INVESTOR PRESENTATION NOVEMBER 30, 2015 www.thorindustries.com - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION

NOVEMBER 30, 2015

2

FORWARD LOOKING STATEMENTS

This presentation includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor Industries, Inc., and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. There can be no assurance that actual results will not differ from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations, material or chassis supply restrictions, legislative and regulatory developments, the costs of compliance with increased governmental regulation, legal issues, the potential impact of increased tax burdens on our dealers and retail consumers, lower consumer confidence and the level of discretionary consumer spending, interest rate fluctuations and the potential economic impact of rising interest rates, restrictive lending practices, management changes, the success of new product introductions, the pace of obtaining and producing at new production facilities, the pace of acquisitions, the potential loss of existing customers of acquisitions, the integration of new acquisitions, the availability of delivery personnel, asset impairment charges, cost structure changes, competition, the potential impact of the strengthening of the U.S. dollar on international demand, general economic, market and political conditions and the other risks and uncertainties discussed more fully in ITEM 1A of our Annual Report on Form 10-K for the year ended July 31, 2015 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ending October 31, 2015. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this presentation or to reflect any change in our expectations after the date of this presentation or any change in events, conditions

• r circumstances on which any statement is based, except as required by law.

3

THOR AT A GLANCE

Founded in 1980 by Wade Thompson & Peter Orthwein with the acquisition of Airstream, Inc. One of the world’s largest manufacturers of recreational vehicles representing a broad range of major brands Two major business segments include:

• Towable RVs such as travel trailers, fifth wheels and specialty trailers
• Motorized RVs which include Class A, B and C motorhomes

Operations in 148 facilities* located in Indiana, Michigan, Ohio and Oregon Products sold through independent retail distributors primarily in the U.S. and Canada Historically strong cash flow and solid balance sheet Approximately 10,450 employees* Listed on the NYSE under ticker THO

$1,849 $2,340 $2,640 $3,242 $3,525 $4,007

FY10 FY11 FY12 FY13 FY14 FY15

Net Sales (continuing operations, $ millions) $1.72 $1.66 $2.07 $2.86 $3.29 $3.79

FY10 FY11 FY12 FY13 FY14 FY15

Diluted EPS (continuing operations)

*as of July 31, 2105

4

THOR’S RV PRODUCT RANGE

Travel Trailers (hitch to the bumper of the tow vehicle) Fifth Wheels (hitch to a specially mounted hitch in the bed of a pickup truck) Specialty Trailers (includes camping trailers, truck campers and horse trailers with living quarters)

Towable RV's $3,096.4 77% Motorized RV's $870.8 22% Other $39.6 1%

FY2015 Sales*

Towable RV Segment Products

Class A Motorhomes (fully enclosed, bus style motorhome) Class B and C Motorhomes (B – van motorhomes, C – living area built on van or pickup chassis)

Motorized RV Segment Products

*Fiscal Year ended July 31, 2015, in millions

5

CONSISTENT GROWTH IN EARNINGS

$1.72 $1.66 $2.07 $2.86 $3.29 $3.79 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 FY10 FY11 FY12 FY13 FY14 FY15

Diluted EPS, Continuing Ops.

$91.2 $91.6 $111.4 $151.7 $175.5 $202.0 $0 $50 $100 $150 $200 $250 FY10 FY11 FY12 FY13 FY14 FY15

Net Income, Continuing Ops., $ Millions

6

REGULAR QUARTERLY DIVIDENDS

Fiscal years ended July 31,

$0.10 $0.15 $0.18 $0.23 $0.27 $0.30 FY11 FY12 FY13 FY14 FY15 FY16

*In addition to regular quarterly dividends, Thor paid special dividends of $1.50 in FY13 and $1.00 in

• FY14. 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.

7

THOR OPERATING ENTITIES – STRONG BRANDS

8

STRATEGIC VISION FOR GROWTH

At Thor we strive to provide RV consumers with superior products and services through innovative solutions which enhance the enjoyment of the RV lifestyle Our decentralized operating structure and independent operating subsidiaries foster an entrepreneurial spirit and an unending focus on the needs of the users of our products – resulting in our drive to lead the industry with innovation, product quality and customer service Our focus requires that we make decisions based on the long-term success of

• ur Company:
• While we strive to lead the industry in market share, we will not strive for market share at

the expense of quality or without regard to bottom-line impact

• Growth is important, but this is a business of relationships, and we realize that the key to

long-term sustainable sales growth rests in the strength of our relationships with consumers, dealers and suppliers

• Our relationship with shareholders is important ― profits are a key driver to our long-term

success

• The path to long-term success is seldom straight, so our leaders manage in a way that

moves us closer to our goals, even though it might impact our results in the short term

