.

Corporate costs included in consolidated selling, general and administrative expenses increased $7,531 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This increase is primarily due to an increase in deferred compensation expense of $2,922 due to market value fluctuations between the two periods and an increase in innovation-led research and development costs of $3,093.

Net expense in Corporate interest and other income and expense decreased $11,776 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This net expense decrease included a decrease in net interest expense of $5,360 on our debt, due to increased interest income received from higher average cash balances held and higher interest income rates combined with lower debt interest expense primarily due to lower average debt balances outstanding. The net expense decrease also includes favorable changes of $2,997 in the fair value of the Company's deferred compensation plan assets and $3,263 in the fair value of certain other equity investments, both due to market value fluctuations between the two periods.

Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended April 30, 2024 compared to the three months ended April 30, 2023:

Three Months Ended
April 30, 2024
% of
Segment
Net Sales
Three Months Ended
April 30, 2023
% of
Segment
Net Sales
Change Amount
%
Change
NET SALES:
North American Towable
Travel Trailers$720,194 67.2 $679,753 60.5 $40,441 5.9
Fifth Wheels351,199 32.8 444,657 39.5 (93,458)(21.0)
Total North American Towable$1,071,393 100.0 $1,124,410 100.0 $(53,017)(4.7)
Three Months Ended
April 30, 2024
% of
Segment
Shipments
Three Months Ended
April 30, 2023
% of
Segment
Shipments
Change Amount
%
Change
# OF UNITS:
North American Towable
Travel Trailers28,526 83.4 22,257 74.9 6,269 28.2
Fifth Wheels5,667 16.6 7,459 25.1 (1,792)(24.0)
Total North American Towable34,193 100.0 29,716 100.0 4,477 15.1
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:
%
Change
North American Towable
Travel Trailers(22.3)
Fifth Wheels3.0
Total North American Towable(19.8)





36


The decrease in total North American Towable net sales of 4.7% compared to the prior-year quarter resulted from a 15.1% increase in unit shipments and a 19.8% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments is primarily due to the heightened demand for the lower-cost travel trailer units, which increased 28.2% over the prior-year quarter. According to statistics published by RVIA, for the three months ended April 30, 2024, combined North American travel trailer and fifth wheel wholesale unit shipments increased 15.5% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended March 31, 2024 and 2023, our North American market share for travel trailers and fifth wheels combined was 40.2% and 42.1%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The decrease in the overall net price per unit within the travel trailer product line of 22.3% was primarily due to the combined impact of sales price reductions due to lower input costs and product mix changes trending toward more moderately-priced units as compared to the prior-year quarter. The increase within the fifth wheel product line of 3.0% was primarily due to product mix changes.

North American Towable cost of products sold decreased $47,132 to $933,290, or 87.1% of North American Towable net sales, for the three months ended April 30, 2024 compared to $980,422, or 87.2% of North American Towable net sales, for the three months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $44,186 of the $47,132 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales decreased to 79.6% for the three months ended April 30, 2024 compared to 79.8% for the three months ended April 30, 2023, primarily due to a decrease in the material costs percentage from the combined net favorable impacts of lower discounting, cost-saving initiatives and product mix changes being partially offset by an increase in the labor percentage.

Total manufacturing overhead decreased $2,946 in correlation with the decrease in net sales but increased slightly as a percentage of North American Towable net sales from 7.4% to 7.5% as the decreased net sales levels resulted in higher overhead costs per unit sold.

The slight decrease in North American Towable gross profit of $5,885 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was due to the decrease in net sales.

The increase in North American Towable selling, general and administrative expenses of $4,715 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 is primarily due to an increase in legal and professional fees and settlement costs of $3,495 and compensation costs of $3,211, partially offset by a reduction in sales-related travel and entertainment costs of $1,152. The increase in the overall selling, general and administrative expense as a percentage of North American Towable net sales is primarily due to the decrease in net sales and the cost increases noted above.

The decrease in North American Towable income before income taxes of $9,174 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily attributable to the decrease in North American Towable net sales, and the primary reason for the decrease in percentage was the increase in the selling, general and administrative expense percentage noted above.





37


NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended April 30, 2024 compared to the three months ended April 30, 2023:

Three Months Ended
April 30, 2024
% of
Segment
Net Sales
Three Months Ended
April 30, 2023
% of
Segment
Net Sales
Change
Amount
%
Change
NET SALES:
North American Motorized
Class A$211,340 32.7 $238,972 30.0 $(27,632)(11.6)
Class C312,980 48.4 390,839 49.1 (77,859)(19.9)
Class B122,628 18.9 166,129 20.9 (43,501)(26.2)
Total North American Motorized$646,948 100.0 $795,940 100.0 $(148,992)(18.7)
Three Months Ended
April 30, 2024
% of
Segment
Shipments
Three Months Ended
April 30, 2023
% of
Segment
Shipments
Change
Amount
%
Change
# OF UNITS:
North American Motorized
Class A1,040 21.0 1,206 19.4 (166)(13.8)
Class C2,867 57.8 3,563 57.4 (696)(19.5)
Class B1,057 21.2 1,434 23.2 (377)(26.3)
Total North American Motorized4,964 100.0 6,203 100.0 (1,239)(20.0)
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:
%
Change
North American Motorized
Class A2.2
Class C(0.4)
Class B0.1
Total North American Motorized1.3

