Investor Presentation September 26, 2016 www.thorindustries.com - - PowerPoint PPT Presentation

www.thorindustries.com

Investor Presentation

September 26, 2016

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. We cannot assure you 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 impact of rising interest rates on our operating results, the costs of compliance with increased governmental regulation, legal and compliance issues including those that may arise in conjunction with recent transactions, 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

• f existing customers of acquisitions, the integration of new acquisitions, our ability to retain key management personnel of

acquired companies, the loss or reduction of sales to key dealers, the availability of delivery personnel, asset impairment charges, cost structure changes, competition, the impact of potential losses under repurchase agreements, the potential impact of the strengthening U.S. dollar on international demand, general economic, market and political conditions and the

• ther risks and uncertainties discussed more fully in ITEM 1A of our Annual Report on Form 10-K for the year ended July

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.

2

2016: A RECORD YEAR

Peter B. Orthwein, Thor Executive Chairman: “This has been an outstanding year for Thor, as we celebrated a number of monumental achievements, including completing the acquisition of Jayco, the successful integrations of Jayco, Cruiser/DRV and Postle Aluminum, and posting record sales and earnings for the quarter and year. With the strength of

• ur retail customers, our dealer base, our product

development teams, our employees and operating management team, along with favorable trends within the economy and the industry, we see ample reasons for optimism in the year ahead. With strong fundamentals in our industry, we will continue to invest in our organic growth while assessing additional acquisition opportunities to ensure the long-term success of Thor.”

3

KEY STATS – INCOME STATEMENT

4 $2,340 $2,640 $3,242 $3,525 $4,007 $4,582 FY11 FY12 FY13 FY14 FY15 FY16

Net Sales (Continuing Ops., $ millions)

$1.66 $2.07 $2.86 $3.29 $3.79 $4.91 FY11 FY12 FY13 FY14 FY15 FY16

Diluted EPS (Continuing Ops.)

$91.6 $111.4 $151.7 $175.5 $202.0 $258.0 FY11 FY12 FY13 FY14 FY15 FY16

Net Income (Continuing Ops., $ millions)

12.8% 12.1% 13.1% 13.3% 13.9% 15.9% FY11 FY12 FY13 FY14 FY15 FY16

Gross Margin (Continuing Ops.)

KEY STATS – BALANCE SHEET

5

$217,477 $220,047 $237,267 $289,336 $183,478 $209,902

FY11 FY12 FY13 FY14 FY15 FY16

Cash & Investments ($000s)

$345,169 $373,796 $469,032 $473,334 $397,506 $365,206

FY11 FY12 FY13 FY14 FY15 FY16

Working Capital ($000s)

$58,724 $76,456 $82,599 $69,831 $148,196 $226,263

FY11 FY12 FY13 FY14 FY15 FY16

Free Cash Flow – Before Special Dividends ($000s)

KEY STATS – OTHER

6

Key Ratios FY16 FY15

Total Assets $2.3 billion $1.5 billion Working Capital $365.2 million $397.5 million Debt to Total Assets 0.15 0.00 Gross Margin 15.9% 13.9% Inventory Turnover 14.1x 17.3x

Towable RV's $3,338.7 73% Motorized RV's $1,094.2 24% Other $149.2 3%

FY2016 Sales by Segment*

*Fiscal Year Ended July 31, 2016, $ millions

REGULAR QUARTERLY DIVIDENDS

7

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

Fiscal Years Ended July 31

*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 compliance with the credit facility and determination of the Board, and are dependent upon future earnings, cash flows and other factors.

THOR – QUICK FACTS

Founded in 1980 by Wade Thompson & Peter Orthwein with the acquisition of Airstream, Inc. Two major business segments include:

• Towable RVs = travel trailers, fifth wheels and

specialty trailers

• Motorized RVs = Class A, B and C motorhomes

Operations in 197 facilities* located in Indiana, Michigan, Idaho, Ohio and Oregon Products sold through independent retail distributors primarily in the U.S. and Canada Approximately 14,900 employees* Listed on the NYSE under ticker THO

8

*as of July 31, 2016

THOR OPERATING ENTITIES

9

THOR OVERVIEW

What started as one RV company has grown into a family of subsidiaries that together make up one of the world’s largest RV manufacturers. Thor Industries is more than just strength in numbers; it’s strength in quality. Whether organically or through acquisition, we’ve grown through being selective, through finding those who pioneer, who deliver on their promises, and who make the best products and provide the best experiences. We choose the best.

10

THOR’S RV PRODUCT RANGE

11

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 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

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 our 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

STRATEGIC VISION FOR GROWTH

12

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 towables, #1 in motorized)*

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

Solid balance sheet Meaningful increases in production capacity during FY15 and FY16 Diversified lineup of innovative product offerings Strong relationships with wholesale financing providers Excellent relationships with dealers, lenders and consumers due to our financial strength enabling us to provide warranty and honor repurchase agreements

13

*Source: Statistical Surveys, Inc., U.S. and Canada, year-to-date through June 2016, including Jayco.

