##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 
 FORM 10-K
 
 Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
  THOR INDUSTRIES, INC.
  Delaware
    
    93-0768752(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 419 W. Pike Street, Jackson Center, Ohio
    
    45334-0629(Address of principal executive offices)
    
    (Zip Code)
   Title of each class:
    
    Name of each exchange on which registered:Common Stock (par value $.10 per share)
    
    New York Stock Exchange
  þ o
 o þ
 þ o
   þ o o
 o þ




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (UNAUDITED)ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESEX-21.1EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART I
 Unless otherwise indicated, all amounts presented in thousands except units, square feet, share and
per share data.
 
 ITEM 1. BUSINESS
 General Development of Business
 www.thorindustries.com.
 Airstream (CrossRoads) Dutchmen Four
Winds Keystone Komfort Citair Thor California (Damon) Champion ElDorado
California ElDorado Kansas (Goshen
Coach)
     Recreation Vehicles
 Airstream
 Airstream Classic Safari International,
Bambi Base Camp Interstate Westfalia
 Dutchmen
 Dutchmen Four Winds, Aero, T@b Grand Junction Colorado
 2




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##### Table of Contents



Four Winds
 Four Winds Hurricane Windsport,
Mandalay, Presidio,
Dutchmen Chateau Fun Mover
 CrossRoads
 Paradise Pointe, Cross Terrain, Cruiser, Zinger and Sunset
Trail.
 Citair
 General Coach Citation Corsair
 Keystone
 Montana Springdale Hornet Sprinter Outback Laredo Everest Mountaineer Challenger Cougar
 Komfort
 Komfort Trailblazer
 Thor California
 Wanderer Tahoe, Summit, Wave Jazz
 Damon Motor Coach
 Daybreak, Intruder Challenger, Astoria, Tuscany Outlaw
 Breckenridge
   Buses
 ElDorado National
  Aerolite AeroElite Aerotech Escort MST Transmark EZ Rider, Axess,
 Champion Bus
 Challenger Defender Crusader
 Goshen Coach
 GC II Pacer
  3




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Product Line Sales and Segment Information
   2006
    
    2005
    
    2004Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %Recreation Vehicles:Towables
    
    $
    2,173,483
    
    
    
    71
    
    
    $
    1,742,318
    
    
    
    68
    
    
    $
    1,433,997
    
    
    
    65Motorized
    
    
    577,025
    
    
    
    19
    
    
    
    566,138
    
    
    
    22
    
    
    
    539,010
    
    
    
    25Total Recreation Vehicles
    
    
    2,750,508
    
    
    
    90
    
    
    
    2,308,456
    
    
    
    90
    
    
    
    1,973,007
    
    
    
    90Buses
    
    
    315,768
    
    
    
    10
    
    
    
    249,895
    
    
    
    10
    
    
    
    214,732
    
    
    
    10Total Net Sales
    
    $
    3,066,276
    
    
    
    100
    
    
    $
    2,558,351
    
    
    
    100
    
    
    $
    2,187,739
    
    
    
    100
  Recreation Vehicles
 Overview
   The Recreational Park Trailer Association.
   4




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Production
     Seasonality
  Marketing and Distribution
     5




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Joint Ventures
   Backlogs
   Warranties
  Buses
 Overview
 Axess
 Production
    6




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Marketing and Distribution
   Backlog
   Warranties
  Regulation
       Competition
 Recreation Vehicles
  7




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Small and Mid-Size Buses
  Trademarks and Patents
  Employee Relations
  Information About Foreign and Domestic Operations and Export Sales
  Forward Looking Statements
  Available Information
  
 ITEM 1A. RISK FACTORS
  8




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##### Table of Contents



Risks Relating To Our Business
 The recreation vehicle and small and mid-size bus industries are highly competitive.
  Our businesses are cyclical and this can lead to fluctuations in our operating results.
  External Factors Affecting Any Business.
  
    
    overall
consumer confidence and the level of discretionary consumer spending;
    
    inventory levels, including
the level of retail sales by our dealers;
    
    general economic conditions;
    
    demographics, such as
the retirement of baby boomers;
    
    interest rates;
    
    employment trends;
    
    the amount of backlog,
which may be a predictor of near-term future revenues;
    
    fuel availability and prices;
    
    the
adverse impact of terrorism on consumer spending and travel related activities; and
    
    adverse
impact on our margins of increases in raw material costs which we are unable to pass on to
customers without negatively affecting sales.
 Two dealers accounted for 28% of our bus sales. Loss of either dealer could have a significant
effect on our bus business.
 A significant portion of our sales of small and mid-size buses are
derived from state and local transportation authorities.
  Our recreation vehicle business is seasonal, and this leads to fluctuations in sales, production
and net income.
  Our business is affected by the availability and terms of financing to dealers and retail
purchasers.
  Changes in consumer preferences for our products or our failure to gauge those preferences could
lead to reduced sales and additional costs.
  9




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If the frequency and size of product liability and other claims against us rises, our business,
results of operations and financial condition may be harmed.
  When we introduce new products into the marketplace we may incur expenses that we did not
anticipate, which, in turn, can result in reduced earnings.
  Fuel shortages, or continuing high prices for fuel, could have a negative effect on sales of our
recreation vehicles.
  Our repurchase agreements with floor plan lenders could result in increased costs.
  For some of our components, we depend on a small group of suppliers, and the loss of any of these
suppliers could affect our ability to obtain components at competitive prices, which would decrease
our margins.
  10




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Our business is subject to numerous federal, state and local regulations.
   Risks Relating To Our Company.
 Provisions in our charter documents and of Delaware law may make it difficult for a third party to
acquire our company and could depress the price of our common stock.
   We will continue to be effectively controlled by one of our shareholders.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  11




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ApproximateBuildingNo. of
    
    
    AreaLocation
    
    Owned or Leased
    
    
    Buildings
    
    
    Square FeetRVs:Jackson Center, OH (Airstream)
    
    Owned
    
    
    9
    
    
    
    299,000Hensall, Ontario, Canada (Citair)
    
    Owned
    
    
    1
    
    
    
    97,000Oliver, B.C., Canada (Citair)
    
    Owned
    
    
    1
    
    
    
    55,000Middlebury, IN (Dutchmen)
    
    Owned
    
    
    2
    
    
    
    110,000Burley, ID (Dutchmen)
    
    Owned
    
    
    5
    
    
    
    162,000Goshen, IN (Dutchmen)
    
    Owned
    
    
    12
    
    
    
    513,000Bristol, IN (Dutchmen)
    
    Owned
    
    
    1
    
    
    
    66,000Bristol, IN (Aero-Dutchmen) (2)
    
    Leased
    
    
    1
    
    
    
    40,000Goshen, IN (Aero-Dutchmen) (2)
    
    Leased
    
    
    1
    
    
    
    23,000Syracuse, IN (Aero-Dutchmen)
    
    Owned
    
    
    3
    
    
    
    133,000Syracuse, IN (Aero-Dutchmen) (1)
    
    Leased
    
    
    1
    
    
    
    49,000Elkhart, IN (Four Winds)
    
    Owned
    
    
    9
    
    
    
    707,000Elkhart, IN (Four Winds) (3)
    
    Leased
    
    
    2
    
    
    
    67,000Elkhart, IN (Damon)
    
    Owned
    
    
    6
    
    
    
    227,000Elkhart, IN (Damon) (4)
    
    Leased
    
    
    3
    
    
    
    41,000Napanee, IN (Breckenridge)
    
    Owned
    
    
    2
    
    
    
    144,000Topeka, IN (CrossRoads)
    
    Owned
    
    
    4
    
    
    
    195,000Bristol, IN (CrossRoads) (5)
    
    Leased
    
    
    2
    
    
    
