tho-20240430

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 INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

93-0768752

(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 class

Trading Symbol(s)

on which registered

Common stock (Par value $0.10 Per Share)

THO

New 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, 2024		July 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	371,819	$	441,232

Accounts receivable, trade, net	642,571		543,865

Accounts receivable, other, net	187,439		99,354
Inventories, net	1,578,147		1,653,070
Prepaid income taxes, expenses and other	90,273		56,059

Total current assets	2,870,249		2,793,580
Property, plant and equipment, net	1,379,541		1,387,808
Other assets:
Goodwill	1,777,335		1,800,422
Amortizable intangible assets, net	889,373		996,979
Deferred income tax assets, net	12,096		5,770
Equity investments	132,270		126,909
Other	157,333		149,362
Total other assets	2,968,407		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 debt	35,491		11,368
Short-term financial obligations	67,957		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 liabilities	23,789		54,720


Other	58,804		66,124

Total current liabilities	1,739,095		1,716,482
Long-term debt, net	1,209,054		1,291,311
Deferred income tax liabilities, net	64,544		75,668
Unrecognized tax benefits	12,135		14,835
Other liabilities	185,022		179,136
Total long-term liabilities	1,470,755		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 capital	568,905		539,032
Retained earnings	4,190,126		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’ equity	4,008,347		3,983,398
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,218,197	$	7,260,830

See Notes to the Condensed Consolidated Financial Statements.

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended April 30,				Nine Months Ended April 30,
	2024		2023		2024		2023
Net sales	$	2,801,113	$	2,928,820	$	7,509,241	$	8,383,539
Cost of products sold	2,379,261		2,496,183		6,458,610		7,181,491
Gross profit	421,852		432,637		1,050,631		1,202,048
Selling, general and administrative expenses	226,515		210,044		664,536		660,411
Amortization of intangible assets	32,316		35,113		97,124		105,531


Interest expense, net	21,830		26,362		70,256		74,802
Other income (expense), net	1,159		(5,667)		3,111		6,136
Income before income taxes	142,350		155,451		221,826		367,440
Income tax provision	28,773		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:
Basic	53,310,318		53,425,379		53,309,546		53,534,746
Diluted	53,722,154		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.

THOR INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Nine Months Ended April 30,
	2024		2023
Cash flows from operating activities:
Net income	$	173,936	$	282,958
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	106,424		97,295
Amortization of intangible assets	97,124		105,531
Amortization of debt issuance costs and extinguishment charges	14,900		8,569


Deferred income tax benefit	(18,722)		(9,052)
Gain on disposition of property, plant and equipment	(9,927)		(374)
Stock-based compensation expense	29,049		26,607
Changes in assets and liabilities:
Accounts receivable, net	(191,483)		143,591
Inventories, net	26,103		(87,841)
Prepaid income taxes, expenses and other	(29,237)		2,119
Accounts payable	79,752		(63,642)

Accrued liabilities	(81,339)		(35,388)
Long-term liabilities and other	10,952		3,747
Net cash provided by operating activities	207,532		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 facilities	186,723		—
Payments on term-loan credit facilities	(227,626)		(102,355)
Borrowings on revolving asset-based credit facilities	113,502		—
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, net	20,036		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 period	441,232		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.


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
								Accumulated					Stockholders’
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders’
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at February 1, 2024	66,859,738	$	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
								Accumulated					Stockholders’
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders’
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at August 1, 2023	66,344,340	$	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 activity	515,398	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.


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
								Accumulated					Stockholders’
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders’
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at February 1, 2023	66,334,072	$	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
								Accumulated					Stockholders’
				Additional				Other					Equity		Non-		Total
	Common Stock			Paid-In		Retained		Comprehensive		Treasury Stock			Attributable		controlling		Stockholders’
	Shares	Amount		Capital		Earnings		Income (Loss)		Shares	Amount		to THOR		Interests		Equity
Balance at August 1, 2022	66,059,403	$	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 activity	274,669	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.

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.

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:	2024		2023		2024		2023
Recreational vehicles
North American Towable	$	1,071,393	$	1,124,410	$	2,747,815	$	3,271,967
North American Motorized	646,948		795,940		1,928,531		2,658,042
Total North America	1,718,341		1,920,350		4,676,346		5,930,009
European	931,061		866,751		2,421,556		2,017,991
Total recreational vehicles	2,649,402		2,787,101		7,097,902		7,948,000
Other	216,227		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


	Three Months Ended April 30,				Nine Months Ended April 30,
INCOME (LOSS) BEFORE INCOME TAXES:	2024		2023		2024		2023

Recreational vehicles
North American Towable	$	68,409	$	77,583	$	118,319	$	181,471
North American Motorized	33,172		48,186		96,684		234,163
Total North America	101,581		125,769		215,003		415,634
European	77,382		72,401		144,206		77,948
Total recreational vehicles	178,963		198,170		359,209		493,582
Other, net	18,831		16,970		35,650		30,004
Corporate	(55,444)		(59,689)		(173,033)		(156,146)
Total	$	142,350	$	155,451	$	221,826	$	367,440


