##### Table of Contents



UNITED STATES
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, 2008
    
    COMMISSION FILE NUMBER
    
    1-9235
 THOR INDUSTRIES, INC.
  Delaware
    
    93-0768752(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)419 West Pike Street, Jackson Center, OH
    
    45334-0629(Address of principal executive offices)
    
    (Zip Code)
 Registrants
telephone number, including area code: (937) 596-6849
  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 1/31/2008Common stock, par value
$.10 per share
    
    55,497,424 shares




---



TABLE OF CONTENTS  PART I    Financial Information Unless otherwise indicated, all amounts presented in thousands of dollars except units, share and per share dataITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. Quantitative and Qualitative Disclosures About Market RiskITEM 4. Controls and ProceduresPART II    Other InformationITEM 1. LEGAL PROCEEDINGSITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY SECURITIESITEM 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 of dollars except units, share and
per share data.
 ITEM 1. Financial Statements
 THOR INDUSTRIES, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS
 January 31, 2008
    
    
    July 31, 2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    87,935
    
    
    $
    171,889Investments  short term
    
    
    146,350
    
    
    
    174,575Accounts receivable:Trade
    
    
    177,681
    
    
    
    171,596Other
    
    
    9,995
    
    
    
    5,799Inventories
    
    
    200,975
    
    
    
    168,980Prepaid expenses
    
    
    12,199
    
    
    
    6,684Deferred income taxes
    
    
    17,966
    
    
    
    6,005Total current assets
    
    
    653,101
    
    
    
    705,528Property:Land
    
    
    20,566
    
    
    
    21,795Buildings and improvements
    
    
    136,900
    
    
    
    134,352Machinery and equipment
    
    
    69,283
    
    
    
    64,572Total cost
    
    
    226,749
    
    
    
    220,719Accumulated depreciation
    
    
    69,383
    
    
    
    63,477Property, net
    
    
    157,366
    
    
    
    157,242Investment in Joint ventures
    
    
    2,912
    
    
    
    2,671Other assets:Goodwill
    
    
    165,663
    
    
    
    165,663Non-compete agreements
    
    
    1,493
    
    
    
    1,906Trademarks
    
    
    13,900
    
    
    
    13,900Other
    
    
    12,419
    
    
    
    12,387Total other assets
    
    
    193,475
    
    
    
    193,856TOTAL ASSETS
    
    $
    1,006,854
    
    
    $
    1,059,297LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    138,240
    
    
    $
    123,433Accrued liabilities:Taxes
    
    
    10,878
    
    
    
    17,991Compensation and related items
    
    
    30,108
    
    
    
    39,242Product warranties
    
    
    61,690
    
    
    
    64,310Promotions and rebates
    
    
    12,801
    
    
    
    11,697Product/property liability and related liabilities
    
    
    11,307
    
    
    
    11,691Other
    
    
    13,019
    
    
    
    8,835Total current liabilities
    
    
    278,043
    
    
    
    277,199Long Term Liabilities:Unrecognized tax benefits
    
    
    27,134
    
    
    
    Other
    
    
    20,573
    
    
    
    15,767Total long term liabilities
    
    
    47,707
    
    
    
    15,767Contingent liabilities and commitments
    
    
    
    
    
    
    Stockholders equity:Common stock  authorized 250,000,000 shares;
issued 57,313,263 shares @ 1/31/08 and 57,222,404
shares @ 7/31/07; par value of $.10 per share
    
    
    5,731
    
    
    
    5,722Additional paid-in capital
    
    
    92,737
    
    
    
    90,247Accumulated other comprehensive income
    
    
    3,766
    
    
    
    2,756Retained earnings
    
    
    650,798
    
    
    
    727,729Less Treasury shares of 1,815,839 @ 1/31/08 & 1,441,600 @ 7/31/07
    
    
    (71,928
    )
    
    
    (60,123
    )Total stockholders equity
    
    
    681,104
    
    
    
    766,331TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,006,854
    
    
    $
    1,059,297
  1




---



##### Table of Contents



THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED INCOME  FOR THE THREE & SIX MONTHS ENDED JANUARY 31, 2008 AND 2007
 Three Months Ended January 31
    
    
    Six Months Ended January 312008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    599,170
    