    67,000Clackamas, OR (Komfort)
    
    Owned
    
    
    1
    
    
    
    107,000Moreno Valley, CA (Thor California) (6)
    
    Leased
    
    
    3
    
    
    
    166,000Moreno Valley, CA (Thor California) (7)
    
    Leased
    
    
    1
    
    
    
    49,000Moreno Valley, CA (Thor California)
    
    Owned
    
    
    1
    
    
    
    63,000Goshen, IN (Keystone) (8)
    
    Leased
    
    
    9
    
    
    
    472,000Goshen, IN (Keystone)
    
    Owned
    
    
    13
    
    
    
    989,000Howe, IN (Keystone) (10)
    
    Leased
    
    
    1
    
    
    
    168,000Pendleton, OR (Keystone)
    
    Owned
    
    
    1
    
    
    
    146,000Pendleton, OR (Keystone) (9)
    
    Leased
    
    
    1
    
    
    
    63,000Buses:Salina, KS (ElDorado Kansas)
    
    Owned
    
    
    2
    
    
    
    252,000Riverside, CA (ElDorado California)
    
    Owned
    
    
    1
    
    
    
    227,000Imlay City, Michigan (Champion Bus)
    
    Owned
    
    
    5
    
    
    
    201,000Elkhart, IN (Goshen Coach)
    
    Owned
    
    
    3
    
    
    
    126,000Total
    
    
    
    
    
    
    107
    
    
    
    6,024,000
 
 (1)
    
    This location is occupied under a net lease which expires in 2010
with option to purchase.(2)
    
    This location is occupied under a net lease which
expires in 2008.(3)
    
    These locations are occupied under net leases expiring at various times starting
in 2007 thru 2008.(4)
    
    These locations are occupied under net leases expiring at
various times starting in 2006 thru 2013.(5)
    
    These locations are occupied under net
leases expiring at various times starting in 2006 and 2007.(6)
    
    This location is
occupied under a net lease which expires in 2008.(7)
    
    This location is occupied under a net lease which expires October 2010.(8)
    
    These locations are occupied under net leases, expiring at various periods starting in 2007
thru 2012. Leases have extensions and or options to purchase.(9)
    
    This location is occupied under a net lease expiring in November 2011 with an option to
renew for 7 years.(10)
    
    This location is occupied under a net lease expiring in 2010. 12




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ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 (a) Market Information
  Fiscal 2006
    
    Fiscal 2005High
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    36.39
    
    
    $
    30.63
    
    
    $
    31.40
    
    
    $
    24.16Second Quarter
    
    
    43.46
    
    
    
    31.66
    
    
    
    37.99
    
    
    
    27.55Third Quarter
    
    
    56.93
    
    
    
    41.65
    
    
    
    36.76
    
    
    
    26.27Fourth Quarter
    
    
    53.28
    
    
    
    42.00
    
    
    
    36.52
    
    
    
    27.00
 (b) Holders
  (c) Dividends
  (d) Securities Authorized for Issuance Under Equity Compensation Plans
  Equity Compensation Plan Information
 Number of securitiesNumber of securities
    
    
    
    
    
    remaining available forto be issued
    
    Weighted-average
    
    future issuance underupon exercise of
    
    exercise price of
    
    equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securitieswarrants and rights
    
    warrants and rights
    
    reflected in column (a))Plan category
    
    (a)
    
    (b)
    
    (c)Equity compensation plans
approved by security holders
    
    
    533,038
    
    
    $
    21.29
    
    
    
    666,003Equity compensation plans
not approved by security holders (1)
    
    
    
    
    
    NA
    
    
    398,013Total
    
    
    533,038
    
    
    $
    21.29
    
    
    
    1,064,016
 
 (1)
    
    Constitutes shares remaining available for issuance under the Thor Industries, Inc. Restricted
Stock Plan (the Stock Plan). The Stock Plan, which was adopted in 1997, is intended to advance
the interests of the Company, its stockhold- 13




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ers, its subsidiaries and its affiliates by encouraging and enabling inside directors, officers
and other employees to acquire and retain a proprietary interest in the Company by ownership of
its stock. The Compensation Committee of the Board of Directors, which administers the Stock
Plan, may, at any time and from time to time, make grants to plan participants in such amounts
as it shall determine. Each grant vests as determined by the Compensation Committee but, in any
event, each grant automatically vests upon the earliest of (x) the termination by the Company
of the recipient other than for cause and (y) the recipients death, disability or retirement. (e) Issuer Purchases of Equity Securities
 (c) Total Number of Shares
    
    (d) Maximum Number(a) Total Number
    
    (b) Average
    
    (or Units) Purchased as
    
    of Shares thatof Shares (or units)
    
    Price Paid Per
    
    Part of Publicly Announced
    
    May Yet Be PurchasedPeriod
    
    Purchased
    
    Share (or Unit)
    
    Plans or Programs (1)
    
    Under the Plans or ProgramsMay 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,032,800June 2006
    
    
    728,600
    
    
    $
    44.82
    
    
    
    728,600
    
    
    
    2,304,200July 2006
    
    
    316,600
    
    
    $
    43.29
    
    
    
    316,600
    
    
    
    1,987,600
 
 (1)
    
    On March 11, 2003, we announced that our Board of Directors had approved a share repurchase
program, pursuant to
which up to 1,000,000 shares of our common stock may be repurchased. In the second quarter of
fiscal 2004, we affected a
two-for-one stock split, resulting in 2,000,000 shares authorized for repurchase under the program.
On June 26, 2006 our
Board of Directors authorized the repurchase of an additional 2,000,000 shares extending over a
24-month period before
expiring. At July 31, 2006, 1,987,600 shares of common stock remained authorized for repurchase
under the repurchase program. 
 ITEM 6. SELECTED FINANCIAL DATA
 Fiscal years ended July 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Income statement data:Net sales (2) (3)
    
    $
    3,066,276
    
    
    $
    2,558,351
    
    
    $
    2,187,739
    
    
    $
    1,571,404
    
    
    $
    1,245,300Net income (2) (3)
    
    
    172,446
    
    
    
    121,767
    
    
    
    106,085
    
    
    
    78,631
    
    
    
    51,182Earnings per common share (1) (2) (3)Basic
    
    
    3.05
    
    
    
    2.15
    
    
    
    1.85
    
    
    
    1.38
    
    
    
    .94Diluted
    
    
    3.03
    
    
    
    2.13
    
    
    
    1.84
    
    
    
    1.37
    
    
    
    .94Dividends declared per common share (1)
    
    
    .19
    
    
    
    .42
    
    
    
    .09
    
    
    
    .025
    
    
    
    .02Dividends paid per common share (1)
    
    
    .49
    
    
    
    .12
    
    
    
    .09
    
    
    
    .025
    
    
    
    .02Balance sheet data:Total assets (2) (3)
    
    $
    1,011,842
    
    
    $
    857,879
    
    
    $
    762,587
    
    
    $
    608,941
    
    
    $
    497,503
 
 (1)
    
    Per share amounts were adjusted for the two-for-one stock split in January 2004 and July 2002.(2)
    
    Selected financial data for 2006, 2005 and 2004 include the results of Damon Corporation, which
was acquired on September 2, 2003. Selected financial data for 2006, 2005, 2004, 2003 and 2002
include the results of Keystone RV
Company, which was acquired on November 9, 2001.(3)
    
    Selected financial data for 2006 and 2005 includes the results of CrossRoads RV, which was
acquired on November 1, 2004, and Goshen Coach, Inc. which was acquired on May 27, 2005. 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Executive Overview
  14




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Trends and Business Outlook
    FISCAL 2006 VS. FISCAL 2005
 ChangeFiscal 2006
    
