THOR INDUSTRIES INC MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Okay)


Except in any other case indicated, all Greenback and Euro quantities are offered in
1000’s besides per share knowledge.

Our Administration's Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations ("MD&A") needs to be learn along with the Firm's
Consolidated Monetary Statements and Notes thereto included in Merchandise 8 of this
Report.
The dialogue beneath is a comparability of the outcomes of operations and modifications in
monetary situation for the fiscal years ended July 31, 2022 and 2021. The
comparability of, and modifications between, the fiscal years ended July 31, 2021 and
2020 will be discovered inside "Administration's Dialogue and Evaluation of Monetary
Situation and Outcomes of Operations" included in our Annual Report on Kind 10-Okay
for the fiscal 12 months ended July 31, 2021, as filed with the SEC on September 28,
2021.
Government Abstract
We have been based in 1980 and have grown to turn into the biggest producer of
leisure autos ("RVs") on this planet based mostly on items bought and income. We
are additionally the biggest producer of RVs in North America, and one of many
largest producers of RVs in Europe. In North America, in accordance with
Statistical Surveys, Inc. ("Stat Surveys"), for the six months ended June 30,
2022, THOR's present mixed U.S. and Canadian market share based mostly on items was
roughly 41.9% for journey trailers and fifth wheels mixed and
roughly 49.4% for motorhomes. In Europe, in accordance with the European Caravan
Federation ("ECF"), EHG's present market share for the six months ended June 30,
2022 based mostly on items was roughly 21.8% for motorcaravans and campervans
mixed and roughly 18.0% for caravans.
Our enterprise mannequin contains decentralized working items, and our RV merchandise
are primarily bought to impartial, non-franchise sellers who, in flip, retail
these merchandise. Our development has been achieved each organically and thru
acquisition, and our technique is designed to extend our profitability by
driving innovation, servicing our clients, manufacturing high quality merchandise,
enhancing the efficiencies of our amenities and making strategic development
acquisitions.

We usually don’t finance sellers instantly, however we do present repurchase
agreements to the sellers’ flooring plan lenders.

We usually have financed our development via a mixture of internally
generated money flows from operations and, when wanted, outdoors credit score
amenities. Capital acquisitions of $240,561 in fiscal 2022 have been made primarily
for purchases of land, manufacturing constructing additions and enhancements and
changing equipment and gear used within the odd course of enterprise. See
Observe 3 to the Consolidated Monetary Statements for capital acquisitions by
section. Ongoing provide chain constraints, and labor shortages all through the
provide chain and inside THOR, have impacted and proceed to affect our enterprise
and our consolidated monetary outcomes and monetary place. As well as, the
affect of current inflation on shopper confidence, which traditionally has been
extremely correlated with RV retail gross sales, and the affect of inflation on the
availability of discretionary funds of our finish customers, mixed with rising
rates of interest, could have a adverse affect on future demand for our merchandise.
Moreover, extra impacts may very well be incurred in future durations, together with
adverse impacts to our outcomes of operations, liquidity and monetary place,
as a direct or oblique results of the persevering with COVID-19 pandemic. Ought to the
price of COVID-19 infections escalate, or the virus mutate into new, uncontrolled
strains, these developments and the ensuing impacts may exacerbate dangers to
our enterprise, monetary outcomes and monetary place. These dangers to our
enterprise are extra absolutely described in Half 1, Merchandise 1A "Danger Components" of this
Report.
Vital Occasions
Fiscal 2022
Togo Group

In the course of the third quarter of fiscal 2022, the Firm acquired the remaining
curiosity in Togo Group for $16,144 in money, and consequently holds a 100%
possession curiosity in Togo Group as of July 31, 2022. The Togo Group was
rebranded as Roadpass Digital in November 2021.

Share Repurchase Program

On December 21, 2021, the Firm's Board of Administrators approved Firm
administration to make the most of as much as $250,000 to repurchase shares of the Firm's
widespread inventory via December 21, 2024. On June 24, 2022, the Board approved
Firm administration to make the most of as much as an extra $448,321 to repurchase shares
of the Firm's widespread inventory via July 31, 2025.
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Below these two share repurchase authorizations, the Firm is allowed to
repurchase, on a discretionary foundation and from time-to-time, excellent shares
of its widespread inventory within the open market, in privately negotiated transactions or
by different means.
Below the December 21, 2021 share repurchase authorization, throughout the three
months ended July 31, 2022, the Firm bought 854,176 shares of its widespread
inventory, at numerous occasions within the open market, at a weighted-average worth of
$78.19 and held them as treasury shares at an combination buy worth of
$66,786. Throughout fiscal 2022, the Firm bought 1,944,243 shares of its
widespread inventory, at numerous occasions within the open market, at a weighted-average worth
of $84.92 and held them as treasury shares at an combination buy worth of
$165,107, all from the December 21, 2021 authorization.
As of July 31, 2022, the remaining quantity of the Firm's widespread inventory that will
be repurchased beneath the December 21, 2021 $250,000 authorization expiring on
December 21, 2024 is $84,893. As of July 31, 2022, the remaining quantity of the
Firm's widespread inventory that could be repurchased beneath the June 24, 2022
authorization expiring on July 31, 2025 is $448,321. As of July 31, 2022, the
whole remaining quantity of the Firm's widespread inventory that could be repurchased
beneath these two authorizations is $533,214.
The Inflation Discount Act of 2022 was enacted following the top of our fiscal
12 months. Amongst different provisions, this statute supplies for a 1% tax to be imposed
on the honest market worth of shares repurchased by issuers whose shares are
traded on a longtime securities market, topic to sure exceptions. The
tax applies to repurchases made after December 31, 2022. We're evaluating this
statute and its affect on our share repurchase program.

Issuance of Senior Unsecured Notes

On October 14, 2021, the Firm issued an combination principal quantity of
$500,000 of 4.000% Senior Unsecured Notes due 2029 ("Senior Unsecured Notes").
The Senior Unsecured Notes will mature on October 15, 2029 until redeemed or
repurchased earlier. Web proceeds from the Senior Unsecured Notes, together with
cash-on-hand, have been used to repay $500,000 of borrowings excellent on the
Firm's ABL and for sure transaction prices. Curiosity on the Senior
Unsecured Notes is payable in semi-annual installments on April 15 and October
15 of every 12 months, and the primary semi-annual fee was made April 14, 2022. The
Senior Unsecured Notes rank equally in proper of fee with all the
Firm's present and any future senior indebtedness and senior to the
Firm's future subordinated indebtedness, if any, and successfully junior in
proper of fee to the Firm's present and any future secured indebtedness
to the extent of the property securing such indebtedness.

Airxcel Acquisition

On September 1, 2021, the Firm acquired Wichita, Kansas-based AirX
Intermediate, Inc. ("Airxcel"). Airxcel manufactures a complete line of
high-quality merchandise which they promote primarily to RV unique gear
producers in addition to customers by way of aftermarket gross sales via sellers and
retailers. Airxcel supplies industry-leading merchandise in leisure automobile
heating, cooling, air flow, cooking, window coverings, sidewalls and roofing
supplies, amongst others. The ultimate money consideration for the acquisition of
Airxcel was $745,279, web of money acquired, and was funded via a mixture
of cash-on-hand and $625,000 in borrowings from the Firm's ABL. In
conjunction with the Airxcel acquisition, the Firm expanded its present ABL
facility from $750,000 to $1,000,000, favorably amended sure phrases of the ABL
settlement and prolonged the time period of the ABL as mentioned in Observe 12 to the
Consolidated Monetary Statements. The rate of interest stays unchanged.
The Firm acquired Airxcel as a part of its long-term, strategic development plan and
the acquisition is predicted to offer quite a few advantages, together with
strengthening the RV provide chain, diversifying the Firm's income sources
and increasing Airxcel's provide chain enterprise in North America and Europe.
Airxcel operates as an impartial operation in the identical method because the Firm's
different subsidiaries.

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Fiscal 2021

Tiffin Group Acquisition

On December 18, 2020, the Firm closed on a Inventory Buy Settlement ("Tiffin
Group SPA") for the acquisition of all the issued and excellent capital
inventory of luxurious motorized leisure automobile producer Tiffin Motorhomes,
Inc., together with fifth wheel towable leisure automobile producer Vanleigh
RV, and sure different related working and provide corporations, which primarily
provide part components and providers to Tiffin Motorhomes, Inc. and Vanleigh RV
(collectively, the "Tiffin Group"). Tiffin Group, LLC, a wholly-owned subsidiary
of the Firm, owns the Tiffin Group. Tiffin Motorhomes, Inc. operates out of
numerous areas in Alabama, whereas Vanleigh RV operates out of Mississippi.
The ultimate money consideration for the acquisition of the Tiffin Group was
$288,238, web of money acquired, and was funded via present cash-on-hand as
effectively as $165,000 in borrowings from the Firm's present asset-based credit score
facility.
North American RV Business
The Firm displays {industry} situations within the North American RV market utilizing a
variety of sources together with its personal efficiency monitoring and modeling. The
Firm additionally considers month-to-month wholesale cargo knowledge as reported by the
Recreation Automobile Business Affiliation ("RVIA"), which is often issued on a
one-month lag and represents producers' North American RV manufacturing and
supply to sellers. As well as, we monitor month-to-month North American retail gross sales
tendencies as reported by Stat Surveys, whose knowledge is often issued on a
month-and-a-half lag. The Firm believes that month-to-month RV retail gross sales knowledge is
essential as shopper purchases affect future vendor orders and finally our
manufacturing and web gross sales.
North American RV impartial vendor stock of our North American RV merchandise
as of July 31, 2022 elevated 117.8% to roughly 127,000 items, in comparison with
roughly 58,300 items as of July 31, 2021. As of July 31, 2022, North
American vendor stock ranges have grown because the traditionally low ranges as
of July 31, 2021, and have reached normalized ranges for many of our towable
merchandise, however are nonetheless usually beneath historic stocking ranges in relation
to our motorized product strains.
THOR's North American RV backlog as of July 31, 2022 decreased $7,291,329, or
54.8%, to $6,007,638 in comparison with $13,298,967 as of July 31, 2021. As famous
above, vendor stock ranges at July 31, 2022 have been at normalized ranges for
most of our towable merchandise and nonetheless beneath historic ranges for our motorized
merchandise, however as of July 31, 2021, North American vendor stock ranges have been
effectively beneath optimum stocking ranges for each towable and motorized merchandise,
which led to considerably elevated vendor orders and backlog at the moment.

