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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for
the quarterly period ended January 31, 2009.
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 for the transition period from  to .
 COMMISSION FILE NUMBER 1-9235
 THOR INDUSTRIES, INC.
  Delaware
    
    93-0768752(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)419 West Pike Street, Jackson Center, OH
    
    45334-0629(Address of principal executive offices)
    
    (Zip Code)
 
  þ o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  o þ
  Class
    
    Outstanding at 1/31/2009Common stock, par value
$.10 per share
    
    55,440,924 shares




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TABLE OF CONTENTS  PART I    Financial InformationITEM 1. Financial StatementsITEM 3. Quantitative and Qualitative Disclosures About Market RiskITEM 4. Controls and ProceduresPART II    Other InformationITEM 1. LEGAL PROCEEDINGS.ITEM 1A. RISK FACTORS.ITEM 4. Submission of Matters to a Vote of Security HoldersITEM 6. EXHIBITSSIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 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
 January 31, 2009
    
    
    July 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    191,099
    
    
    $
    189,620Accounts receivable:Trade
    
    
    51,372
    
    
    
    136,866Other
    
    
    3,270
    
    
    
    9,489Inventories
    
    
    153,779
    
    
    
    152,582Taxes receivable
    
    
    2,820
    
    
    
    Note receivable
    
    
    10,000
    
    
    
    Deferred income taxes and other
    
    
    37,752
    
    
    
    39,363Total current assets
    
    
    450,092
    
    
    
    527,920Property:Land
    
    
    20,296
    
    
    
    21,090Buildings and improvements
    
    
    132,985
    
    
    
    135,167Machinery and equipment
    
    
    73,545
    
    
    
    71,965Total cost
    
    
    226,826
    
    
    
    228,222Accumulated depreciation
    
    
    79,664
    
    
    
    74,992Property, net
    
    
    147,162
    
    
    
    153,230Investment in joint ventures
    
    
    2,158
    
    
    
    3,269Other assets:Long term investments
    
    
    118,961
    
    
    
    126,403Goodwill
    
    
    158,128
    
    
    
    158,128Non-compete agreements
    
    
    801
    
    
    
    1,093Trademarks
    
    
    13,336
    
    
    
    13,900Long term note receivable
    
    
    10,000
    
    
    
    Other
    
    
    6,205
    
    
    
    12,619Total other assets
    
    
    307,431
    
    
    
    312,143TOTAL ASSETS
    
    $
    906,843
    
    
    $
    996,562LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    68,812
    
    
    $
    96,158Accrued liabilities:Taxes
    
    
    
    
    
    
    26,050Compensation and related items
    
    
    20,011
    
    
    
    24,845Product warranties
    
    
    49,798
    
    
    
    61,743Promotions and rebates
    
    
    9,570
    
    
    
    10,781Product/property liability and related
    
    
    11,907
    
    
    
    12,560Other
    
    
    16,204
    
    
    
    16,279Total current liabilities
    
    
    176,302
    
    
    
    248,416Long Term Liabilities:Unrecognized tax benefits
    
    
    33,267
    
    
    
    29,332Other
    
    
    13,751
    
    
    
    19,118Total long term liabilities
    
    
    47,018
    
    
    
    48,450Stockholders equity:Common stock  authorized 250,000,000 shares;
issued 57,318,263 shares @ 1/31/09 and 57,317,263
shares @ 7/31/08; par value of $.10 per share
    
    
    5,732
    
    
    
    5,732Additional paid-in capital
    
    
    93,980
    
    
    
    93,683Retained earnings
    
    
    658,427
    
    
    
    675,928Accumulated other comprehensive income
    
    
    (932
    )
    
    
    (1,963
    )Less Treasury shares of 1,877,339 @ 1/31/09 & 7/31/08
    
    
    (73,684
    )
    
    
    (73,684
    )Total stockholders equity
    
    
    683,523
    
    
    
    699,696TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    906,843
    
    
    $
    996,562
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THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS  FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2009 AND 2008
 Three Months Ended January 31
    
    
    Six Months Ended January 312009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    226,683
    
    
    $
    599,170
    
    
    $
    665,500
    
    
    $
    1,362,906Cost of products sold
    
    
    218,526
    
    
    
    529,453
    
    
    
    617,280
    
    
    
    1,191,914Gross profit
    
    
    8,157
    
    
    
    69,717
    
    
    
    48,220
    
    
    
    170,992Selling, general and
administrative expenses
    
    
    30,199
    
    
    
    39,819
    
    
    
    64,665
    
    
    
    85,229Impairment of trademarks
    
    
    564
    
    
    
    
    
    
    
    564
    
    
    
    Gain on sale of property
    
    
    373
    
    
    
    2,308
    
    
    
    373
    
    
    
    2,308Interest income
    
    
    1,484
    
    
    
    3,161
    
    
    
    3,501
    
    
    
    7,357Interest expense
    
    
    112
    
    
    
    353
    
    
    
    242
    
    
    
    713Net impairment of auction rate securities
    
    
    1,853
    
    
    
    
    
    
    
    1,853
    
    
    
    Other income (expense)
    
    
    (237
    )
    
    
    192
    
    
    
    529
    
    
    
    971Income (loss) before income taxes
    
    
    (22,951
    )
    
    
    35,206
    
    
    
    (14,701
    )
    
    
    95,686Provision (benefit) for income taxes
    
    
    (8,091
    )
    
    
    13,604
    
    
    
    (4,961
    )
    
    
    35,875Net income (loss)
    
    $
    (14,860
    )
    
    $
    21,602
    
    
    $
    (9,740
    )
    
    $
    59,811Average common shares outstanding:Basic
    
    
    55,435,315
    
    
    
    55,758,534
    
    
    
    55,421,946
    
    
    
    55,757,936Diluted
    
    
    55,435,315
    
    
    
    55,910,429
    
    
    
    55,421,946
    
    
    
    55,937,211Earnings (loss) per common share:Basic
    
    $
    (.27
    )
    
    $
    .39
    
    
    $
    (.18
    )
    
    $
    1.07Diluted
    
    $
    (.27
    )
    
