##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
 QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 FOR QUARTER ENDED April 30, 2007
    
    COMMISSION FILE NUMBER 1-9235
 THOR INDUSTRIES, INC.
  Delaware
    
    93-0768752(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)419 West Pike Street, Jackson Center, OH
    
    45334-0629(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: 937) 596-6849
  o þ
  þ o o
  o þ
  Class
    
    Outstanding at 5/31/2007Common stock, par value
    
    55,767,304 shares$.10 per share




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TABLE OF CONTENTS  PART I    Financial InformationITEM 1. Financial StatementsITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. Quantitative and Qualitative Disclosures About Market RiskITEM 4. Controls and ProceduresPART II    Other InformationITEM 1. LEGAL PROCEEDINGSITEM 2. Unregistered Sales of Equity Securities and Use of ProceedsITEM 5. Other InformationITEM 6.ExhibitsSIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2EX-99.1    Table of Contents  Explanatory Note
 (All amounts presented in thousands)
       1




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2




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PART I    Financial Information

Unless otherwise indicated, all amounts presented in thousands except units, share and per
share data.
 
 ITEM 1. Financial Statements
 THOR INDUSTRIES, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS
 April 30, 2007
    
    
    July 31, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    146,982
    
    
    $
    196,136Investments  short term
    
    
    105,590
    
    
    
    68,237Accounts receivable:Trade
    
    
    213,081
    
    
    
    188,104Other
    
    
    8,013
    
    
    
    5,639Inventories
    
    
    202,725
    
    
    
    183,169Prepaid expenses
    
    
    9,850
    
    
    
    6,533Deferred income taxes
    
    
    25,367
    
    
    
    4,898Total current assets
    
    
    711,608
    
    
    
    652,716Property:Land
    
    
    21,741
    
    
    
    21,323Buildings and improvements
    
    
    134,290
    
    
    
    131,649Machinery and equipment
    
    
    60,660
    
    
    
    55,656Total cost
    
    
    216,691
    
    
    
    208,628Accumulated depreciation
    
    
    60,135
    
    
    
    51,163Property, net
    
    
    156,556
    
    
    
    157,465Investment in joint ventures
    
    
    2,696
    
    
    
    2,737Other assets:Goodwill
    
    
    165,663
    
    
    
    165,663Non-compete agreements
    
    
    2,171
    
    
    
    2,841Trademarks
    
    
    13,900
    
    
    
    13,900Other
    
    
    12,216
    
    
    
    9,403Total other assets
    
    
    193,950
    
    
    
    191,807TOTAL ASSETS
    
    $
    1,064,810
    
    
    $
    1,004,725LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    148,103
    
    
    $
    145,609Accrued liabilities:Taxes
    
    
    45,236
    
    
    
    18,709Compensation and related items
    
    
    38,686
    
    
    
    37,161Product warranties
    
    
    60,724
    
    
    
    59,795Promotions and rebates
    
    
    13,429
    
    
    
    12,953Product/property liability and related liabilities
    
    
    12,779
    
    
    
    10,423Other
    
    
    11,745
    
    
    
    7,315Total current liabilities
    
    
    330,702
    
    
    
    291,965Deferred income taxes and other liabilities
    
    
    15,948
    
    
    
    12,911Contingent liabilities and commitments
    
    
    
    
    
    
    Stockholders equity:Common stock  authorized 250,000,000 shares;
issued 57,210,404 shares @ 4/30/07 and 57,100,286
shares @ 7/31/06; par value of $.10 per share
    
    
    5,721
    
    
    
    5,710Additional paid-in capital
    
    
    89,133
    
    
    
    86,538Accumulated other comprehensive income
    
    
    2,109
    
    
    
    1,772Retained earnings
    
    
    681,320
    
    
    
    664,322Less Treasury shares of 1,441,600 @ 4/30/07 & 1,401,200 @
7/31/06
    
    
    (60,123
    )
    
    
    (58,493
    )Total stockholders equity
    
    
    718,160
    
    
    
    699,849TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,064,810
    
    
    $
    1,004,725
  3




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THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED INCOME  FOR THE THREE & NINE MONTHS ENDED APRIL 30, 2007 AND 2006
 Three Months Ended April 30
    
    
    Nine Months Ended April 302007
    
    
    2006
    
    
    2007
    
    
    2006(As restated,
    
    
    
    
    
    
    (As restated,see Note 2)
    
    
    
    
    
    
    see Note 2)Net sales
    
    $
    789,643
    
    
    $
    857,615
    
    
    $
    2,101,408
    
    
    $
    2,260,985Cost of products sold
    
    
    686,663
    
    
    
    733,506
    
    
    
    1,848,091
    
    
    
    1,941,529Gross profit
    
    
    102,980
    
    
    
    124,109
    
    
    
    253,317
    
    
    
    319,456Selling, general and
administrative expenses
    
    
    51,834
    
    
    
    50,317
    
    
    
    132,703
    
    
    
    135,890Interest income
    
    
    2,515
    
    
    
    2,552
    
    
    
    7,771
    
    
    
    6,270Interest expense
    
    
    212
    
    
    
    347
    
    
    