North American Business Wholesale Statistics

Key wholesale statistics for the North American RV {industry}, as reported by RVIA
for the durations indicated, are as follows:

U.S. and Canada Wholesale Unit Shipments

                                                        Six Months Ended June 30,                          Improve                      %
                                                   2022                           2021                    (Lower)                  Change
North American Towable Models                      293,288                         271,119                     22,169                       8.2
North American Motorized Models                     30,543                          29,148                      1,395                       4.8
Whole                                             323,831                         300,267                     23,564                       7.8

In September 2022, RVIA issued a revised forecast for calendar 12 months 2022 North
American wholesale unit shipments. Below a more than likely situation, towable and
motorized unit shipments are projected to lower to roughly 445,100 and
53,700, respectively, for an annual whole of roughly 498,800 items, down
16.9% from the 2021 calendar 12 months wholesale shipments. Wholesale shipments in
the second half of calendar 12 months 2022 are forecasted to be 46.0% decrease than the
document shipments that occurred within the first half of calendar 12 months 2022, which
allowed sellers to replenish their stock ranges. The more than likely forecast
for calendar 12 months 2022 may vary from a decrease estimate of roughly
487,300 whole items to an higher estimate of roughly 510,300 items.

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As a part of their September 2022 forecast, RVIA additionally launched their preliminary
estimates for calendar 12 months 2023 wholesale unit shipments. Within the more than likely
situation, towable and motorized unit shipments are projected to lower to an
approximated annual whole of 419,000 items, or 16.0% decrease than the more than likely
situation for calendar 12 months 2022 wholesale shipments. This calendar 12 months 2023
more than likely forecast may vary from a decrease estimate of roughly 409,000
whole items to an higher estimate of roughly 429,000 items. RVIA said the
causes for the calendar 12 months 2023 wholesale unit cargo discount included
the current advantages seen by the RV {industry} from the one-time stimulus funds
and lockdown-era demand shifts will pullback to extra normalized ranges, and the
present softening financial backdrop, coupled with decrease financial savings charges, elevated
inflation and better rates of interest, will lead some to scale back or postpone
discretionary spending.

North American Business Retail Statistics

We consider that retail demand is the important thing to development within the North American RV
{industry}, and that annual North American RV {industry} wholesale shipments in
calendar 12 months 2023 will return to historic seasonal patterns as vendor
stock ranges and shopper demand turn into extra balanced.

Key retail statistics for the North American RV {industry}, as reported by Stat
Surveys for the durations indicated, are as follows:

U.S. and Canada Retail Unit Registrations

                                                         Six Months Ended June 30,                               Improve                           %
                                                    2022                            2021                        (Lower)                       Change
North American Towable Models                        224,806                          301,883                          (77,077)                       (25.5)
North American Motorized Models                       26,709                           30,283                           (3,574)                       (11.8)
Whole                                               251,515                          332,166                          (80,651)                       (24.3)

Observe: Information reported by Stat Surveys relies on official state and provincial
information. This info is topic to adjustment, is repeatedly up to date and
is usually impacted by delays in reporting by numerous states or provinces.
Each North American towable and motorized unit registrations within the six months
ended June 30, 2022 decreased from the comparable June 30, 2021 document ranges,
however each exceeded the comparable totals for the six months ended June 30,
2020.We consider that North American retail shopper demand has grown in current
years resulting from an rising curiosity within the RV way of life and the power to
join with nature, and has additional accelerated because the onset of the COVID-19
pandemic, notably in calendar 2021, which resulted in document retail gross sales
throughout that interval. Whereas near-term demand can be influenced by many components,
together with shopper confidence and the extent of shopper spending on
discretionary merchandise, we consider future retail demand over the long run
will exceed historic, pre-pandemic ranges as customers proceed to worth the
perceived advantages supplied by the RV way of life, which supplies folks with a
private house to keep up social distance in a secure method, the power to
join with family members and the potential to get away for brief, frequent breaks
or longer adventures.

Firm North American Wholesale Statistics

The Firm’s wholesale RV shipments, for the six months ended June 30, 2022 and
2021 to correspond with the {industry} wholesale durations famous above, have been as
follows:

U.S. and Canada Wholesale Unit Shipments

                                                         Six Months Ended June 30,                             Improve                       %
                                                    2022                            2021                      (Lower)                    Change
North American Towable Models                        125,865                          116,558                      9,307                           8.0
North American Motorized Models                       15,534                           14,529                      1,005                           6.9
Whole                                               141,399                          131,087                     10,312                           7.9


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Firm North American Retail Statistics

Retail statistics of the Firm’s RV merchandise, as reported by Stat Surveys, for
the six months ended June 30, 2022 and 2021 to correspond with the {industry}
retail durations famous above, have been as follows:

U.S. and Canada Retail Unit Registrations

                                                         Six Months Ended June 30,                              Improve                           %
                                                   2022                            2021                        (Lower)                        Change
North American Towable Models                        91,932                          123,244                          (31,312)                        (25.4)
North American Motorized Models                      13,190                           14,308                           (1,118)                         (7.8)
Whole                                              105,122                          137,552                          (32,430)                        (23.6)

Observe: Information reported by Stat Surveys relies on official state and provincial
information. This info is topic to adjustment, is repeatedly up to date, and
is usually impacted by delays in reporting by numerous states or provinces.

North American Outlook

Traditionally, retail gross sales have been dependent upon numerous financial situations
confronted by customers, reminiscent of the speed of unemployment, the speed of inflation, the
degree of shopper confidence, the disposable earnings of customers, modifications in
rates of interest, credit score availability, the well being of the housing market, modifications
in tax charges and gasoline availability and costs. It's troublesome to foretell how
all or any of those components will affect the RV {industry} or our enterprise in a
explicit 12 months. The COVID-19 pandemic brought about a major surge in demand for
RVs, which, when mixed with the provision chain challenges ensuing from the
pandemic's disruption of the North American economic system, brought about a major
improve in our revenues and backlog. The primary half of calendar 2022 noticed
continued strong wholesale demand as sellers restocked their inventories and we
have been in a position to scale back our backlog as we stuffed excellent orders. However
the year-over-year improve in wholesale shipments, we consider shopper demand,
as mirrored within the diminished new RV registrations, slowed within the first half of
calendar 2022 in comparison with the document registration within the prior 12 months interval, due
to the affect of the components recognized above.
Regardless of the near-term challenges, we stay optimistic about future development in
North American retail gross sales in the long run, as there are various components driving
product demand. Surveys carried out by THOR, RVIA and others present that Individuals
of all generations love the liberty of the outside and the enrichment that
comes with dwelling an lively way of life. RVs enable folks to be in command of
their journey experiences, going the place they need, when they need and with the
folks they need. The RV items we design, produce and promote enable folks to spend
time outside pursuing their favourite actions, creating cherished moments and
deeply connecting with household and buddies. Primarily based on the rising worth
customers place on these components, we count on to see long-term development within the North
American RV {industry}. The current development in industry-wide RV gross sales has additionally
resulted in exposing a a lot wider vary of customers to the life-style. We
consider lots of those that have been not too long ago uncovered to the {industry} for the
first time will turn into future house owners, and that those that grew to become first-time
house owners because the pandemic will turn into long-term RVers, leading to future
repeat and improve gross sales alternatives. We additionally consider customers are more likely to
proceed altering their future trip and journey plans, choosing fewer
holidays by way of air journey, cruise ships and lodges, and preferring holidays that
RVs are uniquely positioned to offer, permitting customers the power to
discover or unwind, typically near dwelling. As well as, we consider that the
availability of tenting and RV parking amenities can be an essential think about
the long run development of the {industry} and look at each the numerous current
investments and the long run dedicated investments by campground house owners, states
and the federal authorities in tenting amenities and accessibility to state and
federal parks and forests to be constructive long-term components.
Financial and industry-wide components which have traditionally affected, together with
fiscal 2022, and which we consider will proceed to have an effect on, our working outcomes
embody the prices of commodities, the provision of essential provide elements
and labor prices incurred within the manufacturing of our merchandise. Materials and labor
prices are the first components figuring out our value of merchandise bought, and any
future will increase in uncooked materials or labor prices will affect our revenue margins
negatively if we're unable to offset these value will increase via a mixture
of product decontenting, materials sourcing methods, effectivity enhancements
or elevating the promoting costs for our merchandise by corresponding quantities.
Traditionally, we have now usually been in a position to offset web value will increase over
time.