    
    $
    584,049
    
    
    $
    1,362,906
    
    
    $
    1,311,765Cost of products sold
    
    
    529,453
    
    
    
    522,880
    
    
    
    1,191,914
    
    
    
    1,161,428Gross profit
    
    
    69,717
    
    
    
    61,169
    
    
    
    170,992
    
    
    
    150,337Selling, general and
administrative expenses
    
    
    39,819
    
    
    
    37,424
    
    
    
    85,229
    
    
    
    80,869Gain on sale of property
    
    
    2,308
    
    
    
    
    
    
    
    2,308
    
    
    
    Interest income
    
    
    3,161
    
    
    
    2,346
    
    
    
    7,357
    
    
    
    5,256Interest expense
    
    
    353
    
    
    
    164
    
    
    
    713
    
    
    
    351Other income
    
    
    192
    
    
    
    315
    
    
    
    971
    
    
    
    865Income before income taxes
    
    
    35,206
    
    
    
    26,242
    
    
    
    95,686
    
    
    
    75,238Provision for income taxes
    
    
    13,604
    
    
    
    7,990
    
    
    
    35,875
    
    
    
    26,389Net income
    
    $
    21,602
    
    
    $
    18,252
    
    
    $
    59,811
    
    
    $
    48,849Average common shares outstanding:Basic
    
    
    55,758,534
    
    
    
    55,654,744
    
    
    
    55,757,936
    
    
    
    55,634,023Diluted
    
    
    55,910,429
    
    
    
    55,927,479
    
    
    
    55,937,211
    
    
    
    55,909,970Earnings per common share:Basic
    
    $
    .39
    
    
    $
    .33
    
    
    $
    1.07
    
    
    $
    .88Diluted
    
    $
    .39
    
    
    $
    .33
    
    
    $
    1.07
    
    
    $
    .87Regular dividends declared
per common share:
    
    $
    .07
    
    
    $
    .07
    
    
    $
    .14
    
    
    $
    .14Special dividends declared
per common share:
    
    $
    
    
    
    $
    
    
    
    $
    2.00
    
    
    $
    1.00Regular dividends paid
per common share:
    
    $
    .07
    
    
    $
    .07
    
    
    $
    .14
    
    
    $
    .14Special dividends paid
per common share:
    
    $
    
    
    
    $
    
    
    
    $
    2.00
    
    
    $
    1.00
  2




---



##### Table of Contents



THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS  FOR THE SIX MONTHS ENDED JANUARY 31, 2008 AND 2007
 2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    59,811
    
    
    $
    48,849Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation
    
    
    6,692
    
    
    
    6,393Amortization
    
    
    413
    
    
    
    454Deferred income taxes
    
    
    (11,961
    )
    
    
    (7,699
    )(Gain) Loss on disposition of assets
    
    
    (2,344
    )
    
    
    86Loss on disposition of trading investments
    
    
    
    
    
    
    104Stock based compensation
    
    
    162
    
    
    
    319Changes in non cash assets and liabilities, net of effect
from acquisitions:Proceeds from disposition of trading investments
    
    
    
    
    
    
    68,133Accounts receivable
    
    
    (10,281
    )
    
    
    7,434Inventories
    
    
    (31,995
    )
    
    
    (6,345
    )Prepaids and other
    
    
    (5,788
    )
    
    
    (13,537
    )Accounts payable
    
    
    14,843
    
    
    
    (22,221
    )Accrued liabilities
    
    
    (3,906
    )
    
    
    152Other liabilities
    
    
    4,754
    
    
    
    1,838Net cash provided by operating activities
    
    
    20,400
    
    
    
    83,960Cash flows from investing activities:Purchase of property, plant & equipment
    
    
    (9,439
    )
    
    
    (7,101
    )Proceeds from disposition of assets
    
    
    4,983
    
    
    
    224Purchases of available for sale investments
    
    
    (29,900
    )
    
    
    (202,320
    )Proceeds from sale of available for sale investments
    
    
    58,125
    
    
    
    83,897Net cash provided by (used in) investing activities
    
    
    23,769
    
    
    
    (125,300
    )Cash flows from financing activities:Cash dividends
    
    
    (119,513
    )
    
    
    (63,516
    )Purchase of common stock held as treasury shares
    
    
    (11,805
    )
    