    563
    
    
    
    917Other income
    
    
    510
    
    
    
    243
    
    
    
    1,375
    
    
    
    1,169Income before income taxes
    
    
    53,959
    
    
    
    76,240
    
    
    
    129,197
    
    
    
    190,088Provision for income taxes
    
    
    18,390
    
    
    
    27,571
    
    
    
    44,779
    
    
    
    70,141Net income
    
    $
    35,569
    
    
    $
    48,669
    
    
    $
    84,418
    
    
    $
    119,947Average common shares outstanding:Basic
    
    
    55,696,304
    
    
    
    56,656,684
    
    
    
    55,654,327
    
    
    
    56,605,615Diluted
    
    
    55,935,718
    
    
    
    57,087,096
    
    
    
    55,916,602
    
    
    
    56,994,628Earnings per common share:Basic
    
    $
    .64
    
    
    $
    .86
    
    
    $
    1.52
    
    
    $
    2.12Diluted
    
    $
    .64
    
    
    $
    .85
    
    
    $
    1.51
    
    
    $
    2.10Regular dividends declared per common share:
    
    $
    .07
    
    
    $
    .07
    
    
    $
    .21
    
    
    $
    .12Special dividends declared per common share:
    
    $
    
    
    
    $
    
    
    
    $
    1.00
    
    
    $
    Regular dividends paid per common share:
    
    $
    .07
    
    
    $
    .07
    
    
    $
    .21
    
    
    $
    .17Special dividends paid per common share:
    
    $
    
    
    
    $
    
    
    
    $
    1.00
    
    
    $
    .25
  4




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THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS  FOR THE NINE MONTHS ENDED APRIL 30, 2007 AND 2006
 2007
    
    
    2006(As restated,see Note 2)Cash flows from operating activities:Net income
    
    $
    84,418
    
    
    $
    119,947Adjustments to reconcile net income to net cash (used in)
provided by operating activities:Depreciation
    
    
    9,687
    
    
    
    10,023Amortization
    
    
    670
    
    
    
    712Deferred income taxes
    
    
    (20,604
    )
    
    
    (18,149
    )Loss on disposition of assets
    
    
    85
    
    
    
    (11
    )Loss on disposition of trading investments
    
    
    104
    
    
    
    403Unrealized loss on trading investments
    
    
    
    
    
    
    (461
    )Stock based compensation
    
    
    455
    
    
    
    791Changes in non cash assets and liabilities, net of effect
from acquisitions:Purchases of trading investments
    
    
    
    
    
    
    (197,462
    )Proceeds from disposition of trading investments
    
    
    68,133
    
    
    
    117,726Accounts receivable
    
    
    (27,351
    )
    
    
    (74,934
    )Inventories
    
    
    (19,556
    )
    
    
    (37,787
    )Prepaids and other
    
    
    (6,521
    )
    
    
    (4,427
    )Accounts payable
    
    
    2,303
    
    
    
    43,670Accrued liabilities
    
    
    36,243
    
    
    
    54,697Other liabilities
    
    
    2,869
    
    
    
    2,142Net cash provided by operating activities
    
    
    130,935
    
    
    
    16,880Cash flows from investing activities:Purchase of property, plant & equipment
    
    
    (8,885
    )
    
    
    (18,263
    )Proceeds from disposition of assets
    
    
    230
    
    
    
    229Purchase of available for sale investments
    
    
    (205,020
    )
    
    
    Proceeds from sale of available for sale investments
    
    
    100,148
    
    
    
    Net cash used in investing activities
    
    
    (113,527
    )
    
    
    (18,034
    )Cash flows from financing activities:Cash dividends
    
    
    (67,420
    )
    
    
    (23,807
    )Purchase of common stock held as treasury shares
    
    
    (1,630
    )
    
    
    Proceeds from issuance of common stock
    
    
    2,151
    
    
    
    1,863Net cash used in financing activities
    
    
    (66,899
    )
    
    
    (21,944
    )Effect of exchange rate changes on cash
    
    
    337
    
    
    
    996Net decrease in cash and equivalents
    
    
    (49,154
    )
    
    
    (22,102
    )Cash and equivalents, beginning of period
    
    
    196,136
    
    
    
    163,596Cash and equivalents, end of period
    
    $
    146,982
    
    
    $
    141,494Supplemental cash flow information:Income taxes paid
    
    $
    36,552
    
    
    $
    52,057Interest paid
    
    
    563
    
    
    
    917Non cash transactions:Capital expenditures in accounts payable
    
    $
    191
    
    
    $
    1,406Purchase of treasury shares
    
    
    
    
    
    
    5,102Incentive stock options disqualifying disposition
    
    
    
    
    
    
    339Cancellation of restricted stock
    
    
    35
    
    
    
    42
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    The July 31, 2006 amounts are derived from the annual audited financial statements, as
restated. The interim financial statements are unaudited. In the opinion of management, all
adjustments (which consist of normal recurring adjustments) necessary to present fairly the
financial position, results of operations and change in cash flows for the interim periods
presented have been made. These financial statements should be read in conjunction with the
Companys Annual Report on Form 10-K/A for the year ended July 31, 2006. The results of
operations for the nine months ended April 30, 2007 are not necessarily indicative of the
results for the full year.2.
    