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

14

FOURTH QUARTER REFLECTS RECORD PERFORMANCE

15

Three Months Ended July 31,

2016 2015 % Chg. Net Sales $ 1,292.6 $ 1,058.2 22.2% Gross Profit 223.4 171.3 30.4% % of Sales 17.3% 16.2% SG&A 89.6 69.7 28.6% % of Sales 6.9% 6.6% Income Before Tax (cont. ops.) $ 123.5 $ 97.5 26.7% % of Sales 9.6% 9.2% Income Taxes 40.6 28.5 Net Income (cont. ops.) $ 82.8 $ 69.0 20.0% Diluted EPS (cont. ops.) $ 1.57 $ 1.31 19.8%

Amounts in millions, except per share data

FOURTH QUARTER 2016 RESULTS FROM CONTINUING OPERATIONS UP DOUBLE DIGITS

16

Bob Martin – Thor President & CEO: “The fourth quarter was the culmination of the strongest year in Thor’s history, with solid revenue and earnings growth generated by the tremendous efforts of our entire team augmented by strong industry

• conditions. During the fourth quarter, we saw continued year-over-year industry growth in most product

categories and were able to capitalize on opportunities to expand our production capacity and output to meet the growing demand for affordably priced travel trailers and motorhomes. Our products continue to hit the mark in terms of the expectations of our dealers and consumers.”

$1,058.2 $1,292.6 FY15 FY16

Net Sales ($ millions)

+22%

$69.0 $82.8 FY15 FY16

Net Income (Continuing Ops., $ Millions)

+20%

$1.31 $1.57 FY15 FY16

Diluted EPS (Continuing Ops.)

+20%

$574.0 $1,196.8 FY15 FY16

RV Backlog ($ millions)

+109%

Note: Fourth quarter 2016 results include 1-month of operations of Jayco which was acquired on June 30, 2016.

FISCAL 2016 SEGMENTS ALL SHOW STRONG RESULTS

FY 2016 FY 2015 Recreational Vehicles Towables 321,874 $ 259,092 $ Motorized 88,523 66,746 Total Recreational Vehicles 410,397 325,838 Other* 18,547 1,424 Intercompany Eliminations (23) (554) Corporate (45,608) (33,813) Total 383,313 $ 292,895 $

Income from Continuing Operations before Income Taxes:

* Other represents the operations of the Company's Postle subsidiary, which was acquired on May 1, 2015. Postle manufactures and sells aluminum extrusions and specialized component products to RV and other manufacturers. The growth in income from continuing operations before income taxes was generated from each of the Company's operating segments.

17

INVESTING IN THE FUTURE

18 $33,749 $10,063 $24,305 $30,406 $42,283 $51,976 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 FY11 FY12 FY13 FY14 FY15 FY16 Thousands

Capital Expenditures

$99,562 $170 $10,718 $86,092 $194,486 $557,651 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 FY11 FY12 FY13 FY14 FY15 FY16 Thousands

Business Acquisitions

Colleen Zuhl – Thor Senior Vice President & CFO: “With the growth to record sales and net income in fiscal 2016, we generated record cash from operating activities which we utilized in support of our strategic plan. In addition to the Jayco acquisition, we invested nearly $40 million in land and production building additions and improvements during fiscal 2016 to meet our capacity needs. This included facility additions and enhancements for Keystone, Heartland, Airstream, Thor Motor Coach, KZ, Dutchmen and Postle Aluminum. To ensure we continue to have adequate capacity to meet demand, we currently intend to invest $95 million in capital expenditures in fiscal 2017, with a significant part

• f that investment expected to be utilized for plant expansions.”

JAYCO ACQUISITION – JUNE 30, 2016

Jayco

• Jayco is a $1.5 billion manufacturer and marketer of recreational vehicles, of which

approximately 65% of revenue is from towable RVs and 35% of revenue is from motorized RVs*

• Jayco sells both towable and motorized RVs through its Jayco, Starcraft RV, Entegra

Coach and Highland Ridge subsidiaries

• Family owned and run for nearly 50 years
• Jay Flight – America’s best-selling travel trailer for 11 years
• Strong network of dealers throughout North America
• Full line of RV products, including travel trailers, folding camping trailers, large “Super C”

motorhomes and high-end diesel Class A motorhomes that are complementary to existing product lines produced by Thor’s other RV subsidiaries

*Calendar year 2015 19

JAYCO – STRATEGIC RATIONALE

STRATEGIC FIT: Jayco has a strong cultural fit with Thor, including an entrepreneurial spirit, a focus on dealers and customers and a commitment to high quality products and innovation ACQUISITION FIT: Jayco meets Thor’s criteria of acquiring successful businesses with a desire to further their growth, paired with a strong management team that will remain in place to direct and achieve those growth goals with the support of Thor INDEPENDENCE: Under Thor’s successful decentralized model, Jayco will continue to operate independently, competing against outside RV manufacturers as well as other Thor subsidiaries LEADERSHIP: Existing experienced management team will remain with Jayco and continue to lead with a focus on growth and competition in the market

20

COMPLEMENTARY PRODUCTS: Jayco complements Thor’s other RV subsidiaries through its travel trailers, folding camping trailers, “Super C” motorhomes and luxury Class A diesel motorhomes