The decrease in total North American Motorized net sales of 18.7% compared to the prior-year quarter resulted from a 20.0% decrease in unit shipments and a 1.3% increase in the overall net price per unit due to the combined impact of changes in product mix and price, which included elevated sales discounts compared to the prior-year quarter. The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior-year quarter. According to statistics published by RVIA, for the three months ended April 30, 2024, combined North American motorhome wholesale unit shipments decreased 19.9% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended March 31, 2024 and 2023, our North American market share for motorhomes was 47.9% for both periods. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increases in the overall net price per unit within the Class A product line of 2.2% and the Class B product line of 0.1% were primarily due to increases from product mix changes and selling price increases being mostly offset by higher discounting levels since the prior-year quarter. The decrease in the overall net price per unit within the Class C product line of 0.4% was primarily due to higher discounting levels.





38


North American Motorized cost of products sold decreased $127,438 to $575,195, or 88.9% of North American Motorized net sales, for the three months ended April 30, 2024 compared to $702,633, or 88.3% of North American Motorized net sales, for the three months ended April 30, 2023. The changes in material, labor, freight-out and warranty costs comprised $118,533 of the $127,438 decrease primarily due to the decreased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales increased to 83.1% for the three months ended April 30, 2024 compared to 82.5% for the three months ended April 30, 2023, with the increase mainly due to an increase in the material cost percentage, primarily due to higher sales discounting effectively decreasing net selling prices and correspondingly increasing the material cost percentage, partially offset by a decrease in the labor percentage.

Total manufacturing overhead decreased $8,905 in correlation with the net sales decrease but was consistent as a percentage of North American Motorized at 5.8% for both periods.

The decrease in North American Motorized gross profit of $21,554 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was driven by the decrease in net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

The decrease in North American Motorized selling, general and administrative expenses of $7,391 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily due to the decrease in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $7,822. Selling, general and administrative expense as a percentage of North American Motorized net sales was consistent with the prior year.

The decrease in North American Motorized income before income taxes of $15,014 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily due to the decrease in North American Motorized net sales, and the primary reason for the decrease in percentage was the increase in the cost of products sold percentage noted above and an increase in amortization expense as a percentage of net sales.




39


EUROPEAN RECREATIONAL VEHICLES

Analysis of the change in net sales for the three months ended April 30, 2024 compared to the three months ended April 30, 2023:

Three Months Ended
April 30, 2024
% of
Segment
Net Sales
Three Months Ended
April 30, 2023
% of
Segment
Net Sales
Change
Amount
%
Change
NET SALES:
European
Motorcaravan$492,490 52.9 $394,359 45.5 $98,131 24.9
Campervan289,450 31.1 282,415 32.6 7,035 2.5
Caravan64,379 6.9 116,412 13.4 (52,033)(44.7)
Other84,742 9.1 73,565 8.5 11,177 15.2
Total European$931,061 100.0 $866,751 100.0 $64,310 7.4
Three Months Ended
April 30, 2024
% of
Segment
Shipments
Three Months Ended
April 30, 2023
% of
Segment
Shipments
Change
Amount
%
Change
# OF UNITS:
European
Motorcaravan6,601 43.0 5,339 34.2 1,262 23.6
Campervan6,194 40.3 5,694 36.5 500 8.8
Caravan2,568 16.7 4,560 29.3 (1,992)(43.7)
Total European15,363 100.0 15,593 100.0 (230)(1.5)

IMPACT OF CHANGES IN FOREIGN CURRENCY, PRODUCT MIX AND PRICE ON NET SALES:
Foreign Currency %Mix and Price %%
Change
European
Motorcaravan0.01.31.3
Campervan0.0(6.3)(6.3)
Caravan0.0(1.0)(1.0)
Total European0.08.98.9

The increase in total European Recreational Vehicle net sales of 7.4% compared to the prior-year quarter resulted from a 1.5% decrease in unit shipments and an 8.9% increase in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $64,310 includes no change due to foreign exchange rates since the prior-year quarter.

The overall net price per unit increase of 8.9% includes no impact of foreign currency exchange rate changes and an 8.9% constant-currency increase due to the combined impact of product mix and selling prices, primarily due to the much higher concentration of Motorcaravan sales in the current-year quarter due to improved chassis supply and fewer other component constraints in the current-year quarter.

The constant-currency increase in the overall net price per unit within the Motorcaravan product line of 1.3% was primarily due to the impact of selling price increases and product mix changes. The constant-currency decreases in the overall net price per unit within the Campervan product line of 6.3% and the Caravan product line of 1.0% are primarily due to product mix changes and increased sales discounting. In addition, the current-year quarter included a higher concentration of Campervan units with a customer-supplied chassis that is not included in the unit sales price as opposed to a purchased chassis that is included in the unit sales price.