    Restatement of Financial StatementsOn January 29, 2007, we announced that the Audit Committee of our Board of Directors (the
Audit Committee) initiated an independent investigation regarding certain accounting issues
at our Dutchmen Manufacturing, Inc. operating subsidiary (Dutchmen). The Vice President of
Finance at Dutchmen was intentionally understating the cost of products sold during the periods
restated, primarily by overstating inventory and accounts receivable and understating accounts
payable. We promptly and voluntarily informed the SEC of the Audit Committees investigation,
and have been responding to SEC staff requests for additional information in connection with
the staffs investigation. The Audit Committee, assisted by independent outside legal counsel
and accounting experts, thoroughly investigated the accounting issues raised at Dutchmen. The
Audit Committee and its advisors also reviewed the internal controls at Dutchmen and other
subsidiaries.The Audit Committees investigation confirmed the Companys determination that the income
before income taxes recorded by Dutchmen was overstated during the periods that we subsequently
restated, as a result of misconduct by Dutchmens former Vice President of Finance, the senior
financial officer of Dutchmen.The Company has restated its previously issued financial statements as of July 31, 2006, in
conjunction with the Companys Annual Report on Form 10-K/A, and for the three and nine month
periods ended April 30, 2006. The restatement followed the Companys evaluation, considering
the results from the Audit Committees investigation, of accounting practices employed at
Dutchmen during these periods.The following tables show the previously reported, restatement adjustment and restated amounts
for those accounts in the Statements of Condensed Consolidated Income for the three months
ended April 30, 2006 and the nine months ended April 30, 2006 and the Statement of Condensed
Consolidated Cash Flows for the nine months ended April 30, 2006, affected by the restatements.
 Previously
    
    Restatementreported
    
    adjustment
    
    RestatedStatement of Condensed Consolidated IncomeThree months ended April 30, 2006Cost of products sold
    
    $
    729,604
    
    
    $
    3,902
    
    
    $
    733,506Gross profit
    
    
    128,011
    
    
    
    (3,902
    )
    
    
    124,109Income before income taxes
    
    
    80,142
    
    
    
    (3,902
    )
    
    
    76,240Provision for income taxes
    
    
    29,003
    
    
    
    (1,432
    )
    
    
    27,571Net income
    
    
    51,139
    
    
    
    (2,470
    )
    
    
    48,669Earnings per common shareThree months ended April 30, 2006Basic
    
    $
    .90
    
    
    $
    (.04
    )
    
    $
    .86Diluted
    
    $
    .90
    
    
    $
    (.05
    )
    
    $
    .85Statement of Condensed Consolidated IncomeNine months ended April 30, 2006
 6




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NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Previously
    
    Restatementreported
    
    adjustment
    
    RestatedCost of products sold
    
    $
    1,931,369
    
    
    $
    10,160
    
    
    $
    1,941,529Gross profit
    
    
    329,616
    
    
    
    (10,160
    )
    
    
    319,456Income before income taxes
    
    
    200,248
    
    
    
    (10,160
    )
    
    
    190,088Provision for income taxes
    
    
    73,870
    
    
    
    (3,729
    )
    
    
    70,141Net income
    
    
    126,378
    
    
    
    (6,431
    )
    
    
    119,947Earnings per common shareNine months ended April 30, 2006Basic
    
    $
    2.23
    
    
    $
    (.11
    )
    
    $
    2.12Diluted
    
    $
    2.22
    
    
    $
    (.12
    )
    
    $
    2.10Statement of Condensed Consolidated Cash FlowsNine months ended April 30, 2006Cash flows from operating activitiesNet income
    
    $
    126,378
    
    
    $
    (6,431
    )
    
    $
    119,947Accounts receivable
    
    
    (77,568
    )
    
    
    2,634
    
    
    
    (74,934
    )Inventories
    
    
    (38,389
    )
    
    
    602
    
    
    
    (37,787
    )Accounts payable
    
    
    36,747
    
    
    
    6,923
    
    
    
    43,670Accrued liabilities
    
    
    58,425
    
    
    
    (3,728
    )
    
    
    54,697
 3.
    
    Major classifications of inventories are:
 April 30, 2007
    
    
    July 31, 2006Raw materials
    
    $
    97,791
    
    
    $
    99,807Chassis
    
    
    53,051
    
    
    
    39,772Work in process
    
    
    56,009
    
    
    
    51,208Finished goods
    
    
    22,071
    
    
    
    13,416Total
    
    
    228,922
    
    
    
    204,203Less excess of FIFO costs
over LIFO costs
    
    
    26,197
    
    
    
    21,034Total inventories
    
    $
    202,725
    
    
    $
    183,169
 4.
    
    Earnings Per Share
 Three Months
    
    Three Months
    
    Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Ended
    
    EndedApril 30, 2007
    
    April 30, 2006
    
    April 30, 2007
    
    April 30, 2006Weighted average shares
outstanding for basic
earnings per share
    
    
    55,696,304
    
    
    
    56,656,684
    
    
    
    55,654,327
    
    
    
    56,605,615Stock options and
restricted stock
    
    
    239,414
    
    
    
    430,412
    
    
    
    262,275
    
    
    
    389,013Total  For diluted shares
    
    
    55,935,718
    
    
    
    57,087,096
    
    
    
    55,916,602
    
    
    
    56,994,628
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NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
 5.
    
