INVESTOR PRESENTATION MARCH 7, 2016 www.thorindustries.com FORWARD - - PowerPoint PPT Presentation

www.thorindustries.com

INVESTOR PRESENTATION

MARCH 7, 2016

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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, loss or reduction of sales to key dealers, 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, impact of potential losses under repurchase obligations, 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 January 31, 2016. 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 or circumstances on which any statement is based, except as required by law.

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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

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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

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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

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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.

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THOR OPERATING ENTITIES – STRONG BRANDS

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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

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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 December, 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

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RV INDUSTRY CONDITIONS REMAIN POSITIVE

Although consumer confidence has softened somewhat since the beginning of 2016, it remains at the highest levels since the recession. Final results fell to 91.7 in February from 92.0 in January. This compares with 95.4 a year ago.* Consumer sentiment was boosted by expectations of improving wages and continued modest inflation, as the consumers’ outlook for their personal financial situation reached its best level in ten years. Consumers are expecting a somewhat slower expansion with some concern about how the slowdown in GDP growth will affect employment growth.* Recreation Vehicle Industry Association (RVIA) forecast in March 2016 that calendar 2016 wholesale shipments for all RV categories should increase to 381,800 units, or an increase

• f 2.0% over calendar year 2015.**

Pricing and promotional environment remains competitive, but generally improved over prior year. Domestic travel offers fewer risks than international travel at a more compelling value. Lower fuel prices make RV travel increasingly attractive for consumers.

*Source: University of Michigan final Consumer Sentiment Index for February 2016 **Source: RVIA Roadsigns Spring 2016

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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

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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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SECOND QUARTER REFLECTS STRONG PERFORMANCE

Three Months Ended January 31, 2016 2015 % Chg. Net Sales $975.1 $852.4 14.4% Gross Profit 148.8 102.0 45.9% % of Sales 15.3% 12.0% SG&A 67.4 54.3 24.1% % of Sales 6.9% 6.4% Income Before Tax (cont. ops.) $65.9 $44.1 49.3% % of Sales 6.8% 5.2% Income Taxes 20.6 13.9 Net Income (cont. ops.) $45.2 $30.3 49.2% Diluted EPS (cont. ops.) $0.86 $0.57 50.9%

Amounts in millions, except per share data

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QUARTER 2016 RESULTS FROM CONTINUING OPERATIONS UP DOUBLE DIGITS

Bob Martin – Thor President & CEO: “Our second-quarter results reflect the success of our operating strategy, the popularity of Thor’s products and the breadth of our RV dealer

• base. We drove improvements in cost management and operational efficiencies which, along with favorable product mix and lower material

costs, allowed us to achieve significant growth in margins and overall profits. Recent acquisitions and capital investments continued to be accretive and contributed to Thor’s record second-quarter and first-half results. The retail market remains positive as evidenced by strong attendance and sales at the early spring retail shows and Thor’s dealers continue to be optimistic about future sales. Our dealers’ success and favorable outlook suggests the continuation of industry growth in most segments, and we are ramping up production at the new western facility that is on track to begin producing and shipping units by the end of the fiscal third quarter.” Peter Orthwein – Thor Executive Chairman: “We posted the strongest first half of any fiscal year in the history of our Company, driven by the outstanding performance of our team of employees, management and dealers. We are optimistic about the future of Thor and plan to continue to build on the foundation of our strategic growth plan based on acquisitions and capacity expansion to deliver solid returns to our shareholders.”

$852.4 $975.1 FY15 FY16

Net Sales ($ millions)

+14%

$30.3 $45.2 FY15 FY16

Net Income (Continuing Ops.)

+49%

$0.57 $0.86 FY15 FY16

Diluted EPS (Continuing Ops.)

+51%

$942.1 $1,105.2 FY15 FY16

RV Backlog ($ millions)

+17%

Note: Second quarter 2016 Results include three months of Cruiser and DRV Luxury Suites, acquired effective January 1, 2015 compared with one month in the second quarter of 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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INVESTOR Q&A: QUARTER AND YEAR-TO- DATE OPERATING RESULTS

Sales for the quarter were up significantly from the prior year, which you reported then was a very strong quarter. What were the drivers of the sales growth and do you anticipate the Q3 and Q4 to realize similar growth rates?