40


European Recreational Vehicle cost of products sold increased $53,175 to $768,146, or 82.5% of European Recreational Vehicle net sales, for the three months ended April 30, 2024 compared to $714,971, or 82.5% of European Recreational Vehicle net sales, for the three months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $45,667 of the $53,175 increase. Material, labor, freight-out and warranty costs as a combined percentage of European Recreational Vehicle net sales decreased to 72.9% for the three months ended April 30, 2024 compared to 73.0% for the three months ended April 30, 2023, with the slight decrease due to improved labor and warranty cost percentages being mostly offset by an increase in the material cost percentage due to increased sales discounting. Total manufacturing overhead increased $7,508 with the increase in net sales and increased slightly as a percentage of European Recreational Vehicle net sales from 9.5% to 9.6%.

European Recreational Vehicle gross profit increased $11,135 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 primarily due to the increase in European Recreational Vehicle net sales, and the gross profit percentage remained consistent with the prior-year quarter.

European Recreational Vehicle selling, general and administrative expenses increased $7,102 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 and included an increase in sales-related travel, advertising and promotional costs of $1,235 in correlation with the increase in European Recreational Vehicle net sales, and an increase of $1,798 in professional fees. The increase in European Recreational Vehicle net sales and income before income taxes also caused related commissions, incentive and other compensation to increase by $1,022. The increase in the overall selling, general and administrative expense as a percentage of European Recreational Vehicle net sales is primarily due to the increase in professional fees noted above.            

The increase in European Recreational Vehicle income before income taxes of $4,981 for the three months ended April 30, 2024 compared to the three months ended April 30, 2023 was primarily due to the increase in European Recreational Vehicle net sales. The primary reason for the slight decrease in percentage was the increase in the selling, general and administrative expense percentage noted above.



41


Nine Months Ended April 30, 2024 Compared to the Nine Months Ended April 30, 2023

NET SALES:Nine Months Ended
April 30, 2024
Nine Months Ended
April 30, 2023
Change
Amount
%
Change
Recreational vehicles
North American Towable$2,747,815 $3,271,967 $(524,152)(16.0)
North American Motorized1,928,531 2,658,042 (729,511)(27.4)
Total North America4,676,346 5,930,009 (1,253,663)(21.1)
European2,421,556 2,017,991 403,565 20.0
Total recreational vehicles7,097,902 7,948,000 (850,098)(10.7)
Other581,682 598,671 (16,989)(2.8)
Intercompany eliminations(170,343)(163,132)(7,211)(4.4)
Total$7,509,241 $8,383,539 $(874,298)(10.4)

# OF UNITS:
Recreational vehicles
North American Towable84,258 81,941 2,317 2.8
North American Motorized14,984 19,791 (4,807)(24.3)
Total North America99,242 101,732 (2,490)(2.4)
European40,335 38,131 2,204 5.8
Total139,577 139,863 (286)(0.2)

GROSS PROFIT:% of
Segment
Net Sales
% of
Segment
Net Sales
Change
Amount
%
Change
Recreational vehicles
North American Towable$310,011 11.3$392,717 12.0$(82,706)(21.1)
North American Motorized211,866 11.0386,254 14.5(174,388)(45.1)
Total North America521,877 11.2778,971 13.1(257,094)(33.0)
European405,068 16.7312,075 15.592,993 29.8
Total recreational vehicles926,945 13.11,091,046 13.7(164,101)(15.0)
Other, net123,686 21.3111,002 18.512,684 11.4
Total$1,050,631 14.0$1,202,048 14.3$(151,417)(12.6)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Recreational vehicles
North American Towable$184,717 6.7$192,181 5.9$(7,464)(3.9)
North American Motorized103,756 5.4142,475 5.4(38,719)(27.2)
Total North America288,473 6.2334,656 5.6(46,183)(13.8)
European221,119 9.1192,942 9.628,177 14.6
Total recreational vehicles509,592 7.2527,598 6.6(18,006)(3.4)
Other56,549 9.750,592 8.55,957 11.8
Corporate98,395 82,221 16,174 19.7
Total$664,536 8.8$660,411 7.9$4,125 0.6



42


INCOME (LOSS) BEFORE INCOME TAXES:Nine Months Ended
April 30, 2024
% of
Segment
Net Sales
Nine Months Ended
April 30, 2023
% of
Segment
Net Sales
Change
Amount
%
Change
Recreational vehicles
North American Towable$118,319 4.3$181,471 5.5$(63,152)(34.8)
North American Motorized96,684 5.0234,163 8.8(137,479)(58.7)
Total North America215,003 4.6415,634 7.0(200,631)(48.3)
European144,206 6.077,948 3.966,258 85.0
Total recreational vehicles359,209 5.1493,582 6.2(134,373)(27.2)
Other, net35,650 6.130,004 5.05,646 18.8
Corporate(173,033)(156,146)(16,887)(10.8)
Total$221,826 3.0$367,440 4.4$(145,614)(39.6)

CONSOLIDATED

Consolidated net sales for the nine months ended April 30, 2024 decreased $874,298, or 10.4%, compared to the nine months ended April 30, 2023. The decrease in consolidated net sales is primarily due to lower current dealer and consumer demand in comparison to demand in the prior-year period, primarily in the North American Towable and Motorized segments. Approximately 32.2% of the Company’s net sales for the nine months ended April 30, 2024 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The decrease in consolidated net sales includes an increase of $77,181 from the change in currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative periods.