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We proceed to obtain communications from quite a few our North American
chassis suppliers that resulting from quite a few components, together with (1) provide
constraints of key elements that they require for the manufacturing of
chassis, reminiscent of semiconductor chips and engines, (2) demand outpacing their
manufacturing capability, and (3) personnel shortages, their manufacturing of chassis
can be restricted. As a direct outcome, our manufacturing and gross sales of motorized RVs
can be negatively impacted. The present chassis scarcity is anticipated to
proceed all through our fiscal 2023. It's at the moment extraordinarily troublesome to
predict which chassis can be out there from our numerous suppliers and in what
portions for which merchandise. Modifying out there chassis for sure motorized
merchandise to make use of for different merchandise will not be a viable various, notably in
the quick time period resulting from engineering necessities. These components additional negatively
affect our manufacturing schedule and value construction as we attempt to steadiness our
manufacturing and personnel staffing ranges and schedules to the out there chassis,
typically with quick discover. The North American and European leisure automobile
industries have, now and again previously and throughout the fiscal 12 months ended
July 31, 2022, skilled shortages of chassis for numerous different causes,
together with part shortages, manufacturing delays and work stoppages on the
chassis producers.
The North American RV {industry} can be dealing with persevering with provide shortages or
supply delays of different, non-chassis, uncooked materials elements. Whereas our provide
chain has been resilient sufficient to help us throughout our current development in gross sales
and manufacturing, these shortages and constraints have negatively impacted our
potential to additional ramp up manufacturing charges and gross sales, primarily of our
motorized RV merchandise, and has brought about a rise in unfinished items as of July
31, 2022 in comparison with historic ranges. We consider these uncooked materials shortages
and delays could proceed to lead to manufacturing delays or adjusted manufacturing
charges, and will have a adverse affect on our gross sales and earnings. If shortages
of chassis or different part components have been to turn into extra important or longer
time period in nature, or if different components have been to affect our suppliers' potential to
absolutely provide our wants for key elements, our prices of such elements and our
manufacturing output may very well be adversely affected. The place attainable, we proceed to
work carefully with our suppliers on numerous provide chain methods to attenuate
these constraints, and we proceed to establish various suppliers.

European RV Business

The Firm displays retail tendencies within the European RV market as reported by the
European Caravan Federation ("ECF"), whose {industry} knowledge is reported to the
public quarterly and usually issued on a one-to-two-month lag. Moreover,
on a month-to-month foundation the Firm receives OEM-specific reviews from a lot of the
particular person member nations that make up the ECF. As these reviews are coming
instantly from the ECF member nations, timing and content material differ, however usually
the reviews are issued on a one-to-two-month lag as effectively. Whereas most nations
present OEM-specific info, the United Kingdom, which made up 17.0% and
7.2% of the caravan and motorcaravan (together with campervans) European marketplace for
the six months ended June 30, 2022, respectively, doesn't present OEM-specific
info. Business wholesale cargo knowledge for the European RV market will not be
out there.
Inside Europe, over 90% of our gross sales are made to sellers inside 10 totally different
European nations. The market situations, in addition to the working standing of
our impartial sellers inside every nation, differ based mostly on the varied native
financial situations, the present affect of COVID-19 and the native responses and
restrictions in place to handle the pandemic. It's inherently troublesome to
generalize concerning the working situations inside the total European area.
Nevertheless, impartial RV vendor stock ranges of our European merchandise are
usually beneath historic ranges within the numerous nations we serve. Inside
Germany, which accounts for about 60% of our European product gross sales,
impartial vendor stock ranges are at the moment beneath historic norms.
THOR's European RV backlog as of July 31, 2022 decreased $805,495, or 22.6%, to
$2,753,602 in comparison with $3,559,097 as of July 31, 2021, with the lower
primarily because of the lower within the present overseas change price in comparison with
the prior 12 months.

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European Business Retail Statistics

Key retail statistics for the European RV {industry}, as reported by the ECF for
the durations indicated, are as follows:

                                                                                              European Unit Registrations
                                                        Motorcaravan and Campervan (2)                                                          Caravan
                                              Six Months Ended June 30,                            %                         Six Months Ended June 30,                        %
                                         2022                          2021                     Change                  2022                          2021                 Change
OEM Reporting International locations (1)              80,609                         98,125                    (17.9)                33,062                          34,742               (4.8)
Non-OEM Reporting International locations
(1)                                       9,151                         11,013                    (16.9)                 7,997                          10,896              (26.6)
Whole                                    89,760                        109,138                    (17.8)                41,059                          45,638              (10.0)

(1)Business retail registration statistics have been compiled from particular person
nations reporting of retail gross sales, and embody the next nations:
Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others,
collectively the "OEM Reporting International locations." The "Non-OEM Reporting International locations"
are primarily the United Kingdom and others. Observe: the lower within the "Non-OEM
Reporting International locations" is primarily associated to the United Kingdom, on account of
each BREXIT and prolonged shutdowns on account of the COVID-19 pandemic. Whole
European unit registrations are reported quarterly by ECF.

(2)The ECF reviews motorcaravans and campervans collectively.

Observe: Information from the ECF is topic to adjustment, is repeatedly up to date, and
is usually impacted by delays in reporting by numerous nations. (The "Non-OEM
Reporting International locations" both don't report OEM-specific knowledge to ECF or don't
have it out there for your complete time interval coated).

Firm European Retail Statistics

                                                                                         European Unit Registrations (1)
                                                              Six Months Ended June 30,                              Improve                        %
                                                         2022                            2021                       (Lower)                     Change
Motorcaravan and Campervan                                17,540                          23,880                           (6,340)                     (26.5)
Caravan                                                    5,950                           6,071                             (121)                      (2.0)
Whole OEM-Reporting International locations                             23,490                          29,951                           (6,461)                     

(21.6)

(1)Firm retail registration statistics have been compiled from particular person
nations reporting of retail gross sales, and embody the next nations:
Germany, France, Sweden, Netherlands, Norway, Italy, Spain and others,
collectively the “OEM Reporting International locations.”

Observe: Information from the ECF is topic to changes, is repeatedly up to date, and
is usually impacted by delays in reporting by numerous nations.

Each the European {industry} retail and Firm European retail statistics above
have been negatively impacted within the six months ended June 30, 2022 by the
discount in out there motorized merchandise because of the ongoing chassis provide
limitations.

European Outlook

Our European operations supply a full lineup of leisure autos together with
caravans and motorized merchandise together with city campers, campervans and
small-to-large motorcaravans. Our product choices aren't restricted to autos
solely but in addition embody equipment and providers, together with automobile leases. We
deal with European retail clients via a complicated model administration
strategy based mostly on shopper segmentation in accordance with goal group, core values
and feelings. With the assistance of data-based and digital advertising and marketing, we intend to
proceed increasing our retail buyer attain to new and youthful shopper
segments.