• Revenues in the quarter were driven by growth in our markets, recent acquisitions, positive weather

conditions and a shift in deliveries of certain motorized rental units earlier in the year. Continued strength in the RV market and a healthy dealer channel should result in continued, more modest RV revenue growth in the second half of the fiscal year. What were the drivers of Q2 and year to date gross margin improvements? Is the improvement sustainable?

• Improvements in gross margins were due primarily to favorable changes in product mix,

improvements in material and warranty costs and improved operating efficiencies compared to the prior year. Growth in gross profit margins will become more challenging as improvements in material costs and warranty expenses that were realized in the second half of fiscal 2015 create difficult comparisons for the second half of 2016. In addition, certain benefits to gross margins, specifically the impact of the retroactive reinstatement of tariff rebates on certain imported raw material, which had a significant positive impact on gross margins in the fourth quarter of fiscal 2015, will not repeat in the fourth quarter of fiscal 2016.

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INVESTOR Q&A: QUARTER AND YEAR-TO- DATE OPERATING RESULTS (CONTINUED)

What was the source of the Q2 impairment charge? How do you determine if there is an impairment charge?

• Despite the year-to-date strength of the combined RV operating results, the Company incurred a non-

cash, pre-tax goodwill impairment charge of $9.1 million, representing an after-tax EPS impact of $0.11 per share, related to a specific towable reporting unit based on an impairment analysis of that specific unit’s recent and future forecasted operating results. The $9.1 million charge represents the full impairment of the goodwill related to this reporting unit.

• Annually, or more frequently if events or circumstances warrant, the Company reviews the goodwill of

all reporting units which carry goodwill. Goodwill is reviewed for potential impairment by applying a fair-value based test to the applicable reporting units. Fair value is determined by a discounted cash flow model, and is subject to significant management judgment. If an impairment is determined to exist, we will take the charge in the quarter it is determined.

• As of January 31, 2016, the Company carried $303.5 million of goodwill, with $260.6 million of the

goodwill related to the towable RV Segment and $42.9 million of goodwill related to the “Other” non- reportable segment.

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INVESTOR Q&A: QUARTER AND YEAR-TO- DATE OPERATING RESULTS (CONTINUED)

What was the impact of new acquisitions on Q2 and year to date sales and pre-tax income?

• Cruiser RV, LLC and DRV, LLC (CRV/DRV) were acquired effective January 1, 2015, therefore the

second quarter of 2015 included only one month of activity from these entities compared to a full three months in the second quarter of 2016. The increase in the total towables net sales for the second quarter of 2016 of $23.2 million was primarily due to the inclusion of the additional two months of activity of CRV/DRV. Likewise, the increase in the total towables net sales for the six month period ended January 31, 2016 over the corresponding period in 2015 was primarily due to the inclusion of the additional 5 months of activity of CRV/DRV.

• In addition to CRV/DRV, the Company acquired Postle Aluminum Company, LLC in the fourth quarter
• f fiscal 2015, effective May 1, 2015, therefore the second quarter of 2016 includes three months of

activity from Postle with no corresponding activity in the second quarter of 2015. The operating results

• f Postle for the three and six month periods ended January 31, 2016 are included in the “Other”

segment information of Footnote 4, “Business Segments,” of the Notes to the Condensed Consolidated Financial Statements (unaudited). What was the impact of new RV acquisitions to January 31, 2016 backlogs and dealer inventory?

• The reported backlogs and dealer inventory at January 31, 2015 and January 2016 both include

information related to the CRV/DRV acquisition and therefore are comparable statistics.

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INVESTOR Q&A: QUARTER AND YEAR-TO- DATE OPERATING RESULTS (CONTINUED)

What factors are causing Corporate selling, general and administrative expenses to increase for both the quarter and year to date periods?

• For the quarter, Corporate selling, general and administrative expenses increased $1.8 million to

$10.2 million. This increase is primarily due to an increase in compensation costs, as bonuses increased $0.7 million in correlation with the increase in income from continuing operations before income taxes compared to the prior year and stock-based compensation increased $0.6 million. The stock-based compensation increase is due to increasing income over the past three years, as the stock awards generally vest ratably over a three-year period. The remaining $0.5 million increase is due to increases related to workers’ compensation and product liability reserves and charitable contributions, partially offset by a decrease in deferred compensation expense.