    Comprehensive Income
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 30, 2007
    
    
    April 30, 2006
    
    
    April 30, 2007
    
    
    April 30, 2006Net income
    
    $
    35,569
    
    
    $
    48,669
    
    
    $
    84,418
    
    
    
    119,947Foreign currency
translation adjustment
    
    
    798
    
    
    
    156
    
    
    
    337
    
    
    
    996Comprehensive income
    
    $
    36,367
    
    
    $
    48,825
    
    
    $
    84,755
    
    
    $
    120,943
 6.
    
    Segment InformationThe Company has three reportable segments: 1.) towable recreation vehicles, 2.) motorized
recreation vehicles, and 3.) buses. The towable recreation vehicle segment consists of product
lines from the following operating companies that have been aggregated: Airstream,
Breckenridge, CrossRoads, Dutchmen, General Coach Hensall and Oliver, Keystone, Komfort, and
Thor California. The motorized recreation vehicle segment consists of product lines from the
following operating companies that have been aggregated: Airstream, Damon, Four Winds and
Oliver. The bus segment consists of the following operating companies that have been
aggregated: Champion Bus, ElDorado California, ElDorado Kansas and Goshen Coach. During the
quarter ended January 31, 2006, the Company made the decision not to produce a planned
motorized product line. The impairment charge associated with the decision was $1,360 and is
included in cost of products sold.
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 30, 2007
    
    
    April 30, 2006
    
    
    April 30, 2007
    
    
    April 30, 2006Net Sales:Recreation vehicles:Towables
    
    $
    524,041
    
    
    $
    615,043
    
    
    $
    1,397,936
    
    
    $
    1,606,140Motorized
    
    
    159,642
    
    
    
    161,593
    
    
    
    412,259
    
    
    
    424,528Total recreation vehicles
    
    
    683,683
    
    
    
    776,636
    
    
    
    1,810,195
    
    
    
    2,030,668Buses
    
    
    105,960
    
    
    
    80,979
    
    
    
    291,213
    
    
    
    230,317Total
    
    $
    789,643
    
    
    $
    857,615
    
    
    $
    2,101,408
    
    
    $
    2,260,985
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 30, 2007
    
    
    April 30, 2006
    
    
    April 30, 2007
    
    
    April 30, 2006Income Before Income Taxes:Recreation vehicles:Towables
    
    $
    48,086
    
    
    $
    67,986
    
    
    $
    110,290
    
    
    $
    173,154Motorized
    
    
    7,220
    
    
    
    7,756
    
    
    
    16,756
    
    
    
    18,293Total recreation vehicles
    
    
    55,306
    
    
    
    75,742
    
    
    
    127,046
    
    
    
    191,447Buses
    
    
    5,447
    
    
    
    2,034
    
    
    
    11,622
    
    
    
    6,013Corporate
    
    
    (6,794
    )
    
    
    (1,536
    )
    
    
    (9,471
    )
    
    
    (7,372
    )Total
    
    $
    53,959
    
    
    $
    76,240
    
    
    $
    129,197
    
    
    $
    190,088
 8




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NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
 April 30, 2007
    
    
    July 31, 2006Identifiable Assets:Recreation vehicles:Towables
    
    $
    495,900
    
    
    $
    483,324Motorized
    
    
    177,404
    
    
    
    150,058Total recreation vehicles
    
    
    673,304
    
    
    
    633,382Buses
    
    
    104,659
    
    
    
    103,861Corporate
    
    
    286,847
    
    
    
    267,482Total
    
    $
    1,064,810
    
    
    $
    1,004,725
 7.
    
    Treasury SharesIn the first quarter of fiscal 2007, the Company purchased 40,400 shares and held them as
treasury stock at a cost of $1,630, an average cost of $40.33 per share.8.
    
    Investments  Short TermEffective August 1, 2006, the Company began classifying all short term investment purchases as
available-for-sale. This change was based on the Companys decision to change its investment
strategy from one of generating profits on short term differences in price to one of preserving
capital.At April 30, 2007, all investments  short term are comprised of auction rate securities that
are classified as available-for-sale and are reported at fair value in accordance with SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities. The Company purchases
its auction rate securities at par, which either mature or reset at par, and generally there
are no unrealized or realized gains or losses to report. Cost is determined on the specific
identification basis. Interest income is accrued as earned. All of the available-for-sale
securities held at April 30, 2007 mature within one year.As of July 31, 2006, the Company held short-term debt and equity investments classified as
trading securities. These trading securities were all sold or matured during the three months
ended October 31, 2006 and were recorded as trading securities activity. Realized and
unrealized gains and losses on trading securities are included in earnings. Dividend and
interest income were recognized when earned.9.
    