    
    (1,630
    )Proceeds from issuance of common stock
    
    
    2,185
    
    
    
    2,146Net cash used in financing activities
    
    
    (129,133
    )
    
    
    (63,000
    )Effect of exchange rate changes
    
    
    1,010
    
    
    
    (461
    )Net decrease in cash and equivalents
    
    
    (83,954
    )
    
    
    (104,801
    )Cash and equivalents, beginning of period
    
    
    171,889
    
    
    
    196,136Cash and equivalents, end of period
    
    $
    87,935
    
    
    $
    91,335Supplemental cash flow information:Income taxes paid
    
    $
    46,145
    
    
    $
    25,846Interest paid
    
    
    713
    
    
    
    351Non cash transactions:Capital expenditures in accounts payable
    
    $
    167
    
    
    $
    166
  3




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    The July 31, 2007 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, 2007. The results of operations for
the six months ended January 31, 2008 are not necessarily indicative of the results for the
full year.
 2.
    
    Major classifications of inventories are:
 January 31, 2008
    
    
    July 31, 2007Raw materials
    
    $
    97,187
    
    
    $
    87,245Chassis
    
    
    46,435
    
    
    
    42,528Work in process
    
    
    57,730
    
    
    
    52,102Finished goods
    
    
    26,722
    
    
    
    12,326Total
    
    
    228,074
    
    
    
    194,201Less excess of FIFO costs
over LIFO costs
    
    
    27,099
    
    
    
    25,221Total inventories
    
    $
    200,975
    
    
    $
    168,980
 3.
    
    Earnings Per Share
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJanuary 31, 2008
    
    January 31, 2007
    
    January 31, 2008
    
    January 31, 2007Weighted average shares
outstanding for basic
earnings per share
    
    
    55,758,534
    
    
    
    55,654,744
    
    
    
    55,757,936
    
    
    
    55,634,023Stock options and
restricted stock
    
    
    151,895
    
    
    
    272,735
    
    
    
    179,275
    
    
    
    275,947Total  For diluted shares
    
    
    55,910,429
    
    
    
    55,927,479
    
    
    
    55,937,211
    
    
    
    55,909,970
 4.
    
    Comprehensive Income
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2008
    
    
    January 31, 2007
    
    
    January 31, 2008
    
    
    January 31, 2007Net income
    
    $
    21,602
    
    
    $
    18,252
    
    
    $
    59,811
    
    
    $
    48,849Foreign currency
translation adjustment
    
    
    (1,009
    )
    
    
    (562
    )
    
    
    1,010
    
    
    
    (461
    )Comprehensive income
    
    $
    20,593
    
    
    $
    17,690
    
    
    $
    60,821
    
    
    $
    48,388
 5.
    
    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.
 4




---



##### Table of Contents



Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2008
    
    
    January 31, 2007
    
    
    January 31, 2008
    
    
    January 31, 2007Net Sales:Recreation vehicles:Towables
    
    $
    394,441
    
    
    $
    373,940
    
    
    $
    918,152
    
    
    $
    873,895Motorized
    
    
    110,825
    
    
    
    116,694
    
    
    
    251,325
    
    
    
    252,617Total recreation vehicles
    
    
    505,266
    
    
    
    490,634
    
    
    
    1,169,477
    
    
    
    1,126,512Buses
    
    
    93,904
    
    
    
    93,415
    
    
    
    193,429
    
    
    
    185,253Total
    
    $
    599,170
    
    
    $
    584,049
    
    
    $
    1,362,906
    
    
    $
    1,311,765
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2008
    
    
    January 31, 2007
    
    
    January 31, 2008
    
    
    January 31, 2007Income Before Income Taxes:Recreation vehicles:Towables
    
    $
    30,492
    
    
    $
    21,804
    
    
    $
    81,304
    
    
    $
    62,204Motorized
    
    
    3,561
    
    
    
    3,468
    
    
    
    10,414
    
    
    
    9,536Total recreation vehicles
    
    
    34,053
    
    
    
    25,272
    
    
    
    91,718
    
    
    
    71,740Buses
    
    
    3,556
    
    
    
    3,154
    
    
    
    7,695
    
    
    
    6,174Corporate
    
    
    (2,403
    )
    