    
    Fiscal 2005
    
    
    Amount
    
    
    %NET SALESRecreation VehiclesTowables
    
    $
    2,173,483
    
    
    $
    1,742,318
    
    
    $
    431,165
    
    
    
    24.7Motorized
    
    
    577,025
    
    
    
    566,138
    
    
    
    10,887
    
    
    
    1.9Total Recreation Vehicles
    
    
    2,750,508
    
    
    
    2,308,456
    
    
    
    442,052
    
    
    
    19.1Buses
    
    
    315,768
    
    
    
    249,895
    
    
    
    65,873
    
    
    
    26.4Total
    
    $
    3,066,276
    
    
    $
    2,558,351
    
    
    $
    507,925
    
    
    
    19.9# OF UNITSRecreation VehiclesTowables
    
    
    112,103
    
    
    
    88,471
    
    
    
    23,632
    
    
    
    26.7Motorized
    
    
    7,860
    
    
    
    8,158
    
    
    
    (298
    )
    
    
    (3.7
    )Total Recreation Vehicles
    
    
    119,963
    
    
    
    96,629
    
    
    
    23,334
    
    
    
    24.1Buses
    
    
    5,725
    
    
    
    4,372
    
    
    
    1,353
    
    
    
    30.9Total
    
    
    125,688
    
    
    
    101,001
    
    
    
    24,687
    
    
    
    24.4
 15




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% of
    
    
    % ofSegment
    
    
    Segment
    
    
    ChangeNet Sales
    
    
    
    
    
    Net Sales
    
    
    Amount
    
    
    %GROSS PROFITRecreation VehiclesTowables
    
    $
    365,266
    
    
    
    16.8
    
    
    $
    265,503
    
    
    
    15.2
    
    
    $
    99,763
    
    
    
    37.6Motorized
    
    
    55,622
    
    
    
    9.6
    
    
    
    52,993
    
    
    
    9.4
    
    
    
    2,629
    
    
    
    5.0Total Recreation Vehicles
    
    
    420,888
    
    
    
    15.3
    
    
    
    318,496
    
    
    
    13.8
    
    
    
    102,392
    
    
    
    32.1Buses
    
    
    24,882
    
    
    
    7.9
    
    
    
    21,270
    
    
    
    8.5
    
    
    
    3,612
    
    
    
    17.0Total
    
    $
    445,770
    
    
    
    14.5
    
    
    $
    339,766
    
    
    
    13.3
    
    
    $
    106,004
    
    
    
    31.2SELLING, GENERAL AND
ADMINISTRATIVE EXPENSESRecreation VehiclesTowables
    
    $
    121,778
    
    
    
    5.6
    
    
    $
    98,235
    
    
    
    5.6
    
    
    $
    23,543
    
    
    
    24.0Motorized
    
    
    28,147
    
    
    
    4.9
    
    
    
    28,314
    
    
    
    5.0
    
    
    
    (167
    )
    
    
    (0.6
    )Total Recreation Vehicles
    
    
    149,925
    
    
    
    5.5
    
    
    
    126,549
    
    
    
    5.5
    
    
    
    23,376
    
    
    
    18.5Buses
    
    
    14,577
    
    
    
    4.6
    
    
    
    13,463
    
    
    
    5.4
    
    
    
    1,114
    
    
    
    8.3Corporate
    
    
    19,424
    
    
    
    
    
    
    
    12,487
    
    
    
    
    
    
    
    6,937
    
    
    
    55.6Total
    
    $
    183,926
    
    
    
    6.0
    
    
    $
    152,499
    
    
    
    6.0
    
    
    $
    31,427
    
    
    
    20.6INCOME BEFORE INCOME TAXESRecreation VehiclesTowables
    
    $
    242,904
    
    
    
    11.2
    
    
    $
    168,574
    
    
    
    9.7
    
    
    $
    74,330
    
    
    
    44.1Motorized
    
    
    27,404
    
    
    
    4.7
    
    
    
    24,607
    
    
    
    4.3
    
    
    
    2,797
    
    
    
    11.4Total Recreation Vehicles
    
    
    270,308
    
    
    
    9.8
    
    
    
    193,181
    
    
    
    8.4
    
    
    
    77,127
    
    
    
    39.9Buses
    
    
    9,356
    
    
    
    3.0
    
    
    
    7,492
    
    
    
    3.0
    
    
    
    1,864
    
    
    
    24.9Corporate
    
    
    (9,241
    )
    
    
    
    
    
    
    (7,063
    )
    
    
    
    
    
    
    (2,178
    )
    
    
    (30.8
    )Total
    
    $
    270,423
    
    
    
    8.8
    
    
    $
    193,610
    
    
    
    7.6
    
    
    $
    76,813
    
    
    
    39.7
 ORDER BACKLOG
 As of
    
    
    As ofJuly 31, 2006
    
    
    July 31, 2005
    
    
    Change 
Amount
    
    
    %Recreation VehiclesTowables
    
    $
    229,823
    
    
    $
    202,177
    
    
    $
    27,646
    
    
    
    13.7Motorized
    
    
    103,214
    
    
    
    133,924
    
    
    
    (30,710
    )
    
    
    (23.0
    )Total Recreation Vehicles
    
    
    333,037
    
    
    
    336,101
    
    
    
    (3,064
    )
    
    
    (.9
    )Buses
    
    
    216,454
    
    
    
    130,566
    
    
    
    85,888
    
    
    
    65.8Total
    
    $
    549,491
    
    
    $
    466,667
    
    
    $
    82,824
    
    
    
    17.7
 CONSOLIDATED
     16




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##### Table of Contents



Segment Reporting
 RECREATION VEHICLES
  Impact from Internal GrowthImpact from
    
    Average PriceAcquisitions
    
    Per Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    2.2
    %
    
    
    (2.0
    )%
    
    
    24.5
    %
    
    
    24.7
    %Motorized
    
    
    
    
    
    
    5.6
    %
    
    
    (3.7
    )%
    
    
    1.9
    %
 TOWABLE RECREATION VEHICLES
    MOTORIZED RECREATION VEHICLES
    BUSES
  Impact from Internal GrowthImpact from Acquisition
    
    Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    16.6
    %
    
    
    6.8
    %
    
    
    3.0
    %
    
    
    26.4
    %
    17




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##### Table of Contents



FISCAL 2005 VS. FISCAL 2004
 ChangeFiscal 2005
    
    
    Fiscal 2004
    
    
    Amount
    
    
    %NET SALESRecreation VehiclesTowables
    
    $
    1,742,318
    
    
    $
    1,433,997
    
    
    $
    308,321
    
    
    
    21.5Motorized
    
    
    566,138
    
    
    
    539,010
    
    
    
    27,128
    
    
    
    5.0Total Recreation Vehicles
    
    
    2,308,456
    
    
    
    1,973,007
    
    
    
    335,449
    
    
    
    17.0Buses
    
    
    249,895
    
    
    
    214,732
    
    
    
    35,163
    
    
    
    16.4Total
    
    $
    2,558,351
    
    
    $
    2,187,739
    
    
    $
    370,612
    
    
    
    16.9# OF UNITSRecreation VehiclesTowables
    
    
    88,471
    
    
    
    78,644
    
    
    
    9,827
    
    
    
    12.5Motorized
    
    
    8,158
    
    
    
    8,364
    
    
    
    (206
    )
    
    
    (2.5
    )Total Recreation Vehicles
    
    
    96,629
    
    
    
    87,008
    
    
    
    9,621
    
    
    
    11.1Buses
    
    
    4,372
    
    
    
    3,826
    
    
    
    546
    
    
    
    14.3Total
    
    
    101,001
    
    
    
    90,834
    
    
    
    10,167
    
    
    
    11.2
 % of
    
    
    
    
    
    
    % ofSegment
    
    
    
