##### 



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 January 31, 2007 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)
 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
$.10 per share
    
    55,767,304 shares




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##### 



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
 January 31, 2007
    
    
    July 31, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    91,335
    
    
    $
    196,136Investments  short term
    
    
    118,712
    
    
    
    68,237Accounts receivable:Trade
    
    
    180,824
    
    
    
    188,104Other
    
    
    5,485
    
    
    
    5,639Inventories
    
    
    189,514
    
    
    
    183,169Prepaid expenses
    
    
    12,310
    
    
    
    6,533Deferred income taxes
    
    
    18,368
    
    
    
    4,898Total current assets
    
    
    616,548
    
    
    
    652,716Property:Land
    
    
    21,434
    
    
    
    21,323Buildings and improvements
    
    
    134,129
    
    
    
    131,649Machinery and equipment
    
    
    59,338
    
    
    
    55,656Total cost
    
    
    214,901
    
    
    
    208,628Accumulated depreciation
    
    
    56,896
    
    
    
    51,163Property, net
    
    
    158,005
    
    
    
    157,465Investment in Joint ventures
    
    
    2,657
    
    
    
    2,737Other assets:Goodwill
    
    
    165,663
    
    
    
    165,663Non-compete agreements
    
    
    2,387
    
    
    
    2,841Trademarks
    
    
    13,900
    
    
    
    13,900Other
    
    
    11,183
    
    
    
    9,403Total other assets
    
    
    193,133
    
    
    
    191,807TOTAL ASSETS
    
    $
    970,343
    
    
    $
    1,004,725LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    123,554
    
    
    $
    145,609Accrued liabilities:Taxes
    
    
    24,734
    
    
    
    18,709Compensation and related items
    
    
    31,227
    
    
    
    37,161Product warranties
    
    
    59,061
    
    
    
    59,795Promotions and rebates
    
    
    10,546
    
    
    
    12,953Product/property liability and related liabilities
    
    
    11,840
    
    
    
    10,423Other
    
    
    9,100
    
    
    
    7,315Total current liabilities
    
    
    270,062
    
    
    
    291,965Deferred income taxes and other liabilities
    
    
    14,725
    
    
    
    12,911Contingent liabilities and commitments
    
    
    
    
    
    
    Stockholders equity:Common stock  authorized 250,000,000 shares;
issued 57,210,404 shares @ 1/31/07 and 57,100,286
shares @ 7/31/06; par value of $.10 per share
    
    
    5,721
    
    
    
    5,710Additional paid-in capital
    
    
    88,992
    
    
    
    86,538Accumulated other comprehensive income
    
    
    1,311
    
    
    
    1,772Retained earnings
    
    
    649,655
    
    
    
    664,322Less Treasury shares of 1,441,600 @ 1/31/07 &
1,401,200 @ 7/31/06
    
    
    (60,123
    )
    
    
    (58,493
    )Total stockholders equity
    
    
    685,556
    
    
    
    699,849TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    970,343
    
    
    $
    1,004,725
  3




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##### 



THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED INCOME  FOR THE THREE & SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
 Three Months Ended January 31
    
    
    Six Months Ended January 312007
    
    
    2006
    
    
    2007
    
    
    2006(As restated,
    
    
    
    
    
    
    (As restated,see Note 2)
    
    
    
    
    
    
    see Note 2)Net sales
    
    $
    584,049
    
    
    $
    642,047
    
    
    $
    1,311,765
    
    
    $
    1,403,370Cost of products sold
    
    
    522,880
    
    
    
    555,195
    
    
    
    1,161,428
    
    
    
    1,208,023Gross profit
    
    
    61,169
    
    
    
    86,852
    
    
    
    150,337
    
    
    
    195,347Selling, general and
administrative expenses
    
    
    37,424
    
    
    
    41,237
    
    
    
    80,869
    
    
    
    85,573Interest income
    
    
    2,346
    
    
    
    2,038
    
    
    
    5,256
    
    
    
    3,718Interest expense
    
    
    164
    
    
    
    223
    
    
    
    351
    
    
    
    570Other income
    
    
    315
    
    
    
    127
    
    
    
    865
    
    
    
    926Income before income taxes
    
    
    26,242
    
    
    
    47,557
    
    
    