    
    (2,184
    )
    
    
    (3,727
    )
    
    
    (2,676
    )Total
    
    $
    35,206
    
    
    $
    26,242
    
    
    $
    95,686
    
    
    $
    75,238
 January 31, 2008
    
    
    July 31, 2007Identifiable Assets:Recreation vehicles:Towables
    
    $
    479,914
    
    
    $
    449,276Motorized
    
    
    156,489
    
    
    
    147,598Total recreation vehicles
    
    
    636,406
    
    
    
    596,874Buses
    
    
    99,148
    
    
    
    105,864Corporate
    
    
    271,300
    
    
    
    356,559Total
    
    $
    1,006,854
    
    
    $
    1,059,297
 6.
    
    Treasury SharesIn the second quarter of fiscal year 2008, the Company purchased 374,239 shares and held them
as treasury stock at a cost of $11,805, an average cost of $31.54 per share. In 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.7.
    
    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, 2008, 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
 5




---



##### Table of Contents



unrealized or realized gains or losses to report. Cost is determined on the specific
identification basis. Interest income is accrued as earned.At January 31, 2008, we held approximately $146,000 of short term investments, with an auction
reset feature (auction rate securities) whose underlying assets are generally student loans
which are substantially backed by the Federal government. Since February 12, 2008, auctions
have failed for some of these securities and there is no assurance that successful auctions on
the other auction rate securities in our investment portfolio will succeed and as a result our
ability to liquidate our investment and fully recover the carrying value of our investment in
the near term may be limited or not exist. As of February 29, 2008, we held $135,400 of
auction rate securities. An auction failure means that the parties wishing to sell securities
could not. All of our auction rate securities, including those subject to the failure, are
currently rated AAA, the highest rating, by a rating agency. If the issuers are unable to
successfully close future auctions and their credit ratings deteriorate, we may in the future
be required to record an impairment charge on these investments. We believe we will be able to
liquidate our investment without significant loss within the next year, and we currently
believe these securities are not significantly impaired, primarily due to the government
guarantee of the underlying securities; however, it could take until the final maturity of the
underlying notes (up to 40 years) to realize our investments recorded value. Based on our
expected operating cash flows, and our other sources of cash, we do not anticipate the
potential lack of liquidity on these investments will affect our ability to execute our current
business plan.8.
    
    Goodwill and Other Intangible AssetsThe components of other intangible assets are as follows:
 January 31, 2008
    
    July 31, 2007Accumulated
    
    
    
    
    
    AccumulatedCost
    
    Amortization
    
    Cost
    
    AmortizationAmortized Intangible Assets:Non-compete agreements
    
    $
    6,256
    
    
    $
    4,763
    
    
    $
    6,256
    
    
    $
    4,350
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJanuary 31, 2008
    
    January 31, 2007
    
    January 31, 2008
    
    January 31, 2007Non-compete Agreements:Amortization Expense
    
    $
    200
    
    
    $
    217
    
    
    $
    413
    
    
    $
    454
 Non-compete agreements are amortized on a straight-line basis.
 Estimated Amortization Expense:
 For the year ending July 2008
    
    $
    812For the year ending July 2009
    
    $
    476For the year ending July 2010
    
    $
    322For the year ending July 2011
    
    $
    238For the year ending July 2012
    
    $
    58
 There was no change in the carrying amount of goodwill and trademarks for the six month period
ended January 31, 2008.
 6




---



##### Table of Contents



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
 9.
    
    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, 2008
    
    
    January 31, 2007
    
    
    January 31, 2008
    
    
    January 31, 2007Beginning Balance
    
    $
    66,011
    
    
    $
    60,923
    
    
    $
    64,310
    
    
    $
    59,795Provision
    
    
    13,525
    
    
    
    15,243
    
    
    
    32,075
    
    
    
    33,194Payments
    
    
    (17,846
    )
    
    
    (17,105
    )
    
    
    (34,695
    )
    
    
    (33,928
    )Ending Balance
    
    $
    61,690
    
    
    $
    59,061
    
    
    $
    61,690
    
    
    $
    59,061
 10.
    
