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Big company, small town: Winnebago Industries, Forest City, Iowa

Brian White — Mon, 23 Jun 2008 17:30:00 EST

Filed under: Products and Services, Industry, Competitive Strategy, Recession

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Ever taken a road trip in an RV? If you have, there is a good chance that you were inside a Winnebago recreational vehicle. The name Winnebago has been synonymous with the large RV for as long as I can remember. With such a rich history, one would think Winnebago is located somewhere next a major interstate corridor or airport. Otherwise, how would it receive in its raw materials and ship out its finished product?

Winnebago Industries, Inc. (NYSE: WGO) is actually based in Forest City, Iowa, founded in 1958 in Winnebago County (that's where the company's name comes from). From its inception, the company has been involved with travel trailers. It used names from Native American tribes to name its different lines of trailers, and in the 1970s and early 1980s, made smaller trailers as gas prices spiked upward. In fact, come this summer, one of Winnebago's manufacturing plants in Charles City, Iowa, will be closed due to drastic changes in Winnebago's market due to higher gas prices and declining demand. The company has already laid off 200 employees from its headquarters in Forest City.

Unlike many American companies these days, Winnebago still makes the majority of its products in the United States, most of which are built on top of chassis units made by Ford or Chevy. The term Winnebago has made itself, after more then 40 years, into a brand name completely associated with RVs and trailers. Do you blow your nose with a Kleenex or tissue? Drink Coke or a soft drink? Go on vacation in a Winnebago or travel trailer? There's the brand power the company continues to have today, even with the hard times its experiencing.

Be sure to check out more Big Company, Small Town posts.

Big company, small town: Winnebago Industries, Forest City, Iowa originally appeared on BloggingStocks on Mon, 23 Jun 2008 17:30:00 EST. Please see our terms for use of feeds.

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Fleetwood Enterprises (FLE) cuts its losses

Victoria Erhart — Thu, 13 Dec 2007 17:39:00 EST

Filed under: Earnings Reports

Fleetwood Enterprises Inc. (NYSE: FLE) manufactures motor and mobile homes, as well as other types of manufactured housing. The market has not been kind to the company for the past several years, as gas prices and other costs continue to escalate.

Nevertheless, Fleetwood has been actively rearranging itself, cutting excess manufacturing capacity, selling off unwanted assets, producing more fuel-efficient motor homes and RV trailers. These steps have made a difference in the 2Q FY 2008 results that company recently posted.

For starters, the company actually posted operating income this quarter, $4.4 million -- quite a change from last year's 2Q operating loss of $15.2 million. This quarter's operating income was offset by $3 million in write-downs, leading to a $1.2 million net loss, or $0.02 per share for the quarter, a big improvement over a net loss of $20.4 million or $0.32 per share in 2Q FY 2007.

Fleetwood Enterprises (FLE) cuts its losses originally appeared on BloggingStocks on Thu, 13 Dec 2007 17:39:00 EST. Please see our terms for use of feeds.

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Ford finding success in RVs

Brian White — Mon, 26 Nov 2007 14:26:00 EST

Filed under: Good news, Products and Services, Ford Motor (F)

Although Ford Motor Co. (NYSE: F) has not really been lighting up the sales board in recent quarters, CEO Alan Mulally seems to be on track to get the automotive giant profitable sometime in 2009. He may not have to worry about one specialized area within the Detroit auto giant, however. Can you guess which division that may be?

Try recreational vehicles. Ford's market share has increased in the motor home segment this year while its automotive market share has shrunk in several popular consumer vehicle segments. Although Ford doesn't brand motor homes under its own name, it makes more motor home chassis than any other U.S. company. Using chassis designed and built here in the U.S., Ford's no slouch when it comes to this niche automotive market. Ford makes the base chassis, which RV manufacturers then customize with a plethora of options (and weight) to market to customers.

Therein lies Ford's continuing market opportunity in this arena. The baby boomer generation is beginning to retire at rates that won't see slowdowns for over a decade. Are these folks going to buy RVs and tour the U.S. (and Mexico and Canada) at rates similar to the previous generation? The law of averages says that market will increase (hence the term "boomers) simply due to the large number of Americans (60+ million) in this age classification. Could Ford's savior partially be . . . motor homes? That's a stretch, but the company needs home runs any way it can get them. This is one of them.

Ford finding success in RVs originally appeared on BloggingStocks on Mon, 26 Nov 2007 14:26:00 EST. Please see our terms for use of feeds.

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Winnebago posts counter-intuitive profits

Victoria Erhart — Wed, 24 Oct 2007 19:02:00 EST

Oddly enough, the higher oil prices rise, the more people want to buy a top of the line motor home. That seems to be the conclusion investors can draw from Winnebago Industries, Inc. (NYSE: WGO) recent 4Q and FY 2007 earnings report. Winnebago has introduced a Class C value-priced line of motor homes, but that's not where the sales and profits are. Sales of the top of the line Class A motor homes increased by volume, leading to a 16% increase in revenue in 4Q 2007 and a whopping 59% increase in net income, to just under $15 million, for the quarter. The Class A motor homes have a much higher profit margin, and Class A deliveries are up 48%. Seems like when people are ready to buy a rolling second home, they do not want to do so on a budget.

Despite the good news for the quarter, investors should not start revving their engines just yet. Motor home sales are still soft across the board, and the industry is entering its slowest part of the sales year. Dealers will not boost inventories due to soft demand. Gas prices continue to rise while consumer confidence levels continue to decline.

Winnebago is doing all it can to make the stock attractive to investors. The company repurchased 1.5 million shares of stock during the quarter, at a cost of $44 million. The company will pay a regular quarterly dividend of $0.12 per share. These are, however, actions with a short term impact and do not replace a company's need to increase its profits through organic growth, not real likely for Winnebago under current circumstances.

Visit AOL Money & Finance for more earnings coverage

Winnebago posts counter-intuitive profits originally appeared on BloggingStocks on Wed, 24 Oct 2007 19:02:00 EST. Please see our terms for use of feeds.

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