Consolidated gross profit for the nine months ended April 30, 2024 decreased $151,417 compared to the nine months ended April 30, 2023. Consolidated gross profit was 14.0% of consolidated net sales for the nine months ended April 30, 2024 and 14.3% for the nine months ended April 30, 2023. The decreases in consolidated gross profit and the consolidated gross profit percentage were both primarily due to the impact of the decrease in consolidated net sales in the current-year period compared to the prior-year period and an increase in sales discounting.

Selling, general and administrative expenses for the nine months ended April 30, 2024 increased $4,125, or 0.6%, compared to the nine months ended April 30, 2023, which included decreases due to the 10.4% decrease in consolidated net sales and the decrease in income before income taxes, which resulted in lower commissions and other incentive compensation, and a decrease in net costs related to the ongoing investigation of the Company’s advertising practices in Germany and a product recall as discussed in Note 14 to the Condensed Consolidated Financial Statements. These decreases were more than offset by other cost increases, which included third-party fees related to the debt refinancing in the second quarter of fiscal 2024, research and development costs, dealer settlement and repurchase costs as well as increased advertising and promotion costs.

The decrease of $145,614, or 39.6%, in income before income taxes for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily driven by the decrease in consolidated net sales noted above.

The overall effective income tax rate for the nine months ended April 30, 2024 was 21.6% compared with 23.0% for the nine months ended April 30, 2023. The primary reason for the decrease relates to the favorable impact of the terms of the resolution of certain matters discussed in Note 14 to the Condensed Consolidated Financial Statements during the nine months ended April 30, 2024, as the Company expects certain payments made related to these matters to be deductible for tax purposes.

Additional information concerning the changes in net sales, gross profit, selling, general and administrative expenses and income before income taxes are addressed below and in the segment reporting that follows.





43


The $16,174 increase in Corporate costs included in selling, general and administrative expenses for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 includes an increase of $9,112 in legal and professional fees, primarily related to third-party fees of $7,175 incurred with the debt refinancing discussed in Note 12 to the Condensed Consolidated Financial Statements. The $16,174 increase also includes an increase in deferred compensation expense of $6,606 due to market value fluctuations between the two periods, an increase in innovation-led research and development costs of $7,260 and an increase in stock-based and other compensation costs of $6,479. These increases were partially offset by income of $16,900 related to the legal and recall matters discussed in Note 14 to the Condensed Consolidated Financial Statements.

The $713 increase in net expense in Corporate interest and other income and expense for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 includes a decrease of $10,009 in non-cash foreign currency gains on certain Euro-denominated loans in the current-year period as compared to the prior-year period. In addition, operating losses related to our Roadpass Digital joint venture as discussed in Note 8 to the Condensed Consolidated Financial Statements were $6,282 larger in the current-year period as compared to the prior-year period, primarily due to the current period including nine months of results as compared to four months in the prior-year period. These net expense increases were mostly offset by favorable changes of $6,223 in the fair value of the Company's deferred compensation plan assets and $4,599 in the fair value of certain other equity investments, both due to market value fluctuations between the two periods. Net interest expense also decreased by $7,856, in spite of the one-time debt refinancing fees incurred in the second quarter of fiscal 2024, due to increased interest income received from higher average cash balances held and higher interest income rates combined with lower debt interest expense, primarily due to lower average debt balances outstanding.

Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

Analysis of the change in net sales for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023:
Nine Months Ended
April 30, 2024
% of
Segment
Net Sales
Nine Months Ended
April 30, 2023
% of
Segment
Net Sales
Change Amount%
Change
NET SALES:
North American Towable
Travel Trailers$1,811,215 65.9 $2,030,451 62.1 $(219,236)(10.8)
Fifth Wheels936,600 34.1 1,241,516 37.9 (304,916)(24.6)
Total North American Towable$2,747,815 100.0 $3,271,967 100.0 $(524,152)(16.0)
Nine Months Ended
April 30, 2024
% of
Segment
Shipments
Nine Months Ended
April 30, 2023
% of
Segment
Shipments
Change Amount%
Change
# OF UNITS:
North American Towable
Travel Trailers68,808 81.7 63,106 77.0 5,702 9.0
Fifth Wheels15,450 18.3 18,835 23.0 (3,385)(18.0)
Total North American Towable84,258 100.0 81,941 100.0 2,317 2.8
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:%
Change
North American Towable
Travel Trailers(19.8)
Fifth Wheels(6.6)
Total North American Towable(18.8)





44


The decrease in total North American Towable net sales of 16.0% compared to the prior-year period resulted from a 2.8% increase in unit shipments and a 18.8% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments is primarily due to the recent heightened seasonal demand for the lower cost travel trailer units as compared to the prior-year period. According to statistics published by RVIA, for the nine months ended April 30, 2024, combined North American travel trailer and fifth wheel wholesale unit shipments increased 5.5% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the nine-month periods ended March 31, 2024 and 2023, our North American market share for travel trailers and fifth wheels combined was 40.5% and 42.1%, respectively. Comparisons of Company shipments to industry shipments on an interim basis would not necessarily be indicative of the results expected for a full fiscal year.