• For the year-to-date period, Corporate selling, general and administrative expenses increased $3.3

million to $20.0 million. This increase is primarily due to an increase in legal and professional service fees of $1.6 million, largely attributable to professional service fees incurred related to the development of long-term strategic growth initiatives and increased sales and marketing initiatives. In addition, compensation costs also increased, as bonuses increased $1.2 million in correlation with the increase in income from continuing operations before income taxes compared to the prior year and stock-based compensation increased $1.4 million. The stock-based compensation increase is due to increasing income over the past three years, as the stock awards generally vest ratably over a three- year period. Costs related to workers’ compensation and product liability reserves increased $0.5

• million. These increased costs were partially offset by a decrease in deferred compensation expense
• f $1.1 million.

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INVESTOR Q&A: QUARTER AND YEAR-TO- DATE OPERATING RESULTS (CONTINUED)

Why are amortization of intangible assets costs up for the quarter and year-to-date periods?

• The increase in amortization expense is related to the additional intangible assets recognized as a

result of the recent acquisitions of CRV/DRV and Postle in the second and fourth quarters of fiscal 2015, respectively. Estimated amortization expense for fiscal 2016 and future periods is noted in Footnote 8 of the Notes to the Condensed Consolidated Financial Statements. Why is there a sizeable increase in Other expense for the quarter and year-to-date periods?

• The Other expense line on the income statement primarily relates to the market value of the

Company’s deferred compensation plan assets depreciating in the current year periods as compared to an appreciation in those assets, thus generating income, in the prior year. The equal and offsetting change in the related deferred compensation liability is reported within the selling, general and administrative expense line at Corporate as noted previously. Has the Postle acquisition met expectations?

• Although the aluminum market as a whole has been impacted by falling raw aluminum prices, which in

turn generally has a negative impact on Postle’s operating results, Postle has met our expectations and is providing incremental net income before tax to Thor.

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INVESTOR Q&A: BALANCE SHEET AND CASH FLOW

Net income for the six months of 2016 was $95 million vs 2015 of $68 million, an increase of $27 million, yet cash provided by operating activities was essentially flat year over year. Why?

• Net income plus non-cash expenses (primarily depreciation, amortization, impairment charges, deferred

income tax provision and stock-based compensation) provided a total of $130.3 million of operating cash for the six months ended January 31, 2016. Working capital used $78.4 million of operating cash during that period, primarily due to larger than usual seasonal increases in accounts receivable and inventory in correlation with the increase in sales, production levels and backlog, partially offset by an increase in accounts payable. In addition, required income tax payments exceeded income tax provisions during the period.

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INVESTOR Q&A: BALANCE SHEET AND CASH FLOW

What are your priorities for cash utilization?

• Our priorities for cash utilization remain consistent – our first priority is to support and grow our core RV

business, both organically and through acquisitions. For the full year fiscal 2016 we anticipate spending nearly $50 million in purchases of property, plant and equipment. This figure includes sizeable expansions at Airstream; Heartland – including their new facility in Nampa, Idaho as well as expansions in Elkhart and Howe, Indiana; Keystone; Thor Motor Coach and KZ. In fiscal 2015, we spent approximately $194 million on acquisitions, including nearly $50 million on acquisitions directly related to

• ur core RV business. The acquisitions have contributed meaningfully to our recent success and offer

great potential to do the same for our shareholders in the longer term.

• Our second priority is on maintaining and growing our regular dividend rate over time. The Company

increased its previous regular quarterly dividend of $0.27 per share to $0.30 per share in October 2015. In October 2014, the Company increased its previous regular quarterly dividend of $0.23 per share to $0.27 per share.

• Our third priority for the use of cash is for strategic share repurchases or special dividends, as

determined by the Company’s Board.

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INVESTOR Q&A: MARKET CONDITIONS AND COMPETITION

What is the current state of the Canadian RV market? What do you anticipate the market will be like for the remainder of calendar 2016?

• The Canadian market is still challenging as we see continued volatility in the value of the Canadian

dollar relative to the U.S. dollar. Since we sell our products to Canadian dealers priced in U.S. dollars, this creates an upward pressure on prices in local currency which has an adverse impact on

• demand. As a result, total Canadian retail registrations as reported by Statistical Surveys, Inc., fell

12.9% for the full calendar year 2015, with towables decreasing 12.0% and motorized decreasing 26.7%. Other factors impacting the Canadian market include increased job losses, an economic recession and tighter lending practices. However, even with these negative headwinds, we are seeing some areas of improvement in certain geographies and lean, healthy dealer inventory levels in the channel. Have you seen any signs of a slowdown in demand for RVs?