JAYCO – PRODUCT PROFILE

21

CAMPING TRAILER TRAVEL TRAILER FIFTH WHEEL CLASS B CLASS C CLASS A

THOR JAYCO

RV INDUSTRY CONDITIONS REMAIN POSITIVE

Consumer confidence remains strong. Preliminary results were unchanged at 89.8 in September from August’s final reading of 89.8. This compares with 87.2 a year ago.* Consumers remain reasonably optimistic about their economic prospects, with an improved outlook for the overall economy. Income gains edged upward while inflation expectations declined.* Recreation Vehicle Industry Association (RVIA) forecast in August 2016 that calendar 2016 wholesale shipments for all RV categories should increase to 405,300 units, or an increase of 8.3% 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. Low fuel prices make RV travel increasingly attractive for consumers.

22

*Source: University of Michigan preliminary Consumer Sentiment Index for September 2016 **Source: RVIA Roadsigns Fall 2016

CONSUMER TRENDS: GROWING RV POPULARITY

Leisure Travel Such as Camping Continues to be Popular*

Approximately 28.6 million households in North America camp at least once a year, but only 22% of them are RV campers. The remaining campers primarily use tents or cabins, which makes them a solid target market for the RV industry.

Favorable Demographics*

Baby boomers (a prime RV target market for many years) represent 24% of the population and are 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. Younger campers (25-34 age) are also a growing market – from 18% in 2012 to 23% in 2015.

New Applications – Broader Usage

Growth in RV use at youth sports leagues and tournaments, dog and craft shows, and collegiate sports activities for alumni and fans.

23

*Source: Kampgrounds of America (KOA) 2016 North American Camping Report

CONSUMER TRENDS: GROWING RV POPULARITY

Opportunities with Millennials*

Millennials (defined as age 19-35) are camping more, with 58% surveyed indicating they plan to camp more nights. This demographic is camping in groups, as they view camping as an opportunity to spend time with family and friends. Younger campers also view camping as a way to reduce stress, escape the pressures of everyday life, be more active and lead a healthier lifestyle.

Increasing Diversity Among Campers*

Although Hispanic, African American, Asian and other ethnicities accounted for 23% of campers in 2015, they represented 41% of new campers in 2015 – showing their strong, long-term growth potential. Like traditional RVers and Millennials, these increasingly diverse campers view camping as an affordable vacation option that allows them to be more active, reduce stress and spend more time with family and friends.

24

*Source: Kampgrounds of America (KOA) 2016 North American Camping Report

KEY TAKEAWAYS

Profitable every year since our founding in 1980

• 36 years of continuous profitability

We are primarily assemblers, not manufacturers Variable cost structure provides flexibility in cyclical industry Proven innovators in the industry Strong market share in all main RV product categories

• Travel Trailers
• Fifth Wheels
• Motorhomes

Solid balance sheet

• Consistent history of returning cash to shareholders

Strong consumer, dealer and lender relationships Experienced management team

25

Appendix 1: Q&A

26

INVESTOR Q&A: FOURTH QUARTER OPERATING RESULTS

What was Thor’s sales growth for the fourth quarter, and what was the impact on sales from the recent Jayco acquisition?

• Thor’s fourth quarter sales and the impact from the Jayco acquisition are

illustrated below (in millions, except percent changes):

27

4Q16 4Q15 Change Sales ex. Jayco $1,189 $1,058 12.4% Jayco sales $104

• N/A

Total sales $1,293 $1,058 22.2%

INVESTOR Q&A: FOURTH QUARTER OPERATING RESULTS (CONTINUED)

Was Thor’s fourth quarter growth faster or slower than the industry growth rate? Why?

• Adjusting for the impact of the Jayco acquisition, our motorized unit sales for the

quarter exceeded industry growth rates for the same period by a substantial margin, while our towable unit sales for the quarter were modestly higher than the industry growth rate. Our growth in both motorized and towable RVs reflects the continued positive reception to our new products among consumers and dealers as well as our ongoing strategy to balance growth in market share with margin expectations.

What was the fourth-quarter gross margin rate? And how did it compare to prior year?

• Gross margin rate for the fourth-quarter of fiscal 2016 was 17.3% compared to

16.2% for the fourth-quarter of fiscal 2015. The improvement in the gross margin was primarily a result of increased sales, improved material costs, favorable product mix and reduced warranty expense as a percentage of sales.

28

INVESTOR Q&A: FOURTH QUARTER OPERATING RESULTS (CONTINUED)

What was the nature and amount of expenses recognized in the fourth quarter that were associated with the Jayco acquisition?

• In the fourth quarter of fiscal 2016, we recognized certain expenses related to the Jayco

acquisition that impacted our operating results, including purchase price adjustments related to the step-up valuation of inventory which reduced gross profit by approximately $2.1 million. In addition, amortization expense of approximately $4.1 million on intangible assets associated with Jayco’s backlog was recognized in the fourth quarter. Finally, interest expense for the quarter on the outstanding balance on the asset-based credit facility was approximately $0.8 million.