    Commercial CommitmentsOur principal commercial commitments at January 31, 2008 are summarized in the following chart:
 Total
    
    Term ofCommitment
    
    Amount Committed
    
    CommitmentGuarantee on dealer financing
    
    $
    2,116
    
    
    less than 1 yearStandby repurchase obligation
on dealer financing
    
    $
    1,010,074
    
    
    less than 1 year
 The Company records repurchase and guarantee reserves based on prior experience and known
current events. The combined repurchase and recourse reserve balances are approximately $1,727
and $1,293 as of January 31, 2008 and July 31, 2007, respectively.
 7




---



##### Table of Contents



Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJanuary 31, 2008
    
    
    January 31, 2007
    
    
    January 31, 2008
    
    
    January 31, 2007Cost of units repurchased
    
    $
    1,650
    
    
    $
    6,128
    
    
    $
    2,754
    
    
    $
    8,089Realization on units resold
    
    
    1,596
    
    
    
    5,474
    
    
    
    2,435
    
    
    
    7,017Losses due to repurchase
    
    $
    54
    
    
    $
    654
    
    
    $
    319
    
    
    $
    1,072
 11.
    
    Income TaxesThe Company adopted FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB Statement No. 109, on August 1, 2007. FIN 48
clarifies the accounting for uncertainties in income tax law by prescribing a minimum
recognition threshold a tax position is required to meet before being recognized for financial
accounting purposes. FIN 48 also provides guidance on derecognition, measurement,
classification, interest and penalties, and disclosure.On August 1, 2007 the Company recognized a cumulative effect adjustment of $17,200 as a
reduction to the balance of retained earnings and an increase in tax liabilities of $11,300 and
an increase in liability for penalties and interest of $5,900. The amount of unrecognized tax
benefits as of August 1, 2007 totaled $25,900, all of which would increase income from
continuing operations, and thus impact the Companys effective tax rate, if ultimately
recognized into income. Unrecognized state income tax benefits are reported net of their
related deferred federal income tax benefit.It is the Companys policy to recognize interest and penalties accrued relative to unrecognized
tax benefits in income tax expense. As of August 1, 2007, $6,500 in interest and penalties had
been accrued.The Company and its corporate subsidiaries file a consolidated U.S. federal income tax return
and multiple state income tax returns. The federal returns are subject to examination by
taxing authorities for all years after 2005. We are currently under audit by various state
Departments of Revenue for 2002 through 2005 tax years. The anticipated effect on unrecognized
tax benefits resulting from these audits is not expected to have a material impact on the
financial statements.The Company anticipates a decrease of approximately $2,100 in unrecognized tax benefits within
the next 12 months from (1) expected settlements or payments of uncertain tax positions, and
(2) lapses of the applicable statutes of limitations. Actual results may differ materially
from this estimate.12.
    
    Retained EarningsThe components of changes in retained earnings are as follows:
 Balance @ 7/31/07
    
    $
    727,729Net income
    
    
    59,811Dividends paid
    
    
    (119,513
    )FIN 48 adjustment
    
    
    (17,229
    )Balance @ 1/31/08
    
    $
    650,798
 8




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Executive Overview
      Trends and Business Outlook
   9




---



##### Table of Contents



Three Months Ended January 31, 2007
 Three Months Ended
    
    
    Three Months Ended
    
    
    ChangeJanuary 31, 2008
    
    
    January 31, 2007
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    394,441
    
    
    
    
    
    
    $
    373,940
    
    
    
    
    
    
    $
    20,501
    
    
    
    5.5Motorized
    
    
    110,825
    
    
    
    
    
    
    
    116,694
    
    
    
    
    
    
    
    (5,869
    )
    
    
    (5.0
    )Total Recreation Vehicles
    
    
    505,266
    
    
    
    
    
    
    
    490,634
    
    
    
    
    
    
    
    14,632
    
    
    
    3.0Buses
    
    
    93,904
    
    
    
    
    
    
    
    93,415
    
    
    
    
    
    
    
    489
    
    
    
    .5Total
    
    $
    599,170
    
    
    
    
    
    
    $
    584,049
    
    
    
    
    
    
    $
    15,121
    
    
    
    2.6# OF UNITS:Recreation VehiclesTowables
    
    
    17,825
    
    
    
    
    
    
    
    17,436
    
    
    
    
    
    
    
    389
    
    
    
    2.2Motorized
    
    
    1,340
    
    
    