The decreases in the overall net price per unit within the travel trailer product line of 19.8% and the fifth wheel product line of 6.6% were primarily due to the combined impact of sales price reductions due to lower input costs, higher sales discounting levels and product mix changes trending toward more moderately-priced units as compared to the prior-year period.

North American Towable cost of products sold decreased $441,446 to $2,437,804, or 88.7% of North American Towable net sales, for the nine months ended April 30, 2024 compared to $2,879,250, or 88.0% of North American Towable net sales, for the nine months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $421,175 of the $441,446 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales were 80.4% for the nine months ended April 30, 2024 compared to the same 80.4% for the nine months ended April 30, 2023, as a decrease in the material cost percentage was offset by modest increases in the labor and warranty percentages. Total manufacturing overhead decreased $20,271 in correlation with the decrease in sales but increased as a percentage of North American Towable net sales from 7.6% to 8.3%, as the decreased net sales levels resulted in higher overhead costs per unit sold.

The decrease of $82,706 in North American Towable gross profit for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was driven by the decrease in net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

The decrease of $7,464 in North American Towable selling, general and administrative expenses for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 includes the impact of the decrease in North American Towable net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $13,827. These decreases were mostly offset by an increase of $10,985 in professional fees and related settlement and RV repurchase costs. The increase in the overall selling, general and administrative expense as a percentage of North American Towable net sales is primarily due to the decrease in net sales.

The decrease of $63,152 in North American Towable income before income taxes for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily due to the decrease in North American Towable net sales, and the primary reasons for the decrease in percentage were the increases in the cost of products sold and selling, general and administrative expense percentages noted above.





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NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

Analysis of the change in net sales for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023:
Nine Months Ended
April 30, 2024
% of
Segment
Net Sales
Nine Months Ended
April 30, 2023
% of
Segment
Net Sales
Change
Amount
%
Change
NET SALES:
North American Motorized
Class A$597,559 31.0 $887,678 33.4 $(290,119)(32.7)
Class C922,388 47.8 1,216,537 45.8 (294,149)(24.2)
Class B408,584 21.2 553,827 20.8 (145,243)(26.2)
Total North American Motorized$1,928,531 100.0 $2,658,042 100.0 $(729,511)(27.4)
Nine Months Ended
April 30, 2024
% of
Segment
Shipments
Nine Months Ended
April 30, 2023
% of
Segment
Shipments
Change
Amount
%
Change
# OF UNITS:
North American Motorized
Class A2,995 20.0 4,326 21.9 (1,331)(30.8)
Class C8,451 56.4 10,844 54.8 (2,393)(22.1)
Class B3,538 23.6 4,621 23.3 (1,083)(23.4)
Total North American Motorized14,984 100.0 19,791 100.0 (4,807)(24.3)
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:%
Change
North American Motorized
Class A(1.9)
Class C(2.1)
Class B(2.8)
Total North American Motorized(3.1)

The decrease in total North American Motorized net sales of 27.4% compared to the prior-year period resulted from a 24.3% decrease in unit shipments and a 3.1% decrease in the overall net price per unit due to the combined impact of changes in product mix and price, which included elevated sales discounts compared to the prior-year period. The decrease in unit shipments is primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior-year period, which included independent dealer restocking of certain motorized products. According to statistics published by RVIA, for the nine months ended April 30, 2024, combined North American motorhome wholesale unit shipments decreased 23.8% compared to the same period last year. According to statistics published by Stat Surveys, for the nine-month periods ended March 31, 2024 and 2023, our North American market share for motorhomes was 48.2% and 47.4%, respectively. Comparisons of Company shipments to industry shipments on an interim basis would not necessarily be indicative of the results expected for a full fiscal year.

The decreases in the overall net price per unit within the Class A product line of 1.9%, the Class C product line of 2.1% and the Class B product line of 2.8% were all primarily due to higher discounting levels since the prior-year period and consumers trending toward more moderately-priced units compared to the prior-year period.





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North American Motorized cost of products sold decreased $555,123 to $1,716,665, or 89.0% of North American Motorized net sales, for the nine months ended April 30, 2024 compared to $2,271,788, or 85.5% of North American Motorized net sales, for the nine months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $524,625 of the $555,123 decrease. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales increased to 82.9% for the nine months ended April 30, 2024 compared to 79.9% for the nine months ended April 30, 2023, with the increase due to an increase in the material cost percentage, primarily due to higher sales discounting, which effectively decreases net selling prices and correspondingly increases the material cost percentage, as well as increased chassis costs. Total manufacturing overhead decreased $30,498 with the decrease in net sales but increased as a percentage of North American Motorized net sales from 5.6% to 6.1% as the decrease in net sales levels resulted in higher overhead costs per unit sold.