• We also incurred and recognized approximately $2.7 million in other acquisition-related costs in

the fourth quarter of fiscal 2016. For the full year fiscal 2016, approximately $3.6 million in other acquisition-related costs were incurred and recognized in the income statement. These other charges included various legal and professional fees related to the acquisition.

• In addition, we incurred approximately $7.9 million in financing costs in connection with the

asset-based loan that was obtained to fund a portion of the acquisition. These fees were capitalized and will be amortized over the life of the loan, or sooner if the facility is to be terminated prior to its stated contractual term. Amortization expense recognized in the fourth quarter related to financing costs was $0.1 million. Additional details related to the acquisition of Jayco and the asset based credit facility are described in Notes 2 and 12, respectively, of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K filed with the Securities and Exchange Commission.

29

INVESTOR Q&A: FULL YEAR OPERATING RESULTS

What was Thor’s sales growth for fiscal 2016, excluding the Jayco acquisition?

• Thor’s FY16 sales and the impact from the Jayco acquisition are illustrated

below (in millions, except percent changes):

What were the primary drivers of the improved fiscal 2016 gross margin?

• The overall gross margin improved from 13.9% to 15.9% as a result of

variety of factors, including increased sales volume, improved material cost, favorable product mix and lower warranty expense as a percent of sales.

30

FY16 FY15 Change Sales ex. Jayco $4,478 $4,007 11.8% Jayco sales $104

• N/A

Total sales $4,582 $4,007 14.4%

INVESTOR Q&A: FULL YEAR OPERATING RESULTS (CONTINUED)

Are your current gross margins sustainable?

• There are two primary factors to consider when looking at gross margin.

First, gross margins are subject to certain seasonal factors that may cause them to vary based on seasonal production volume changes, various scheduled plant shutdowns and large trade shows. Second, we are attuned to the trade-off between market share and margin, so there may be times when we strategically pursue market share in certain regions or products, as well as deciding how to respond to various pricing or discounting actions by competitors. Given the differential between Thor’s pre-acquisition gross margins (15.3% for the nine-month period ended April 30, 2016) and Jayco’s historical gross margins (approximately 9.5% on an annual basis for calendar 2015), we would expect to see a dilution of our consolidated margins over the near term. However, we anticipate that the overall consolidated gross margins on an annual basis thereafter will increase over time.

31

INVESTOR Q&A: FULL YEAR OPERATING RESULTS (CONTINUED)

What has been the impact of the Restricted Stock Unit (RSU) program on SG&A expenses?

• The RSU expense is more fully explained in Note 17 of our Annual Report

filed on Form 10-K with the SEC, and the following table sets forth the costs recognized in each period:

• The increase in expense is due to increasing income from continuing
• perations before income taxes over the past three years as the RSUs

generally vest, and are expensed, ratably over a three-year period.

32

RSU Expense (in millions) July 31, 2016 July 31, 2015 Year ended $9.4 $6.8

INVESTOR Q&A: FULL YEAR OPERATING RESULTS (CONTINUED)

What caused the discontinued operations impact this year?

• The operating loss of discontinued operations before income taxes reflects

expenses incurred directly related to the former bus segment, including ongoing costs related to liabilities retained by the Company under the Stock Purchase Agreement with Allied Specialty Vehicles, Inc. (ASV) for bus product liability and worker’s compensation claims occurring prior to the closing date of the sale.

During fiscal 2016, you have made certain changes to your reporting structure among your subsidiaries, has that helped to drive gross margin growth? Do you intend to further combine your operating subsidiaries?

• Since our founding, our decentralized structure has been one of the long-term keys

to our success as a Company. The reporting structure changes we have made have helped in improving our financial results indirectly, as we improved our overall

• perations to the benefit of our dealers, consumers and the broader RV market.

They do not indicate a shift from our decentralized structure and we have no additional reporting structure changes planned at this time.

33

INVESTOR Q&A: FULL YEAR OPERATING RESULTS (CONTINUED)

Backlog is up significantly, even absent the increase from the Jayco products. What’s driving the increase and do you have the capacity to fulfill demand?

• Backlogs have been driven up as a result of industry growth and the

positive reception by dealers and consumers to the products we have introduced over the past year, particularly the more affordably priced travel trailers and motorhomes. With the increase in demand over recent years, we have added capacity throughout fiscal 2016 and 2015. In addition, we have a number of planned production expansion projects anticipated for fiscal 2017. We will continue to evaluate our production needs based on demand and adjust capacity accordingly.

34

Backlog FY16 FY15 % Change Backlog ex. Jayco $850,909 $573,966 48.2% Jayco $345,938

• 60.3%

Total $1,196,847 $573,966 108.5%

INVESTOR Q&A: RECENT ACQUISITION – JAYCO

As announced on July 1, 2016, Thor purchased all the outstanding stock of Jayco, Corp. (Jayco) for a total initial purchase price of approximately $576 million, subject to a final true-up adjustment based on the final value of net assets acquired. Specific Questions and Answers related to the acquisition can be accessed by following the following link: http://ir.thorindustries.com/acquisition-of-jayco/Press-Release/default.aspx. Given that Thor acquired Jayco on June 30, 2016, what was the contribution of Jayco for the fourth quarter and fiscal 2016 in terms of revenues and pre-tax profit?

