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Thor Industries reported Better than expected third-quarter earnings on Monday before the bell. $THO earnings were affected by acquisition-related costs of the purchase of the European Erwin Hymer Group. The company cited favorable trends.

Thor Palazzo

Thor Industries, Inc. NYSE: THO: Reported Earnings Before Open Monday

$1.65 Beat $1.64 EPS But $2.51 Missed $2.63 Billion Forecast in Revenue

Earnings

Thor Industries (THO) reported fiscal third-quarter earnings on Monday before the bell of $32.7 million or net income of 59 cents per share. Earnings, adjusted for costs related to mergers and acquisitions, were $1.65 per share. The results beat Wall Street expectations of $1.64 per share. Revenue of $2.51 billion in the period, missed analysts expected earning of $2.63 billion.

The acquisition-related costs  of the purchase of Erwin Hymer Group hit the bottom line.. The company expects to face challenging conditions in the near term despite remaining optimistic for the long term.

Thor Industries, Inc. NYSE: THO

Market Reaction - Pre-market $56.25 +1.01 (+1.83%)

Highlights

  • - Increase in net sales for the third quarter reflects the acquisition of Erwin Hymer Group (EHG) which was completed at the start of the third quarter, with European RV segment contributing $767.5 million in net sales.
  • - Financial results for the third quarter include acquisition-related costs and purchase accounting adjustments related to the EHG acquisition.
  • In addition, the Company incurred costs related to the acquisition that will be ongoing, including amortization expense and interest expense.
  • - Continued rationalization in North American independent dealer inventory levels supports positive outlook for the North American industry supported by long-term favorable demand trends.
  • - To date, the Company has paid approximately $255 million of principal on the debt incurred to finance the EHG acquisition, including paying down all $100 million outstanding on its asset-based credit facility (ABL) and approximately $155 million of its term loan.

thor industries Q3 2019 earnings results

Outlook

"During the remainder of our fiscal 2019, we expect the North American dealer inventory rationalization will continue, but we expect to see a resumption of growth in the North American markets in 2020. In Europe, we believe our dealer inventory levels of EHG products, while elevated in certain locations, are generally appropriate for seasonal consumer demand in Europe and are progressing towards more normalized levels," added Bob Martin.

"Currently, our focus is on identifying and realizing the benefits of sharing best practices and operating efficiencies across Europe and North America, and continuing to optimize our working capital management processes." "Having completed the EHG acquisition, we are now beginning the hard work of realizing the full value of EHG to our Company," commented Peter B. Orthwein, Executive Chairman of Thor. "With the strong industry fundamentals and demographic tailwinds, we are confident that our strategic expansion into the European RV market will contribute to Thor's long-term growth, and provide the strong cash flow and returns on investment that our shareholders have come to expect from Thor."

RV Industry

 

About Thor

Thor Industries, Inc. was founded on August 29, 1980, when Wade F. B. Thompson and Peter B. Orthwein acquired Airstream, the most recognized name in the industry. Despite its venerable image, Airstream had not fared well during the economic downturn of the late 1970s. By focusing on improving quality while reducing costs, Airstream returned to profitability in its very first year under the new Thor management.

Thor Brands

Together, the Thor Industries family of RV companies makes up one of the world’s largest RV manufacturers.

  • Airstream
  • Bison
  • CrossRoads
  • Cruiser RV
  • DRV
  • Dutchmen
  • Entegra Coach
  • Erwin Hymer Group
  • Heartland RV
  • Highland Ridge
  • Jayco
  • Keystone RV
  • K-Z Redwood RV
  • Starcraft RV
  • Thor Motor Coach (TMC) is the #1 motorhome brand in North America, and produces nearly one out of every four motorhomes sold each year. TMC’s diverse product lineup includes many of the world’s most recognized Class A and Class C motorhomes.
  • Venture RV

Source: Thor, AlphaStreet

From The TradersCommunity Research Desk

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