    Goodwill and Other Intangible AssetsThe components of other intangible assets are as follows:
 April 30, 2007
    
    July 31, 2006Accumulated
    
    
    
    AccumulatedCost
    
    Amortization
    
    Cost
    
    AmortizationAmortized Intangible Assets:Non-compete agreements
    
    $
    15,889
    
    
    $
    13,718
    
    
    $
    15,889
    
    
    $
    13,048
 Three Months
    
    Three Months
    
    Nine Months
    
    Nine MonthsEnded
    
    Ended
    
    Ended
    
    EndedApril 30, 2007
    
    April 30, 2006
    
    April 30, 2007
    
    April 30, 2006Non-compete Agreements:Amortization Expense
    
    $
    216
    
    
    $
    237
    
    
    $
    670
    
    
    $
    712
 Non-compete agreements are amortized on a straight-line basis.
 9




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##### Table of Contents



NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Amortization Expense:
 For the year ending July 2007
    
    $
    887For the year ending July 2008
    
    $
    828For the year ending July 2009
    
    $
    492For the year ending July 2010
    
    $
    337For the year ending July 2011
    
    $
    239
 There was no change in the carrying amount of goodwill and trademarks for the nine month period
ended April 30, 2007.As of April 30, 2007, Goodwill and Trademarks by segments totaled as follows:
 Goodwill
    
    
    TrademarksRecreation Vehicles:Towables
    
    $
    143,795
    
    
    $
    10,237Motorized
    
    
    17,252
    
    
    
    2,600Total Recreation Vehicles
    
    
    161,047
    
    
    
    12,837Bus
    
    
    4,616
    
    
    
    1,063Total
    
    $
    165,663
    
    
    $
    13,900
 10.
    
    WarrantyThor provides customers of our products with a warranty covering defects in material or
workmanship for periods generally ranging from one to two years, with longer warranties on
certain structural components. We record a liability based on our best estimate of the amounts
necessary to settle future and existing claims on products sold as of the balance sheet date.
Factors we use in estimating the warranty liability include a history of units sold, existing
dealer inventory, average cost incurred and a profile of the distribution of warranty
expenditures over the warranty period. A significant increase in dealer shop rates, the cost
of parts or the frequency of claims could have a material adverse impact on our operating
results for the period or periods in which such claims or additional costs materialize.
Management believes that the warranty reserve is adequate; however, actual claims incurred
could differ from estimates, requiring adjustments to the reserves. Warranty reserves are
reviewed and adjusted as necessary on a quarterly basis.
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 30, 2007
    
    
    April 30, 2006
    
    
    April 30, 2007
    
    
    April 30, 2006Beginning Balance
    
    $
    59,061
    
    
    $
    53,882
    
    
    $
    59,795
    
    
    $
    55,118Provision
    
    
    17,049
    
    
    
    17,428
    
    
    
    50,243
    
    
    
    45,281Payments
    
    
    15,386
    
    
    
    14,470
    
    
    
    49,314
    
    
    
    43,559Ending Balance
    
    $
    60,724
    
    
    $
    56,840
    
    
    $
    60,724
    
    
    $
    56,840
 11.
    
    Commercial CommitmentsOur principal commercial commitments at April 30, 2007 are summarized in the following chart:
 Total
    
    
    Term ofCommitment
    
    Amount Committed
    
    
    GuaranteeGuarantee on dealer financing
    
    $
    2,972
    
    
    less than 1 yearStandby repurchase obligation
on dealer financing
    
    $
    956,975
    
    
    less than 1 year
 10




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##### Table of Contents



NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
 The Company records repurchase and guarantee reserves based on prior experience and known
current events. The combined repurchase and recourse reserve balances are approximately $2,212
and $1,563 as of April 30, 2007 and July 31, 2006, respectively.
 Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedApril 30, 2007
    
    
    April 30, 2006
    
    
    April 30, 2007
    
    
    April 30, 2006Cost of units repurchased
    
    $
    2,313
    
    
    $
    881
    
    
    $
    10,402
    
    
    $
    2,984Realization on units resold
    
    
    2,245
    
    
    
    749
    
    
    
    9,262
    
    
    
    2,555Losses due to repurchase
    
    $
    68
    
    
    $
    132
    
    
    $
    1,140
    
    
    $
    429
 12.
    
    Provision for Income Taxes
 In April 2007, the Company reached an agreement in principle to settle a tax dispute with the
State of Indiana regarding filing positions taken on its Indiana state income tax returns. It
is anticipated that when the agreement is finalized, tax reserves of approximately $6,000 will
be reversed by the Company, decreasing the provision for income taxes.
 11




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Executive Overview
      Restatement
  12




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Trends and Business Outlook
    13




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##### Table of Contents



Three Months Ended April 30, 2007 vs.
 Three Months Ended April 30, 2006
 Three Months Ended
    
    
    Three Months Ended
    
    
    ChangeApril 30, 2007
    
    
    April 30, 2006
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    524,041
    
    
    $
    615,043
    
    
    $
    (91,002
    )
    
    
    (14.8
    )Motorized
    
    
    159,642
    
    
    
    161,593
    
    
    
    (1,951
    )
    
    
    (1.2
    )Total Recreation Vehicles
    
    
    683,683
    
    
    