• At this point, we have not seen any indications of a slowdown in demand at the dealer or retail level

in the U.S. Despite the recent volatility in the stock market, consumers remain positive, as the impact of lower fuel prices, increasing job creation and lower unemployment have helped consumer confidence to remain strong. This positive consumer confidence is met with improved product

• fferings in our industry and, combined, these factors have driven continued growth surpassing the

growth rate of the broader economy.

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INVESTOR Q&A: MARKET CONDITIONS AND COMPETITION

Describe the current competitive environment, is there much discounting going on?

• The RV industry is always competitive, but in the past year or two, we have seen less of the more

extreme discounting than we have seen in prior years, with pockets of more aggressive discounting

• n certain high-end products.

Have you seen any softness in markets that have been heavily impacted by the oil industry?

• The largest state with exposure to the oil industry is Texas, which, based on retail registration data

from Statistical Surveys, accounted for 31,656 units in 2015, which was up 8.5% for the year. At this point, we have not seen signs of reduced demand in the large metro regions of Texas, though we continue to monitor the situation closely. What is the current state of Dealer sentiment and Dealer inventory levels?

• Dealers in general remain optimistic regarding calendar 2016. Early season shows on average have

been well attended with very solid sales volume. Dealer orders are generally expected to reflect a 1- for-1 replacement as units are sold at retail. Dealer inventory remains appropriate for current conditions in both towables and motorized.

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INVESTOR Q&A: MARKET CONDITIONS AND COMPETITION

Do we anticipate further RV industry consolidation?

• Although a significant amount of consolidation has already happened within the industry since the

last recession, we do believe that opportunities remain for additional consolidation within the

• industry. Consolidation in our industry does not threaten the competitive environment as years of

consolidation have evidenced. So, even with more consolidation, we are confident that the competitive environment that drives innovation and improved product offerings throughout our industry will continue. In addition, we have seen a number of new or returning entrants to the RV manufacturer base since the recession as well. As these new entrants grow, there may be additional consolidation. Are we at the peak for shipments?

• We do not believe we are at the peak for shipments. As an industry, we are impacted by many

macro-economic factors such as consumer confidence, interest rates and credit availability, employment levels, inflation rate, and a number of other factors. Currently, many of these macro- economic factors remain favorable. In addition, a positive future outlook for the RV segment is supported by favorable demographics – both as more people reach the age brackets that historically have accounted for the bulk of the retail RV sales as well as an influx of younger consumers that are attracted to the RV lifestyle. These younger consumers in particular are generally attracted to lower and moderately priced entry-level products and are, in part, fueling additional growth in the industry beyond historical levels. In addition, RVIA recently updated their forecast for calendar 2016 and are now projecting 2% growth, to 381,800 units.

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INVESTOR Q&A: OUTLOOK

What is the status of the new Heartland plant in Idaho?

• The Heartland facility in Idaho is progressing according to our original timeline. We are ramping up

production at the new western facility that is on track to begin producing and shipping units by the end of the fiscal third quarter. The Nampa facility will produce travel trailers to meet the strong demands of the West Coast dealers of our Heartland subsidiary. What is your outlook for the rest of the year?

• Continued strength in the RV market and a healthy dealer channel should result in continued, but

more modest RV revenue growth in the second half of the fiscal year. Growth in gross profit margins will become more challenging as improvements in material costs and warranty expenses that were realized in the second half of fiscal 2015 will create difficult comparisons for the second half of 2016. In addition, certain benefits to gross margins, specifically the impact of the retroactive reinstatement

• f tariff rebates on certain imported raw material, which had a significant positive impact on gross

margins in the fourth quarter of fiscal 2015, will not repeat in the fourth quarter of fiscal 2016. Finally, the effective income tax rate will likely remain higher on a year-over-year basis, compared with the relatively low rate in the second half of fiscal 2015.

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INVESTOR Q&A: OUTLOOK

Thor has lost market share in calendar 2015. Why have you lost market share and what does the Company plan on doing to address or reverse the losses?

• From a share perspective, we have gained significant market share in motorized, which has been

partially offset by some decreases in towable share, most notably in high-end fifth wheels and some travel trailers. Market share is certainly a key metric that we monitor for all our product categories – however, it is not the only metric. Overall, we generally try to take a balanced approach to growing or maintaining market share and growing or maintaining gross margin. The RV industry is extremely competitive and pricing discipline can come at the expense of market share for all participants, including the largest. We have developed a variety of new products that we believe address the largest and fastest growing segments of the market, which should help to improve share as they penetrate the broader market. What is your strategic plan for future acquisitions?