9

THOR COMPETITIVE ADVANTAGES

Primary focus on assembly:

• Vertical integration – only where it makes sense
• Flexibility – performance in any market condition
• Low overhead costs
• High return on assets employed

Strong market share in the primary RV categories – Travel Trailers, Fifth Wheels and Motorized (#1 in motorized, #2 in towables)*

• Provides scale and purchasing power
• Low cost, high volume producer – generates improved margin

Solid balance sheet Meaningful increases in production capacity during FY14 and FY15 Diversified lineup of innovative product offerings Strong relationships with wholesale financing providers Excellent relationships with dealers, lenders and consumers based on financial strength to provide warranty and honor repurchase agreements

*Source: Statistical Surveys, Inc., U.S. and Canada, year-to-date through September, 2015.

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INVESTING IN THE FUTURE - CAPACITY

$12,767 $33,698 $10,442 $24,190 $30,438 $43,055 $0 $10,000 $20,000 $30,000 $40,000 $50,000 FY10 FY11 FY12 FY13 FY14 FY15 Thousands

Capital Acquisitions

$19,756 $99,562 $170 $10,718 $86,092 $194,486 $0 $50,000 $100,000 $150,000 $200,000 $250,000 FY10 FY11 FY12 FY13 FY14 FY15 Thousands

Business Acquisitions

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CORPORATE INTEGRITY

No golden parachutes No ‘pro forma’ earnings. We report net income, not adjusted earnings to cover up performance Consistent focus on shareholder value Simple compensation philosophy:

• Mainly cash compensation based on pre-tax income – a true pay-

for-performance philosophy

• Restricted stock units also awarded based on performance to

provide broader, long-term focus on overall Company results

12

RV INDUSTRY CONDITIONS REMAIN POSITIVE

Consumer confidence has strengthened since September. Preliminary results rose to 93.1 in November 2015 from 90.0 in October and 85.7 in September. This compares with 88.8 a year ago.* Consumer sentiment was boosted by expectations of improving wages and continued modest inflation heading into 2016, resulting in improvements in buying plans for large discretionary purchases, including vehicles.* Recreation Vehicle Industry Association (RVIA) forecast in August 2015, that calendar 2015 wholesale shipments for all RV categories should increase to 373,700 units, or an increase of 4.7% over calendar year 2014. Most of the unit growth in calendar 2015 is expected in travel trailers, which along with fifth wheels are expected to account for 84% of all RV shipments in 2015.** RVIA forecast 2016 calendar year shipments for all categories will total 383,100 units, a 2.5% increased from the expected calendar year 2015.** Pricing and promotional environment remains competitive, but generally improved over prior year. Domestic travel offers fewer risks than international travel. Lower fuel prices make RV travel increasingly attractive for consumers.

*Source: University of Michigan preliminary Consumer Sentiment Index for November 2015 **Source: RVIA Roadsigns Fall 2015

13

CONSUMER TRENDS: GROWING RV POPULARITY

Leisure travel such as camping continues to be popular Approximately 46.2 million households in North America are active campers, but only 9.7 million, or 21% of them, are RV campers. The remaining campers primarily use tents or cabins, which makes them a solid target market for the RV industry (58% of RV owners started as tent campers). Favorable demographics Baby boomers (a prime RV target market for many years) represent 24% of the population and a target market as they reach retirement age and have more time for travel. Generation X and Millennials offer future opportunities as they seek more active outdoor experiences with their families. Increasingly diverse potential customer base – Hispanic, African American, Asian and

• ther ethnicities grew from 12% in 2012 to 23% in 2014.

Younger campers (25-34 age) are a growing market – from 18% in 2012 to 23% in 2014. New applications – broader usage Growth in use at extreme sporting events, youth sports leagues and tournaments, dog and craft shows, and collegiate sports activities for alumni and fans.

*Source: Kampgrounds of America (KOA) 2015 North American Camping Report

14

FY15 ACQUISITIONS EXPAND TOWABLE BRANDS

On January 5, 2015, Thor’s Heartland RV subsidiary acquired towable RV maker Cruiser RV (CRV) and luxury fifth wheel maker DRV Luxury Suites, both based in Howe, Indiana, for total net cash consideration of $47.5 million. CRV produces light-weight laminated travel trailers targeting the fast-growing entry- to mid-priced segments of the market while DRV is a leader in high-end luxury fifth wheels, including some custom units that complement Heartland’s luxury fifth wheel brands. CRV and DRV generated approximately $135 million in combined sales for calendar 2014. With locations about 30 miles from Heartland’s main complex, CRV and DRV offer opportunities for expanded production for Heartland while drawing from a talented labor pool in an adjacent county.