    776,636
    
    
    
    (92,953
    )
    
    
    (12.0
    )Buses
    
    
    105,960
    
    
    
    80,979
    
    
    
    24,981
    
    
    
    30.8Total
    
    $
    789,643
    
    
    $
    857,615
    
    
    $
    (67,972
    )
    
    
    (7.9
    )# OF UNITS:Recreation VehiclesTowables
    
    
    24,530
    
    
    
    31,729
    
    
    
    (7,199
    )
    
    
    (22.7
    )Motorized
    
    
    2,153
    
    
    
    2,190
    
    
    
    (37
    )
    
    
    (1.7
    )Total Recreation Vehicles
    
    
    26,683
    
    
    
    33,919
    
    
    
    (7,236
    )
    
    
    (21.3
    )Buses
    
    
    1,737
    
    
    
    1,438
    
    
    
    299
    
    
    
    20.8Total
    
    
    28,420
    
    
    
    35,357
    
    
    
    (6,937
    )
    
    
    (19.6
    )
 % of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    SegmentNet Sales
    
    
    
    
    
    
    Net SalesGROSS PROFIT:Recreation VehiclesTowables
    
    $
    77,258
    
    
    
    14.7
    
    
    $
    101,841
    
    
    
    16.6
    
    
    $
    (24,583
    )
    
    
    (24.1
    )Motorized
    
    
    16,395
    
    
    
    10.3
    
    
    
    15,830
    
    
    
    9.8
    
    
    
    565
    
    
    
    3.6Total Recreation Vehicles
    
    
    93,653
    
    
    
    13.7
    
    
    
    117,671
    
    
    
    15.2
    
    
    
    (24,018
    )
    
    
    (20.4
    )Buses
    
    
    9,327
    
    
    
    8.8
    
    
    
    6,438
    
    
    
    8.0
    
    
    
    2,889
    
    
    
    44.9Total
    
    $
    102,980
    
    
    
    13.0
    
    
    $
    124,109
    
    
    
    14.5
    
    
    $
    (21,129
    )
    
    
    (17.0
    )SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    29,275
    
    
    
    5.6
    
    
    $
    33,914
    
    
    
    5.5
    
    
    $
    (4,639
    )
    
    
    (13.7
    )Motorized
    
    
    9,175
    
    
    
    5.7
    
    
    
    8,074
    
    
    
    5.0
    
    
    
    1,101
    
    
    
    13.7Total Recreation Vehicles
    
    
    38,450
    
    
    
    5.6
    
    
    
    41,988
    
    
    
    5.4
    
    
    
    (3,538
    )
    
    
    (8.4
    )Buses
    
    
    3,655
    
    
    
    3.4
    
    
    
    4,092
    
    
    
    5.1
    
    
    
    (437
    )
    
    
    (10.7
    )Corporate
    
    
    9,729
    
    
    
    
    
    
    
    4,237
    
    
    
    
    
    
    
    5,492
    
    
    
    129.6Total
    
    $
    51,834
    
    
    
    6.6
    
    
    $
    50,317
    
    
    
    5.9
    
    
    $
    1,517
    
    
    
    3.0INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    48,086
    
    
    
    9.2
    
    
    $
    67,986
    
    
    
    11.1
    
    
    $
    (19,900
    )
    
    
    (29.3
    )Motorized
    
    
    7,220
    
    
    
    4.5
    
    
    
    7,756
    
    
    
    4.8
    
    
    
    (536
    )
    
    
    (6.9
    )Total Recreation Vehicles
    
    
    55,306
    
    
    
    8.1
    
    
    
    75,742
    
    
    
    9.8
    
    
    
    (20,436
    )
    
    
    (26.9
    )Buses
    
    
    5,447
    
    
    
    5.1
    
    
    
    2,034
    
    
    
    2.5
    
    
    
    3,413
    
    
    
    167.8Corporate
    
    
    (6,794
    )
    
    
    
    
    
    
    (1,536
    )
    
    
    
    
    
    
    (5,258
    )
    
    
    (342.4
    )Total
    
    $
    53,959
    
    
    
    6.8
    
    
    $
    76,240
    
    
    
    8.9
    
    
    $
    (22,281
    )
    
    
    (29.2
    )
 As of
    
    
    As of
    
    
    ChangeApril 30, 2007
    
    
    April 30, 2006
    
    
    Amount
    
    
    %ORDER BACKLOGRecreation VehiclesTowables
    
    $
    266,448
    
    
    $
    369,034
    
    
    $
    (102,586
    )
    
    
    (27.8
    )Motorized
    
    
    111,339
    
    
    
    132,109
    
    
    
    (20,770
    )
    
    
    (15.7
    )Total Recreation Vehicles
    
    
    377,787
    
    
    
    501,143
    
    
    
    (123,356
    )
    
    
    (24.6
    )Buses
    
    
    214,755
    
    
    
    196,687
    
    
    
    18,068
    
    
    
    9.2Total
    
    $
    592,542
    
    
    $
    697,830
    
    
    $
    (105,288
    )
    
    
    (15.1
    )
 14




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##### Table of Contents



CONSOLIDATED
    Segment Reporting
 RECREATION VEHICLES
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    7.9
    %
    