TOTAL ASSETS:	April 30, 2024		July 31, 2023
Recreational vehicles
North American Towable	$	1,412,923	$	1,429,899
North American Motorized	1,180,707		1,268,109
Total North America	2,593,630		2,698,008
European	2,983,548		2,898,175
Total recreational vehicles	5,577,178		5,596,183
Other	1,045,512		1,048,076
Corporate	595,507		616,571
Total	$	7,218,197	$	7,260,830


DEPRECIATION AND INTANGIBLE ASSET AMORTIZATION EXPENSE:	Three Months Ended April 30,				Nine Months Ended April 30,
	2024		2023		2024		2023
Recreational vehicles
North American Towable	$	13,555	$	15,188	$	41,107	$	45,653
North American Motorized	8,556		8,114		26,347		24,447
Total North America	22,111		23,302		67,454		70,100
European	31,517		29,840		93,050		85,855
Total recreational vehicles	53,628		53,142		160,504		155,955
Other	13,865		14,563		41,159		45,549
Corporate	658		446		1,885		1,322
Total	$	68,151	$	68,151	$	203,548	$	202,826


	Three Months Ended April 30,				Nine Months Ended April 30,
CAPITAL ACQUISITIONS:	2024		2023		2024		2023
Recreational vehicles
North American Towable	$	3,726	$	14,367	$	15,099	$	52,361
North American Motorized	2,642		4,918		15,503		34,248
Total North America	6,368		19,285		30,602		86,609
European	13,268		15,889		44,144		36,960
Total recreational vehicles	19,636		35,174		74,746		123,569
Other	5,762		13,144		20,297		25,913
Corporate	945		854		7,852		1,125
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,
	2024	2023	2024	2023
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.

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,
	2024		2023
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,
	2024		2023
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,
	2024				2023
			Interest					Interest
	Sales		Expense			Sales		Expense
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


	Nine Months Ended April 30,
	2024				2023
			Interest					Interest
	Sales		Expense			Sales		Expense
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, 2024		July 31, 2023
Finished goods – RV	$	272,428	$	164,456
Finished goods – other	87,423		93,476
Work in process	322,181		313,006
Raw materials	452,493		563,614
Chassis	598,226		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.

6. Property, Plant and Equipment

Property, plant and equipment consists of the following:


	April 30, 2024		July 31, 2023
Land	$	145,878	$	147,633
Buildings and improvements	1,055,126		1,038,394
Machinery and equipment	703,876		672,499
Rental vehicles	122,317		99,360
Lease right-of-use assets – operating	43,780		47,969
Lease right-of-use assets – finance	4,959		5,518
Total cost	2,075,936		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, 2024				July 31, 2023
			Accumulated				Accumulated
	Cost		Amortization		Cost		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	253,988		124,000		258,868		107,483

Non-compete agreements	1,400		1,400		1,400		1,225
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, 2025	117,211
For the fiscal year ending July 31, 2026	105,987
For the fiscal year ending July 31, 2027	97,308
For the fiscal year ending July 31, 2028	89,963
For the fiscal year ending July 31, 2029 and thereafter	446,687
	$	889,373

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


	North American Towable		North American Motorized		European		Other		Total
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 Towable		North American Motorized		European		Other		Total
Net balance as of August 1, 2022	$	344,975	$	53,875	$	893,383	$	511,918	$	1,804,151
Fiscal 2023 activity:
Goodwill acquired	4,097		—		—		—		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, 2024		July 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.

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 Level	April 30, 2024		July 31, 2023
Cash equivalents	Level 1	$	202,961	$	286,984
Deferred compensation plan mutual fund assets	Level 1	$	37,538	$	40,220
Equity investments	Level 1	$	1,286	$	4,105

Foreign currency forward contract liability	Level 2	$	251	$	—

Interest rate swap liability	Level 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.

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,
	2024		2023		2024		2023
Beginning balance	$	319,614	$	326,665	$	345,197	$	317,908
Provision	84,327		94,971		225,240		256,752
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, 2024		July 31, 2023
Term loan	$	703,694	$	758,094

Senior unsecured notes	500,000		500,000
Unsecured notes	26,795		27,558
Other debt	33,306		41,753
Total long-term debt	1,263,795		1,327,405
Debt issuance costs, net of amortization	(19,250)		(24,726)
Total long-term debt, net of debt issuance costs	1,244,545		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.

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, 2025	35,730
For the fiscal year ending July 31, 2026	6,628
For the fiscal year ending July 31, 2027	6,163
For the fiscal year ending July 31, 2028	11,586
For the fiscal year ending July 31, 2029 and thereafter	1,199,083
	$	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.

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