• For the fourth quarter and annual periods of fiscal 2016, Jayco contributed approximately

$104 million to revenues while the impact on net income before tax was not material.

What has been the reaction to the acquisition of Jayco by Thor? How is the integration going?

• Since the Jayco acquisition closed on June 30, 2016, the integration of Jayco into Thor has

been very smooth for our employees, dealers and consumers. Based on discussions with dealers at Jayco’s recently held annual dealer meeting, the Jayco dealers have expressed positive feedback on the acquisition and their vision of the future of Jayco as part of Thor.

35

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

The acquisition of Jayco took place a few months ago now. Based on what you know now, is Thor planning any significant changes in Jayco’s structure or operations?

• No. Jayco is operating under Thor’s established and successful decentralized
• structure. Day to day operating decisions are, and will continue to be, made at the
• perating level. As it does with all of its operating subsidiaries, Thor will act as a

resource to Jayco and will work with the Company to strive for continuous improvement in all aspects of its operations.

What costs do you anticipate will be incurred related to Jayco in fiscal 2017 and beyond?

• In the first quarter of fiscal 2017, we expect purchase accounting adjustments

related to the Jayco acquisition to reduce gross profit by approximately $2.6 million, and amortization of $8.3 million in the first quarter of fiscal 2017 associated with the remaining acquired backlog. Ongoing dealer network and tradename intangible asset amortization will also be recognized throughout the entire fiscal 2017 year, totaling approximately $34.6 million on a combined basis.

36

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

Based on information previously provided, Jayco’s gross margins are not as strong as Thor’s. What specific actions are you taking to improve Jayco’s gross margins?

• All of our subsidiaries are focused on continuous improvements in their
• perations, and Jayco’s management team shares that focus and drive.

Over the near term, we expect to generate cost synergies in certain back-

• ffice functions, such as legal, insurance and employee benefits that can

reduce costs. Over the longer term, Thor will act as a resource to Jayco and will provide assistance in its mission to attain continuous improvement in all aspects of its operations. As a consequence, we expect Jayco’s cost structure to steadily improve.

37

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

What was the impact of the Jayco acquisition to July 31, 2016, backlogs and dealer inventory?

• Jayco contributed approximately $345.9 million to total backlog as of July

31, 2016. For dealer inventory, Jayco added approximately 25,300 units. Details of the impact of Jayco in backlogs and dealer inventory are shown

• n the following table:

38

$000s FY16 FY15 Change Towable Backlog ex. Jayco $511,682 $304,005 68.3% Jayco Backlog $223,403

• N/A

Total Towable Backlog $735,085 $304,005 141.8% Motorized Backlog ex. Jayco $339,227 $269,961 25.7% Jayco Backlog $122,535

• N/A

Total Motorized Backlog $461,762 $269,961 71.0% Dealer Inventory Units ex. Jayco 69,200 67,700 2.2% Jayco Dealer Inventory 25,300

• N/A

Total Dealer Inventory 94,500 67,700 39.6%

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

What are Jayco’s US market share numbers in towables, fifth wheels, Class A and Class C? Has Jayco been gaining market share?

• Based on retail registration data from Statistical Surveys, Inc. through June 2016

(which was prior to Thor’s acquisition of Jayco), Jayco’s market share in the United States by key market categories were as follows:

• travel trailer US market share – 14.9%,
• fifth wheels US market share – 11.3%,
• Class A US market share – 6.9%, and
• Class C US market share – 12.1%.
• Jayco has gained market share in all the key market categories noted above on a

year-over-year basis, with significant gains realized during the first six months of 2016 (prior to Jayco’s acquisition by Thor) in:

• fifth wheels - up 23.1%,
• Class A – up 29.1%, and
• Class C – up 29.9%
• with more modest market share gains realized on travel trailers of 1.8%.

39

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

What will be the impact of the Jayco acquisition on Thor’s income taxes?

• The total of all intangible assets, including goodwill, recognized in

connection with the acquisition of Jayco is $440.5 million, which will result in an annual tax deduction of $29.4 million or approximately $10.3 million of taxable benefit per year assuming a 35% tax rate.

What products are produced in Jayco’s Idaho facility? Are there

• pportunities for expansion there?
• Jayco produces towable RVs at the Twin Falls, Idaho facility. There are
• pportunities to expand production there, and as with all expansions,

management will evaluate the need and timeline for any expansion based

• n demand.

40

INVESTOR Q&A: RECENT ACQUISITION – JAYCO (CONTINUED)

Why was there a change in the asset values for Jayco between the 8- K/A filed on September 15, 2016 and the 10-K filed on September 26, 2016?

• The main difference was that, as required, the pro forma financials contained in the

8-K/A filing were prepared based on the asset values as of Jayco as of the end of

• ur fiscal third quarter on April 30, 2016. The 10-K utilizes the asset values based
• n the balance sheet as of the closing date of the acquisition of June 30, 2016.