    75,238
    
    
    
    113,848Provision for income taxes
    
    
    7,990
    
    
    
    17,652
    
    
    
    26,389
    
    
    
    42,570Net income
    
    $
    18,252
    
    
    $
    29,905
    
    
    $
    48,849
    
    
    $
    71,278Average common shares outstanding:Basic
    
    
    55,654,744
    
    
    
    56,593,434
    
    
    
    55,634,023
    
    
    
    56,580,913Diluted
    
    
    55,927,479
    
    
    
    56,982,007
    
    
    
    55,909,970
    
    
    
    56,942,738Earnings per common share:Basic
    
    $
    .33
    
    
    $
    .53
    
    
    $
    .88
    
    
    $
    1.26Diluted
    
    $
    .33
    
    
    $
    .52
    
    
    $
    .87
    
    
    $
    1.25Regular dividends declared per common share:
    
    $
    .07
    
    
    $
    .05
    
    
    $
    .14
    
    
    $
    .05Special dividends declared per common share:
    
    $
    
    
    
    $
    
    
    
    $
    1.00
    
    
    $
    Regular dividends paid per common share:
    
    $
    .07
    
    
    $
    .05
    
    
    $
    .14
    
    
    $
    .10Special 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 SIX MONTHS ENDED JANUARY 31, 2007 AND 2006
 2007
    
    
    2006(As restated,see Note 2)Cash flows from operating activities:Net income
    
    $
    48,849
    
    
    $
    71,278Adjustments to reconcile net income to net cash (used in)
provided by operating activities:Depreciation
    
    
    6,393
    
    
    
    6,968Amortization
    
    
    454
    
    
    
    475Deferred income taxes
    
    
    (7,699
    )
    
    
    (12,396
    )Loss on disposition of assets
    
    
    86
    
    
    
    12Loss on disposition of trading investments
    
    
    104
    
    
    
    255Unrealized loss on trading investments
    
    
    
    
    
    
    15Stock based compensation
    
    
    319
    
    
    
    540Changes in non cash assets and liabilities, net of effect
from acquisitions:Purchases of trading investments
    
    
    
    
    
    
    (152,062
    )Proceeds from disposition of trading investments
    
    
    68,133
    
    
    
    84,274Accounts receivable
    
    
    7,434
    
    
    
    (29,159
    )Inventories
    
    
    (6,345
    )
    
    
    (26,445
    )Prepaids and other
    
    
    (13,537
    )
    
    
    (5,514
    )Accounts payable
    
    
    (22,221
    )
    
    
    9,139Accrued liabilities
    
    
    152
    
    
    
    36,901Other liabilities
    
    
    1,838
    
    
    
    1,314Net cash (used in) provided by operating activities
    
    
    83,960
    
    
    
    (14,405
    )Cash flows from investing activities:Purchase of property, plant & equipment
    
    
    (7,101
    )
    
    
    (14,244
    )Proceeds from disposition of assets
    
    
    224
    
    
    
    49Purchase of available for sale investments
    
    
    (202,320
    )
    
    
    Proceeds from sale of available for sale investments
    
    
    83,897
    
    
    
    Net cash used in investing activities
    
    
    (125,300
    )
    
    
    (14,195
    )Cash flows from financing activities:Cash dividends
    
    
    (63,516
    )
    
    
    (19,834
    )Purchase of common stock held as treasury shares
    
    
    (1,630
    )
    
    
    Proceeds from issuance of common stock
    
    
    2,146
    
    
    
    1,256Net cash used in financing activities
    
    
    (63,000
    )
    
    
    (18,578
    )Effect of exchange rate changes on cash
    
    
    (461
    )
    
    
    840Net decrease in cash and equivalents
    
    
    (104,801
    )
    
    
    (46,338
    )Cash and equivalents, beginning of period
    
    
    196,136
    
    
    
    163,596Cash and equivalents, end of period
    
    $
    91,335
    
    
    $
    117,258Supplemental cash flow information:Income taxes paid
    
    $
    25,846
    
    
    $
    23,343Interest paid
    
    
    351
    
    
    
    570Non cash transactions:Capital expenditures in accounts payable
    
    $
    166
    
    
    $
    894
  5




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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 six months ended January 31, 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 six month
periods ended January 31, 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 January 31, 2006 and the six months ended January 31, 2006 and the Statement of Condensed
Consolidated Cash Flows for the six months ended January 31, 2006, affected by the
restatements.
 Previously
    