The decrease of $174,388 in North American Motorized gross profit for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was driven by the decrease in net sales, while the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

The decrease of $38,719 in North American Motorized selling, general and administrative expenses for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 is primarily due to the decreases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $38,584.

The decrease of $137,479 in North American Motorized income before income taxes for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily due to the decrease in North American Motorized net sales, and the primary reason for the decrease in percentage was the increase in the cost of products sold percentage noted above.






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EUROPEAN RECREATIONAL VEHICLES

Analysis of the change in net sales for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023:
Nine Months Ended
April 30, 2024
% of
Segment
Net Sales
Nine Months Ended
April 30, 2023
% of
Segment
Net Sales
Change Amount%
Change
NET SALES:
European
Motorcaravan$1,263,814 52.2 $901,926 44.7 $361,888 40.1
Campervan755,783 31.2 648,717 32.1 107,066 16.5
Caravan180,093 7.4 272,521 13.5 (92,428)(33.9)
Other221,866 9.2 194,827 9.7 27,039 13.9
Total European$2,421,556 100.0 $2,017,991 100.0 $403,565 20.0
Nine Months Ended
April 30, 2024
% of
Segment
Shipments
Nine Months Ended
April 30, 2023
% of
Segment
Shipments
Change Amount%
Change
# OF UNITS: 
European
Motorcaravan16,714 41.4 12,523 32.8 4,191 33.5
Campervan16,316 40.5 13,853 36.3 2,463 17.8
Caravan7,305 18.1 11,755 30.9 (4,450)(37.9)
Total European40,335 100.0 38,131 100.0 2,204 5.8

IMPACT OF CHANGES IN FOREIGN CURRENCY, PRODUCT MIX AND PRICE ON NET SALES:
Foreign Currency %Mix and Price %%
Change
European
Motorcaravan3.82.86.6
Campervan3.8(5.1)(1.3)
Caravan3.80.24.0
Total European3.810.414.2

The increase in total European Recreational Vehicle net sales of 20.0% compared to the prior-year period resulted from increases of 5.8% in unit shipments and 14.2% in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $403,565 includes an increase of $77,181, or 3.8% of the 20.0% increase, due to the increase in foreign exchange rates since the prior-year period. Sales on a constant-currency basis increased by 16.2%.

The overall net price per unit increase of 14.2% includes an increase of 3.8% due to the impact of foreign currency exchange rate changes and a constant-currency increase of 10.4% due to the combined impact of product mix and selling price increases, primarily due to the much higher concentration of Motorcaravan sales in the current-year period due primarily to improved supply of chassis and other components in the current-year period compared to the prior-year period.

The constant-currency increases in the overall net price per unit within the Motorcaravan product line of 2.8% and the Caravan product line of 0.2% were primarily due to the impact of selling price increases and product mix changes. The constant-currency decrease in the overall net price per unit within the Campervan product line of 5.1% was primarily due to the impact of product mix changes and increased sales discounting. In addition, the current-year period included a higher concentration of Campervan units with a customer-supplied chassis that is not included in the unit sales price as opposed to a purchased chassis that is included in the unit sales price.




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European Recreational Vehicle cost of products sold increased $310,572 to $2,016,488, or 83.3% of European Recreational Vehicle net sales, for the nine months ended April 30, 2024 compared to $1,705,916, or 84.5% of European Recreational Vehicle net sales, for the nine months ended April 30, 2023. Changes in material, labor, freight-out and warranty costs comprised $268,517 of the $310,572 increase. Material, labor, freight-out and warranty costs as a combined percentage of European Recreational Vehicle net sales decreased to 72.7% for the nine months ended April 30, 2024 compared to 73.9% for the nine months ended April 30, 2023, with the decrease primarily due to a decrease in the material cost percentage due to net selling price increases and product mix changes. The labor and warranty cost percentages also improved. Total manufacturing overhead increased with the increase in European Recreational Vehicle net sales but remained consistent as a percentage of European Recreational Vehicle net sales at 10.6% for both periods.

The increase of $92,993 in European Recreational Vehicle gross profit for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily due to the increase in European Recreational Vehicle net sales and the decrease in the cost of products sold percentage noted above.

The increase of $28,177 in European Recreational Vehicle selling, general and administrative expenses for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily due to the increase in European Recreational Vehicle net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $8,403. Sales-related travel and advertising and promotional costs also increased $10,163, primarily due to increased display space at the annual Dusseldorf show and attending more regional shows in comparison to the prior-year period. An increase in the foreign exchange rates in the current period as compared to the prior-year period also contributed to the overall increase.

The increase of $66,258 in European Recreational Vehicle income before income taxes for the nine months ended April 30, 2024 compared to the nine months ended April 30, 2023 was primarily due to the increase in European Recreational Vehicle net sales. The primary reasons for the increase in percentage were the decreases in both the cost of products sold and selling, general and administrative expense percentages noted above. Amortization expense was also 0.4% lower as a percentage of sales in the current year compared to the prior-year period.