    
    (22.7
    )%
    
    
    (14.8
    )%Motorized
    
    
    .5
    %
    
    
    (1.7
    )%
    
    
    (1.2
    )%
 TOWABLE RECREATION VEHICLES
  15
    Table of Contents  MOTORIZED RECREATION VEHICLES
    BUSES
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    10.0
    %
    
    
    20.8
    %
    
    
    30.8
    %
    Nine Months Ended April 30, 2007 vs.
 Nine Months Ended April 30, 2006
 Nine Months Ended
    
    
    Nine Months Ended
    
    
    ChangeApril 30, 2007
    
    
    April 30, 2006
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    1,397,936
    
    
    $
    1,606,140
    
    
    $
    (208,204
    )
    
    
    (13.0
    )Motorized
    
    
    412,259
    
    
    
    424,528
    
    
    
    (12,269
    )
    
    
    (2.9
    )Total Recreation Vehicles
    
    
    1,810,195
    
    
    
    2,030,668
    
    
    
    (220,473
    )
    
    
    (10.9
    )Buses
    
    
    291,213
    
    
    
    230,317
    
    
    
    60,896
    
    
    
    26.4Total
    
    $
    2,101,408
    
    
    $
    2,260,985
    
    
    $
    (159,577
    )
    
    
    (7.1
    )
 16
    Table of Contents  Nine Months Ended
    
    
    Nine Months Ended
    
    
    ChangeApril 30, 2007
    
    
    April 30, 2006
    
    
    Amount
    
    
    %# OF UNITS:Recreation VehiclesTowables
    
    
    65,456
    
    
    
    83,289
    
    
    
    (17,833
    )
    
    
    (21.4
    )Motorized
    
    
    5,529
    
    
    
    5,695
    
    
    
    (166
    )
    
    
    (2.9
    )Total Recreation Vehicles
    
    
    70,985
    
    
    
    88,984
    
    
    
    (17,999
    )
    
    
    (20.0
    )Buses
    
    
    4,825
    
    
    
    4,227
    
    
    
    598
    
    
    
    14.2Total
    
    
    75,810
    
    
    
    93,211
    
    
    
    (17,401
    )
    
    
    (18.7
    )
 % of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    SegmentNet Sales
    
    
    
    
    
    
    Net SalesGROSS PROFIT:Recreation VehiclesTowables
    
    $
    191,656
    
    
    
    13.7
    
    
    $
    263,105
    
    
    
    16.4
    
    
    
    (71,449
    )
    
    
    (27.2
    )Motorized
    
    
    38,888
    
    
    
    9.4
    
    
    
    39,007
    
    
    
    9.2
    
    
    
    (119
    )
    
    
    (.3
    )Total Recreation Vehicles
    
    
    230,544
    
    
    
    12.7
    
    
    
    302,112
    
    
    
    14.9
    
    
    
    (71,568
    )
    
    
    (23.7
    )Buses
    
    
    22,773
    
    
    
    7.8
    
    
    
    17,344
    
    
    
    7.5
    
    
    
    5,429
    
    
    
    31.3Total
    
    $
    253,317
    
    
    
    12.1
    
    
    $
    319,456
    
    
    
    14.1
    
    
    
    (66,139
    )
    
    
    (20.7
    )SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    81,659
    
    
    
    5.8
    
    
    $
    90,167
    
    
    
    5.6
    
    
    $
    (8,508
    )
    
    
    (9.4
    )Motorized
    
    
    22,118
    
    
    
    5.4
    
    
    
    20,711
    
    
    
    4.9
    
    
    
    1,407
    
    
    
    6.8Total Recreation Vehicles
    
    
    103,777
    
    
    
    5.7
    
    
    
    110,878
    
    
    
    5.5
    
    
    
    (7,101
    )
    
    
    (6.4
    )Buses
    
    
    10,659
    
    
    
    3.7
    
    
    
    10,709
    
    
    
    4.6
    
    
    
    (50
    )
    
    
    (.5
    )Corporate
    
    
    18,267
    
    
    
    
    
    
    
    14,303
    
    
    
    
    
    
    
    3,964
    
    
    
    27.7Total
    
    $
    132,703
    
    
    
    6.3
    
    
    $
    135,890
    
    
    
    6.0
    
    
    $
    (3,187
    )
    
    
    (2.3
    )INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    110,290
    
    
    
    7.9
    
    
    $
    173,154
    
    
    
    10.8
    
    
    $
    (62,864
    )
    
    
    (36.3
    )Motorized
    
    
    16,756
    
    
    
    4.1
    
    
    
    18,293
    
    
    
    4.3
    
    
    
    (1,537
    )
    
    
    (8.4
    )Total Recreation Vehicles
    
    
    127,046
    
    
    
    7.0
    
    
    
    191,447
    
    
    
    9.4
    
    
    
    (64,401
    )
    
    
    (33.6
    )Buses
    
    
    11,622
    
    
    
    4.0
    
    
    
    6,013
    
    
    
    2.6
    
    
    
    5,609
    
    
    
    93.3Corporate
    
    
    (9,471
    )
    