• We have established a very disciplined approach to acquisitions to ensure we remain focused on the

factors that provide the greatest likelihood to a successful acquisition and that will provide long-term value to our shareholders. We are opportunistic in our approach and seek willing sellers at a reasonable sales price. We also seek companies with strong management teams. We remain focused on acquisition opportunities within or adjacent to the RV industry.

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RV WHOLESALE MARKET TRENDS (UNITS 000s)

295.8 339.6 441.1 413.9 389.9 199.2 106.9 133.6 140.6 196.6 215.7 186.9 189.9 211.7 215.8 187.9 173.1 163.1 203.4 227.8 259.5 247.2 247.5 254.5 292.7 321.2 300.1 256.8 311.0 320.8 370.1 384.4 390.5 353.5 237.0 165.6 242.3 252.3 285.8 321.2 356.8 374.2 381.8 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 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2016: RVIA estimate as of Spring RV Roadsigns, published in March 2016

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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 47.3 49.0 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 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2016: RVIA estimate as of Spring RV Roadsigns, published in March 2016

33

RV MARKET TOWABLE WHOLESALE TRENDS (UNITS 000s)

226.9 243.0 285.0 253.7 232.7 135.1 78.4 98.1 99.4 127.1 133.7 118.1 122.1 137.9 142.9 126.7 120.8 121.1 156.5 176.5 201.3 194.3 192.2 199.5 229.1 249.6 239.1 207.6 250.6 258.9 298.3 323.0 334.5 298.1 208.6 152.4 217.1 227.5 257.6 282.8 312.8 326.9 332.8 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 2016 (e)

Historical Data: Recreation Vehicle Industry Association, Calendar year 2016: RVIA estimate as of Spring RV Roadsigns, published in March 2016

34

RV INDUSTRY DEMAND

Industry retail demand has shifted toward more light-weight towables and gas Class A and Class C 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 Industry Retail Registrations* 262,805 units (+6.8%) 301,481 units (+14.7%) 328,866 units (+9.1%) 369,883 units (+12.5%) Industry Wholesale Shipments** 285,749 units (+13.2%) 321,127 units (+12.4%) 356,735 units (+11.1%) 374,246 units (+4.9%)

* Statistical Surveys, Inc., includes US and Canada. 2012, 2013, 2014 & 2015 Full Year Actual ** RVIA wholesale shipments for full years 2012, 2013, 2014 & 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 Backlogs reflect the inclusion of Cruiser/DRV for both periods Backlog: January 31 ($000s),

2016 2015 % Change Towables $708,408 $626,052 13.2% Motorized $396,839 $316,008 25.6% Total RV $1,105,247 $942,060 17.3%

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: January 31, (units)

2016 2015 % Change RV 78,000 76,440 2.0%

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RV INDUSTRY RETAIL MARKET SHARE

Total Share % Total Share % Total Share % Total Share % THOR* 127,528 34.5% 119,089 36.2% 115,572 38.3% 102,780 39.1% Forest River** 131,198 35.5% 112,979 34.4% 99,822 33.1% 81,873 31.2% Jayco*** 49,650 13.4% 41,574 12.6% 37,942 12.6% 33,803 12.9% Winnebago 11,857 3.2% 10,395 3.2% 8,661 2.9% 7,053 2.7% Grand Design 6,967 1.9% 4,174 1.3% 813 0.3%

• 0.0%

Gulfstream 4,743 1.3% 4,562 1.4% 4,882 1.6% 5,410 2.1% Subtotal 331,943 89.8% 292,773 89.1% 267,692 88.8% 230,919 88.0% All Others 37,940 10.2% 36,093 10.9% 33,789 11.2% 31,886 12.0% Grand Total 369,883 100.0% 328,866 100.0% 301,481 100.0% 262,805 100.0% Y/E 12/31/14 Y/E 12/31/13 Y/E 12/31/12 Y/E 12/31/15

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

37

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

41.2% 40.9% 41.2% 40.2% 37.9% 35.8% 17.8% 19.5% 20.0% 23.3% 23.9% 25.1% 12.4% 14.4% 16.7% 22.1% 21.9% 22.5%

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

*Source: Statistical Surveys Inc., U.S. and Canada, calendar year 2010-15. 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.

38

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

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