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The affect of present macroeconomic components on our enterprise, together with
rising inflation and rates of interest, provide chain constraints, environmental
and sustainability laws and geopolitical occasions, is unsure. In
addition, though its affect is lessening, the extent to which the COVID-19
pandemic could affect our enterprise in future durations stays unsure and
unpredictable. Our outlook for future development in European RV retail gross sales relies upon
upon the varied financial and regulatory situations within the respective nations
wherein we promote our merchandise, and on our potential to handle via provide chain
points which have, and can proceed to, restrict the extent to which we are able to improve
output of our motorized merchandise within the close to time period. Finish-customer demand for RVs
relies upon strongly on shopper confidence. Components reminiscent of the speed of
unemployment, the speed of inflation, personal consumption and investments, development
in disposable earnings of customers, modifications in rates of interest, the well being of the
housing market, modifications in tax charges and regulatory restrictions, and, extra
not too long ago, journey security issues all affect retail gross sales. Our long-term
outlook for future development in European RV retail gross sales stays constructive as extra
and extra folks uncover RVs as a technique to help their way of life searching for
independence and individuality, in addition to utilizing the RV as a multi-purpose
automobile to flee city life and discover outside actions and nature.
Previous to the pandemic, we and our impartial European sellers marketed our
European leisure autos via quite a few RV gala's on the nation and
regional ranges which occurred all through the calendar 12 months. These gala's have
traditionally been well-attended occasions that allowed retail customers the power
to see the latest merchandise, options and designs and to speak with product
specialists along with having the ability to buy or order an RV. Because the begin of
the pandemic, the safety of the well being of our staff, clients and
sellers has been our high precedence. Consequently, we cancelled our participation
in most European commerce gala's and main occasions in calendar 2021 and restricted
participation in early calendar 2022. We did, nonetheless, attend the Caravan Salon
present in Dusseldorf in late August/early September 2022 and anticipate
collaborating in different main fiscal 2023 retail exhibits. The 2022 Caravan Salon
present skilled close to document attendance, demonstrating the excessive degree of
curiosity within the RV way of life regardless of the present macroeconomic uncertainties
dealing with many customers. Along with our attendance at numerous strategic commerce
gala's going ahead, we have now and can proceed to strengthen and develop our
digital actions with the intention to attain excessive potential goal teams, generate
leads and steer clients on to dealerships. With roughly 1,100
lively impartial sellers in Germany and all through Europe that we do enterprise
with, we consider our European manufacturers have one of many strongest and most
professionally structured vendor and repair networks in Europe.
Financial or industry-wide components affecting our European RV working outcomes
embody the provision and prices of commodities and part components and the
labor used within the manufacture of our merchandise. Materials and labor prices are the
main components figuring out our value of merchandise bought and any future will increase
in these prices will affect our revenue margins negatively if we're unable to
offset these value will increase via a mixture of product decontenting,
materials sourcing methods, effectivity enhancements or elevating the promoting
costs for our merchandise by corresponding quantities.
We proceed to obtain communications from our European chassis suppliers that
resulting from quite a few components, together with (1) provide constraints of key elements
that they require for the manufacturing of chassis, reminiscent of semiconductor chips
and engines, (2) demand outpacing their manufacturing capability, and (3) personnel
shortages, their manufacturing of chassis can be restricted. Exacerbating this
state of affairs is the truth that sure of the chassis we have now traditionally utilized
within the manufacturing of sure of our increased quantity merchandise require a better
variety of semiconductors in comparison with different chassis. All through fiscal 2022, we
skilled delays within the receipt of, and important reductions within the quantity
of, chassis from our European chassis suppliers, limiting our potential to additional
improve manufacturing of our motorized merchandise. We count on these ongoing
challenges to persist all through fiscal 2023 and, specifically, anticipate
continued delays in receipt of chassis in Europe in addition to important
reductions within the variety of chassis to be acquired in a minimum of the primary half of
fiscal 2023 in comparison with our deliberate manufacturing charges. Consequently, these
limitations within the availability of chassis will inhibit our potential to
persistently preserve our deliberate manufacturing ranges, and can restrict our potential
to ramp up manufacturing and gross sales of sure merchandise regardless of vendor demand for
these merchandise. Uncertainties associated to altering emission requirements may additionally
affect the provision of chassis utilized in our manufacturing of sure European
motorized RVs and will additionally affect shopper shopping for patterns.
In Europe, we additionally proceed to expertise value will increase, provide shortages and
supply delays of different, non-chassis, uncooked materials elements which negatively
impacted our potential to additional ramp up manufacturing and gross sales within the present
fiscal 12 months and has brought about a rise in our work in course of stock as of
July 31, 2022. We consider these shortages and delays will proceed to lead to
manufacturing delays or adjusted manufacturing charges within the close to time period, which can
restrict our potential to ramp up manufacturing and gross sales to fulfill present demand and
may have a adverse affect on our European working outcomes, as we steadiness our
labor and overhead prices to quickly altering manufacturing schedules.

                                       40
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The place attainable, to attenuate the long run affect of those provide chain constraints,
we have now recognized a second-source provider base for sure part components,
nonetheless, the general scope of provide chain constraints inside Europe and the
engineering necessities required with an alternate part half, notably
the chassis our numerous items are constructed upon, has restricted the affect of those
various suppliers on lowering our near-term provide constraints.

Along with materials provide constraints, labor shortages may additionally affect our
European operations. At the moment, we’re experiencing a scarcity of obtainable
expert staff resulting from close to full employment charges within the European nations
the place we have now manufacturing websites.

                                       41
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RESULTS OF OPERATIONS
FISCAL 2022 VS. FISCAL 2021
                                                                                 Change             %
                               FISCAL 2022             FISCAL 2021               Quantity          Change
NET SALES:
Leisure autos
North American Towables       $  8,661,945            $  6,221,928            $ 2,440,017         39.2
North American Motorized         3,979,647               2,669,391              1,310,256         49.1
Whole North America             12,641,592               8,891,319              3,750,273         42.2
European                         2,887,453               3,200,079               (312,626)        (9.8)
Whole leisure autos     15,529,045              12,091,398              3,437,647         28.4
Different                            1,225,824                 373,174                852,650        228.5
Intercompany eliminations         (442,344)               (147,192)              (295,152)      (200.5)
Whole                         $ 16,312,525            $ 12,317,380            $ 3,995,145         32.4

# OF UNITS:
Leisure autos
North American Towables     238,634             214,600              24,034 

11.2

North American Motorized     29,731              25,008               4,723 

18.9

Whole North America         268,365             239,608              28,757 

12.0

European                     60,192              64,875              (4,683)       (7.2)
Whole                       328,557             304,483              24,074         7.9

                                                        % of                                     % of
                                                       Phase                                  Phase
                                                      Web Gross sales                                Web Gross sales
GROSS PROFIT:
Leisure autos
North American Towables        $ 1,512,298              17.5            $ 1,020,908              16.4            $ 491,390              48.1
North American Motorized           654,052              16.4                345,755              13.0              308,297              89.2
Whole North America              2,166,350              17.1              1,366,663              15.4              799,687              58.5
European                           409,987              14.2                440,855              13.8              (30,868)             (7.0)
Whole leisure autos      2,576,337              16.6              1,807,518              14.9              768,819              42.5
Different, web                         229,693              18.7                 87,455              23.4              142,238             162.6
Whole                          $ 2,806,030              17.2            $ 1,894,973              15.4            $ 911,057              48.1

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Leisure autos
North American Towables       $   429,053       5.0      $ 330,138       5.3      $  98,915        30.0
North American Motorized          206,613       5.2        134,315       5.0         72,298        53.8
Whole North America               635,666       5.0        464,453       5.2        171,213        36.9
European                          264,723       9.2        261,778       8.2          2,945         1.1
Whole leisure autos       900,389       5.8        726,231       6.0        174,158        24.0
Different                              75,731       6.2         26,113       7.0         49,618       190.0
Company                         140,342         -        117,572         -         22,770        19.4
Whole                         $ 1,116,462       6.8      $ 869,916       7.1      $ 246,546        28.3

                                       42
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                                                     % of                                      % of
                                                    Phase                                   Phase             Change                %
                             FISCAL 2022           Web Gross sales           FISCAL 2021           Web Gross sales            Quantity             Change
INCOME (LOSS) BEFORE INCOME
TAXES:
Leisure autos
North American Towables     $ 1,050,536              12.1            $    658,964              10.6            $ 391,572               59.4
North American Motorized        436,604              11.0                 202,057               7.6              234,547              116.1
Whole North America           1,487,140              11.8                 861,021               9.7              626,119               72.7
European                         87,116               3.0                 116,576               3.6              (29,460)             (25.3)
Whole leisure autos   1,574,256              10.1                 977,597               8.1              596,659               61.0
Different, web                      110,798               9.0                  57,674              15.5               53,124               92.1
Company                      (225,190)                -                (190,690)                -              (34,500)             (18.1)
Whole                       $ 1,459,864               8.9            $    844,581               6.9            $ 615,283               72.9

                                As of                     As of                   Change            %
                            July 31, 2022             July 31, 2021               Quantity          Change
ORDER BACKLOG:
Leisure autos
North American Towables    $    2,571,009            $   9,284,229            $ (6,713,220)      (72.3)
North American Motorized        3,436,629                4,014,738                (578,109)      (14.4)
Whole North America             6,007,638               13,298,967              (7,291,329)      (54.8)
European                        2,753,602                3,559,097                (805,495)      (22.6)
Whole                      $    8,761,240            $  16,858,064            $ (8,096,824)      (48.0)

CONSOLIDATED
Consolidated web gross sales for fiscal 2022 elevated $3,995,145, or 32.4%, in contrast
to fiscal 2021. The rise in consolidated web gross sales is primarily because of the
improve in shopper demand, impartial sellers restocking their stock
ranges, promoting worth will increase to offset recognized and anticipated materials value
will increase, and the affect of acquisitions. The addition of the Tiffin Group,
acquired on December 18, 2020, accounted for $505,457 of the $3,995,145
improve, or 4.1% of the 32.4% improve, as fiscal 2022 contains twelve months
of operations in comparison with six and one-half months in fiscal 2021. The addition
of Airxcel, acquired on September 1, 2021, accounted for $501,114 of the
$3,995,145 improve in web gross sales, web of intercompany gross sales, or 4.1% of the
32.4% improve.
Roughly 18% of the Firm's web gross sales for fiscal 2022 have been transacted in
a forex apart from the U.S. greenback. The Firm's most materials change price
publicity is gross sales in Euros. The $3,995,145, or 32.4% improve in consolidated
web gross sales, features a lower of $230,223 from the change in forex change
charges between the 2 durations. To find out this affect, web gross sales transacted in
currencies apart from U.S. {dollars} have been translated to U.S. {dollars} utilizing
the typical change charges that have been in impact throughout the comparative interval.
Consolidated gross revenue for fiscal 2022 elevated $911,057, or 48.1%, in contrast
to fiscal 2021. Consolidated gross revenue was 17.2% of consolidated web gross sales
for fiscal 2022 and 15.4% for fiscal 2021. The will increase in consolidated gross
revenue and the consolidated gross revenue proportion have been each primarily resulting from
the affect of the rise in web gross sales within the current-year interval in comparison with
the prior-year interval and gross margin proportion enhancements famous beneath.
Promoting, normal and administrative bills for fiscal 2022 elevated $246,546,
or 28.3%, in comparison with fiscal 2021, primarily because of the 32.4% improve in web
gross sales given the variable nature of sure promoting, normal and administrative
prices. Promoting, normal and administrative bills have been 6.8% of consolidated
web gross sales for fiscal 2022 and seven.1% for fiscal 2021.