    
    
    
    SegmentNet Sales
    
    
    
    
    
    
    Net SalesGROSS PROFITRecreation VehiclesTowables
    
    $
    265,503
    
    
    
    15.2
    
    
    $
    227,199
    
    
    
    15.8
    
    
    $
    38,304
    
    
    
    16.9Motorized
    
    
    52,993
    
    
    
    9.4
    
    
    
    53,190
    
    
    
    9.9
    
    
    
    (197
    )
    
    
    (.4
    )Total Recreation Vehicles
    
    
    318,496
    
    
    
    13.8
    
    
    
    280,389
    
    
    
    14.2
    
    
    
    38,107
    
    
    
    13.6Buses
    
    
    21,270
    
    
    
    8.5
    
    
    
    20,148
    
    
    
    9.4
    
    
    
    1,122
    
    
    
    5.6Total
    
    $
    339,766
    
    
    
    13.3
    
    
    $
    300,537
    
    
    
    13.7
    
    
    $
    39,229
    
    
    
    13.1SELLING, GENERAL AND 
ADMINISTRATIVE EXPENSESRecreation VehiclesTowables
    
    $
    98,235
    
    
    
    5.6
    
    
    $
    81,665
    
    
    
    5.7
    
    
    $
    16,570
    
    
    
    20.3Motorized
    
    
    28,314
    
    
    
    5.0
    
    
    
    25,065
    
    
    
    4.7
    
    
    
    3,249
    
    
    
    13.0Total Recreation Vehicles
    
    
    126,549
    
    
    
    5.5
    
    
    
    106,730
    
    
    
    5.4
    
    
    
    19,819
    
    
    
    18.6Buses
    
    
    13,463
    
    
    
    5.4
    
    
    
    11,132
    
    
    
    5.2
    
    
    
    2,331
    
    
    
    20.9Corporate
    
    
    12,487
    
    
    
    
    
    
    
    19,799
    
    
    
    
    
    
    
    (7,312
    )
    
    
    (36.9
    )Total
    
    $
    152,499
    
    
    
    6.0
    
    
    $
    137,661
    
    
    
    6.3
    
    
    $
    14,838
    
    
    
    10.8INCOME BEFORE INCOME TAXESRecreation VehiclesTowables
    
    $
    168,574
    
    
    
    9.7
    
    
    $
    144,908
    
    
    
    10.1
    
    
    $
    23,666
    
    
    
    16.3Motorized
    
    
    24,607
    
    
    
    4.3
    
    
    
    28,064
    
    
    
    5.2
    
    
    
    (3,457
    )
    
    
    (12.3
    )Total Recreation Vehicles
    
    
    193,181
    
    
    
    8.4
    
    
    
    172,972
    
    
    
    8.8
    
    
    
    20,209
    
    
    
    11.7Buses
    
    
    7,492
    
    
    
    3.0
    
    
    
    9,577
    
    
    
    4.5
    
    
    
    (2,085
    )
    
    
    (21.8
    )Corporate
    
    
    (7,063
    )
    
    
    
    
    
    
    (14,329
    )
    
    
    
    
    
    
    7,266
    
    
    
    50.7Total
    
    $
    193,610
    
    
    
    7.6
    
    
    $
    168,220
    
    
    
    7.7
    
    
    $
    25,390
    
    
    
    15.1
 ORDER BACKLOG
 As of
    
    
    As ofJuly 31, 2005
    
    
    July 31, 2004
    
    
    Change
Amount
    
    
    %Recreation VehiclesTowables
    
    $
    202,177
    
    
    $
    251,573
    
    
    $
    (49,396
    )
    
    
    (19.6
    )Motorized
    
    
    133,924
    
    
    
    108,991
    
    
    
    24,933
    
    
    
    22.9Total Recreation Vehicles
    
    
    336,101
    
    
    
    360,564
    
    
    
    (24,463
    )
    
    
    (6.8
    )Buses
    
    
    130,566
    
    
    
    134,414
    
    
    
    (3,848
    )
    
    
    (2.9
    )Total
    
    $
    466,667
    
    
    $
    494,978
    
    
    $
    (28,311
    )
    
    
    (5.7
    )
 18




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##### Table of Contents



CONSOLIDATED
     Segment Reporting
 RECREATION VEHICLES
  Impact from Internal GrowthImpact from
    
    Average PriceAcquisitions
    
    Per Unit
    
    Units
    
    Net ChangeRecreation VehiclesTowables
    
    
    5.2
    %
    
    
    8.8
    %
    
    
    7.5
    %
    
    
    21.5
    %Motorized
    
    
    
    
    
    
    7.5
    %
    
    
    (2.5
    )%
    
    
    5.0
    %
 TOWABLE RECREATION VEHICLES
    MOTORIZED RECREATION VEHICLES
    19




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##### Table of Contents



BUSES
  Impact from Internal GrowthImpact from Acquisition
    
    Average Price Per Unit
    
    Units
    
    Net ChangeBuses
    
    
    2.2
    %
    
    
    4.3
    %
    
    
    9.9
    %
    
    
    16.4
    %
    Financial Condition and Liquidity
     Critical Accounting Principles
  Impairment of Goodwill, Trademarks and Long-Lived Assets
  20




---



##### Table of Contents



Insurance Reserves
  Warranty
  Income Taxes
  Revenue Recognition
       Repurchase Commitments
  21




---



##### Table of Contents



Principal Contractual Obligations and Commercial Commitments
  Contractual
    
    Payments Due By PeriodObligations
    
    Total
    
    Fiscal 2007
    
    Fiscal 2008-2009
    
    Fiscal 2010-2011
    
    After 5 YearsOperating leases
    
    $
    13,094
    
    
    $
    4,021
    
    
    $
    5,589
    
    
    $
    2,609
    
    
    $
    875Total contractual
cash obligations
    
    $
    13,094
    
    
    $
    4,021
    
    
    $
    5,589
    
    
    $
    2,609
    
    
    $
    875
 Other
    
    Total
    
    Amount of Commitment Expiration Per PeriodCommercial
    
    Amounts
    
    Less Than 1Commitments
    
    Committed
    
    Year
    
    1-3 Years
    
    4-5 Years
    
    Over 5 YearsGuarantees
    
    $
    2,574
    
    
    $
    2,574
    
    
    $
    
    
    
    $
    
    
    
    $
    Standby repurchase
obligations
    
    $
    813,795
    
    
    $
    813,795
    
    
    $
    
    
    
    $
    
    
    
    $
    Total commercial
commitments
    
    $
    816,369
    
    
    $
    816,369
    
    
    $
    
    
    
    $
    
    
    
    $
    
 22




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##### Table of Contents



Accounting Pronouncements
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK
  
 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (UNAUDITED)  SEE
ITEM 15 Quarterly Financial Data
 October 31
    
    January 31
    
    April 30
    
    July 31Fiscal 2006Net sales
    
    $
    761,323
    
    
    $
    642,047
    
    
    $
    857,615
    
    
    $
    805,291Gross profit
    
    
    111,642
    
    
    
    89,963
    
    
    
    128,011
    
    
    
    116,154Net income
    
    
    43,365
    
    
    
    31,874
    
    
    
    51,139
    
    
    
    46,086Earnings per common shareBasic
    
    
    .77
    
    
    
    .56
    
    
    
    .90
    
    
    
    .82Diluted
    
    
    .76
    
    
    
    .56
    
    
    
    .90
    
    
    
    .81Dividends declared per common share
    
    
    
    
    
    
    .05
    
    
    
    .07
    
    
    
    .07Dividends paid per common share
    
    
    .30
    
    
    
    .05
    
    
    
    .07
    
    
    