15

POSTLE ALUMINUM ACQUISITION ENSURES SUPPLY OF KEY MATERIAL COMPONENT

On May 1, 2015 Thor acquired Postle Aluminum, based in Elkhart, Indiana, for approximately $144 million in cash, net

• f cash acquired.

Postle generated sales of approximately $220 million in calendar 2014 and we expect the acquisition to be accretive to earnings. Approximately 30% of total sales are to Thor subsidiaries and approximately 75% of total sales were to the RV industry. The remaining sales are to the specialty truck and trailer, cargo, marine and fencing industries. Postle produces a variety of aluminum extrusions, specialized components and powder coating and painting services. The current management team will continue to lead the company as a separate Thor subsidiary.

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FIRST QUARTER REFLECTS STRONG PERFORMANCE

Three Months Ended October 31, 2015 2014 % Chg. Net Sales $1,030.4 $922.0 11.8% Gross Profit 152.2 117.7 29.4% % of Sales 14.8% 12.8% SG&A 68.5 58.0 18.0% % of Sales 6.6% 6.3% Income Before Tax (cont. ops.) $77.7 $56.7 37.0% % of Sales 7.5% 6.2% Income Taxes 27.0 17.5 Net Income (cont. ops.) $50.7 $39.2 29.4% Diluted EPS (cont. ops.) $0.97 $0.73 32.9%

Amounts in millions, except per share data

17

FIRST QUARTER 2016 RESULTS FROM CONTINUING OPERATIONS UP DOUBLE DIGITS

Bob Martin – Thor President & CEO: “Continued focus upon execution of our strategic plan allowed Thor to achieve a record start to fiscal 2016, with sales and backlogs both exceeding $1 billion, improved margins and strong earnings growth for the quarter. This record performance would not have been possible without the strength of our dealer base and all of our team members who work hard to make what we think are the best RVs in the business. We are optimistic about our prospects for continued growth in fiscal 2016 as we build on the momentum of our September Dealer Open House at our largest industry trade show in Louisville this week.” Peter Orthwein – Thor Executive Chairman: “We have posted a very strong start to the new fiscal year as our focus on strategically growing our business over the past two years through investments in acquisitions, new capacity, and product innovation continued to pay dividends. Although we achieved record backlogs, exceeding $1 billion for the first time, the next two quarters will present tougher comparisons given the significant growth we achieved last year. Despite seasonal variations, we expect to achieve growth in sales and earnings for the full year, even though we may not see quarterly growth rates as strong as we saw this quarter.”

$922.0 $1,030.4 FY15 FY16

Net Sales ($ millions)

+12%

$39.2 $50.7 FY15 FY16

Net Income (Continuing Ops.)

+29%

$0.73 $0.97 FY15 FY16

Diluted EPS (Continuing Ops.)

+33%

$909.7 $1,051.0 FY15 FY16

RV Backlog ($ millions)

+16%

Note: Fist Quarter 2016 Results include Cruiser and DRV Luxury Suites, acquired effective January 1, 2015 and Postle acquired May 1, 2015.

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KEY TAKEAWAYS

Profitable every year since our founding in 1980 – 35 years of profitability We are primarily assemblers, not manufacturers Variable cost structure provides flexibility in cyclical industry Known as innovators in the industry Strong market share in all main RV product categories Rock-solid balance sheet – history of returning cash to shareholders Strong consumer, dealer and lender relationships Experienced team

www.thorindustries.com

Appendix: Financial and Market Data

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RV WHOLESALE MARKET TRENDS (UNITS 000s)

295.8 339.6 441.1 413.9 389.9 199.2 106.9 133.6 140.6 196.6 215.7 186.9 189.9 211.7 215.8 187.9 173.1 163.1 203.4 227.8 259.5 247.2 247.5 254.5 292.7 321.2 300.1 256.8 311.0 320.8 370.1 384.4 390.5 353.5 237.0 165.6 242.3 252.3 285.8 321.2 356.8 373.7 383.1 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (e) 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2015 and 2016: RVIA estimate as of Fall RV Roadsigns, published in August 2015

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RV MARKET MOTORIZED WHOLESALE TRENDS (UNITS 000s)

68.9 96.6 156.1 160.2 157.2 64.1 28.5 35.4 41.2 69.5 82.0 68.7 67.7 73.7 72.8 61.1 52.3 41.9 46.9 51.3 58.2 52.8 55.3 55.1 63.5 71.5 61.0 49.2 60.4 62.0 71.7 61.4 55.8 55.4 28.4 13.2 25.2 24.8 28.2 38.4 44.0 47.0 48.6 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (e) 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2015 and 2016: RVIA estimate as of Fall RV Roadsigns, published in August 2015