Amortization of intangible property expense for fiscal 2022 elevated $39,763, or
33.9%, to $156,946, in comparison with fiscal 2021, primarily resulting from extra
amortization throughout fiscal 2022 of $36,771 from the acquisition of Airxcel
throughout fiscal 2022 as mentioned in Observe 2 to the Consolidated Monetary
Statements.

                                       43
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Different earnings, web for fiscal 2022 decreased $12,918 to $17,334, in comparison with
$30,252 for fiscal 2021, primarily resulting from an unfavorable change of $26,906 in
the honest worth of the Firm's deferred compensation plan property resulting from market
fluctuations in fiscal 2022, partially offset by a non-cash overseas forex
achieve of $9,775 associated to sure Euro-denominated loans in fiscal 2022 as
in comparison with a nominal achieve in fiscal 2021.

Earnings earlier than earnings taxes for fiscal 2022 was $1,459,864, as in comparison with
$844,581 for fiscal 2021, a rise of $615,283, or 72.9%, primarily pushed by
the rise in web gross sales and gross margin and promoting, normal and
administrative expense proportion enhancements famous beneath.

The general annual efficient earnings tax price for fiscal 2022 was 22.0% on
$1,459,864 of earnings earlier than earnings taxes, in contrast with 21.8% on $844,581 of
earnings earlier than earnings taxes for fiscal 2021. The first motive for the rise
pertains to the jurisdictional mixture of pretax earnings between overseas and home
between the comparable durations.
Extra info regarding the modifications in web gross sales, gross revenue and
promoting, normal and administrative bills are addressed beneath within the section
reporting that follows.
Company prices included in promoting, normal and administrative bills
elevated $22,770 to $140,342 for fiscal 2022 in comparison with $117,572 for fiscal
2021, a rise of 19.4%. This improve contains bills accrued by the
Firm throughout fiscal 2022 associated to the continuing investigation of the Firm's
promoting practices in Germany, as mentioned in Observe 14 to the Consolidated
Monetary Statements. Analysis and improvement prices, that are associated to
product electrification and different Company-led innovation initiatives, additionally
elevated $9,907. Different modifications embody a rise of $6,799 in prices associated
to our standby repurchase obligation reserve resulting from vendor stock ranges
rising considerably in fiscal 2022 in comparison with vendor stock ranges
reducing in fiscal 2021. These value will increase have been largely offset by a lower
in deferred compensation expense of $26,232, which was successfully offset by the
improve in different expense associated to the deferred compensation plan property famous
beneath.
Company curiosity and different earnings and expense, web was $84,848 of web expense
for fiscal 2022 in comparison with $73,118 of web expense for fiscal 2021. This
improve in web expense of $11,730 included the change within the honest worth of the
Firm's deferred compensation plan property due primarily to market
fluctuations, which resulted in a complete improve in different expense, web of
$26,906 in comparison with the prior fiscal 12 months. These will increase in expense have been
partially offset by a non-cash overseas forex achieve of $9,775 associated to
sure Euro-denominated loans in fiscal 2022 as in comparison with a nominal achieve in
fiscal 2021, a lower in curiosity expense and charges on the debt amenities of
$2,101 and a $2,139 achieve in fiscal 2022 associated to corporate-owned life
insurance coverage advantages.

SEGMENT REPORTING

North American Towable Leisure Automobiles

Evaluation of Change in Web Gross sales for Fiscal 2022 vs. Fiscal 2021

                                                         % of                                      % of
                                                       Phase                                   Phase               Change                 %
                                Fiscal 2022           Web Gross sales           Fiscal 2021           Web Gross sales              Quantity              Change
NET SALES:
North American Towables
Journey Trailers                $ 5,430,526               62.7            $ 3,791,235               60.9            $ 1,639,291               43.2
Fifth Wheels                     3,231,419               37.3              2,430,693               39.1                800,726               32.9
Whole North American
Towables                       $ 8,661,945              100.0            $ 6,221,928              100.0            $ 2,440,017               39.2

                                                            % of                                         % of
                                                          Phase                                      Phase               Change                 %
                                  Fiscal 2022            Shipments             Fiscal 2021            Shipments              Quantity              Change
# OF UNITS:
North American Towables
Journey Trailers                    190,795                  80.0                167,309                  78.0                23,486                14.0
Fifth Wheels                        47,839                  20.0                 47,291                  22.0                   548                 1.2
Whole North American
Towables                           238,634                 100.0                214,600                 100.0                24,034                11.2

                                       44
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                                                                %
IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES:      Change
North American Towables
Journey Trailers                                              29.2
Fifth Wheels                                                 31.7
Whole North American Towables                                28.0

The rise in whole North American towables web gross sales of 39.2% in comparison with the
prior fiscal 12 months resulted from a 11.2% improve in unit shipments resulting from
elevated shopper demand and impartial sellers restocking their stock
ranges , and a 28.0% improve within the general web worth per unit because of the
affect of modifications in product combine and worth, together with web promoting worth
will increase to assist offset rising materials prices. Based on statistics
revealed by RVIA, for the twelve months ended July 31, 2022, mixed journey
trailer and fifth wheel wholesale unit shipments elevated 9.3% in comparison with the
identical interval final 12 months. Based on statistics revealed by Stat Surveys, for
the twelve-month durations ended June 30, 2022 and 2021, our market share for
journey trailers and fifth wheels mixed was 41.8% and 41.6%, respectively.
The will increase within the general web worth per unit inside each the journey trailer
product line of 29.2% and the fifth wheel product line of 31.7% have been primarily
because of the impacts of web promoting worth will increase, primarily to offset
rising materials prices, and product combine modifications in comparison with the prior 12 months.
North American towables value of merchandise bought elevated $1,948,627 to
$7,149,647, or 82.5% of North American towables web gross sales, for fiscal 2022
in comparison with $5,201,020, or 83.6% of North American towables web gross sales, for
fiscal 2021. The modifications in materials, labor, freight-out and guarantee prices
comprised $1,876,671 of the $1,948,627 improve in value of merchandise bought resulting from
the elevated gross sales quantity. Materials, labor, freight-out and guarantee prices as a
mixed proportion of North American towables web gross sales decreased to 77.4% for
fiscal 2022 in comparison with 77.7% for fiscal 2021, primarily on account of a
lower within the labor value proportion, primarily resulting from elevated volumes mixed
with a extra environment friendly workforce in comparison with the prior-year interval. The
freight-out value proportion additionally decreased resulting from a better proportion of items
being picked up by sellers within the current-year interval versus being
delivered, and the guarantee value proportion decreased barely. These reductions
have been largely offset by a rise within the materials value proportion in comparison with
the prior 12 months, because the continued profit from diminished gross sales reductions because the
prior 12 months, which successfully will increase web promoting costs and correspondingly
decreases the fabric value proportion, was greater than offset by rising
materials prices because the prior 12 months.
Whole manufacturing overhead elevated $71,956 with the rise in North
American towables web gross sales, however decreased as a proportion of North American
towables web gross sales from 5.9% to five.1%, because the elevated gross sales resulted in decrease
overhead prices per unit bought. Variable prices in manufacturing overhead elevated
$69,620 in fiscal 2022 in comparison with fiscal 2021 on account of the rise in
North American towables web gross sales.
North American towables gross revenue elevated $491,390 to $1,512,298, or 17.5%
of North American towables web gross sales, for fiscal 2022 in comparison with $1,020,908, or
16.4% of North American towables web gross sales, for fiscal 2021. The rise in
gross revenue was pushed by the rise in North American towables web gross sales,
and the rise within the gross revenue proportion is because of the lower within the
value of merchandise bought proportion famous above.
North American towables promoting, normal and administrative bills have been
$429,053, or 5.0% of North American towables web gross sales, for fiscal 2022 in contrast
to $330,138, or 5.3% of North American towables web gross sales, for fiscal 2021. The
main motive for the $98,915 improve was the affect of the rise in North
American towables web gross sales and earnings earlier than earnings taxes, which brought about associated
commissions, incentive and different compensation to extend by $83,597.
Gross sales-related journey, promoting and promotional prices additionally elevated $6,163.
The remaining improve is primarily resulting from a rise in settlement prices
associated to a product recall associated to sure bought components utilized in
sure of our North American towable merchandise, as mentioned in Observe 14 to the
Consolidated Monetary Statements. The lower within the general promoting, normal
and administrative expense as a proportion of North American towable web gross sales
is primarily because of the improve in North American towables web gross sales.
North American towables earnings earlier than earnings taxes was $1,050,536, or 12.1% of
North American towables web gross sales, for fiscal 2022 in comparison with $658,964, or
10.6% of North American towables web gross sales, for fiscal 2021. The first motive
for the rise in North American towables earnings earlier than earnings taxes was the
improve in North American towables web gross sales, and the first causes for the
improve in proportion have been the decreases in the price of merchandise bought and
promoting, normal and administrative expense percentages famous above.
                                       45
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North American Motorized Leisure Automobiles