    $
    .39
    
    
    $
    (.18
    )
    
    $
    1.07Regular dividends declared
and paid per common share:
    
    $
    .07
    
    
    $
    .07
    
    
    $
    .14
    
    
    $
    .14Special dividends declared per common share:
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2.00
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THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS  FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2009 AND 2008
 Six Months Ended January 312009
    
    
    2008Cash flows from operating activities:Net income (loss)
    
    $
    (9,740
    )
    
    $
    59,811Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation
    
    
    6,680
    
    
    
    6,692Amortization
    
    
    292
    
    
    
    413Trademark impairment
    
    
    564
    
    
    
    Deferred income taxes
    
    
    
    
    
    
    (11,961
    )Gain on disposition of assets
    
    
    (340
    )
    
    
    (2,344
    )Net loss on trading investments
    
    
    1,853
    
    
    
    Stock based compensation
    
    
    270
    
    
    
    162Changes in non cash assets and liabilities,
net of effect from acquisitions:Proceeds from disposition of trading investments
    
    
    5,550
    
    
    
    Accounts receivable
    
    
    91,713
    
    
    
    (10,281
    )Note receivable
    
    
    (10,000
    )
    
    
    Inventories
    
    
    (1,197
    )
    
    
    (31,995
    )Prepaids and other
    
    
    7,558
    
    
    
    (5,788
    )Accounts payable
    
    
    (26,951
    )
    
    
    14,843Accrued liabilities
    
    
    (43,653
    )
    
    
    (3,906
    )Other liabilities
    
    
    (6,954
    )
    
    
    4,754Net cash provided by operating activities
    
    
    15,645
    
    
    
    20,400Cash flows from investing activities:Purchases of property, plant & equipment
    
    
    (3,562
    )
    
    
    (9,439
    )Proceeds from disposition of assets
    
    
    2,753
    
    
    
    4,983Purchases of available for sale investments
    
    
    
    
    
    
    (29,900
    )Proceeds from sale of available for sale investments
    
    
    4,450
    
    
    
    58,125Loan transaction
    
    
    (10,000
    )
    
    
    Proceeds on dissolution of joint venture
    
    
    1,578
    
    
    
    Net cash (used in) provided by investing activities
    
    
    (4,781
    )
    
    
    23,769Cash flows from financing activities:Cash dividends
    
    
    (7,761
    )
    
    
    (119,513
    )Purchase of common stock held as treasury shares
    
    
    
    
    
    
    (11,805
    )Proceeds from issuance of common stock
    
    
    27
    
    
    
    2,185Net cash used in financing activities
    
    
    (7,734
    )
    
    
    (129,133
    )Effect of exchange rate changes
    
    
    (1,651
    )
    
    
    1,010Net increase (decrease) in cash and equivalents
    
    
    1,479
    
    
    
    (83,954
    )Cash and equivalents, beginning of period
    
    
    189,620
    
    
    
    171,889Cash and equivalents, end of period
    
    $
    191,099
    
    
    $
    87,935Supplemental cash flow information:Income taxes paid
    
    $
    18,270
    
    
    $
    46,145Interest paid
    
    
    242
    
    
    
    713Non cash transactions:Capital expenditures in accounts payable
    
    $
    148
    
    
    $
    167
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    The July 31, 2008 amounts are derived from the annual audited financial statements. 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 for the year ended July 31, 2008. The results of
operations for the three and six months ended January 31, 2009 are not necessarily indicative
of the results for the full year.
 2.
    
    Major classifications of inventories are:
 January 31, 2009
    
    
    July 31, 2008Raw materials
    
    $
    73,578
    
    
    $
    79,356Chassis
    
    
    37,410
    
    
    
    37,562Work in process
    
    
    43,350
    
    
    
    51,162Finished goods
    
    
    28,606
    
    
    
    13,584Total
    
    
    182,944
    
    
    
    181,664Less excess of FIFO costs
over LIFO costs
    
    
    29,165
    
    
    
    29,082Total inventories
    
    $
    153,779
    
    
    $
    152,582
 3.
    
    Earnings Per Share
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJanuary 31, 2009
    
    January 31, 2008
    
    January 31, 2009
    
    January 31, 2008Weighted average shares
outstanding for basic
earnings per share
    
    
    55,435,315
    
    
    
    55,758,534
    
    
    
    55,421,946
    
    
    
    55,757,936Stock options and
restricted stock
    
    
    
    
    
    
    151,895
    
    
    
    
    
    
    
    179,275Total  For diluted shares
    
    
    55,435,315
    
    
    
    55,910,429
    
    
    
    55,421,946
    
    
    
    55,937,211
 4.
    
    Comprehensive Income
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2009
    
    
    January 31, 2008
    
    
    January 31, 2009
    
    
    January 31, 2008Net income
    
    $
    (14,860
    )
    
    $
    21,602
    
    
    $
    (9,740
    )
    
    $
    59,811Foreign currency
translation adjustment
    
    
    (102
    )
    
    
    (1,009
    )
    
    
    (1,651
    )
    
    
    1,010Change in temporary impairment
of investments
    
    
    3,047
    
    
    
    
    
    
    
    2,682
    
    
    
    Comprehensive income
    
    $
    (11,915
    )
    
    $
    20,593
    
    
    $
    (8,709
    )
    
    $
    60,821
 As described in Note 6, the Auction Rate Securities (ARS) purchased from UBS were
transferred to trading securities and the related other-than-temporary impairment was
recorded against operations for the quarter. This resulted in a decrease of the amount
previously recorded in other comprehensive income in respect of these securities.
 5.
    