Why are the Fiscal 2015 pro forma financial results contained in the 8- K/A filed on September 15, 2016 different from those in Note 2 of the 10- K filed on September 26, 2016?

• As required, the pro forma financial information filed in the 8-K/A only included the

impact of the Jayco acquisition as if the acquisition had occurred at the beginning

• f fiscal 2015, while the pro forma information in the 10-K represents the

Company’s results of operations as if the fiscal 2016 acquisition of Jayco had

• ccurred at the beginning of fiscal 2015 and the fiscal 2015 acquisitions of both

Postle and CRV/DRV had occurred at the beginning of fiscal 2014.

41

INVESTOR Q&A: BALANCE SHEET AND CASH FLOW

What are your priorities for cash utilization?

• Our priorities haven’t changed. We strive to maintain adequate cash balances to

ensure we have sufficient resources to respond to opportunities and changing business conditions within the RV industry. We will use current and future available cash generated from operations to support and grow our core businesses, both organically and through acquisitions, maintain and grow our regular dividends over time, and reduce indebtedness. Strategic share repurchases or special dividends as determined by the Board of Directors will also continue to be considered.

What are the key terms of the debt facility?

• The debt facility is a 5-year, $500 million asset-based revolving loan. Borrowing

availability under the credit agreement is determined monthly and is limited under the agreement to the lesser of the facility total and the monthly calculated borrowing base. The loan matures on June 30, 2021. Interest on borrowings under the credit facility is variable. During 2016, the weighted average interest rate on borrowings was 2.55%.The credit facility is secured by substantially all of the Company’s tangible and intangible assets excluding real property. For additional details on the credit agreement, please refer to Note 12 to the Consolidated Financial Statements in our Annual Report on Form 10-K filed with the SEC.

42

INVESTOR Q&A: MARKET CONDITIONS

What is the current state of the Canadian RV market?

• The Canadian market is still challenging as the weakness in the value of the Canadian dollar

relative to the U.S. dollar continues. Since we sell our products to Canadian dealers priced in U.S. dollars, this creates an upward pressure on prices in the local currency which has an adverse impact on demand. For calendar year 2015, total Canadian retail registrations as reported by Statistical Surveys, Inc. fell 12.9% from calendar 2014. Through July 2016, total Canadian retail registrations as reported by Statistical Surveys, Inc., fell 14.6%, with towables decreasing 14.8% and motorized decreasing 12.3%.

Thor lost market share in calendar 2015. What have your market share trends been year to date in 2016? What is the Company doing to address market share?

• Market share is a key metric that we monitor for all our product categories – however, it is not

the only metric. We take a balanced approach to growing or maintaining market share across

• ur portfolio of products and growing or maintaining gross margins.
• 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. We have, however, made certain deliberate moves that adversely affected our market share, but improved our operating efficiency. We have also developed a variety of new products that we believe address the largest and fastest growing segments of the market, which should improve

• ur market share as they penetrate the broader market.

43

INVESTOR Q&A: MARKET CONDITIONS (CONTINUED)

Describe the current competitive environment, is there much discounting going

• n?
• The RV industry is always competitive, as our subsidiaries and our outside competitors

continue to drive the industry forward with new and better products for dealers and

• consumers. However, given the industry-wide capacity limitations on certain products,

most notably towable RVs, we have seen less traditional discounting pressure overall in the market than we did several years ago.

What is the current status of the labor market in Northern Indiana?

• Labor markets are still tight and competitive in Northern Indiana, but labor costs have

generally been stable over the past year.

How do used RVs impact the demand and pricing for new products?

• Robust demand for used RV inventory enhances trade-in values, which is necessary to

support the new RV market where many consumers choose to purchase new units every 3- 5 years. In recent years, availability of used RV inventory has been limited while new products at the entry level have been priced competitively, leading consumers to buy new

• products. We do recognize that as an alternative to new RVs, low prices on used products

may prompt consumers to buy used instead of new. But overall we view a healthy used RV market as a positive impact on the overall RV industry.

44

INVESTOR Q&A: MARKET CONDITIONS (CONTINUED)

What is the nature of the current Dealer and Consumer credit environment?

• The wholesale lending environment remains healthy, with normal credit line

utilization and continued discipline among lenders concerning curtailments. Consumer credit is available and lending standards also appear healthy.

What is the health and status of the dealer body?

• We maintain close relationships with our dealers, and the current health of the

dealer base is generally very strong.

How does consolidation within the dealer base impact Thor?

• Consolidation within the dealer base, as well as expansion of dealers with new

locations, can be a positive for Thor as dealers value partnering with strong manufacturers like Thor on their long-term growth initiatives. Consolidation may also present some challenges to us as larger dealers generally account for higher sales volume and thus may exercise more pricing power within the overall

• marketplace. This pricing power is balanced to a certain extent by our ability to

provide the larger unit volumes on a timely basis.

45

INVESTOR Q&A: OUTLOOK

Thor just wrapped its fall Open House which was held the week of September 19th, what was the response from dealers to the show? And what new products were introduced?