    .07Market prices per common shareHigh
    
    $
    36.39
    
    
    $
    43.46
    
    
    $
    56.93
    
    
    $
    53.28Low
    
    $
    30.63
    
    
    $
    31.66
    
    
    $
    41.65
    
    
    $
    42.00
 October 31
    
    January 31
    
    April 30
    
    July 31Fiscal 2005Net sales
    
    $
    632,726
    
    
    $
    537,041
    
    
    $
    728,693
    
    
    $
    659,891Gross profit
    
    
    90,774
    
    
    
    67,832
    
    
    
    94,035
    
    
    
    87,125Net income
    
    
    35,073
    
    
    
    20,638
    
    
    
    32,950
    
    
    
    33,106Earnings per common shareBasic
    
    
    .61
    
    
    
    .36
    
    
    
    .58
    
    
    
    .59Diluted
    
    
    .61
    
    
    
    .36
    
    
    
    .58
    
    
    
    .58Dividends declared per common share
    
    
    .03
    
    
    
    .03
    
    
    
    .03
    
    
    
    .33Dividends paid per common share
    
    
    .03
    
    
    
    .03
    
    
    
    .03
    
    
    
    .03Market prices per common shareHigh
    
    $
    31.40
    
    
    $
    37.99
    
    
    $
    36.76
    
    
    $
    36.52Low
    
    $
    24.16
    
    
    $
    27.55
    
    
    $
    26.27
    
    
    $
    27.00
 23




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
     
 ITEM 9B. OTHER INFORMATION
  24




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##### Table of Contents



Internal Control  Integrated Framework,
  (Signed)
    /S/ Wade F.B. ThompsonWade F. B. ThompsonChairman, President, and Chief Executive OfficerDate
    September 28, 2006(Signed)
    /S/ Walter L. BennettWalter L. BennettExecutive Vice President and Chief Financial OfficerDate
    September 28, 2006
 25




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##### Table of Contents



To the Board of Directors and Stockholders of Thor Industries, Inc.:
          26




---



##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  http://www.thorindustries.com
 
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  27




---



##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) (1) Financial Statements
 PageReport of Independent Registered Public Accounting Firm
    
    
    31Consolidated Balance Sheets, July 31, 2006 and 2005
    
    
    32-33Consolidated Statements of Income for the Years Ended July 31, 2006, 2005 and 2004
    
    
    34Consolidated Statements of Stockholders Equity, and Comprehensive Income for the Years Ended July 31, 2006, 2005 and 2004
    
    
    35Consolidated Statements of Cash Flows for the Years Ended July 31, 2006, 2005 and 2004
    
    
    36Notes to Consolidated Financial Statements for the Years Ended July 31, 2006, 2005 and 2004
    
    
    37-47
 (b) Exhibits
 Exhibit
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3(a) of
the Companys Annual Report on Form 10-K for the fiscal year ended July 31, 2001)*3.2
    
    Certificate of Amendment to Amended and Restated Certificate of Incorporation
(incorporated
by reference to Exhibit 3.2 of the Companys Annual Report on Form 10-K for the
fiscal year
ended July 31, 2004)*3.3
    
    By-laws (incorporated by reference to Exhibit 3(b) of the Companys Registration
Statement No.
33-13827)*4.1
    
    Form of Common Stock Certificate. (incorporated by reference to Exhibit 4(a) of the
Companys
Annual Report on Form 10-K for the fiscal year ended July 31, 1987)*10.1
    
    Thor Industries, Inc. 1999 Stock Option Plan (incorporated by reference to Exhibit
4.1 of the
Companys Registration Statement on Form S-8 dated November 5, 1999)*10.2
    
    Thor Industries, Inc. Restricted Stock Plan (incorporated by reference to Exhibit
4.1 of the Companys
Registration Statement on Form S-8 dated December 3, 1997)*10.3
    
    Thor Industries, Inc. Select Executive Incentive Plan (incorporated by reference to
Exhibit 10(c)
of the Companys Annual Report on Form 10-K for the fiscal year ended July 31, 2000)*14.1
    
    Thor Industries, Inc. Business Ethics Policy (Incorporated by reference to Exhibit
14.1 of the
Companys Annual Report on Form 10-K/A for the fiscal year ended July 31, 2003)*21.1
    
    Subsidiaries of the Company**31.1
    
    Certification of the Chief Executive Officer filed pursuant to Section 302 of the
Sarbanes-Oxley
Act of 2002**31.2
    
    Certification of the Chief Financial Officer filed pursuant to Section 302 of the
Sarbanes-Oxley
Act of 2002**32.1
    
    Certification of the Chief Executive Officer furnished pursuant to Section 906 of the
SarbanesOxley Act of 2002**32.2
    
    Certification of the Chief Financial Officer furnished pursuant to Section 906 of
the Sarbanes 
Oxley Act of 2002**
 
 *
    
    Incorporated by reference**
    
    Filed herewith
 28




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##### Table of Contents



(Signed)
    /S/ Wade F.B. ThompsonWade F. B. ThompsonChairman, President, and Chief Executive OfficerDate
    September 28, 2006
  (Signed)
    
    /S/ Peter B. Orthwein
    
    
    
    (Signed)
    
    /S/ Walter L. BennettPeter B. Orthwein
    
    
    
    
    
    Walter L. BennettVice Chairman, Treasurer
    
    
    
    
    
    Chief Financial Officer(Director)
    
    
    
    
    
    (Principal Financial Officer & PrincipalAccounting Officer)Date
September 28, 2006
    
    
    
    Date
September 28, 2006(Signed)
    
    /S/ Wade F.B. Thompson
    
    
    
    (Signed)
    
    /S/ Alan SiegelWade F. B. Thompson
    
    
    
    
    
    Alan SiegelChairman, President, and Chief Executive
    
    
    
    
    
    DirectorOfficer (Principal Executive Officer
and Director)Date
September 28, 2006
    
    
    
    Date
September 28, 2006(Signed)
    
    /S/ William C. Tomson
    
    
    
    (Signed)
    
    /S/ Neil D. ChrismanWilliam C. Tomson
    
    
    
    
    
    Neil D. ChrismanDirector
    
    
    
    
    
    DirectorDate
September 28, 2006
    
    
    
    Date
September 28, 2006(Signed)
    
    /S/ H. Coleman Davis
    
    
    
    (Signed)
    
    /S/ Jan H. SuwinskiH. Coleman Davis
    
    
    
    
    
    Jan H. SuwinskiDirector
    
    
    
    
    
    DirectorDate
September 28, 2006
    
    
    
    Date
September 28, 2006(Signed)
    
    /S/ Geoffrey A. ThompsonGeoffrey A. ThompsonDirectorDate
September 28, 2006
 29




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##### Table of Contents



To the Board of Directors and Stockholders of Thor Industries, Inc.
        30




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##### Table of Contents



Consolidated Balance Sheets, July 31, 2006 and 2005
 (amounts in thousands except share data)
    
    2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    196,136
    
    
    $
    163,596Investments-short term (Note A)
    
    
    68,237
    
    
    
    45,219Accounts receivable:Trade, less allowance for doubtful accounts
$105 in 2006 and $506 in 2005 (Note A)
    
    
    191,299
    
    
    
    140,927Other
    
    
    5,639
    
    
    
    5,409Inventories (Note D)
    
    
    187,091
    
    
    
    161,770Deferred income taxes and other (Note F)
    
    
    11,431
    
    
    
    7,119Total current assets
    
    
    659,833
    
    
    
    524,040Property, plant and equipment:Land
    
    
    21,323
    
    
    
    21,339Buildings and improvements
    
    
    131,649
    
    
    
    109,443Machinery and equipment
    
    
    55,656
    
    
    
    49,259Total cost
    
    
    208,628
    
    
    
    180,041Less accumulated depreciation
    
    
    51,163
    
    
    