    Segment Information
 The 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, Keystone and Komfort. The motorized
recreation vehicle
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segment consists of product lines from the following operating companies that have been
aggregated: Airstream, Damon and Four Winds. The bus segment consists of the following
operating companies that have been aggregated: Champion Bus, ElDorado California, ElDorado
Kansas and Goshen Coach.
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2009
    
    
    January 31, 2008
    
    
    January 31, 2009
    
    
    January 31, 2008Net Sales:Recreation vehicles:Towables
    
    $
    114,663
    
    
    $
    394,441
    
    
    $
    400,200
    
    
    $
    918,152Motorized
    
    
    19,910
    
    
    
    110,825
    
    
    
    64,775
    
    
    
    251,325Total recreation vehicles
    
    
    134,573
    
    
    
    505,266
    
    
    
    464,975
    
    
    
    1,169,477Buses
    
    
    92,110
    
    
    
    93,904
    
    
    
    200,525
    
    
    
    193,429Total
    
    $
    226,683
    
    
    $
    599,170
    
    
    $
    665,500
    
    
    $
    1,362,906
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2009
    
    
    January 31, 2008
    
    
    January 31, 2009
    
    
    January 31, 2008Income (loss) Before Income Taxes:Recreation vehicles:Towables
    
    $
    (9,551
    )
    
    $
    30,492
    
    
    $
    2,823
    
    
    $
    81,304Motorized
    
    
    (10,289
    )
    
    
    3,561
    
    
    
    (16,891
    )
    
    
    10,414Total recreation vehicles
    
    
    (19,840
    )
    
    
    34,053
    
    
    
    (14,068
    )
    
    
    91,718Buses
    
    
    3,723
    
    
    
    3,556
    
    
    
    9,020
    
    
    
    7,695Corporate
    
    
    (6,834
    )
    
    
    (2,403
    )
    
    
    (9,653
    )
    
    
    (3,727
    )Total
    
    $
    (22,951
    )
    
    $
    35,206
    
    
    $
    (14,701
    )
    
    $
    95,686
 January 31, 2009
    
    
    July 31, 2008Identifiable Assets:Recreation vehicles:Towables
    
    $
    340,907
    
    
    $
    409,793Motorized
    
    
    94,643
    
    
    
    108,740Total recreation vehicles
    
    
    435,550
    
    
    
    518,533Buses
    
    
    93,377
    
    
    
    110,647Corporate
    
    
    377,916
    
    
    
    367,382Total
    
    $
    906,843
    
    
    $
    996,562
 6.
    
    Investments and Fair Value Measurements
 Effective August 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements (SFAS
157). In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, Effective Date of
FASB Statement No. 157, which provides a one year deferral of the effective date of SFAS 157
for non-financial assets and non-financial liabilities, except those that are recognized or
disclosed in the financial statements at fair value at least annually. Therefore, the Company
has adopted the provisions of SFAS 157 with respect to its financial assets and liabilities
only. The adoption of this statement did not have a material impact on the Companys
consolidated results of operations or financial condition. On October 10, 2008, the FASB
issued FSP No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That
Asset is Not Active, (FSP 157-3) that clarifies the application of SFAS 157 in a market that
is not active and provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not active. The FSP
157-3 is applicable to the valuation of
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auction rate securities held by the Company for which
there was no active market as of January 31, 2009. FSP 157-3 is effective upon issuance,
including prior periods for which the financial statements have not been issued. The adoption
of FSP 157-3 during the three month
period ended January 31, 2009 did not have a material impact on the Companys consolidated
results of operations or financial condition.Effective August 1, 2008, the Company adopted SFAS No. 159 The Fair Value Option for
Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 allows an entity the
irrevocable option to elect fair value for the initial and subsequent measurement for
specified financial assets and liabilities on a contract-by-contract basis. The Company
did not elect to adopt the fair value option under this Statement at the adoption date.
On November 14, 2008, the Company adopted the fair value option related to the Put Rights
as further discussed in this Note.
 INVESTMENTS AND FAIR VALUE MEASUREMENTSSFAS 157 defines fair value, establishes a framework for measuring fair value under generally
accepted accounting principles and enhances disclosures about fair value measurements. Fair
value is defined under SFAS 157 as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants on the
measurement date. Valuation techniques used to measure fair value under SFAS 157 must
maximize the use of observable inputs and minimize the use of unobservable inputs. The
standard describes a fair value hierarchy based on three levels of inputs, of which the first
two are considered observable and the last unobservable, that may be used to measure fair
value which are the following:Level 1  Quoted prices in active markets for identical assets or liabilities.Level 2  Inputs other than Level 1 that are observable, either directly or indirectly, such
as quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data
for substantially the full term of the assets or liabilities.Level 3  Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.In accordance with SFAS 157, the following table represents the Companys fair value
hierarchy for its financial assets (cash equivalents and investments) measured at fair value
on a recurring basis as of January 31, 2009:
 SignificantQuoted Market
    
    
    Other
    
    
    SignificantPrices in
    
    
    Observable
    
    
    Unobservable
    
    
    Fair Value atActive Markets
    
    
    Inputs
    
    
    Inputs
    
    
    January 31,(Level1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2009Cash & cash equivalents
    
    $
    191,099
    
    
    $
    
    
    
    $
    
    
    
    $
    191,099Auction rate securities
(including Put Rights)
    
    
    
    
    
    
    
    
    
    
    118,961
    
    
    
    118,961Total
    
    $
    191,099
    
    
    $
    
    
    
    $
    118,961
    
    
    $
    310,060
 Our cash equivalents are comprised of money market funds traded in an active market with no
restrictions and are classified as Level 1.In addition to the above investments, the Company holds non-qualified retirement plan assets of
$4,962 at January 31, 2009 ($13,276 at July 31, 2008). These assets, which are held for
the benefit of certain employees of the Company, represent Level 1 investments primarily in
mutual funds which are valued using observable market prices in active markets. They are
included in Other Assets on the Consolidated Balance Sheet.
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Level 3 assets consist of municipal bonds with an auction reset feature (auction rate
securities or ARS) whose underlying assets are primarily student loans which are
substantially backed by the federal government. Auction-rate securities are long-term floating
rate bonds tied to short-term interest rates. After the initial issuance of the securities, the interest rate on the
securities is reset periodically, at intervals established at the time of issuance based on
market demand for a reset period. Auction-rate securities are bought and sold in the
marketplace through a competitive bidding process often referred to as a Dutch auction. If
there is insufficient interest in the securities at the time of an auction, the auction may not
be completed and the rates may be reset to predetermined penalty or maximum rates based on
mathematical formulas in accordance with each securitys prospectus.The following table provides a reconciliation of the beginning and ending balances for the
assets measured at fair value using significant unobservable inputs (Level 3 financial assets):
 Fair Value Measurements atReporting Date UsingSignificant Unobservable Inputs(Level 3)Balances at August 1, 2008
    