• The Open House, which is a dealer only event, had record attendance. Dealers were overwhelmingly
• ptimistic and appear confident that steady growth will continue even as the industry exceeds the peak

2006 levels this year.

• All of our subsidiaries introduced a number of new or redesigned models to their suite of product offerings.

Many of the new or redesigned models focused on the high demand, lower and moderately-priced travel trailer and motorhome segments of the market. New or redesigned models that created strong demand from the show include the Airstream Basecamp, the Thor Motor Coach Aria, the CrossRoads Volante, as well as a broad variety of new models and updated floorplans for all of our brands.

Thor has continued to grow revenues since the recession. Has Thor reached its peak?

• We do not believe we have reached a peak. We see many positive indicators to continued growth for both

the RV industry as a whole and Thor specifically. Among the factors driving our optimism for continued growth:

• Demographic trends, including:
• younger consumers entering the market sooner than prior generations,
• an increase in the number of people entering the age brackets that historically have accounting for the bulk of retail sales
• increasing diversity among campers
• Changes in how consumers desire to spend their free time - with a much stronger desire to spend time with their friends and

families enjoying the wide-array of destinations available throughout North America, tailgating, or attending other activity based events

• Forecasted economic stability – relatively low inflation, interest rates and fuel prices along with continued job and wage

growth and strong, steady consumer confidence rates are expected to continue to fuel demand for RVs.

46

INVESTOR Q&A: OUTLOOK (CONTINUED)

What is your outlook for fiscal year 2017?

• Continued strength in the RV market and an ongoing shift toward more moderately priced

towable and motorized products as well as a full year of revenues from Jayco is expected to result in double-digit revenue growth in fiscal 2017. The inclusion of lower gross-margin revenues from Jayco is expected to result in a dilution of gross margins in the coming year, though Jayco should contribute meaningful accretion to earnings per share for the full year.

With record sales for the year, are you operating at full capacity? What actions are you taking to increase capacity and minimize capacity constraints?

• Certain of our production facilities have operated at or near full capacity during periods of strong

demand during the year. During fiscal 2016, in addition to the Jayco acquisition, we invested nearly $40 million in land and production building additions and improvements to meet our capacity needs. This included facility additions and enhancements for Keystone, Heartland, Airstream, Thor Motor Coach, KZ, Dutchmen and Postle Aluminum. To ensure we continue to have adequate capacity to meet demand, we currently intend to invest $95 million in capital expenditures in fiscal 2017, with a significant part of that investment expected to be utilized for plant expansions. The additional capacity to be added in fiscal 2017 will address production needs in towables, specifically capacity for smaller, lower cost travel trailers and on the motorized side, the added capacity will be for gas Class A motorhomes and Class C motorhomes.

• In addition, we are focused on various lean initiatives which we believe will enhance production

capacity without the need for additional investments in production facilities.

47

INVESTOR Q&A: OUTLOOK (CONTINUED)

You have noted previously that there is strong demand for RVs in the West Coast region, is that still the case? And if so, what capacity do you have currently for West Coast production and do you have plans to increase your West Coast production capacity?

• Yes. Demand for product on the West Coast remains strong, and we see additional
• pportunities for growth in the West Coast markets, particularly in California and the Pacific
• Northwest. Currently, we have production facilities in Pendleton, Oregon, Nampa, Idaho

and Twin Falls, Idaho and have announced plans to increase capacity at Heartland’s Nampa, Idaho facility, with the second production line expected to begin operation in December 2016. We will continue to evaluate demand and capacity availability at our West Coast production facilities to determine the best long term solutions for our dealers and consumers on the West Coast.

Given the length of the current expansion, are you concerned that you may be adding significant capacity at a peak in the market?

• We believe that the industry will see continued growth based on the long-term growth

drivers of our customers. In addition, our variable cost structure provides a natural hedge in the event of a downturn in the industry that should allow us to rapidly adjust as conditions change.

48

INVESTOR Q&A: OUTLOOK (CONTINUED)

When looking to add capacity, what metrics do you look at to determine if it’s a wise investment?

• Unlike other, more capital intensive industries, RV production facilities are typically smaller,

between 70,000 and 90,000 square feet with an average cost in the range of $3 million to $6 million. With this modest investment, we review a number of return metrics, with a focus

• n achieving a rapid payback on the investment which enhances return on invested capital.

Do you 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. In fact, it tends to benefit the industry by heightening the competitive landscape and broadens the customer base by driving innovation and attracting more individuals to the RV lifestyle, all to the benefit of the retail customers. 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.

49

INVESTOR Q&A: OUTLOOK (CONTINUED)

What is your strategic plan for future acquisitions?

• As we have throughout our history, we will continue to be an opportunistic
• acquirer. As opportunities arise in the future, we will evaluate them just as

we have in the past.