    Restatementreported
    
    adjustment
    
    RestatedStatement of Condensed Consolidated IncomeThree months ended January 31, 2006Cost of products sold
    
    $
    552,084
    
    
    $
    3,111
    
    
    $
    555,195Gross profit
    
    
    89,963
    
    
    
    (3,111
    )
    
    
    86,852Income before income taxes
    
    
    50,668
    
    
    
    (3,111
    )
    
    
    47,557Provision for income taxes
    
    
    18,794
    
    
    
    (1,142
    )
    
    
    17,652Net income
    
    
    31,874
    
    
    
    (1,969
    )
    
    
    29,905Earnings per common shareThree months ended January 31, 2006Basic
    
    $
    .56
    
    
    $
    (.03
    )
    
    $
    .53Diluted
    
    $
    .56
    
    
    $
    (.04
    )
    
    $
    .52
 6




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##### 



Previously
    
    Restatementreported
    
    adjustment
    
    RestatedStatement of Condensed Consolidated IncomeSix months ended January 31, 2006Cost of products sold
    
    $
    1,201,765
    
    
    $
    6,258
    
    
    $
    1,208,023Gross profit
    
    
    201,605
    
    
    
    (6,258
    )
    
    
    195,347Income before income taxes
    
    
    120,106
    
    
    
    (6,258
    )
    
    
    113,848Provision for income taxes
    
    
    44,867
    
    
    
    (2,297
    )
    
    
    42,570Net income
    
    
    75,239
    
    
    
    (3,961
    )
    
    
    71,278
 Statement of Condensed Consolidated Cash Flows
Six months ended January 31, 2006
 Previously
    
    Restatementreported
    
    adjustment
    
    RestatedCash flows from operating activitiesNet income
    
    $
    75,239
    
    
    $
    (3,961
    )
    
    $
    71,278Accounts receivable
    
    
    (32,284
    )
    
    
    3,125
    
    
    
    (29,159
    )Inventories
    
    
    (29,089
    )
    
    
    2,644
    
    
    
    (26,445
    )Accounts payable
    
    
    8,650
    
    
    
    489
    
    
    
    9,139Accrued liabilities
    
    
    39,198
    
    
    
    (2,297
    )
    
    
    36,901Earnings per common shareSix months ended January 31, 2006Basic
    
    $
    1.33
    
    
    $
    (.07
    )
    
    $
    1.26Diluted
    
    $
    1.32
    
    
    $
    (.07
    )
    
    $
    1.25
 3.
    
    Major classifications of inventories are:
 January 31, 2007
    
    
    July 31, 2006Raw materials
    
    $
    89,826
    
    
    $
    99,807Chassis
    
    
    49,495
    
    
    
    39,772Work in process
    
    
    50,837
    
    
    
    51,208Finished goods
    
    
    23,827
    
    
    
    13,416Total
    
    
    213,985
    
    
    
    204,203Less excess of FIFO costs
over LIFO costs
    
    
    24,471
    
    
    
    21,034Total inventories
    
    $
    189,514
    
    
    $
    183,169
 4.
    
    Earnings Per Share
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Weighted average shares
outstanding for basic
earnings per share
    
    
    55,654,744
    
    
    
    56,593,434
    
    
    
    55,634,023
    
    
    
    56,580,913Stock options and
restricted stock
    
    
    272,735
    
    
    
    388,573
    
    
    
    275,947
    
    
    
    361,825Total  For diluted shares
    
    
    55,927,479
    
    
    
    56,982,007
    
    
    
    55,909,970
    
    
    
    56,942,738
 7




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##### 



5.
    