    $
    126,403Net change in other comprehensive income
    
    
    4,411Net loss included in earnings
    
    
    (1,853
    )Purchases
    
    
    Sales/Maturities
    
    
    (10,000
    )Balances at January 31, 2009
    
    $
    118,961
 Auction Rate SecuritiesAt January 31, 2009, we held $122,550 (par value) of long-term investments comprised of taxable
and tax-exempt ARS, which are variable-rate debt securities and have a long-term maturity with
the interest being reset through Dutch auctions that are typically held every 7, 28 or 35 days.
The securities have historically traded at par and are callable at par at the option of the
issuer. Interest is typically paid at the end of each auction period or semi-annually. At
January 31, 2009, the majority of the ARS we held were AAA rated or equivalent, and none were
below A rated or equivalent, with most collateralized by student loans substantially backed by
the U.S. Federal government.Since February 12, 2008, most auctions have failed for these securities and there is no
assurance that future auctions on the ARS in our investment portfolio will succeed and, as a
result, our ability to liquidate our investment and fully recover the par value of our
investment in the near term may be limited or not exist. An auction failure means that the
parties wishing to sell securities could not.In November 2008, the Company elected to participate in a rights offering by UBS AG (UBS), a
Swiss bank which is one of the Companys investment providers that provides the Company with
the right (the Put Rights) to sell to UBS at par value ARS purchased from UBS (approximately
$107,400 of our entire ARS portfolio of $122,550) at any time during a two-year sale period
beginning June 30, 2010.The Put Rights are not transferable or marginable. By electing to participate in the rights
offering the Company granted UBS the right, exercisable at any time prior to June 30, 2010 or
during the two-year sale period, to purchase or cause the sale of the companys ARS (the Call
Right). UBS has stated that it will only exercise the Call Right for the purpose of
restructurings, dispositions or other solutions that will provide their clients with par value
for their ARS. UBS will pay their clients the par value of their ARS within one day of
settlement of any Call Right transaction. Notwithstanding the Call Right, the Company would be
permitted to sell ARS to parties other than UBS, in which case the Put Rights attached to the
ARS that are sold would be extinguished.
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As consideration for this transaction, Thor has released UBS from all claims relating to the
marketing or sale of ARS (except claims for consequential damages) and has agreed not to sue
UBS for such claims. During 2008, UBS was sued by the Massachusetts Securities Division and by
the New York Attorney General in separate civil lawsuits alleging improper sales practices
relating to ARS. The rights offering reflects the terms of a settlement entered into by UBS and
various regulators, including the SEC, the New York Attorney General, and the Massachusetts
Securities Division, pursuant to which UBS agreed to pay a fine of $150 million. UBS has also
been sued by investors in civil lawsuits and arbitrations seeking damages relating to sales of
ARS.Through its acceptance of the UBS offer, the Company also became eligible to participate in a
no net cost loan program pursuant to which it may borrow up to the par value of its ARS until
June 30, 2010. The Company is still permitted to obtain ARS based financing from lenders other
than UBS.At January 31, 2009, there was insufficient observable ARS market information available to
determine the fair value of our ARS investments, including the Put Rights. Therefore,
management, assisted by Houlihan, Smith & Company, Inc. an independent consultant, determined
an estimated fair value. In determining the estimate, consideration was given to credit
quality, final stated maturities, estimates on the probability of the issue being called prior
to final maturity, impact due to extended periods of maximum auction rates and broker quotes.
Based on this analysis, we recorded a temporary impairment of $1,736 ($1,128 net of tax in
other comprehensive income which is in the equity section of the balance sheet) related to our
long-term ARS investments of $15,150 (par value) that were not part of the UBS settlement as of
January 31, 2009. These same assumptions were used to estimate the fair value of our UBS ARS
portfolio described above, including the Put Rights.The enforceability of the Put Rights results in a put option and is recognized as a separate
freestanding instrument that is accounted for separately from the ARS investment. The Company
has elected to account for this put option at fair value under FASB Statement No. 159, The
Fair Value Option for Financial Assets and Liabilities(SFAS 159) and elected to treat this
portion of our ARS portfolio as trading securities. As such, we recorded a benefit to
operations of $10,339 related to the Put Rights provided by the settlement and an
other-than-temporary impairment charge to operations of $12,192 on the $107,400 (par value)
portion of our ARS portfolio for a net loss of $1,853, as we may decide not to hold these ARS
until final maturity with the opportunity provided by the Put Rights.We have no reason to believe that any of the underlying issuers of our ARS are presently at
risk of default. Through January 31, 2009, we have continued to receive interest payments on
the ARS in accordance with their terms. We believe we will be able to liquidate our investments
without significant loss primarily due to the government guarantee of the underlying
securities; however, it could take until the final maturity of the underlying notes (up to 31
years) to realize our investments par value. Due to these recent changes and uncertainty in
the ARS market, we believe the recovery period for these investments may be longer than twelve
months and as a result, we have classified these investments as long-term at January 31, 2009.
Although there is uncertainty with regard to the short-term liquidity of these securities, the
Company continues to believe that the carrying value represents the fair value of these
marketable securities because of the overall quality of the underlying investments and the
anticipated future market for such investments. In addition, the Company has the intent and
ability to hold these securities until the earlier of: the market for ARS stabilizes, the
issuer refinances the underlying security, a buyer is found outside of the auction process at
acceptable terms, the underlying securities have matured or the Company exercises its right to
put the securities to UBS, one of the Companys investment providers.
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7.
    