    
    
    
    
    1,521
    
    
    
    
    
    
    
    (181
    )
    
    
    (11.9
    )Total Recreation Vehicles
    
    
    19,165
    
    
    
    
    
    
    
    18,957
    
    
    
    
    
    
    
    208
    
    
    
    1.1Buses
    
    
    1,427
    
    
    
    
    
    
    
    1,531
    
    
    
    
    
    
    
    (104
    )
    
    
    (6.8
    )Total
    
    
    20,592
    
    
    
    
    
    
    
    20,488
    
    
    
    
    
    
    
    104
    
    
    
    .5% of
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    Segment
    
    ChangeNet Sales

    

    
    

    Net Sales

    Amount
    
    
    %GROSS PROFIT:Recreation VehiclesTowables
    
    $
    52,079
    
    
    
    13.2
    
    
    $
    44,576
    
    
    
    11.9
    
    
    $
    7,503
    
    
    
    16.8Motorized
    
    
    9,855
    
    
    
    8.9
    
    
    
    9,854
    
    
    
    8.4
    
    
    
    1
    
    
    
    Total Recreation Vehicles
    
    
    61,934
    
    
    
    12.3
    
    
    
    54,430
    
    
    
    11.1
    
    
    
    7,504
    
    
    
    13.8Buses
    
    
    7,783
    
    
    
    8.3
    
    
    
    6,739
    
    
    
    7.2
    
    
    
    1,044
    
    
    
    15.5Total
    
    $
    69,717
    
    
    
    11.6
    
    
    $
    61,169
    
    
    
    10.5
    
    
    $
    8,548
    
    
    
    14.0SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    24,109
    
    
    
    6.1
    
    
    $
    22,954
    
    
    
    6.1
    
    
    $
    1,155
    
    
    
    5.0Motorized
    
    
    6,334
    
    
    
    5.7
    
    
    
    6,388
    
    
    
    5.5
    
    
    
    (54
    )
    
    
    (.8
    )Total Recreation Vehicles
    
    
    30,443
    
    
    
    6.0
    
    
    
    29,342
    
    
    
    6.0
    
    
    
    1,101
    
    
    
    3.8Buses
    
    
    3,872
    
    
    
    4.1
    
    
    
    3,510
    
    
    
    3.8
    
    
    
    362
    
    
    
    10.3Corporate
    
    
    5,505
    
    
    
    
    
    
    
    4,572
    
    
    
    
    
    
    
    933
    
    
    
    20.4Total
    
    $
    39,820
    
    
    
    6.6
    
    
    $
    37,424
    
    
    
    6.4
    
    
    $
    2,396
    
    
    
    6.4INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    30,492
    
    
    
    7.7
    
    
    $
    21,804
    
    
    
    5.8
    
    
    $
    8,688
    
    
    
    39.8Motorized
    
    
    3,561
    
    
    
    3.2
    
    
    
    3,468
    
    
    
    3.0
    
    
    
    93
    
    
    
    2.7Total Recreation Vehicles
    
    
    34,053
    
    
    
    6.7
    
    
    
    25,272
    
    
    
    5.2
    
    
    
    8,781
    
    
    
    34.7Buses
    
    
    3,556
    
    
    
    3.8
    
    
    
    3,154
    
    
    
    3.4
    
    
    
    402
    
    
    
    12.7Corporate
    
    
    (2,403
    )
    
    
    
    
    
    
    (2,184
    )
    
    
    
    
    
    
    219
    
    
    
    (10.0
    )Total
    
    $
    35,206
    
    
    
    5.9
    
    
    $
    26,242
    
    
    
    4.5
    
    
    $
    8,964
    
    
    
    34.2
 10




---



##### Table of Contents



ORDER BACKLOG
 As of
    
    
    As of
    
    
    ChangeJanuary 31, 2008
    
    
    January 31, 2007
    
    
    Amount
    
    
    %Recreation VehiclesTowables
    
    $
    215,479
    
    
    $
    238,658
    
    
    $
    (23,179
    )
    
    
    (9.7
    )Motorized
    
    
    102,884
    
    
    
    99,756
    
    
    
    3,128
    
    
    
    3.1Total Recreation Vehicles
    
    
    318,363
    
    
    
    338,414
    
    
    