    Comprehensive Income
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Net income
    
    $
    18,252
    
    
    $
    29,905
    
    
    $
    48,849
    
    
    $
    71,278Foreign currency
translation adjustment
    
    
    (562
    )
    
    
    430
    
    
    
    (461
    )
    
    
    840Comprehensive income
    
    $
    17,690
    
    
    $
    30,335
    
    
    $
    48,388
    
    
    $
    72,118
 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
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Net Sales:Recreation vehicles:Towables
    
    $
    373,940
    
    
    $
    457,861
    
    
    $
    873,895
    
    
    $
    991,097Motorized
    
    
    116,694
    
    
    
    113,841
    
    
    
    252,617
    
    
    
    262,935Total recreation vehicles
    
    
    490,634
    
    
    
    571,702
    
    
    
    1,126,512
    
    
    
    1,254,032Buses
    
    
    93,415
    
    
    
    70,345
    
    
    
    185,253
    
    
    
    149,338Total
    
    $
    584,049
    
    
    $
    642,047
    
    
    $
    1,311,765
    
    
    $
    1,403,370
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Income Before Income Taxes:Recreation vehicles:Towables
    
    $
    21,804
    
    
    $
    46,891
    
    
    $
    62,204
    
    
    $
    105,168Motorized
    
    
    3,468
    
    
    
    2,171
    
    
    
    9,536
    
    
    
    10,537Total recreation vehicles
    
    
    25,272
    
    
    
    49,062
    
    
    
    71,740
    
    
    
    115,705Buses
    
    
    3,154
    
    
    
    1,985
    
    
    
    6,174
    
    
    
    3,979Corporate
    
    
    (2,184
    )
    
    
    (3,490
    )
    
    
    (2,676
    )
    
    
    (5,836
    )Total
    
    $
    26,242
    
    
    $
    47,557
    
    
    $
    75,238
    
    
    $
    113,848
 8




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##### 



January 31, 2007
    
    
    July 31, 2006Identifiable Assets:Recreation vehicles:Towables
    
    $
    472,589
    
    
    $
    483,324Motorized
    
    
    147,370
    
    
    
    150,058Total recreation vehicles
    
    
    619,959
    
    
    
    633,382Buses
    
    
    110,338
    
    
    
    103,861Corporate
    
    
    240,046
    
    
    
    267,482Total
    
    $
    970,343
    
    
    $
    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 January 31, 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 January 31, 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:
 January 31, 2007
    
    July 31, 2006Accumulated
    
    
    
    
    
    AccumulatedCost
    
    Amortization
    
    Cost
    
    AmortizationAmortized Intangible Assets:Non-compete agreements
    
    $
    15,889
    
    
    $
    13,502
    
    
    $
    15,889
    
    
    $
    13,048
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJanuary 31, 2007
    
    January 31, 2006
    
    January 31, 2007
    
    January 31, 2006Non-compete Agreements:Amortization Expense
    
    $
    217
    
    
    $
    238
    
    
    $
    454
    
    
    $
    475
 Non-compete agreements are amortized on a straight-line basis.
 9




---



##### 



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 six month period
ended January 31, 2007.As of January 31, 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
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Beginning Balance
    
    $
    60,923
    
    
    $
    56,112
    
    
    $
    59,795
    
    
    $
    55,118Provision
    
    
    15,243
    
    
    
    11,886
    
    
    
    33,194
    
    
    
    27,853Payments
    
    
    17,105
    
    
    
    14,116
    
    
    
    33,928
    
    
    
    29,089Ending Balance
    
    $
    59,061
    
    
    $
    53,882
    
    
    $
    59,061
    
    
    $
    53,882
 11.
    
    Commercial CommitmentsOur principal commercial commitments at January 31, 2007 are summarized in the following chart:
 Total
    
    Term ofCommitment
    
    Amount Committed
    
    GuaranteeGuarantee on dealer financing
    
    $
    3,504
    
    
    less than 1 yearStandby repurchase obligation
on dealer financing
    
    $
    912,276
    
    
    less than 1 year
 10




---



##### 



The Company records repurchase and guarantee reserves based on prior experience and known
current events. The combined repurchase and recourse reserve balances are approximately $2,241
and $1,563 as of January 31, 2007 and July 31, 2006, respectively.
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2007
    
    
    January 31, 2006
    
    
    January 31, 2007
    
    
    January 31, 2006Cost of units repurchased
    
    $
    6,128
    
    
    $
    753
    
    
    $
    8,089
    
    
    $
    2,103Realization on units resold
    
    
    5,474
    
    
    
    534
    
    
    
    7,017
    
    
    
    1,806Losses due to repurchase
    
    $
    654
    
    
    $
    219
    
    
    $
    1,072
    
    
    $
    297
 12.
    