    40,252Net property, plant and equipment
    
    
    157,465
    
    
    
    139,789Investments  Joint ventures (Note K)
    
    
    2,737
    
    
    
    2,800Other assets:Goodwill (Note C)
    
    
    165,663
    
    
    
    165,662Noncompete agreements  Net (Note C)
    
    
    2,841
    
    
    
    3,790Trademarks (Note C)
    
    
    13,900
    
    
    
    13,900Other
    
    
    9,403
    
    
    
    7,898Total other assets
    
    
    191,807
    
    
    
    191,250Total
    
    $
    1,011,842
    
    
    $
    857,879
 See notes to consolidated financial statements.
 31




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##### Table of Contents



2006
    
    
    2005Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    131,606
    
    
    $
    118,056Accrued liabilities:Compensation and related items
    
    
    37,161
    
    
    
    28,519Product warranties (Note M)
    
    
    59,795
    
    
    
    55,118Taxes
    
    
    26,574
    
    
    
    8,351Promotions and rebates
    
    
    12,953
    
    
    
    7,362Product/property liability and related
    
    
    10,423
    
    
    
    7,913Dividends payable (Note J)
    
    
    
    
    
    
    17,000Other
    
    
    7,315
    
    
    
    6,493Total current liabilities
    
    
    285,827
    
    
    
    248,812Deferred income taxes and other liabilities (Note F)
    
    
    12,911
    
    
    
    11,680Contingent liabilities and commitments (Note I)
    
    
    
    
    
    
    Stockholders equity (Note J):Preferred stockauthorized 1,000,000 shares; none outstanding
    
    
    
    
    
    
    Common stockpar value of $.10 a share;
authorized, 250,000,000 shares;
issued 57,100,286 shares at July 31, 2006
and 56,933,483 shares at July 31, 2005
    
    
    5,710
    
    
    
    5,693Additional paid-in capital
    
    
    86,538
    
    
    
    82,652Retained earnings
    
    
    677,577
    
    
    
    515,877Less restricted stock plan
    
    
    
    
    
    
    747Accumulated other comprehensive income
    
    
    1,772
    
    
    
    943Less treasury shares of 1,401,200 in 2006 and 256,000 in 2005, at cost
    
    
    58,493
    
    
    
    7,031Total stockholders equity
    
    
    713,104
    
    
    
    597,387Total
    
    $
    1,011,842
    
    
    $
    857,879
 See
notes to consolidated financial statements.
 32




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Net sales
    
    $
    3,066,276
    
    
    $
    2,558,351
    
    
    $
    2,187,739Cost of products sold
    
    
    2,620,506
    
    
    
    2,218,585
    
    
    
    1,887,202Gross profit
    
    
    445,770
    
    
    
    339,766
    
    
    
    300,537Selling, general and administrative expenses
    
    
    183,926
    
    
    
    152,499
    
    
    
    137,661Amortization of intangibles
    
    
    949
    
    
    
    967
    
    
    
    799Gain on sale of equity securities
    
    
    
    
    
    
    
    
    
    
    1,802Interest income
    
    
    9,020
    
    
    
    3,155
    
    
    
    1,789Interest expense
    
    
    (1,248
    )
    
    
    (580
    )
    
    
    (156
    )Other income
    
    
    1,756
    
    
    
    4,735
    
    
    
    2,708Income before income taxes
    
    
    270,423
    
    
    
    193,610
    
    
    
    168,220Income taxes (Note F)
    
    
    97,959
    
    
    
    71,843
    
    
    
    62,135Net income
    
    $
    172,464
    
    
    $
    121,767
    
    
    $
    106,085Earnings per common share (Note A)Basic
    
    $
    3.05
    
    
    $
    2.15
    
    
    $
    1.85Diluted
    
    $
    3.03
    
    
    $
    2.13
    
    
    $
    1.84
 See
notes to consolidated financial statements.
 33




---



##### Table of Contents



Treasury Stock
    
    
    Common Stock
    
    
    Additional
    
    
    Restricted
    
    
    Accumulated Other
    
    
    
    
    
    
    Compre-Paid-In
    
    
    Stock
    
    
    Comprehensive
    
    
    Retained
    
    
    hensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Plan
    
    
    Income (Loss)
    
    
    Earnings
    
    
    IncomeJuly 31, 2003
    
   
    
    
    
    
    
    
    
    
    57,195,290
    
    
    $
    5,720
    
    
    $
    78,765
    
    
    $
    (1,169
    )
    
    $
    (141
    )
    
    $
    331,648Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,085
    
    
    $
    106,085Shares purchased
    
    
    288,000
    
    
    
    (7,078
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares retired
    
    
    (288,000
    )
    
    
    7,078
    
    
    
    (288,000
    )
    
    
    (29
    )
    
    
    (403
    )
    
    
    
    
    
    
    
    
    
    
    (6,647
    )
    
    
    Stock option activity
    
    
    
    
    
    
    
    
    
    
    227,370
    
    
    
    23
    
    
    
    2,348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock activity
    
    
    
    
    
    
    
    
    
    
    11,500
    
    
    
    1
    
    
    
    309
    
    
    
    (310
    )
    
    
    
    
    
    
    
    
    
    
    Cash dividends  $.09
per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,152
    )
    
    
    Unrealized appreciation
on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (358
    )
    
    
    
    
    
    
    (358
    )Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    563
    
    
    
    
    
    
    
    563Compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    351
    
    
    
    
    
    
    
    
    
    
    
    July 31, 2004
    
    
    
    
    
    
    
    
    
    
    57,146,160
    
    
    
    5,715
    
    
    
    81,019
    
    
    
    (1,128
    )
    
    
    64
    
    
    
    425,934
    
    
    $
    106,290Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121,767
    
    
    $
    121,767Shares purchased
    
    
    579,200
    
    
    
    (15,521
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares retired
    
    
    (323,200
    )
    
    
    8,490
    
    
    
    (323,200
    )
    
    
    (32
    )
    
    
    (458
    )
    
    
    
    
    
    
    
    
    
    
    (8,000
    )
    
    
    Stock option activity
    
    
    
    
    
    
    
    
    
    
    110,636
    
    
    
    10
    
    
    
    2,094
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock activity
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    
    
    
    
    (3
    )
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    Cash dividends  $.42
per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,824
    )
    
    
    Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    879
    
    
    
    
    
    
    
    879Compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    378
    
    
    
    
    
    
    
    
    
    
    
    July 31, 2005
    
    
    256,000
    
    
    $
    (7,031
    )
    
    
    56,933,483
    
    
    $
    5,693
    
    
    
    82,652
    
    
    
    (747
    )
    
    
    943
    
    
    
    515,877
    
    
    $
    122,646Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    172,464
    
    
    $
    172,464Shares purchased
    
    
    1,145,200
    
    
    
    (51,462
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option activity
    
    
    
    
    
    
    
    
    
    
    171,003
    
    
    
    17
    
    
    
    3,331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock activity
    
    
    
    
    
    
    
    
    
    
    (4,200
    )
    
    
    
    
    
    
    191
    
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    Cash dividends  $.19
per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,764
    )
    
    
    Adoption of 123R
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (494
    )
    
    
    494
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    829
    
    
    
    
    
    
    
    829Compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    858
    
    
    
    211
    
    
    
    
    
    
    
    July 31, 2006
    
    
    1,401,200
    
    
    $
    (58,493
    )
    
    
    57,100,286
    
    
    $
    5,710
    
    
    $
    86,538
    
    
    $
    
    
    
    $
    1,772
    
    
    $
    677,577
    
    
    $
    173,293
 See
notes to consolidated financial statements.
 34




---



##### Table of Contents



Consolidated Statements of Cash Flows for the Years Ended July 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    172,464
    