    Goodwill and Other Intangible Assets
 Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets, requires goodwill to be tested for impairment at least annually and more frequently if
an event occurs which indicates that goodwill may be impaired.The components of other intangible assets are as follows:
 January 31, 2009
    
    July 31, 2008Accumulated
    
    
    
    
    
    AccumulatedCost
    
    Amortization
    
    Cost
    
    AmortizationAmortized Intangible Assets:Non-compete agreements
    
    $
    2,938
    
    
    $
    2,137
    
    
    $
    5,938
    
    
    $
    4,845
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJanuary 31, 2009
    
    January 31, 2008
    
    January 31, 2009
    
    January 31, 2008Non-compete Agreements:Amortization Expense
    
    $
    92
    
    
    $
    200
    
    
    $
    292
    
    
    $
    413
 Non-compete agreements are amortized on a straight-line basis.Estimated Amortization Expense:
 For the year ending July 2009
    
    $
    476For the year ending July 2010
    
    $
    322For the year ending July 2011
    
    $
    238For the year ending July 2012
    
    $
    57
 In accordance with SFAS 142, goodwill and indefinite-lived intangible assets are not subject to
amortization. Goodwill and indefinite-lived intangible assets are reviewed for impairment by
applying a fair-value based test on an annual basis, or more frequently if circumstances
indicate a potential impairment.The Company completed an impairment review as of December 31, 2008 which resulted in a non-cash
trademark impairment charge of $564 in the second quarter for the trademark associated with an
operating subsidiary in the motorized reportable segment. The impairment results from the
difficult market environment and outlook for the motorhome business.As of January 31, 2009, Goodwill and Trademarks by segment are as follows:
 Goodwill
    
    
    TrademarksRecreation Vehicles:Towables
    
    $
    143,795
    
    
    $
    10,237Motorized
    
    
    9,717
    
    
    
    2,036Total Recreation Vehicles
    
    
    153,512
    
    
    
    12,273Bus
    
    
    4,616
    
    
    
    1,063Total
    
    $
    158,128
    
    
    $
    13,336
 8.
    
    Warranty
 Thor provides customers of our products with a warranty covering defects in material or
workmanship for primarily one year with longer warranties of up to five years 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.
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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
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2009
    
    
    January 31, 2008
    
    
    January 31, 2009
    
    
    January 31, 2008Beginning Balance
    
    $
    58,823
    
    
    $
    66,011
    
    
    $
    61,743
    
    
    $
    64,310Provision
    
    
    2,418
    
    
    
    13,525
    
    
    
    14,031
    
    
    
    32,075Payments
    
    
    (11,443
    )
    
    
    (17,846
    )
    
    
    (25,976
    )
    
    
    (34,695
    )Ending Balance
    
    $
    49,798
    
    
    $
    61,690
    
    
    $
    49,798
    
    
    $
    61,690
 The lower provision for the three months ended January 31, 2009 results primarily from the
lower sales activity which the Company is experiencing in the current difficult market
environment.9.
    
    Commercial CommitmentsOur principal commercial commitments at January 31, 2009 are summarized in the following chart:
 Total
    
    Term ofCommitment
    
    Amount Committed
    
    CommitmentGuarantee on dealer financing
    
    $
    4,166
    
    
    variousStandby repurchase obligation
on dealer financing
    
    $
    566,139
    
    
    up to eighteen months
 The Company records repurchase and guarantee reserves based on prior experience and known
current events. The combined repurchase and recourse reserve balances are approximately
$6,427 and $5,040 as of January 31, 2009 and July 31, 2008, respectively.
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2009
    
    
    January 31, 2008
    
    
    January 31, 2009
    
    
    January 31, 2008Cost of units repurchased
    
    $
    10,526
    
    
    $
    1,650
    
    
    $
    20,707
    
    
    $
    2,754Realization on units resold
    
    
    8,174
    
    
    
    1,596
    
    
    
    16,566
    
    
    
    2,435Losses due to repurchase
    
    $
    2,352
    
    
    $
    54
    
    
    $
    4,141
    
    
    $
    319
 The increase in losses due to repurchase resulted from the more difficult market for the
recreation vehicle business. We increased our reserve for repurchases and guarantees at July
31, 2008 and at January 31, 2009.10.
    
    Provision for Income TaxesIt is the Companys policy to recognize interest and penalties accrued relative to unrecognized
tax benefits in income tax expense. For the six months ended January 31, 2009, no material
change relative to accrued unrecognized tax benefits was recorded and $1,210 in interest and
penalties has been accrued.The Company anticipates a decrease of approximately $2,450 in unrecognized tax benefits within
the next 12 months from (1) expected settlements or payments of uncertain tax positions, and
(2)
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lapses of the applicable statutes of limitations. Actual results may differ materially from
this estimate.The Company has a current deferred tax asset of $33,891 recorded in Deferred income taxes and
other on the Consolidated Balance Sheet.11.
    
    Retained EarningsThe components of changes in retained earnings are as follows:
 Balance @ 7/31/08
    
    $
    675,928Net loss
    
    
    (9,740
    )Dividends Paid
    
    
    (7,761
    )Balance @ 1/31/09
    
    $
    658,427
 12.
    
    Line of CreditThe Company had a $30,000 unsecured revolving line of credit which bore interest at prime less
2.15% and expired on November 30, 2008. The Company decided not to renew the unsecured
revolving line of credit and allowed it to expire on November 30, 2008. The decision not to
renew the line of credit was based on our strong cash position combined with our expectation
that we will have the ability to borrow at favorable rates against our ARS if needed. As a
result, we did not anticipate utilizing the line of credit and did not want to incur the cost
of maintaining it. There was no outstanding balance at July 31, 2008.13.
    