    (20,051
    )
    
    
    (5.9
    )Buses
    
    
    249,495
    
    
    
    206,820
    
    
    
    42,675
    
    
    
    20.6Total
    
    $
    567,858
    
    
    $
    545,234
    
    
    $
    22,624
    
    
    
    4.1
 CONSOLIDATED
     SEGMENT REPORTING
 Recreation Vehicles
  Average PricePer Unit

    
    Units

    
    Net ChangeRecreation VehiclesTowables
    
    
    3.3
    %
    
    
    2.2
    %
    
    
    5.5
    %Motorized
    
    
    6.9
    %
    
    
    (11.9
    )%
    
    
    (5.0
    %)
 Towable Recreation Vehicles
  11




---



##### Table of Contents



Motorized Recreation Vehicles
    Buses
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    7.3
    %
    
    
    (6.8
    %)
    
    
    .5
    %
    12




---



##### Table of Contents



Six Months Ended January 31, 2007
 Six Months Ended
    
    
    
    
    
    
    Six Months Ended
    
    
    ChangeJanuary 31, 2008
    
    
    
    
    
    
    January 31, 2007
    
    
    Amount
    
    
    %NET SALES:Recreation VehiclesTowables
    
    $
    918,152
    
    
    
    
    
    
    $
    873,895
    
    
    
    
    
    
    $
    44,257
    
    
    
    5.1Motorized
    
    
    251,325
    
    
    
    
    
    
    
    252,617
    
    
    
    
    
    
    
    (1,292
    )
    
    
    (.5
    )Total Recreation Vehicles
    
    
    1,169,477
    
    
    
    
    
    
    
    1,126,512
    
    
    
    
    
    
    
    42,965
    
    
    
    3.8Buses
    
    
    193,429
    
    
    
    
    
    
    
    185,253
    
    
    
    
    
    
    
    8,176
    
    
    
    4.4Total
    
    $
    1,362,906
    
    
    
    
    
    
    $
    1,311,765
    
    
    
    
    
    
    $
    51,141
    
    
    
    3.9# OF UNITS:Recreation VehiclesTowables
    
    
    41,640
    
    
    
    
    
    
    
    40,926
    
    
    
    
    
    
    
    714
    
    
    
    1.8Motorized
    
    
    3,111
    
    
    
    
    
    
    
    3,376
    
    
    
    
    
    
    
    (265
    )
    
    
    (7.8
    )Total Recreation Vehicles
    
    
    44,751
    
    
    
    
    
    
    
    44,302
    
    
    
    
    
    
    
    449
    
    
    
    1.0Buses
    
    
    2,970
    
    
    
    
    
    
    
    3,088
    
    
    
    
    
    
    
    (118
    )
    
    
    (3.8
    )Total
    
    
    47,721
    
    
    
    
    
    
    
    47,390
    
    
    
    
    
    
    
    331
    
    
    
    .7% of
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    Segment
    
    ChangeNet Sales
    
    
    
    
    
    Net Sales
    
    Amount
    
    
    %GROSS PROFIT:Recreation VehiclesTowables
    
    $
    131,255
    
    
    
    14.3

    
    
    $
    114,398
    
    
    
    13.1
    
    
    $
    16,857
    
    
    
    14.7Motorized
    
    
    23,673
    
    
    
    9.4
    
    
    
    22,493
    
    
    
    8.9
    
    
    
    1,180
    
    
    
    5.2Total Recreation Vehicles
    
    
    154,928
    
    
    
    13.2
    
    
    
    136,891
    
    
    
    12.2
    
    
    
    18,037
    
    
    
    13.2Buses
    
    
    16,064
    
    
    
    8.3
    
    
    
    13,446
    
    
    
    7.3
    
    
    
    2,618
    
    
    
    19.5Total
    
    $
    170,992
    
    
    
    12.5
    
    
    $
    150,337
    
    
    
    11.5
    
    
    $
    20,655
    
    
    
    13.7SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:Recreation VehiclesTowables
    
    $
    52,628
    
    
    
    5.7
    
    
    $
    52,383
    
    
    
    6.0
    
    
    $
    245
    
    
    
    .5Motorized
    
    
    13,296
    
    
    
    5.3
    
    
    
    12,944
    
    
    