    Subsequent EventsIn 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




---



##### 



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




---



##### 



Trends and Business Outlook
    13




---



##### 



Three Months Ended January 31, 2006
 Three Months Ended
    
    




    Three Months Ended
    




    
    ChangeJanuary 31, 2007
    
    




    January 31, 2006
    




    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    373,940
    
    




    $
    457,861
    




    
    $
    (83,921
    )
    
    
    (18.3
    )Motorized
    
    
    116,694
    
    




    
    113,841
    




    
    
    2,853
    
    
    
    2.5Total Recreation Vehicles
    
    
    490,634
    
    




    
    571,702
    




    
    
    (81,068
    )
    
    
    (14.2
    )Buses
    
    
    93,415
    
    




    
    70,345
    




    
    
    23,070
    
    
    
    32.8Total
    
    $
    584,049
    
    




    $
    642,047
    




    
    $
    (57,998
    )
    
    
    (9.0
    )# OF UNITS:Recreation VehiclesTowables
    
    
    17,436
    
    




    
    24,042
    




    
    
    (6,606
    )
    
    
    (27.5
    )Motorized
    
    
    1,521
    
    




    
    1,486
    




    
    
    35
    
    
    
    2.4Total Recreation Vehicles
    
    
    18,957
    
    




    
    25,528
    




    
    
    (6,571
    )
    
    
    (25.7
    )Buses
    
    
    1,531
    
    




    
    1,321
    




    
    
    210
    
    
    
    15.9Total
    
    
    20,488
    
    




    
    26,849
    




    
    
    (6,361
    )
    
    
    (23.7
    )% of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    SegmentNet Sales
    
    
    
    
    
    
    Net SalesGROSS PROFIT:Recreation VehiclesTowables
    
    $
    44,576
    
    
    
    11.9
    
    
    $
    73,647
    
    
    
    16.1
    
    
    $
    (29,071
    )
    
    
    (39.5
    )Motorized
    
    
    9,854
    
    
    
    8.4
    
    
    
    7,876
    
    
    
    6.9
    
    
    
    1,978
    
    
    
    25.1Total Recreation Vehicles
    
    
    54,430
    
    
    
    11.1
    
    
    
    81,523
    
    
    
    14.3
    
    
    
    (27,093
    )
    
    
    (33.2
    )Buses
    
    
    6,739
    
    
    
    7.2
    
    
    
    5,329
    
    
    
    7.6
    
    
    
    1,410
    
    
    
    26.5Total
    
    $
    61,169
    
    
    
    10.5
    
    
    $
    86,852
    
    
    
    13.5
    
    
    $
    (25,683
    )
    
    
    (29.6
    )SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    22,954
    
    
    
    6.1
    
    
    $
    26,881
    
    
    
    5.9
    
    
    $
    (3,927
    )
    
    
    (14.6
    )Motorized
    
    
    6,388
    
    
    
    5.5
    
    
    
    5,704
    
    
    
    5.0
    
    
    
    684
    
    
    
    12.0Total Recreation Vehicles
    
    
    29,342
    
    
    
    6.0
    
    
    
    32,585
    
    
    
    5.7
    
    
    
    (3,243
    )
    
    
    (10.0
    )Buses
    
    
    3,510
    
    
    
    3.8
    
    
    
    3,154
    
    
    
    4.5
    
    
    
    356
    
    
    
    11.3Corporate
    
    
    4,572
    
    
    
    
    
    
    
    5,498
    
    
    
    
    
    
    
    (926
    )
    
    
    (16.8
    )Total
    
    $
    37,424
    
    
    
    6.4
    
    
    $
    41,237
    
    
    
    6.4
    
    
    $
    (3,813
    )
    
    
    (9.2
    )INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    21,804
    
    
    
    5.8
    
    
    $
    46,891
    
    
    
    10.2
    
    
    $
    (25,087
    )
    
    
    (53.5
    )Motorized
    
    
    3,468
    
    
    
    3.0
    
    
    
    2,171
    
    
    
    1.9
    
    
    
    1,297
    
    
    
    59.7Total Recreation Vehicles
    
    
    25,272
    
    
    
    5.2
    
    
    
    49,062
    
    
    
    8.6
    
    
    