    Loan Transactions and Related Notes ReceivableOn January 15, 2009, the Company entered into a Credit Agreement (the First Credit Agreement)
with Stephen Adams, in his individual capacity, and Stephen Adams and his successors, as
trustee under the Stephen Adams Living Trust (the Trust and together with each of the
foregoing persons, the Borrowers), pursuant to which the Company loaned $10 million to the
Borrowers (the First Loan). The Borrowers own approximately 90% of FreedomRoads Holding
Company, LLC (FreedomRoads), the parent company of one of the Companys dealers, and pursuant
to the terms of the First Credit Agreement, the Borrowers agreed to use the proceeds of the
First Loan solely to make an equity contribution to FreedomRoads to enable FreedomRoads to
repay its principal obligations under floorplan financing arrangements with third parties in
respect of products of the Company and its subsidiaries.The principal amount of the First Loan is payable in full on January 15, 2014 and bears
interest at a rate of 12% per annum. Interest is payable in kind for the first year and is
payable in cash on a monthly basis thereafter.In connection with the First Loan, the Borrowers caused FreedomRoads and its subsidiaries
(collectively, the FR Dealers), to enter into an agreement pursuant to which the FR Dealers
agreed to purchase additional recreation vehicles from the Company and its subsidiaries. The
term of this agreement continues until the repayment in full of the First Loan under the First
Credit Agreement (including any refinancing or replacement thereof).On January 30, 2009, the Company entered into a Second Credit Agreement (the Second Credit
Agreement and together with the First Credit Agreement, the Credit Agreements) with the
Borrowers pursuant to which the Company loaned an additional $10 million to the Borrowers (the
Second Loan and together with the First Loan, the Loans). Pursuant to the terms of the
Second Credit Agreement, the Borrowers agreed to use the proceeds of the Second Loan solely to
make an equity contribution to FreedomRoads to be used by FreedomRoads to purchase the
Companys products.
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The principal amount of the Second Loan is payable in full on January 29, 2010 and bears
interest at a rate of 12% per annum. Interest is payable in cash on the following dates: April
30, 2009, July 31, 2009, October 30, 2009 and January 29, 2010.The Credit Agreements contain customary representations and warranties, affirmative and
negative covenants, events of default and acceleration provisions for loans of this type.The obligations of the Borrowers under the Credit Agreements are guaranteed by FreedomRoads and
are secured by a first priority security interest in all of the direct and indirect legal,
equitable and beneficial interests of the Borrowers in FreedomRoads.In connection with the Second Loan, the FR Dealers and the Company amended their prior
agreement pursuant to which the FR Dealers agreed to purchase additional recreation vehicles
from the Company and its subsidiaries to provide that the term of this agreement now continues
until the repayment in full of the Loans (including any refinancing or replacement thereof).14.
    
    Thor Credit Corporation, Inc.In March 1994, the Company and a financial services company formed a joint venture, Thor Credit
Corporation (TCC), to finance the sale of recreation vehicles to consumer buyers. This joint
venture was dissolved in September 2008 after the joint venture partner informed us that it
will no longer be providing retail financing for recreation vehicles. We recovered our
investment of $1,578 upon dissolution.In November 2008, the Company announced that it is re-launching Thor Credit on its own to
provide retail financing for recreation vehicles of Thor dealers. The new business, which is led by
employees of the former joint venture, will finance new Thor and used recreation vehicle
products.
 13




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 Unless otherwise indicated, all amounts presented in thousands of dollars except unit, share and
per share data.
 Executive Overview
      Trends and Business Outlook
   14




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Three Months Ended January 31, 2009 vs.  Three Months Ended January 31, 2008
 Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Change1/31/2009
    
    
    1/31/2008
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    114,663
    
    
    $
    394,441
    
    
    $
    (279,778
    )
    
    
    (70.9
    )Motorized
    
    
    19,910
    
    
    
    110,825
    
    
    
    (90,915
    )
    
    
    (82.0
    )Total Recreation Vehicles
    
    
    134,573
    
    
    
    505,266
    
    
    
    (370,693
    )
    
    
    (73.4
    )Buses
    
    
    92,110
    
    
    
    93,904
    
    
    
    (1,794
    )
    
    
    (1.9
    )Total
    
    $
    226,683
    
    
    $
    599,170
    
    
    $
    (372,487
    )
    
    
    (62.2
    )# OF UNITS:Recreation VehiclesTowables
    
    
    5,107
    
    
    
    17,825
    
    
    
    (12,718
    )
    
    
    (71.3
    )Motorized
    
    
    226
    
    
    
    1,340
    
    
    
    (1,114
    )
    
    
    (83.1
    )Total Recreation Vehicles
    
    
    5,333
    
    
    
    19,165
    
    
    
    (13,832
    )
    
    
    (72.2
    )Buses
    
    
    1,449
    
    
    
    1,427
    
    
    
    22
    
    
    
    1.5Total
    
    
    6,782
    
    
    
    20,592
    
    
    
    (13,810
    )
    
    
    (67.1
    )
 Three Months
    
    
    % of
    
    
    Three Months
    
    
    % ofEnded
    
    
    Segment
    
    
    Ended
    
    
    Segment
    
    
    Change1/31/2009
    
    
    Net Sales
    
    
    1/31/2008
    
    
    Net Sales
    
    
    Amount
    
    
    %GROSS PROFIT:Recreation VehiclesTowables
    
    $
    3,915
    
    
    
    3.4
    
    
    $
    52,079
    
    
    
    13.2
    
    
    $
    (48,164
    )
    
    
    (92.5
    )Motorized
    
    
    (3,635
    )
    
    
    (18.3
    )
    
    
    9,855
    
    
    
    8.9
    
    
    
    (13,490
    )
    
    
    (136.9
    )Total Recreation Vehicles
    
    
    280
    
    
    
    0.2
    
    
    
    61,934
    
    
    
    12.3
    
    
    
    (61,654
    )
    
    
    (99.5
    )Buses
    
    
    7,877
    
    
    
    8.6
    
    
    
    7,783
    
    
    
    8.3
    
    
    
    94
    
    
    
    1.2Total
    
    $
    8,157
    
    
    
    3.6
    
    
    $
    69,717
    
    
    
    11.6
    
    
    $
    (61,560
    )
    
    
    (88.3
    )SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    13,914
    
    
    
    12.1
    
    
    $
    24,108
    
    
    
    6.1
    
    
    $
    (10,194
    )
    
    
    (42.3
    )Motorized
    
    
    6,091
    
    
    
    30.6
    
    
    
    6,334
    
    
    
    5.7
    
    
    
    (243
    )
    
    
    (3.8
    )Total Recreation Vehicles
    
    
    20,005
    
    
    
    14.9
    
    
    
    30,442
    
    
    
    6.0
    
    
    
    (10,437
    )
    
    
    (34.3
    )Buses
    
    
    4,076
    
    
    