Evaluation of Change in Web Gross sales for Fiscal 2022 vs. Fiscal 2021

                                                         % of                                      % of
                                                       Phase                                   Phase               Change                 %
                                Fiscal 2022           Web Gross sales           Fiscal 2021           Web Gross sales              Quantity               Change
NET SALES:
North American Motorized
Class A                        $ 1,779,295               44.7            $ 1,052,982               39.4            $   726,313                69.0
Class C                          1,408,470               35.4              1,266,624               47.4                141,846                11.2
Class B                            791,882               19.9                349,785               13.2                442,097               126.4
Whole North American
Motorized                      $ 3,979,647              100.0            $ 2,669,391              100.0            $ 1,310,256                49.1

                                                            % of                                         % of
                                                          Phase                                      Phase               Change                 %
                                  Fiscal 2022            Shipments             Fiscal 2021            Shipments              Quantity               Change
# OF UNITS:
North American Motorized
Class A                              9,026                  30.4                  6,717                  26.9                 2,309                 34.4
Class C                             13,260                  44.6                 14,828                  59.3                (1,568)               (10.6)
Class B                              7,445                  25.0                  3,463                  13.8                 3,982                115.0
Whole North American                29,731                 100.0                 25,008                 100.0                 4,723                 18.9
Motorized

                                                                %

IMPACT OF CHANGE IN PRODUCT MIX AND PRICE ON NET SALES: Change
North American Motorized
Class A

                                                      34.6
Class C                                                      21.8
Class B                                                      11.4
Whole North American Motorized                               30.2

The rise in whole North American motorized web gross sales of 49.1% in comparison with
the prior fiscal 12 months resulted from a 18.9% improve in unit shipments resulting from an
improve in shopper demand and vendor restocking of sure motorized merchandise,
and a 30.2% improve within the general web worth per unit because of the affect of
modifications in product combine and worth, together with web promoting worth will increase to assist
offset materials value and different enter value will increase. The addition of the Tiffin
Group, acquired on December 18, 2020, accounted for $439,771 of the $1,310,256
improve, or 16.5% of the 49.1% improve, as fiscal 2022 contains twelve months
of operations in comparison with six and one-half months in fiscal 2021. Based on
statistics revealed by RVIA, for the twelve months ended July 31, 2022,
mixed motorhome wholesale unit shipments elevated 9.0% in comparison with the identical
interval final 12 months. Based on statistics revealed by Stat Surveys, for the
twelve-month durations ended June 30, 2022 and 2021, our market share for
motorhomes was 48.9% and 43.2%, respectively.
The will increase within the general web worth per unit inside the Class A of 34.6%
throughout fiscal 2022 was primarily because of the affect of web promoting worth
will increase to offset rising materials and different enter prices and a bigger
focus of gross sales of the higher-priced Tiffin Group product strains. The
Tiffin Group Class A product strains are primarily within the higher-priced diesel
items versus the extra moderately-priced fuel items, which represented the
majority of the Class A items bought within the prior-year interval. The rise within the
general web worth per unit inside the Class C product line of 21.8% throughout
fiscal 2022 was primarily resulting from product combine modifications and web promoting worth
will increase because the prior 12 months to offset rising materials and different enter prices.
The rise within the general web worth per unit inside the Class B product line
of 11.4% throughout fiscal 2022 is primarily resulting from web promoting worth will increase
because the prior 12 months, partially offset by a better focus of gross sales of
lower-priced Class B merchandise within the present fiscal 12 months, together with the
introduction of a number of new lower-priced fashions because the prior fiscal 12 months.

                                       46
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North American motorized value of merchandise bought elevated $1,001,959 to
$3,325,595, or 83.6% of motorized web gross sales, for fiscal 2022 in comparison with
$2,323,636, or 87.0% of motorized web gross sales, for fiscal 2021. The modifications in
materials, labor, freight-out and guarantee prices comprised $937,124 of the
$1,001,959 improve because of the elevated gross sales quantity. Materials, labor,
freight-out and guarantee prices as a mixed proportion of motorized web gross sales
was 78.6% for fiscal 2022 in comparison with 81.9% for fiscal 2021, with the lower
primarily resulting from a lower within the materials value proportion, partially offset by
modest will increase within the labor and guarantee value percentages. The development in
the fabric value proportion is primarily resulting from web promoting worth will increase to
cowl recognized and anticipated materials value will increase, a discount in gross sales
reductions because the prior-year interval, which successfully will increase web promoting
costs and correspondingly decreases the fabric value proportion, and product
combine modifications, primarily resulting from a better focus of Tiffin Group merchandise
in comparison with the prior-year interval.
Whole manufacturing overhead elevated $64,835 because of the web gross sales improve,
however decreased barely as a proportion of North American motorized web gross sales
from 5.1% to five.0%, because the elevated web gross sales resulted in decrease overhead prices
per unit bought. Variable prices in manufacturing overhead elevated $60,447 in
fiscal 2022 in comparison with fiscal 2021 on account of the rise in North
American motorized web gross sales.
North American motorized gross revenue elevated $308,297 to $654,052, or 16.4%
of motorized web gross sales, for fiscal 2022 in comparison with $345,755, or 13.0% of North
American motorized web gross sales, for fiscal 2021. The rise in gross revenue was
due primarily to the rise in web gross sales, and the rise within the gross revenue
proportion was because of the lower in the price of merchandise bought proportion famous
above.
North American motorized promoting, normal and administrative bills have been
$206,613, or 5.2% of motorized web gross sales, for fiscal 2022 in comparison with $134,315,
or 5.0% of North American motorized web gross sales, for fiscal 2021. The $72,298
improve was primarily because of the improve in North American motorized web gross sales
and earnings earlier than earnings taxes, which brought about associated commissions, incentive and
different compensation to extend by $62,800. Gross sales-related journey, promoting and
promotional prices additionally elevated by $3,253.
North American motorized earnings earlier than earnings taxes was $436,604, or 11.0% of
motorized web gross sales, for fiscal 2022 in comparison with $202,057, or 7.6% of motorized
web gross sales, for fiscal 2021. The first motive for the rise in North
American motorized earnings earlier than earnings taxes was the rise in North American
motorized web gross sales. The first motive for the rise in proportion was the
lower in the price of merchandise bought proportion famous above.

                                       47
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European Leisure Automobiles

Evaluation of Change in Web Gross sales for Fiscal 2022 vs. Fiscal 2021

                                        % of                            % of
                                       Phase                         Phase         Change           %
                     Fiscal 2022      Web Gross sales      Fiscal 2021      Web Gross sales        Quantity         Change
NET SALES:
European
Motorcaravan        $ 1,457,226        50.5         $ 1,779,906        55.6         $ (322,680)      (18.1)
Campervan               750,310        26.0             779,755        24.4            (29,445)       (3.8)
Caravan                 365,902        12.7             292,708         9.1             73,194        25.0
Different                   314,015        10.8             347,710        10.9            (33,695)       (9.7)

Whole European $ 2,887,453 100.0 $ 3,200,079 100.0

        $ (312,626)       (9.8)

                                                               % of                                         % of
                                                             Phase                                      Phase
                                     Fiscal 2022            Shipments             Fiscal 2021            Shipments            Change Quantity             % Change
# OF UNITS:
European
Motorcaravan                           23,688                  39.4                 29,899                  46.1                 (6,211)                 (20.8)
Campervan                              19,369                  32.2                 21,371                  32.9                 (2,002)                  (9.4)
Caravan                                17,135                  28.4                 13,605                  21.0                  3,530                   25.9
Whole European                         60,192                 100.0                 64,875                 100.0                 (4,683)                  (7.2)

IMPACT OF CHANGES IN FOREIGN CURRENCY, PRODUCT MIX AND PRICE ON NET SALES:

                                                                        Overseas                          Combine and                             %
                                                                      Forex %                         Worth %                          Change
European
Motorcaravan                                                              (7.2)                             9.9                                2.7
Campervan                                                                 (7.2)                            12.8                                5.6
Caravan                                                                   (7.2)                             6.3                               (0.9)
Whole European                                                            (7.2)                             4.6                               (2.6)

The lower in whole European leisure automobile web gross sales of 9.8% in contrast
to the prior-year interval resulted from a 7.2% lower in unit shipments and a
2.6% lower within the general web worth per unit because of the whole affect of
modifications in overseas forex, product combine and worth. The general web gross sales
lower of $312,626 features a lower of $230,223, or 7.2% of the 9.8%
lower, because of the affect of the discount within the overseas change charges in
fiscal 2022 in comparison with fiscal 2021. The remaining gross sales lower was pushed by
the adverse impacts of the shortage of chassis availability, COVID-related
shutdowns, different manufacturing disruptions resulting from part half shortages in
fiscal 2022 and product combine modifications, because the chassis shortages famous above
resulted in a better focus of gross sales of the lower-priced caravans in
fiscal 2022.
The general web worth per unit lower of two.6% contains the affect of overseas
forex change price modifications, which accounts for a 7.2% lower, partially
offset by a rise of 4.6% resulting from combine and worth on a constant-currency foundation.
The rise within the general web worth per unit resulting from product combine and worth
inside the motorcaravan product line of 9.9% was primarily resulting from product combine
modifications and web promoting worth will increase. The rise within the general web worth
per unit resulting from product combine and worth inside the campervan product line of 12.8%
was primarily because of the web affect of product combine modifications and web promoting worth
will increase. The rise within the general web worth per unit resulting from product combine and
worth inside the Caravan product line of 6.3% was primarily because of the affect of
product combine modifications.