    
    $
    121,767
    
    
    $
    106,085Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation
    
    
    13,097
    
    
    
    9,808
    
    
    
    7,656Amortization of intangibles
    
    
    949
    
    
    
    967
    
    
    
    799Deferred income taxes
    
    
    (4,094
    )
    
    
    6,831
    
    
    
    101(Gain) on sale of equity securities
    
    
    
    
    
    
    
    
    
    
    (1,802
    )(Gain) loss on disposition of property,
plant and equipment
    
    
    5
    
    
    
    (2,164
    )
    
    
    (200
    )Loss on sale of trading investments
    
    
    439
    
    
    
    1,369
    
    
    
    1,298Unrealized (gain) loss on trading investments
    
    
    10
    
    
    
    (233
    )
    
    
    98Stock based compensation
    
    
    1,069
    
    
    
    
    
    
    
    Changes in assets and liabilities,
net of effects from acquisitions and divestments:Purchase of trading investments
    
    
    (255,491
    )
    
    
    (221,223
    )
    
    
    (122,909
    )Proceeds from sale of trading investments
    
    
    232,024
    
    
    
    237,914
    
    
    
    102,688Accounts receivable
    
    
    (50,602
    )
    
    
    (6,151
    )
    
    
    (22,107
    )Inventories
    
    
    (25,321
    )
    
    
    (5,860
    )
    
    
    (23,946
    )Deferred taxes and other
    
    
    (2,120
    )
    
    
    (1,145
    )
    
    
    3,262Accounts payable
    
    
    12,708
    
    
    
    (9,354
    )
    
    
    9,145Accrued liabilities
    
    
    40,464
    
    
    
    (1,624
    )
    
    
    20,924Other
    
    
    1,658
    
    
    
    441
    
    
    
    2,124Net cash provided by operating activities
    
    
    137,259
    
    
    
    131,343
    
    
    
    83,216Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (30,166
    )
    
    
    (47,670
    )
    
    
    (26,940
    )Proceeds from disposition of property
plant and equipment
    
    
    263
    
    
    
    3,054
    
    
    
    292Acquisitions  net of cash acquired
    
    
    
    
    
    
    (38,113
    )
    
    
    (29,619
    )Net cash (used in) investing activities
    
    
    (29,903
    )
    
    
    (82,729
    )
    
    
    (56,267
    )Cash flows from financing activities:Cash dividends
    
    
    (27,764
    )
    
    
    (6,824
    )
    
    
    (5,152
    )Purchase of common stock held as treasury shares
    
    
    (51,462
    )
    
    
    (7,031
    )
    
    
    (7,078
    )Purchase of common stock for retirement
    
    
    
    
    
    
    (8,490
    )
    
    
    Retirement of acquired debt
    
    
    
    
    
    
    (1,001
    )
    
    
    (12,973
    )Proceeds from issuance of common stock
    
    
    3,581
    
    
    
    1,329
    
    
    
    1,687Net cash (used in) financing activities
    
    
    (75,645
    )
    
    
    (22,017
    )
    
    
    (23,516
    )Effect of exchange rate changes on cash
    
    
    829
    
    
    
    879
    
    
    
    563Net increase in cash and cash equivalents
    
    
    32,540
    
    
    
    27,476
    
    
    
    3,996Cash and cash equivalents, beginning of year
    
    
    163,596
    
    
    
    136,120
    
    
    
    132,124Cash and cash equivalents, end of year
    
    $
    196,136
    
    
    $
    163,596
    
    
    $
    136,120Supplemental cash flow information:Income taxes paid
    
    $
    82,817
    
    
    $
    76,665
    
    
    $
    62,431Interest paid
    
    $
    1,248
    
    
    $
    580
    
    
    $
    156Non-cash transactions:Issuance of restricted stock
    
    $
    
    
    
    $
    
    
    
    $
    310Retirement of treasury shares
    
    $
    
    
    
    $
    8,490
    
    
    $
    7,078Dividends payable
    
    $
    
    
    
    $
    17,000
    
    
    $
    Deferred taxes
    
    $
    
    
    
    $
    775
    
    
    $
    Capital expenditures in accounts payable
    
    $
    842
    
    
    $
    
    
    
    $
    Cancellation of restricted stock
    
    $
    42
    
    
    $
    
    
    
    $
    
 See
notes to consolidated financial statements.
 35




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##### Table of Contents



Notes to the Consolidated Financial Statements Years Ended
July 31, 2006, 2005 and 2004
 (All amounts presented in thousands except share and per share data)
 A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles
of Consolidation
 Cash and Cash Equivalents
 Investments 
 Fair Value of Financial Investments
 Inventories
 Depreciation
   Other Assets
 Long-lived Assets
 Product Warranties
 Allowance for Doubtful Accounts
 Year Ended
    
    
    Year Ended
    
    
    Year EndedJuly 31, 2006
    
    
    July 31, 2005
    
    
    July 31, 2004Beginning Balance
    
    $
    506
    
    
    $
    558
    
    
    $
    625Charged to expense
    
    
    98
    
    
    
    76
    
    
    
    (45
    )Write-offs net of recoveries/payments
    
    
    (499
    )
    
    
    (128
    )
    
    
    (38
    )Acquisitions
    
    
    
    
    
    
    
    
    
    
    16Ending Balance
    
    $
    105
    
    
    $
    506
    
    
    $
    558
 36




---



##### 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.
  Dealer Volume
Rebates and Sales Incentives
 Estimates
 Foreign
Currency
 Stock Split
 Stock
Options
 Earnings Per Share
 2006
    
    
    2005
    
    
    2004Weighted average shares outstanding for
basic earnings per share
    
    
    56,502,865
    
    
    
    56,726,200
    
    
    
    57,224,404Stock options and restricted stock
    
    
    394,174
    
    
    
    381,363
    
    
    
    365,790Weighted average shares outstanding assuming dilution
    
    
    56,897,039
    
    
    
    57,107,563
    
    
    
    57,590,194
  37




---



##### Table of Contents



2005
    
    
    2004Net income as reported
    
    $
    121,767
    
    
    $
    106,085Deduct: Total stock-based employee compensation
expense determined under fair value
method for all awards, net of related tax effects
    
    
    (1,161
    )
    
    
    (884
    )Pro forma
    
    $
    120,606
    
    
    $
    105,201Earnings per common share  basicAs reported
    
    $
    2.15
    
    
    $
    1.85Pro forma
    
    $
    2.13
    
    
    $
    1.84Earnings per common share  dilutedAs reported
    
    $
    2.13
    
    
    $
    1.84Pro forma
    
    $
    2.11
    
    
    $
    1.83
  Net income, as reported
    
    $
    172,464The share-based employee compensation cost included in net income as reported
    
    
    858Pro Forma Net income
    
    $
    173,322Earnings per common share  basicAs reported
    
    $
    3.05Pro forma
    
    $
    3.07Earnings per common share  dilutedAs reported
    
    $
    3.03Pro forma
    
    $
    3.05
   B. ACQUISITIONS
   38




---



##### Table of Contents



C. GOODWILL AND OTHER INTANGIBLE ASSETS
   July 31, 2006
    
    
    July 31, 2005Accumulated
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Cost
    
    
    AmortizationAmortizable Intangible Assets- Non-compete
agreements
    
    $
    15,889
    
    
    $
    13,048
    
    
    $
    15,889
    
    
    $
    12,099
    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
   Goodwill
    
    
    TrademarkRecreation VehiclesTowables
    
    $
    143,795
    
    
    $
    10,237Motorized
    
    
    17,252
    
    
    
    2,600Buses
    
    
    4,616
    
    
    