    (23,790
    )
    
    
    (48.5
    )Buses
    
    
    3,154
    
    
    
    3.4
    
    
    
    1,985
    
    
    
    2.8
    
    
    
    1,169
    
    
    
    58.9Corporate
    
    
    (2,184
    )
    
    
    
    
    
    
    (3,490
    )
    
    
    
    
    
    
    1,306
    
    
    
    37.4Total
    
    $
    26,242
    
    
    
    4.5
    
    
    $
    47,557
    
    
    
    7.4
    
    
    $
    (21,315
    )
    
    
    (44.8
    )
 14




---



##### 



ORDER BACKLOG
 As of
    
    
    As of
    
    
    ChangeJanuary 31, 2007
    
    
    January 31, 2006
    
    
    Amount
    
    
    %Recreation VehiclesTowables
    
    $
    238,658
    
    
    $
    376,069
    
    
    $
    (137,411
    )
    
    
    (36.5
    )Motorized
    
    
    99,756
    
    
    
    122,416
    
    
    
    (22,660
    )
    
    
    (18.5
    )Total Recreation Vehicles
    
    
    338,414
    
    
    
    498,485
    
    
    
    (160,071
    )
    
    
    (32.1
    )Buses
    
    
    206,820
    
    
    
    173,697
    
    
    
    33,123
    
    
    
    19.1Total
    
    $
    545,234
    
    
    $
    672,182
    
    
    $
    (126,948
    )
    
    
    (18.9
    )
 CONSOLIDATED
    Segment Reporting
 RECREATION VEHICLES
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    9.2
    %
    
    
    (27.5
    )%
    
    
    (18.3
    )%Motorized
    
    
    .1
    %
    
    
    2.4
    %
    
    
    2.5
    %
 TOWABLE RECREATION VEHICLES
  15




---



##### 



MOTORIZED RECREATION VEHICLES
    BUSES
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    17.0
    %
    
    
    15.9
    %
    
    
    32.8
    %
   16




---



##### 



Six Months Ended January 31, 2006
 Six Months Ended
    




    
    Six Months Ended
    
    




    ChangeJanuary 31, 2007
    




    
    January 31, 2006
    
    




    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    873,895
    




    
    $
    991,097
    
    




    $
    (117,202
    )
    
    
    (11.8
    )Motorized
    
    
    252,617
    




    
    
    262,935
    
    




    
    (10,318
    )
    
    
    (3.9
    )Total Recreation Vehicles
    
    
    1,126,512
    




    
    
    1,254,032
    
    




    
    (127,520
    )
    
    
    (10.2
    )Buses
    
    
    185,253
    




    
    
    149,338
    
    




    
    35,915
    
    
    
    24.0Total
    
    $
    1,311,765
    




    
    $
    1,403,370
    
    




    $
    (91,605
    )
    
    
    (6.5
    )# OF UNITS:Recreation VehiclesTowables
    
    
    40,926
    




    
    
    51,560
    
    




    
    (10,634
    )
    
    
    (20.6
    )Motorized
    
    
    3,376
    




    
    
    3,505
    
    




    
    (129
    )
    
    
    (3.7
    )Total Recreation Vehicles
    
    
    44,302
    




    
    
    55,065
    
    




    
    (10,763
    )
    
    
    (19.5
    )Buses
    
    
    3,088
    




    
    
    2,789
    
    




    
    299
    
    
    
    10.7Total
    
    
    47,390
    




    
    
    57,854
    
    




    
    (10,464
    )
    
    
    (18.1
    )% of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    SegmentNet Sales
    
    
    
    
    
    
    Net SalesGROSS PROFIT:Recreation VehiclesTowables
    
    $
    114,398
    
    
    
    13.1
    
    
    $
    161,264
    
    
    
    16.3
    
    
    $
    (46,866
    )
    
    
    (29.1
    )Motorized
    
    
    22,493
    
    
    
    8.9
    
    
    
    23,177
    
    
    
    8.8
    
    
    
    (684
    )
    
    
    (3.0
    )Total Recreation Vehicles
    
    
    136,891
    
    
    
    12.2
    
    
    
    184,441
    
    
    
    14.7
    
    
    
    (47,550
    )
    
    
    (25.8
    )Buses
    
    
    13,446
    
    
    