    4.4
    
    
    
    3,872
    
    
    
    4.1
    
    
    
    204
    
    
    
    5.3Corporate
    
    
    6,118
    
    
    
    
    
    
    
    5,505
    
    
    
    
    
    
    
    613
    
    
    
    11.1Total
    
    $
    30,199
    
    
    
    13.3
    
    
    $
    39,819
    
    
    
    6.6
    
    
    $
    (9,620
    )
    
    
    (24.2
    )INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    (9,551
    )
    
    
    (8.3
    )
    
    $
    30,492
    
    
    
    7.7
    
    
    $
    (40,043
    )
    
    
    (131.3
    )Motorized
    
    
    (10,289
    )
    
    
    (51.7
    )
    
    
    3,561
    
    
    
    3.2
    
    
    
    (13,850
    )
    
    
    (388.9
    )Total Recreation Vehicles
    
    
    (19,840
    )
    
    
    (14.7
    )
    
    
    34,053
    
    
    
    6.7
    
    
    
    (53,893
    )
    
    
    (158.3
    )Buses
    
    
    3,723
    
    
    
    4.0
    
    
    
    3,556
    
    
    
    3.8
    
    
    
    167
    
    
    
    4.7Corporate
    
    
    (6,834
    )
    
    
    
    
    
    
    (2,403
    )
    
    
    
    
    
    
    (4,431
    )
    
    
    184.4Total
    
    $
    (22,951
    )
    
    
    (10.1
    )
    
    $
    35,206
    
    
    
    5.9
    
    
    $
    (58,157
    )
    
    
    (165.2
    )
 16




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ORDER BACKLOG:
 As of
    
    
    As of
    
    
    ChangeJanuary 31, 2009
    
    
    January 31,2008
    
    
    Amount
    
    
    %Recreation VehiclesTowables
    
    $
    133,988
    
    
    $
    215,479
    
    
    $
    (81,491
    )
    
    
    (37.8
    )Motorized
    
    
    40,723
    
    
    
    102,884
    
    
    
    (62,161
    )
    
    
    (60.4
    )Total Recreation Vehicles
    
    
    174,711
    
    
    
    318,363
    
    
    
    (143,652
    )
    
    
    (45.1
    )Buses
    
    
    217,085
    
    
    
    249,495
    
    
    
    (32,410
    )
    
    
    (13.0
    )Total
    
    $
    391,796
    
    
    $
    567,858
    
    
    $
    (176,062
    )
    
    
    (31.0
    )
 CONSOLIDATED
     Segment Reporting
 RECREATION VEHICLES
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    .4
    %
    
    
    (71.3
    )%
    
    
    (70.9
    )%Motorized
    
    
    1.1
    %
    
    
    (83.1
    )%
    
    
    (82.0
    )%
 TOWABLE RECREATION VEHICLES
    17




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MOTORIZED RECREATION VEHICLES
    BUSES
  Average PricePer Unit
    
    Units
    
    Net ChangeBuses
    
    
    (3.4)
    %
    
    
    1.5
    %
    
    
    (1.9
    )%
    18




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Six
Months Ended January 31, 2009 vs.  Six Months Ended January 31, 2008
 Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Change1/31/2009
    
    
    1/31/2008
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    400,200
    
    
    $
    918,152
    
    
    $
    (517,952
    )
    
    
    (56.4
    )Motorized
    
    
    64,775
    
    
    
    251,325
    
    
    
    (186,550
    )
    
    
    (74.2
    )Total Recreation Vehicles
    
    
    464,975
    
    
    
    1,169,477
    
    
    
    (704,502
    )
    
    
    (60.2
    )Buses
    
    
    200,525
    
    
    
    193,429
    
    
    
    7,096
    
    
    
    3.7Total
    
    $
    665,500
    
    
    $
    1,362,906
    
    
    $
    (697,406
    )
    
    
    (51.2
    )# OF UNITS:Recreation VehiclesTowables
    
    
    17,646
    
    
    
    41,640
    
    
    
    (23,994
    )
    
    
    (57.6
    )Motorized
    
    
    748
    
    
    
    3,111
    
    
    
    (2,363
    )
    
    
    (76.0
    )Total Recreation Vehicles
    
    
    18,394
    
    
    
    44,751
    
    
    
    (26,357
    )
    
    
    (58.9
    )Buses
    
    
    3,097
    
    
    
    2,970
    
    
    
    127
    
    
    
    4.3Total
    
    
    21,491
    
    
    
    47,721
    
    
    
    (26,230
    )
    
    
    (55.0
    )
 Six Months
    
    
    % of
    
    
    Six Months
    
    
    % ofEnded
    
    
    Segment
    
    
    Ended
    
    
    Segment
    
    
    Change1/31/2009
    
    
    Net Sales
    
    
1/31/2008
    
    
    Net Sales
    
    
    Amount
    
    
    %GROSS PROFIT:Recreation VehiclesTowables
    
    $
    34,737
    
    
    
    8.7
    
    
    $
    131,255
    
    
    
    14.3
    
    
    $
    (96,518
    )
    
    
    (73.5
    )Motorized
    
    
    (4,411
    )
    
    
    (6.8
    )
    
    
    23,673
    
    
    
    9.4
    
    
    
    (28,084
    )
    
    
    (118.6
    )Total Recreation Vehicles
    
    
    30,326
    
    
    
    6.5
    
    
    
    154,928
    
    
    
    13.2
    
    
    
    (124,602
    )
    
    
    (80.4
    )Buses
    
    
    17,894
    
    
    
    8.9
    
    
    
    16,064
    
    
    
    8.3
    
    
    
    1,830
    
    
    
    11.4Total
    
    $
    48,220
    
    
    
    7.2
    
    
    $
    170,992
    
    
    
    12.5
    
    
    $
    (122,772
    )
    
    
    (71.8
    )SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    32,414
    
    
    
    8.1
    
    
    $
    52,627
    
    
    
    5.7
    
    
    $
    (20,213
    )
    
    
    (38.4
    )Motorized
    
    
    11,912
    
    
    
    18.4
    
    
    