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RV MARKET TOWABLE WHOLESALE TRENDS (UNITS 000s)

226.9 243.0 285.0 253.7 232.7 135.1 78.4 98.1 99.4 127.1 133.7 118.1 122.1 137.9 142.9 126.7 120.8 121.1 156.5 176.5 201.3 194.3 192.2 199.5 229.1 249.6 239.1 207.6 250.6 258.9 298.3 323.0 334.5 298.1 208.6 152.4 217.1 227.5 257.6 282.8 312.8 326.7 334.5 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (e) 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2015 and 2016: RVIA estimate as of Fall RV Roadsigns, published in August 2015

23

RV INDUSTRY DEMAND

Industry retail demand has shifted toward more light-weight towables and gas Class A motorhomes as consumers seek value Wholesale units typically outpace retail in the early part of the calendar year; historically sales become more balanced as we reach the peak retail selling season

Calendar Year 2012 2013 2014 2015 YTD Industry Retail Registrations* 262,805 units (+6.8%) 301,481 units (+14.7%) 326,168 units (+8.2%) 307,402 units (+11.0%) Industry Wholesale Shipments** 285,749 units (+13.2%) 321,127 units (+12.4%) 356,735 units (+11.1%) 285,049 units (+5.0%)

* Statistical Surveys, inc., includes US and Canada. 2012, 2013 & 2014 Full Year Actual, YTD though September 2015 ** RVIA wholesale shipments for full years 2012, 2013 & 2014, YTD through September 2015

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THOR BACKLOG AND DEALER INVENTORY

Dealers remain confident with orders reflecting a shift toward more normal ordering patterns Orders generally expected to reflect 1-for-1 replacement as units are sold at retail Backlog: October 31 ($000s),

2015 2014 % Change Towables $710,013 $653,441 8.7% Motorized $341,010 $256,210 33.1% Total RV $1,051,023 $909,651 15.5%

Dealers inventory remains appropriate for current conditions in both towable and motorized Lenders still comfortable with current dealer inventory turns and current credit line utilization; year-

• ver-year turns have increased modestly, resulting in a slight reduction in average age of Thor units
• n dealers’ lots

Dealer Inventory: October 31, (units)

2015 2014 % Change RV 66,200 62,450 6.0%

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RV INDUSTRY RETAIL MARKET SHARE

Total Share % Total Share % Total Share % Total Share % THOR* 106,322 34.6% 118,380 36.3% 115,572 38.3% 102,780 39.1% Forest River** 110,501 35.9% 111,765 34.3% 99,822 33.1% 81,873 31.2% Jayco*** 41,729 13.6% 41,341 12.7% 37,942 12.6% 33,803 12.9% Winnebago 9,681 3.1% 10,339 3.2% 8,661 2.9% 7,053 2.7% Gulfstream 4,029 1.3% 4,531 1.4% 4,882 1.6% 5,410 2.1% Grand Design 5,392 1.8% 4,147 1.3% 813 0.3%

• 0.0%

Subtotal 277,654 90.3% 290,503 89.2% 267,692 88.8% 230,919 88.0% All Others 29,748 9.7% 35,665 10.8% 33,789 11.2% 31,886 12.0% Grand Total 307,402 100.0% 326,168 100.0% 301,481 100.0% 262,805 100.0% Y/E 12/31/14 Y/E 12/31/13 Y/E 12/31/12 YTD 9/30/15

Source: Statistical Surveys, Inc., U.S. and Canada * Thor adjusted to include historical results of Livin’ Lite, Bison Coach, K-Z, Inc., Cruiser RV and DRV Luxury Suites for all periods presented ** Forest River includes Palomino, Coachmen, Prime Time, Shasta and Dynamax *** Jayco adjusted to include historical results of Open Range

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THOR RV RETAIL MARKET SHARE TREND (CALENDAR YEAR, UNITS)

41.2% 40.9% 41.2% 40.2% 38.0% 35.8% 17.8% 19.5% 20.0% 23.3% 23.8% 25.2% 12.4% 14.4% 16.7% 22.1% 21.9% 22.2%

2010 2011 2012 2013 2014 2015 YTD Towable Retail Share* Class A/C Retail Share* Class B Retail Share*

*Source: Statistical Surveys Inc., U.S. and Canada, calendar year 2010-14, 2015 YTD through September. Historical results adjusted to include results of Heartland, Livin’ Lite, Bison Coach, K-Z, Inc., Cruiser RV and DRV Luxury Suites for all periods presented.

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QUARTERLY THOR RV UNIT SHIPMENTS

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 1Q2006 1Q2007 1Q2008 1Q2009 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 1Q2015 1Q2016

www.thorindustries.com