    7.3
    
    
    
    10,906
    
    
    
    7.3
    
    
    
    2,540
    
    
    
    23.3Total
    
    $
    150,337
    
    
    
    11.5
    
    
    $
    195,347
    
    
    
    13.9
    
    
    $
    (45,010
    )
    
    
    (23.0
    )SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    52,383
    
    
    
    6.0
    
    
    $
    56,253
    
    
    
    5.7
    
    
    $
    (3,870
    )
    
    
    (6.9
    )Motorized
    
    
    12,944
    
    
    
    5.1
    
    
    
    12,637
    
    
    
    4.8
    
    
    
    307
    
    
    
    2.4Total Recreation Vehicles
    
    
    65,327
    
    
    
    6.0
    
    
    
    68,890
    
    
    
    5.5
    
    
    
    (3,563
    )
    
    
    (5.2
    )Buses
    
    
    7,003
    
    
    
    3.8
    
    
    
    6,617
    
    
    
    4.4
    
    
    
    386
    
    
    
    5.8Corporate
    
    
    8,539
    
    
    
    
    
    
    
    10,066
    
    
    
    
    
    
    
    (1,527
    )
    
    
    (15.2
    )Total
    
    $
    80,869
    
    
    
    6.2
    
    
    $
    85,573
    
    
    
    6.1
    
    
    $
    (4,704
    )
    
    
    (5.5
    )INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    62,204
    
    
    
    7.1
    
    
    $
    105,168
    
    
    
    10.6
    
    
    $
    (42,964
    )
    
    
    (40.9
    )Motorized
    
    
    9,536
    
    
    
    3.8
    
    
    
    10,537
    
    
    
    4.0
    
    
    
    (1,001
    )
    
    
    (9.5
    )Total Recreation Vehicles
    
    
    71,740
    
    
    
    6.4
    
    
    
    115,705
    
    
    
    9.2
    
    
    
    (43,965
    )
    
    
    (38.0
    )Buses
    
    
    6,174
    
    
    
    3.3
    
    
    
    3,979
    
    
    
    2.7
    
    
    
    2,195
    
    
    
    55.2Corporate
    
    
    (2,676
    )
    
    
    
    
    
    
    (5,836
    )
    
    
    
    
    
    
    3,160
    
    
    
    54.1Total
    
    $
    75,238
    
    
    
    5.7
    
    
    $
    113,848
    
    
    
    8.1
    
    
    $
    (38,610
    )
    
    
    (33.9
    )
 17




---



##### 



CONSOLIDATED
    Segment Reporting
 RECREATION VEHICLES
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    9.1
    %
    
    
    (20.6
    )%
    
    
    (11.8
    )%Motorized
    
    
    (.2
    )%
    
    
    (3.7
    )%
    
    
    (3.9
    )%
 TOWABLE RECREATION VEHICLES
    18




---



##### 



MOTORIZED RECREATION VEHICLES
    BUSES
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    13.3
    %
    
    
    10.7
    %
    
    
    24.0
    %
    Financial Condition and Liquidity
   19




---



##### 



Critical Accounting Principles
  Impairment of Goodwill, Trademarks and Long-Lived Assets
  Insurance Reserves
  Warranty
  20




---



##### 



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;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
  21




---



##### 



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  ITEM 4. Controls and Procedures
    Segregation of Duties.
 22




---



##### 




    
    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;
 23




---



##### 




    
    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;
    
    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




---



##### 



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 ProgramsNovember 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200December 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200January 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200
 
 (1)
    
    On June 26, 2006 our Board of Directors authorized the repurchase of 2,000,000 shares
extending over a 24-month period before expiring. At January 31, 2007, 1,947,200 shares of
common stock remained authorized for repurchase under the repurchase program. ITEM
6. Exhibits
 Exhibit
    
    Description31.1
    
    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.
 25




---



##### 



SIGNATURES
  THOR INDUSTRIES, INC.
            (Registrant)DATE: June 19, 2007
    By:
    /s/  Wade F. B. ThompsonWade F. B. ThompsonChairman of the Board, President
and Chief Executive OfficerDATE: June 19, 2007
    By:
    /s/  Walter L. BennettWalter L. BennettExecutive Vice President,
Secretary and Chief Financial Officer 26