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European leisure automobile value of merchandise bought decreased $281,758 to
$2,477,466, or 85.8% of European leisure automobile web gross sales, for fiscal 2022
in comparison with $2,759,224, or 86.2% of European leisure automobile web gross sales, for
fiscal 2021. The modifications in materials, labor, freight-out and guarantee prices
comprised $273,364 of the $281,758 lower. Materials, labor, freight-out and
guarantee prices as a mixed proportion of European leisure automobile web
gross sales decreased to 76.0% for fiscal 2022 in comparison with 77.1% for fiscal 2021,
primarily resulting from a lower within the materials value proportion on account of
promoting worth will increase and product combine modifications.
Whole manufacturing overhead decreased $8,394 with the web gross sales lower however
elevated as a proportion of motorized web gross sales from 9.1% to 9.8% primarily due
to a better proportion in oblique labor and manufacturing worker profit
prices.
European leisure automobile gross revenue decreased $30,868 to $409,987, or
14.2% of European leisure automobile web gross sales, for fiscal 2022 in comparison with
$440,855, or 13.8% of European leisure automobile web gross sales, for fiscal 2021.
The lower in gross revenue is because of the lower in web gross sales, whereas the
improve in gross revenue as a proportion of European leisure automobile web
gross sales is because of the lower in the price of merchandise bought proportion famous
above.
European leisure automobile promoting, normal and administrative bills have been
$264,723, or 9.2% of European leisure automobile web gross sales, for fiscal 2022,
in line with the $261,778, or 8.2% of European leisure automobile web
gross sales, for fiscal 2021. The rise within the general promoting, normal and
administrative expense as a proportion of European leisure automobile web
gross sales is primarily because of the lower in web gross sales.
European leisure automobile earnings earlier than earnings taxes was $87,116, or 3.0% of
European leisure automobile web gross sales, for fiscal 2022 in comparison with $116,576,
or 3.6% of European leisure automobile web gross sales, for fiscal 2021. The first
motive for the lower in earnings earlier than earnings taxes was the lower in
European leisure automobile web gross sales. The lower within the earnings earlier than
earnings taxes proportion was primarily because of the improve within the promoting,
normal and administrative expense proportion famous above, partially offset by
the lower in the price of merchandise bought proportion.

Liquidity and Capital Sources

As of July 31, 2022, we had $311,553 in money and money equivalents, of which
$256,492 is held in the USA and the equal of $55,061,
predominantly in Euros, is held in Europe, in comparison with $445,852 on July 31,
2021, of which $282,220 was held in the USA and the equal of
$163,632, predominantly in Euros, was held in Europe. Money and money equivalents
held internationally could also be topic to overseas withholding taxes if repatriated
to the USA. The elements of the $134,299 lower in money and money
equivalents are described in additional element beneath, however the lower was primarily
attributable to money supplied by operations of $990,253 much less money utilized in
financing actions of $47,841 and money utilized in investing actions of
$1,049,257.
Web working capital at July 31, 2022 was $1,306,563 in comparison with $1,008,738 at
July 31, 2021, with the rise primarily resulting from will increase in stock and
accounts receivable as famous within the Working Actions part beneath. Capital
expenditures of $242,357 for fiscal 2022 have been made primarily for land and
manufacturing constructing additions and enhancements, and changing equipment and
gear used within the odd course of enterprise.
We attempt to keep up ample money balances to make sure we have now enough
sources to answer alternatives and altering enterprise situations. In
addition, the unused availability beneath our revolving asset-based credit score
facility is usually out there to the Firm for normal working functions,
and approximated $874,000 at July 31, 2022. We consider our on-hand money and money
equivalents and funds generated from operations, together with funds out there
beneath the revolving asset-based credit score facility, can be enough to fund
anticipated operational necessities for the foreseeable future.
Our priorities for using present and future out there money generated from
operations stay in line with our historical past, and embody lowering our
indebtedness, sustaining and, over time, rising our dividend funds and
funding our development, each organically and opportunistically, via
acquisitions. We may additionally take into account strategic and opportunistic repurchases of
shares of THOR inventory beneath the share repurchase authorizations as mentioned in
Observe 16 to the Consolidated Monetary Statements, and particular dividends based mostly
upon market and enterprise situations and extra money availability, topic to
potential customary limits and restrictions pursuant to our credit score amenities,
relevant authorized limitations and dedication by the Firm's Board of
Administrators ("Board"). We consider our on-hand money and money equivalents and funds
generated from operations can be enough to fund anticipated money dividend
funds and share repurchases for the foreseeable future.

                                       49
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Our present estimate of dedicated and internally accredited capital spend for
fiscal 2023 is $275,000, primarily for sure constructing initiatives and sure
automation initiatives, in addition to changing and upgrading equipment, gear and
different property all through our amenities for use within the odd course of
enterprise. We anticipate roughly two-thirds can be in North America and
one-third in Europe, and that these expenditures can be funded by money supplied
by our working actions.
The Firm's Board at the moment intends to proceed common quarterly money
dividend funds sooner or later. As is customary beneath credit score amenities,
sure actions, together with our potential to pay dividends, are topic to the
satisfaction of sure fee situations previous to fee. The situations for
the fee of dividends beneath the present debt amenities embody a minimal
degree of adjusted extra money availability and a hard and fast cost protection ratio
take a look at, each as outlined within the credit score agreements. The declaration of future
dividends and the institution of the per share quantities, document dates and
fee dates for any such future dividends are topic to the dedication of
the Board, and can be dependent upon future earnings, money flows and different
components, along with compliance with any then-existing financing amenities.

Working Actions

Web money supplied by working actions for fiscal 2022 was $990,253 as
in comparison with web money supplied by working actions of $526,482 for fiscal
2021 and $540,941 for fiscal 2020.

For fiscal 2022, web earnings adjusted for non-cash objects (primarily depreciation,
amortization of intangibles, deferred earnings tax profit and stock-based
compensation) supplied $1,405,990 of working money. The change in web working
capital resulted in using $415,737 of working money throughout fiscal 2022,
primarily resulting from a rise in stock, which included the affect of ongoing
provide constraints and disruptions.

For fiscal 2021, web earnings adjusted for non-cash working objects (primarily
depreciation, amortization of intangibles, deferred earnings tax profit and
stock-based compensation) supplied $929,482 of working money. The change in web
working capital resulted in using $403,000 of working money throughout fiscal
2021, primarily resulting from a rise in stock, as manufacturing ranges elevated
resulting from heightened demand, leading to a rise in productions strains and
capability. As well as, work-in-process stock elevated at July 31, 2021 due
to elevated materials part shortages on in any other case considerably accomplished
items. Accounts receivable additionally elevated given the rise in gross sales. These
will increase have been partially offset by a rise in accounts payable primarily
associated to the stock development, and a rise in accrued liabilities, pushed
primarily by elevated accrued compensation and incentive pay ensuing from the
elevated manufacturing ranges and earnings earlier than earnings taxes.

Investing Actions

Web money utilized in investing actions for fiscal 2022 was $1,049,257, primarily
resulting from $781,967 utilized in enterprise acquisitions, primarily for the Airxcel
acquisition mentioned in Observe 2 to the Consolidated Monetary Statements, and
capital expenditures of $242,357.

Web money utilized in investing actions for fiscal 2021 was $428,493, primarily
resulting from $310,938 utilized in enterprise acquisitions and capital expenditures of
$128,835.

Financing Actions

Web money utilized in financing actions for fiscal 2022 was $47,841, consisting
primarily of borrowings of $660,088 on the revolving asset-based credit score
amenities, which included $625,000 borrowed in reference to the acquisition
of Airxcel and $35,088 for short-term working capital wants, along with
$500,000 in proceeds from the issuance of Senior Unsecured Notes in October
2021, which have been then used as a part of the $559,035 in funds on the ABL
facility. Funds of $332,907 have been additionally made on the term-loan credit score
amenities. Moreover, the Firm made common quarterly money dividend
funds of $0.43 per share for every quarter of fiscal 2022 totaling $94,944,
and $165,107 was used for treasury share repurchases.
Web money utilized in financing actions for fiscal 2021 was $188,438, together with
$59,700 in time period mortgage debt funds. Moreover, the Firm made common
quarterly money dividend funds of $0.41 per share for every quarter of fiscal
2021 totaling $90,801.
The Firm elevated its earlier common quarterly dividend of $0.41 per share
to $0.43 per share in October 2021. The Firm elevated its earlier common
quarterly dividend of $0.40 per share to $0.41 per share in October 2020.
                                       50
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Principal Contractual Obligations and Industrial Commitments

Our principal contractual obligations and industrial commitments at July 31,
2022 are summarized within the following charts. Unrecognized earnings tax advantages in
the quantity of $20,197 have been excluded from the desk as a result of we're unable to
decide a fairly dependable estimate of the timing of future fee. We
haven't any different materials off-balance sheet commitments.
                                                                             Funds Due By Interval
                                                              Fiscal              Fiscal               Fiscal
Contractual Obligations                    Whole                2023             2024-2025            2026-2027            After 5 Years
Debt principal funds (1)            $ 1,799,911          $  13,190          $    41,423          $ 1,230,094          $      515,204
Finance leases (2)                           5,781              1,578                2,142                2,003                      58
Working leases (2)                        61,367             14,463               19,042                9,454                  18,408
Buy obligations (3)                   100,149            100,149                    -                    -                       -
Whole contractual money
obligations                            $ 1,967,208          $ 129,380          $    62,607          $ 1,241,551          $      533,670

(1)See Observe 12 to the Consolidated Monetary Statements for added
info.