    
    
    
    
    
    (7,372
    )
    
    
    
    
    
    
    (2,099
    )
    
    
    (28.5
    )Total
    
    $
    129,197
    
    
    
    6.1
    
    
    $
    190,088
    
    
    
    8.4
    
    
    $
    (60,891
    )
    
    
    (32.0
    )
 CONSOLIDATED
    17
    Table of Contents  Segment Reporting
 RECREATION VEHICLES
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    8.4
    %
    
    
    (21.4
    )%
    
    
    (13.0
    )%Motorized
    
    
    
    %
    
    
    (2.9
    )%
    
    
    (2.9
    )%
 TOWABLE RECREATION VEHICLES
    MOTORIZED RECREATION VEHICLES
    18
    Table of Contents  BUSES
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    12.2
    %
    
    
    14.2
    %
    
    
    26.4
    %
    Financial Condition and Liquidity
    Critical Accounting Principles
  19
    Table of Contents  Impairment of Goodwill, Trademarks and Long-Lived Assets
  Insurance Reserves
  Warranty
  Income Taxes
  Revenue Recognition
  1)
    
    An order for a product has been received from a dealer;2)
    
    Written or oral approval for payment has been received from the dealers flooring
institution;
 20
    Table of Contents  3)
    
    A common carrier signs the delivery ticket accepting responsibility for the product as
agent for the dealer; and4)
    
    The product is removed from the Companys property for delivery to the dealer who
placed the order.
  Repurchase Commitments
  Forward Looking Statements
  
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  21
    Table of Contents  ITEM 4. Controls and Procedures
    Segregation of Duties.
  22
    Table of Contents  
    
    The Company has terminated the employment of the Dutchmen Vice President of Finance
and has hired a new Vice President of Finance at Dutchmen;
    
    The Company has eliminated the excessive accounting and information system access
rights found to be available to the Dutchmen Vice President of Finance;
    
    Since discovery of the activities of the former Dutchmen Vice President of Finance,
the Company has assigned a member of its internal audit department to Dutchmen to
assist in implementing full segregation of duties in Dutchmens accounting function;
    
    The Company is modifying the duties of accounting personnel to improve segregation
of duties and modifying certain information access rights at certain of its other
operating subsidiaries;
    
    The Company is providing additional training on fraud risk and awareness and
assisting management and other key personnel to understand the lessons learned through
the Dutchmen review;
    
    To improve the Companys oversight of internal controls at its subsidiaries, the
Companys Board of Directors has hired a professional services firm to lead and
coordinate ongoing compliance efforts under Sarbanes-Oxley section 404 and partner with
the internal audit function of the Company;
    
    More frequent and in-depth periodic, unannounced internal audits of controls will be
conducted at the subsidiary level;
 23
    Table of Contents  
    
    The Company has enhanced its corporate level monitoring of the operating
subsidiaries accounts receivable, accounts payable and cash reconciliations, including
verification that financial information submitted by the operating subsidiaries agrees
with the financial information recorded in the operating subsidiaries information
systems; and
    
    The Company has modified its reporting relationships so that heads of subsidiary
accounting departments report directly to the Chief Financial Officer of the Company as
opposed to subsidiary level presidents.
 24
    Table of Contents  PART II    Other Information
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (c) ISSUER PURCHASES OF EQUITY SECURITIES
 (c) Total Number
    
    (d) Maximum Numberof Shares
    
    (or Approximate(a) Total
    
    (b)
    
    (or Units)
    
    Dollar Value)Number
    
    Average
    
    Purchased as
    
    of Shares (or Units)of Shares
    
    Price Paid
    
    Part of Publicly
    
    that May Yet Be(or Units)
    
    Per Share
    
    Announced Plans
    
    Purchased Under thePeriod
    
    Purchased
    
    (or Unit)
    
    or Programs (1)
    
    Plans or ProgramsFebruary 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200March 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200April 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200
 
 (1)
    
    On June 26, 2006 our Board of Directors authorized the repurchase of an additional
2,000,000 shares extending over a 24-month period before expiring. At April 30, 2007,
1,947,200 shares of common stock remained authorized for repurchase under the repurchase
program. 
 ITEM 5. Other Information
  
 ITEM 6. Exhibits
 Exhibit
    
    Description31.1
    
    Chief Executive Officers Certification filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
 25
    Table of Contents  Exhibit
    
    Description31.2
    
    Chief Financial Officers Certification filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officers Certification furnished pursuant to Section 906 of the
Sarbanes-Oxley Act 2002.32.2
    
    Chief Financial Officers Certification furnished pursuant to Section 906 of the
Sarbanes-Oxley Act 2002.99.1
    
    Copy of press release issued by the Company on May 2, 2007.
 26
    Table of Contents  SIGNATURES
  THOR INDUSTRIES, INC.
          (Registrant)DATE:   July 3, 2007
    By:
    /s/ Wade F. B. ThompsonWade F. B. ThompsonChairman of the Board, President
and Chief Executive Officer DATE:    July 3, 2007
    By:
    /s/ Walter L. BennettWalter L. BennettExecutive Vice President,
Secretary and Chief Financial Officer 27