Liquidity and Capital Resources

As of April 30, 2024, we had $371,819 in cash and cash equivalents, of which $264,541 was held in the U.S. and the equivalent of $107,278, predominantly in Euros, was held in Europe, compared to $441,232 on July 31, 2023, of which $338,703 was held in the U.S. and the equivalent of $102,529, predominantly in Euros, was held in Europe. Cash and cash equivalents held internationally may be subject to foreign withholding taxes if repatriated to the U.S. The components of the $69,413 decrease in cash and cash equivalents are described in more detail below, but the decrease was primarily attributable to cash provided by operations of $207,532 being more than offset by cash used in investing activities of $102,889 and cash used in financing activities of $173,327.

Net working capital at April 30, 2024 was $1,131,154 compared to $1,077,098 at July 31, 2023. Capital expenditures of $106,069 for the nine months ended April 30, 2024 were made primarily for production building additions and improvements and replacing machinery and equipment used in the ordinary course of business.

We strive to maintain adequate cash balances to ensure we have sufficient resources to respond to opportunities and changing business conditions. In addition, the unused availability under our revolving asset-based credit facility is generally available to the Company for general operating purposes and approximated $998,000 at April 30, 2024. We believe our on-hand cash and cash equivalents and funds generated from operations, along with funds available under the revolving asset-based credit facility, will be sufficient to fund expected operational requirements for the foreseeable future.

Our priorities for the use of current and future available cash generated from operations remain consistent with our history, and include reducing our indebtedness, maintaining and, over time, growing our dividend payments and funding our growth, both organically and, opportunistically, through acquisitions. We may also consider strategic and opportunistic repurchases of shares of THOR stock under the share repurchase authorizations as discussed in Note 16 to the Condensed Consolidated Financial Statements, and special dividends based upon market and business conditions and excess cash availability, subject to potential customary limits and restrictions pursuant to our credit facilities, applicable legal limitations and determination by the Company's Board of Directors ("Board"). We believe our on-hand cash and cash equivalents and funds generated from operations will be sufficient to fund expected cash dividend payments and share repurchases for the foreseeable future.




49


Our current estimate of committed and internally approved capital spend for the remainder of fiscal 2024 is $35,000, primarily for certain building projects and certain automation projects, as well as replacing and upgrading machinery, equipment and other assets throughout our facilities to be used in the ordinary course of business. We anticipate that these expenditures will be funded by cash provided by our operating activities.

The Company’s Board currently intends to continue regular quarterly cash dividend payments in the future. As is customary under credit facilities, certain actions, including our ability to pay dividends, are subject to the satisfaction of certain conditions prior to payment. The conditions for the payment of dividends under the existing debt facilities include a minimum level of adjusted excess cash availability and a fixed charge coverage ratio test, both as defined in the credit agreements. The declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board, and will be dependent upon future earnings, cash flows and other factors, in addition to compliance with any then-existing financing facilities.

Operating Activities

Net cash provided by operating activities for the nine months ended April 30, 2024 was $207,532 as compared to net cash provided by operating activities of $474,120 for the nine months ended April 30, 2023.

For the nine months ended April 30, 2024, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles and stock-based compensation) provided $392,784 of operating cash. The change in net working capital resulted in a net use of $185,252 of operating cash during that period, primarily due to a seasonal increase in trade accounts receivable, required income tax payments during the period exceeding the income tax provision for the period, and a decrease in certain accrued liabilities as a result of the reduction in sales and production when compared to the prior-year period.

For the nine months ended April 30, 2023, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles and stock-based compensation) provided $511,534 of operating cash. The change in working capital resulted in the use of $37,414 of operating cash during that period.

Investing Activities

Net cash used in investing activities for the nine months ended April 30, 2024 was $102,889, primarily due to capital expenditures of $106,069.

Net cash used in investing activities for the nine months ended April 30, 2023 was $171,562, primarily due to capital expenditures of $150,466.

Financing Activities

Net cash used in financing activities for the nine months ended April 30, 2024 was $173,327, which included borrowings of $113,502 on the asset-based credit facility for temporary working capital needs and subsequent payments of $111,555 on the asset-based credit facility. In addition, borrowings of $186,723 were made in connection with the debt refinancing as discussed in Note 12 to the Condensed Consolidated Financial Statements, and payments totaling $227,626 were made on the term-loan credit facilities, of which $127,626 was paid in connection with the debt refinancing. Treasury share repurchases of $43,034 were made and regular quarterly dividend payments of $0.48 per share for each of the first three quarters of fiscal 2024 were also made totaling $76,730.

Net cash used in financing activities for the nine months ended April 30, 2023 was $266,068, including payments of $50,000 on the asset-based credit facility and $102,355 on the term-loan credit facilities, in addition to treasury share repurchases of $42,007. Regular quarterly dividend payments of $0.45 per share for each of the first three quarters of fiscal 2023 were also made totaling $71,978.