(2)See Observe 15 to the Consolidated Monetary Statements for added
info.

(3)Signify commitments to buy specified portions of uncooked supplies at
market costs. The greenback values above have been estimated based mostly on July 31,
2022 market costs.
                                                                            

Quantity of Dedication Expiration Per Interval

                                         Whole Quantities              Much less 

Than

Different Industrial Commitments               Dedicated               One 12 months (1)             1-3 Years            4-5 Years           Over 5 Years
Standby repurchase obligations
(1)                                     $   4,308,524          $       

2,539,672 $ 1,768,852 $ – $ –


(1)The standby repurchase totals above don't take into account any curtailments that
decrease the eventual repurchase obligation totals, and these obligations usually
lengthen as much as eighteen months from the date of sale of the associated product to the
vendor. In estimating the expiration of the standby repurchase obligations, we
used stock reviews as of July 31, 2022 from our impartial sellers' main
lending establishments and made an assumption for obligations for stock aged
0-12 months that it was financed evenly over the twelve-month interval.

Software of Essential Accounting Estimates

See Observe 1 to the Consolidated Monetary Statements for additional info on
the Firm’s most vital accounting insurance policies.

The Consolidated Monetary Statements are ready in conformity with accounting
ideas usually accepted in the USA of America. The preparation
of those monetary statements requires using estimates, judgments and
assumptions that have an effect on the reported quantities of property and liabilities on the
date of the monetary statements and the reported quantities of revenues and
bills throughout the durations offered. We consider that of our accounting
estimates, the next could contain a better diploma of judgment and complexity:

Enterprise Mixtures

We account for the acquisition of a enterprise utilizing the acquisition technique of
accounting. Belongings acquired and liabilities assumed, together with quantities
attributed to non-controlling pursuits, are recorded on the acquisition date at
their honest values. Assigning honest values requires the Firm to make
important estimates and assumptions relating to the honest values of identifiable
intangible property, property, plant and gear, deferred tax asset valuation
allowances, and liabilities, reminiscent of unsure tax positions and contingencies.
The Firm could refine these estimates if obligatory over a interval to not exceed
one 12 months by considering new info that, if recognized on the
acquisition date, would have affected the honest values ascribed to the property
acquired and liabilities assumed.
Vital estimates and assumptions are utilized in estimating the worth of
acquired identifiable intangible property, together with estimating future money flows
based mostly on revenues and margins that the Firm expects to generate following the
acquisition, deciding on an relevant royalty price the place wanted, figuring out an
applicable vendor attrition price, making use of an applicable low cost price to
estimate a gift worth of these money flows and figuring out their helpful lives.
Subsequent modifications to projections pushed by precise outcomes following the
acquisition date may require the Firm to document impairment fees.
                                       51
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Goodwill, Intangible and Lengthy-Lived Belongings

Goodwill outcomes from the surplus of buy worth over the web property of an
acquired enterprise. The Firm's reporting items are usually the identical as its
working segments, that are recognized in Observe 3 to the Consolidated Monetary
Statements. Goodwill will not be amortized however is examined for impairment yearly as
of Could 31 of every fiscal 12 months and every time occasions or modifications in circumstances
point out that an impairment could have occurred. The overall carrying worth of
goodwill as of July 31, 2022 is $1,804,151. See Observe 7 to the Consolidated
Monetary Statements for a abstract of modifications in carrying worth by fiscal 12 months
and reportable section. If the carrying quantity of a reporting unit exceeds its
honest worth, an impairment cost equal to that extra is acknowledged, to not
exceed the quantity of goodwill allotted to the reporting unit. As a part of the
annual impairment testing, the Firm could make the most of a qualitative strategy slightly
than a quantitative strategy to find out if an impairment exists, contemplating
numerous components together with {industry} modifications, precise outcomes as in comparison with
forecasted outcomes, or the timing of a current acquisition, if relevant.
The Firm's European reportable section is comprised of 1 reporting unit,
which has a goodwill steadiness of $893,383 as of July 31, 2022. The Firm
utilized each a reduced money movement mannequin and market strategy based mostly on
guideline public corporations to estimate the honest worth of the reporting unit in
the latest annual impairment take a look at. The honest worth of the European reporting
unit exceeded its carrying worth by lower than 10% on this take a look at. The estimated
honest worth is topic to important administration judgment, together with the
dedication of many components reminiscent of, however not restricted to, gross sales development charges,
margin development charges and low cost charges developed utilizing market observable inputs
and contemplating threat relating to future efficiency, in addition to market multiples
derived from chosen guideline public corporations. Modifications in any of those
estimates can have a major affect on the dedication of honest worth.
Moreover, market knowledge and components outdoors the Firm's management, reminiscent of
provide limitations past these at the moment factored into our evaluation, may
have a major affect on estimated honest worth. Modifications in any of those
estimates or different components may doubtlessly lead to future materials
impairments.
The Firm's main intangible property are vendor networks, emblems and
design expertise and different intangible property acquired in enterprise acquisitions.
Vendor networks are valued on a Discounted Money Circulate technique and are amortized on
an accelerated foundation over 12 to twenty years, with amortization starting after any
relevant backlog amortization is accomplished. Logos and design expertise
property are each valued on a Aid of Royalty technique and are each amortized on a
straight-line foundation, utilizing lives of 15 to 25 years for emblems and 10 to fifteen
years for design expertise property, respectively. Amortizable intangible property,
web as of July 31, 2022 totaled $1,117,492. See Observe 7 to the Consolidated
Monetary Statements for a abstract of the elements of that steadiness.
We evaluate our tangible and intangible long-lived property (individually or in a
associated group, as applicable) for impairment every time occasions or modifications in
circumstances point out that the carrying quantity of such property will not be
recoverable from future money flows attributable to the property. We regularly
assess whether or not occasions or modifications in circumstances characterize a 'triggering' occasion
that will require us to finish an impairment evaluation. Components that we
take into account in figuring out whether or not a triggering occasion has occurred embody, amongst
different issues, whether or not there was a major hostile change in authorized
components, enterprise local weather or competitors associated to the operation of the asset,
whether or not there was a major lower in precise or anticipated working
outcomes associated to the asset and whether or not there are present plans to promote or
get rid of the asset. The dedication of whether or not a triggering occasion has
occurred is topic to important administration judgment, together with at which level
or fiscal quarter a triggering occasion has occurred when the related hostile
components persist over prolonged durations.
Ought to a triggering occasion be deemed to happen, and for every of the annual
goodwill impairment assessments, administration is required to estimate honest worth.
Honest values are usually decided by a reduced money movement mannequin, in
addition to a market strategy based mostly on guideline public corporations, in sure
conditions. These estimates are additionally topic to important administration judgment,
together with the dedication of many components reminiscent of gross sales development charges, gross
margin patterns, value development charges, terminal worth assumptions and low cost
charges developed utilizing market observable inputs and consideration of threat
relating to future efficiency, in addition to market multiples derived from chosen
guideline public corporations. Modifications in these estimates can have a major
affect on the dedication of money flows and honest worth and will doubtlessly
lead to future materials impairments.
The Firm accomplished its annual goodwill impairment take a look at as of Could 31, 2022,
and no impairment was recognized. See Observe 7 to the Consolidated Monetary
Statements for additional info relating to goodwill and intangible property.

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Product Guarantee

We usually present retail clients of our merchandise with both a one-year or
two-year guarantee masking defects in materials or workmanship, with longer
warranties on sure structural elements or different objects. We document a
legal responsibility, which totaled $317,908 at July 31, 2022, based mostly on our greatest estimate
of the quantities essential to settle unpaid present claims and estimated future
claims on merchandise bought as of the steadiness sheet date. Components we use in
estimating the guarantee legal responsibility embody a historical past of items bought, present THOR
items in vendor stock, historic common restore prices per unit incurred and
a profile of the distribution of guarantee expenditures over the guarantee interval.
A big improve in service store charges, the price of components or the frequency
of claims may have a cloth hostile affect on our working outcomes for the
interval or durations wherein such extra claims or prices materialize.
Administration believes that the guarantee legal responsibility is suitable; nonetheless, precise
claims incurred may differ from estimates, requiring changes to the
reserves.

Accounting Pronouncements

Reference is made to Observe 1 to the Consolidated Monetary Statements on this
report for a abstract of not too long ago adopted accounting pronouncements, which
abstract is hereby included by reference.

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