    5.1
    
    
    
    352
    
    
    
    2.7Total Recreation Vehicles
    
    
    65,924
    
    
    
    5.6
    
    
    
    65,327
    
    
    
    6.0
    
    
    
    597
    
    
    
    .9Buses
    
    
    7,668
    
    
    
    4.0
    
    
    
    7,003
    
    
    
    3.8
    
    
    
    665
    
    
    
    9.5Corporate
    
    
    11,638
    
    
    
    
    
    
    
    8,539
    
    
    
    
    
    
    
    3,099
    
    
    
    36.3Total
    
    $
    85,230
    
    
    
    6.3
    
    
    $
    80,869
    
    
    
    6.2
    
    
    $
    4,361
    
    
    
    5.4INCOME BEFORE INCOME TAXES:Recreation VehiclesTowables
    
    $
    81,304
    
    
    
    8.9
    
    
    $
    62,204
    
    
    
    7.1
    
    
    $
    19,100
    
    
    
    30.7Motorized
    
    
    10,414
    
    
    
    4.1
    
    
    
    9,536
    
    
    
    3.8
    
    
    
    878
    
    
    
    9.2Total Recreation Vehicles
    
    
    91,718
    
    
    
    7.8
    
    
    
    71,740
    
    
    
    6.4
    
    
    
    19,978
    
    
    
    27.8Buses
    
    
    7,695
    
    
    
    4.0
    
    
    
    6,174
    
    
    
    3.3
    
    
    
    1,521
    
    
    
    24.6Corporate
    
    
    (3,727
    )
    
    
    
    
    
    
    (2,676
    )
    
    
    
    
    
    
    (1,051
    )
    
    
    (39.3
    )Total
    
    $
    95,686
    
    
    
    7.0
    
    
    $
    75,238
    
    
    
    5.7
    
    
    $
    20,448
    
    
    
    27.2
 CONSOLIDATED
  13




---



##### Table of Contents



SEGMENT REPORTING
 Recreation Vehicles
  Average PricePer Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    3.3
    %
    
    
    1.8
    %
    
    
    5.1
    %Motorized
    
    
    7.3
    %
    
    
    (7.8
    %)
    
    
    (.5
    %)
 Towable Recreation Vehicles
    Motorized Recreation Vehicles
  14




---



##### Table of Contents



Buses
  Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    8.2
    %
    
    
    (3.8
    %)
    
    
    4.4
    %
    Financial Condition and Liquidity
    15




---



##### Table of Contents



Critical Accounting Principles
  Impairment of Goodwill, Trademarks and Long-Lived Assets
  Insurance Reserves
  Warranty
  16




---



##### Table of Contents



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
  Investments
  17




---



##### 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
  18




---



##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
   
 ITEM 4. Controls and Procedures
  19




---



##### Table of Contents



PART II    Other Information
 
 ITEM 1. LEGAL PROCEEDINGS
    
 ITEM 1A. RISK FACTORS
  Our investments in auction rate securities are subject to risks which may cause losses and affect
the liquidity of these investments.
   20




---



##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
 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 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200December 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,947,200January 2008
    
    
    374,239
    
    
    $
    31.54
    
    
    
    374,239
    
    
    
    1,572,961
 
 (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, 2008, 1,572,961
shares of common stock remained authorized for repurchase under the repurchase program. 
 ITEM 4. Submission of Matters to a Vote of Security Holders
  BrokerDirector
    
    For
    
    Withheld
    
    Non-VotesH. Coleman Davis, III
    
    
    51,265,563
    
    
    
    2,387,623
    
    
    
    Peter B. Orthwein
    
    
    52,891,869
    
    
    
    761,317
    
    
    
    William C. Tomson
    
    
    53,028,249
    
    
    
    624,937
    
    
    
    
   21




---



##### Table of Contents



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.
 22




---



##### Table of Contents



SIGNATURES
  THOR INDUSTRIES, INC.
              (Registrant)DATE: March 10, 2008
    By:
    /s/  Wade F. B. ThompsonWade F. B. ThompsonChairman of the Board, President
and Chief Executive OfficerDATE: March 10, 2008
    By:
    /s/  Walter L. BennettWalter L. BennettExecutive Vice President,
Secretary and Chief Financial Officer 23