The Company increased its previous regular quarterly dividend of $0.45 per share to $0.48 per share in October 2023. In October 2022, the Company increased its previous regular quarterly dividend of $0.43 per share to $0.45 per share.



50


Accounting Standards

See Note 1 in the Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and the notes to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended July 31, 2023. There have been no material changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended July 31, 2023.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign currency exchange rates and interest rates. At times, the Company enters into hedging transactions to mitigate certain of these risks in accordance with guidelines established by the Company’s management. The Company does not use financial instruments for trading or speculative purposes.

CURRENCY EXCHANGE RISK – The Company’s principal currency exposures mainly relate to the Euro and British Pound Sterling. The Company periodically uses foreign currency forward contracts to manage certain foreign exchange rate exposure related to anticipated sales transactions in Pounds Sterling with financial instruments whose maturity date, along with the realized gain or loss, occurs on or near the execution of the anticipated transaction.

The Company also holds $413,795 of debt denominated in Euros at April 30, 2024. A hypothetical 10% change in the Euro/U.S. Dollar exchange rate would change our April 30, 2024 debt balance by approximately $41,380.

INTEREST RATE RISK – Based on our assumption of the Company’s floating-rate debt levels over the next 12 months, a one-percentage-point increase in interest rates (approximately 13.1% of our weighted-average interest rate at April 30, 2024) would result in an estimated $7,112 reduction in income before income taxes over a one-year period.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures,” as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at attaining the level of reasonable assurance noted above.

During the quarter ended April 30, 2024, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.



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ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

No director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K) during the three months ended April 30, 2024.







53


PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

ITEM 1A. RISK FACTORS

Although risks specific to the supply chain disruptions are ongoing, and macroeconomic issues like general inflation, as well as certain geopolitical events, including military conflicts, remain, at this point there have been no material changes in those risks or any others from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023.






54


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended April 30, 2024, the Company used $12,997 to purchase shares of common stock under its share repurchase authorizations. The Company’s total remaining authorizations for common stock repurchases was $448,173 at April 30, 2024.

A summary of the Company’s share repurchases during the three months ended April 30, 2024 is set forth below:

PeriodTotal Number of Shares PurchasedAverage Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
2/1/24 – 2/29/24— $— — $461,170 
3/1/24 – 3/31/24— $— — $461,170 
4/1/24 – 4/30/24126,754 $102.54 126,754 $448,173 
126,754 126,754 

(1)On December 21, 2021, the Company’s Board of Directors authorized Company management to utilize up to $250,000 to repurchase shares of the Company’s common stock through December 21, 2024. On June 24, 2022, the Board authorized Company management to utilize up to an additional $448,321 to repurchase shares of the Company’s common stock through July 31, 2025. Under the two share repurchase authorizations, the Company is authorized to repurchase, on a discretionary basis and from time-to-time, outstanding shares of its common stock in the open market, in privately negotiated transactions or by other means. The timing and amount of share repurchases will be determined at the discretion of the Company’s management team based upon the market price of the stock, management's evaluation of general market and economic conditions, cash availability and other factors. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under this program. During the three months ended April 30, 2024, the Company purchased 126,754 shares of its common stock, at various times in the open market, at a weighted-average price of $102.54 and held them as treasury shares at an aggregate purchase price of $12,997, with 125,318 shares, or $12,849, coming from the December 21, 2021 authorization and 1,436 shares, or $148, coming from the June 24, 2022 authorization. During the nine months ended April 30, 2024, the Company purchased 454,630 shares of its common stock, at various times in the open market, at a weighted-average price of $94.66 and held them as treasury shares at an aggregate purchase price of $43,034, with 453,194 shares, or $42,886, coming from the December 21, 2021 authorization and 1,436 shares, or $148, coming from the June 24, 2022 authorization. Since the inception of the initial December 21, 2021 authorization, the Company has purchased 2,948,405 shares of its common stock, at various times in the open market, at a weighted-average price of $84.84 and held them as treasury shares at an aggregate purchase price of $250,148. As of April 30, 2024, there are no remaining shares of the Company's common stock that may be repurchased under the December 21, 2021 authorization. As of April 30, 2024, the remaining amount of the Company’s common stock that may be repurchased under the June 24, 2022 authorization expiring on July 31, 2025 is $448,173.



55


ITEM 6. EXHIBITS
ExhibitDescription
3.1
3.2
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Calculation Linkbase Document
101.PREInline XBRL Taxonomy Presentation Linkbase Document
101.LABInline XBRL Taxonomy Label Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
104Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)

Attached as Exhibits 101 to this report are the following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended April 30, 2024 formatted in XBRL (“eXtensible Business Reporting Language”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity and (v) related notes to these financial statements.



56


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


THOR INDUSTRIES, INC.
(Registrant)


DATE:June 5, 2024/s/ Robert W. Martin
Robert W. Martin
President and Chief Executive Officer
DATE:June 5, 2024/s/ Colleen Zuhl
Colleen Zuhl
Senior Vice President and Chief Financial Officer