50

Appendix 2: Financial & Market Data

51

RV WHOLESALE MARKET TRENDS (UNITS 000S)

52 339.6 441.1 413.9 389.9 199.2 106.9 133.6 140.6 196.6 215.7 186.9 189.9 211.7 215.8 187.9 173.1 163.1 203.4 227.8 259.5 247.2 247.5 254.5 292.7 321.2 300.1 256.8 311.0 320.8 370.1 384.4 390.5 353.5 237.0 165.6 242.3 252.3 285.8 321.2 356.8 374.2 405.3 411.0 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) 2017 (e)

Historical Data: Recreation Vehicle Industry Association; Calendar year 2016 and 2017 represent RVIA estimates as of Fall RV Roadsigns, published in August 2016

RV WHOLESALE MARKET MOTORIZED TRENDS (UNITS 000S)

53 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 52.2 53.9 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) 2017 (e)

Historical Data: Recreation Vehicle Industry Association; Calendar year 2016 and 2017 represent RVIA estimates as of Fall RV Roadsigns, published in August 2016

RV WHOLESALE MARKET TOWABLE TRENDS (UNITS 000S)

54 243.0 285.0 253.7 232.7 135.1 78.4 98.1 99.4 127.1 133.7 118.1 122.1 137.9 142.9 126.7 120.8 121.1 156.5 176.5 201.3 194.3 192.2 199.5 229.1 249.6 239.1 207.6 250.6 258.9 298.3 323.0 334.5 298.1 208.6 152.4 217.1 227.5 257.6 282.8 312.8 326.9 353.1 357.1 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) 2017 (e)

Historical Data: Recreation Vehicle Industry Association; Calendar year 2016 and 2017 represent RVIA estimates as of Fall RV Roadsigns, published in August 2016

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

55

Calendar Year

2013 2014 2015 YTD 2015 YTD 2016 Industry Retail Registrations* 301,481 units (+14.7%) 328,866 units (+9.1%) 369,883 units (+12.5%) 198,579 units (+14.2%) 213,547 units (+7.5%) Industry Wholesale Shipments** 321,127 units (+12.4%) 356,735 units (+11.1%) 374,246 units (+4.9%) 202,653 units (+5.5%) 226,286 units (+11.7%)

* Statistical Surveys, Inc., includes US and Canada. 2013, 2014 & 2015 Full Year Actual, YTD 2015 and 2016 through June ** RVIA wholesale shipments for full years 2013, 2014 & 2015, YTD 2015 and 2016 through June

THOR BACKLOG & 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 Jayco added approximately $345.9 million to backlog as of July 31, 2016

56

Backlog ($000s) July 31, 2016 July 31, 2015 $ Change % Change Towables $735,085 $304,005 $431,080 141.8% Motorized $461,762 $269,961 $191,801 71.0% Total RV $1,196,847 $573,966 $622,881 108.5%

Dealer inventory remains appropriate for current conditions in both towable and motorized Jayco added approximately 25,300 units to dealer inventory as of July 31, 2016, representing 37.4% of the 39.6% increase Lenders still comfortable with current dealer inventory turns and current credit line utilization; year-over-year turns have generally increased modestly, resulting in a slight reduction in average age of Thor units on dealers’ lots

Dealer Inventory (units) July 31, 2016 July 31, 2015 Unit Change % Change RV 94,500 67,700 26,800 39.6%

RV INDUSTRY RETAIL MARKET SHARE

57

Total Share % Total Share % Total Share % Total Share % THOR* 101,326 47.4% 177,178 47.9% 160,663 48.9% 153,514 50.9% Forest River** 76,611 35.9% 131,198 35.5% 112,979 34.4% 99,822 33.1% Winnebago 6,573 3.1% 11,857 3.2% 10,395 3.2% 8,661 2.9% Grand Design 5,342 2.5% 6,967 1.9% 4,174 1.3% 813 0.3% REV Group 1,715 0.8% 3,380 0.9% 4,888 1.5% 6,034 2.0% Gulfstream 2,606 1.2% 4,743 1.3% 4,562 1.4% 4,882 1.6% Subtotal 194,173 90.9% 335,323 90.7% 297,661 90.5% 273,726 90.8% All Others 19,374 9.1% 34,560 9.3% 31,205 9.5% 27,755 9.2% Grand Total 213,547 100.0% 369,883 100.0% 328,866 100.0% 301,481 100.0% Y/E 12/31/15 Y/E 12/31/14 Y/E 12/31/13 YTD 6/30/16

Source: Statistical Surveys, Inc., U.S. and Canada * Thor adjusted to include historical results of Jayco, 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

THOR RV RETAIL MARKET SHARE TREND (UNITS)

58

54.8% 54.9% 53.7% 51.3% 50.0% 49.2% 24.4% 25.4% 29.4% 31.0% 33.2% 35.7% 14.4% 16.7% 22.1% 21.9% 22.5% 19.0%

2011 2012 2013 2014 2015 2016 YTD**

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 Jayco, Heartland, Livin’ Lite, Bison Coach, K-Z, Inc., Cruiser RV and DRV Luxury Suites for all periods presented. **2016 YTD through June. Note Towable market share includes Travel Trailers, Fifth Wheels, Camping Trailers and Park Models.

QUARTERLY THOR RV UNIT SHIPMENTS

59

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 1Q2006 1Q2007 1Q2008 1Q2009 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 1Q2015 1Q2016

www.thorindustries.com