    13,296
    
    
    
    5.3
    
    
    
    (1,384
    )
    
    
    (10.4
    )Total Recreation Vehicles
    
    
    44,326
    
    
    
    9.5
    
    
    
    65,923
    
    
    
    5.6
    
    
    
    (21,597
    )
    
    
    (32.8
    )Buses
    
    
    8,665
    
    
    
    4.3
    
    
    
    7,668
    
    
    
    4.0
    
    
    
    997
    
    
    
    13.0Corporate
    
    
    11,674
    
    
    
    
    
    
    
    11,638
    
    
    
    
    
    
    
    36
    
    
    
    0.3Total
    
    $
    64,665
    
    
    
    9.7
    
    
    $
    85,229
    
    
    
    6.3
    
    
    $
    (20,564
    )
    
    
    (24.1
    )INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    2,823
    
    
    
    0.7
    
    
    $
    81,304
    
    
    
    8.9
    
    
    $
    (78,481
    )
    
    
    (96.5
    )Motorized
    
    
    (16,891
    )
    
    
    (26.1
    )
    
    
    10,414
    
    
    
    4.1
    
    
    
    (27,305
    )
    
    
    (262.2
    )Total Recreation Vehicles
    
    
    (14,068
    )
    
    
    (3.0
    )
    
    
    91,718
    
    
    
    7.8
    
    
    
    (105,786
    )
    
    
    (115.3
    )Buses
    
    
    9,020
    
    
    
    4.5
    
    
    
    7,695
    
    
    
    4.0
    
    
    
    1,325
    
    
    
    17.2Corporate
    
    
    (9,653
    )
    
    
    
    
    
    
    (3,727
    )
    
    
    
    
    
    
    (5,926
    )
    
    
    159.0Total
    
    $
    (14,701
    )
    
    
    (2.2
    )
    
    $
    95,686
    
    
    
    7.0
    
    
    $
    (110,387
    )
    
    
    (115.4
    )
 19




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##### Table of Contents



CONSOLIDATED
   SEGMENT REPORTING
 Recreation Vehicles
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    1.2
    %
    
    
    (57.6
    %)
    
    
    (56.4
    %)Motorized
    
    
    1.8
    %
    
    
    (76.0
    %)
    
    
    (74.2
    %)
 Towable Recreation Vehicles
    Motorized Recreation Vehicles
  20




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##### Table of Contents



Buses
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    (.6
    %)
    
    
    4.3
    %
    
    
    3.7
    %
    Financial Condition and Liquidity
     21




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##### Table of Contents



Critical Accounting Principles
  Impairment of Goodwill, Trademarks and Long-Lived Assets
  Insurance Reserves
  Warranty
  Income Taxes
  22




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##### Table of Contents



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;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
  Investments
  23




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##### Table of Contents



Accounting Pronouncements
 Business Combinations
 
    
    Transaction costs, many of which are currently treated as costs of the acquisition, will
generally be expensed.
    
    In-process research and development will be accounted for as an asset, with the cost
recognized as the research and development is realized or abandoned. These costs are
currently expensed at the time of the acquisition.
    
    Contingencies, including contingent consideration, will generally be recorded at fair
value
with subsequent adjustments recognized in operations. Contingent consideration is
currently accounted for as an adjustment of the purchase price.
    
    Decreases in valuation allowances on acquired deferred tax assets will be recognized in
operations. Previously such changes were considered to be subsequent changes in
consideration and were recorded as decreases in goodwill.
  Forward Looking Statements
  
 ITEM 3.Quantitative and Qualitative Disclosures About Market Risk
    24




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##### Table of Contents



ITEM 4.Controls and Procedures
   25




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##### Table of Contents



PART II    Other Information
 
 ITEM 1. LEGAL PROCEEDINGS.
   
 ITEM 1A. RISK FACTORS.
  Our repurchase agreements with floor plan lenders could result in increased costs.
  Certain of our notes receivable may have collectibility risk.
  26




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##### Table of Contents



ITEM 4. Submission of Matters to a Vote of Security Holders
   Director
    
    For
    
    Withheld
    
    Broker Non-VotesWade F. B. Thompson
    
    
    51,836,733
    
    
    
    485,489
    
    
    
    Jan H. Suwinski
    
    
    48,872,751
    
    
    
    3,449,471
    
    
    
    
   For
    
    Against
    
    Abstain
    
    Broker Non-Votes47,846,041
    
    
    
    413,462
    
    
    
    694,382
    
    
    
    3,368,337
 27




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##### Table of Contents



ITEM 6. EXHIBITS
 Exhibit
    
    Description10.1
    
    Thor Industries, Inc. 2008 Annual Incentive Plan (incorporated by reference to
Exhibit 10.1 of the Companys 8-K dated December 15, 2008).10.2
    
    Thor Industries, Inc. Deferred Compensation Plan (incorporated by reference to
Exhibit 10.2 of the Companys 8-K dated December 15, 2008).10.3
    
    Thor Industries, Inc. Select Executive Incentive Plan (incorporated by reference
to Exhibit 10.3 of the Companys 8-K dated December 15, 2008).10.4
    
    Credit Agreement between the Company and Stephen Adams, in his individual
capacity, and Stephen Adams and his successors, as trustee under the Stephen Adams
Living Trust, dated January 15, 2009 (incorporated by reference to Exhibit 10.1 of the
Companys 8-K dated January 22, 2009).10.5
    
    Credit Agreement between the Company and Stephen Adams, in his individual
capacity, and Stephen Adams and his successors, as trustee under the Stephen Adams
Living Trust, dated January 30, 2009 (incorporated by reference to Exhibit 10.1 of the
Companys 8-K dated February 3, 2009).31.1
    
    Chief Executive Officers Certification filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    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.
 
 SIGNATURES
  THOR INDUSTRIES, INC.
(Registrant)DATE: March 9, 2009
    /s/ Wade F. B. ThompsonWade F. B. ThompsonChairman of the Board, President
and Chief Executive OfficerDATE: March 9, 2009
    /s/ Christian G. FarmanChristian G. FarmanSenior Vice President
and Chief Financial Officer 28