    1,063Total
    
    $
    165,663
    
    
    $
    13,900
 39




---



##### Table of Contents



D. INVENTORIES
  As of July 31,2006
    
    
    2005Finished products
    
    $
    12,894
    
    
    $
    14,196Work in process
    
    
    51,208
    
    
    
    55,413Raw materials
    
    
    104,352
    
    
    
    78,493Chassis
    
    
    39,772
    
    
    
    29,506Subtotal
    
    
    208,226
    
    
    
    177,608Less excess of FIFO costs over LIFO costs
    
    
    21,135
    
    
    
    15,838Total inventories
    
    $
    187,091
    
    
    $
    161,770
 E. LINE OF CREDIT
  F. INCOME TAXES
 Years ended July 31,2006
    
    
    2005
    
    
    2004Income taxes:Federal
    
    $
    86,717
    
    
    $
    56,375
    
    
    $
    50,673State and local
    
    
    14,206
    
    
    
    7,840
    
    
    
    10,503Foreign
    
    
    1,129
    
    
    
    797
    
    
    
    858Total current
    
    
    102,052
    
    
    
    65,012
    
    
    
    62,034Total deferred
    
    
    (4,093
    )
    
    
    6,831
    
    
    
    101Income taxes
    
    $
    97,959
    
    
    $
    71,843
    
    
    $
    62,135
  Years ended July 31,2006
    
    
    2005
    
    
    2004Provision at statutory rates
    
    $
    94,648
    
    
    $
    67,764
    
    
    $
    58,876State and local income taxes, net of federal tax benefit
    
    
    9,245
    
    
    
    5,678
    
    
    
    6,735Extraterritorial income benefit
    
    
    (1,013
    )
    
    
    (1,221
    )
    
    
    (867
    )Credits and incentives
    
    
    (233
    )
    
    
    (490
    )
    
    
    (1,181
    )Other
    
    
    (4,688
    )
    
    
    112
    
    
    
    (1,428
    )Income taxes
    
    $
    97,959
    
    
    $
    71,843
    
    
    $
    62,135
  40




---



##### Table of Contents



July 31,
    
    
    July 31,2006
    
    
    2005A summary of deferred income taxes is:Current deferred tax asset (liability):Inventory basis
    
    $
    (1,076
    )
    
    $
    (931
    )Employee benefits
    
    
    2,110
    
    
    
    801Self-insurance
    
    
    (518
    )
    
    
    (1,645
    )Product warranties
    
    
    3,377
    
    
    
    3,059Other
    
    
    1,005
    
    
    
    (22
    )Total current deferred tax asset
included in deferred income taxes and other
    
    
    4,898
    
    
    
    1,262Long-term deferred tax asset (liability):Property basis
    
    
    (2,211
    )
    
    
    (2,754
    )Investments
    
    
    162
    
    
    
    686Deferred compensation
    
    
    3,859
    
    
    
    3,179Intangibles
    
    
    (3,547
    )
    
    
    (3,696
    )Other
    
    
    (1,840
    )
    
    
    (1,450
    )Total net long-term deferred tax liability
included in deferred income taxes and other liabilities
    
    
    (3,577
    )
    
    
    (4,035
    )Net deferred tax asset (liability)
    
    $
    1,321
    
    
    $
    (2,773
    )
 G. LEASES
  H. EMPLOYEE BENEFIT PLANS
   I. CONTINGENT LIABILITIES AND COMMITMENTS
  41




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##### Table of Contents



Total
    
    Term ofCommitment
    
    Amount Commitment
    
    GuaranteeGuarantee on dealer financing
    
    $
    2,574
    
    
    less than 1 yearStandby repurchase obligation on dealer financing
    
    $
    813,795
    
    
    less than 1 year
   Fiscal 2006
    
    
    Fiscal 2005
    
    
    Fiscal 2004Cost of units repurchased
    
    $
    4,878
    
    
    $
    11,220
    
    
    $
    3,775Realization of units resold
    
    
    4,230
    
    
    
    9,355
    
    
    
    3,133Losses due to repurchase
    
    $
    648
    
    
    $
    1,865
    
    
    $
    642
   J. STOCKHOLDERS EQUITY
     42




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##### Table of Contents



2006
    
    2005
    
    2004Weighted-
    
    
    
    
    
    Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    Average
    
    
    
    
    
    AverageShares
    
    Exercise Price
    
    Shares
    
    Exercise Price
    
    Shares
    
    Exercise PriceOutstanding at beginning of year
    
    
    704,041
    
    
    $
    19.63
    
    
    
    792,344
    
    
    $
    18.07
    
    
    
    658,714
    
    
    $
    9.26Exercised
    
    
    (171,003
    )
    
    
    14.47
    
    
    
    (110,636
    )
    
    
    11.79
    
    
    
    (227,370
    )
    
    
    7.42Canceled
    
    
    
    
    
    
    
    
    
    
    (12,667
    )
    
    
    
    
    
    
    (16,000
    )
    
    
    Granted
    
    
    
    
    
    
    
    
    
    
    35,000
    
    
    
    30.51
    
    
    
    377,000
    
    
    
    27.12Outstanding at end of year
    
    
    533,038
    
    
    $
    21.29
    
    
    
    704,041
    
    
    $
    19.63
    
    
    
    792,344
    
    
    $
    18.07Exercisable at year-end
    
    
    382,843
    
    
    $
    18.79
    
    
    
    426,375
    
    
    $
    14.48
    
    
    
    303,343
    
    
    $
    9.11
   2005
    
    2004Expected volatility
    
    
    38
    %
    
    
    38
    %Expected life of grant
    
    6 years
    
    6 yearsRisk free interest rate
    
    
    3.90
    %
    
    
    3.29
    %Expected dividend rate
    
    
    .30
    %
    
    
    .26
    %
       43




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##### Table of Contents



WeightedAverage GrantShares
    
    Date Fair ValueNonvested, August 1, 2005
    
    
    115,700
    
    
    $
    12.93Granted
    
    
    
    
    
    
    Vested
    
    
    16,800
    
    
    
    5.77Forfeited
    
    
    4,200
    
    
    
    9.98Nonvested, July 31, 2006
    
    
    94,700
    
    
    $
    14.33
   K. JOINT VENTURES
     L. BUSINESS SEGMENTS
   44




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##### Table of Contents



2006
    
    2005
    
    2004Net sales:Recreation vehiclesTowables
    
    $
    2,173,483
    
    
    $
    1,742,318
    
    
    $
    1,433,997Motorized
    
    
    577,025
    
    
    
    566,138
    
    
    
    539,010Total Recreation Vehicles
    
    
    2,750,508
    
    
    
    2,308,456
    
    
    
    1,973,007Buses
    
    
    315,768
    
    
    
    249,895
    
    
    
    214,732Total
    
    $
    3,066,276
    
    
    $
    2,558,351
    
    
    $
    2,187,739Income before income taxes:Recreation vehiclesTowables
    
    $
    242,904
    
    
    $
    168,574
    
    
    $
    144,908Motorized
    
    
    27,404
    
    
    
    24,607
    
    
    
    28,064Total recreation vehicles
    
    
    270,308
    
    
    
    193,181
    
    
    
    172,972Buses
    
    
    9,356
    
    
    
    7,492
    
    
    
    9,577Corporate
    
    
    (9,241
    )
    
    
    (7,063
    )
    
    
    (14,329
    )Total
    
    $
    270,423
    
    
    $
    193,610
    
    
    $
    168,220Identifiable assets:Recreation vehiclesTowables
    
    $
    490,441
    
    
    $
    384,292
    
    
    $
    324,041Motorized
    
    
    150,058
    
    
    
    126,045
    
    
    
    123,607Total recreation vehicles
    
    
    640,499
    
    
    
    510,337
    
    
    
    447,648Buses
    
    
    103,861
    
    
    
    96,942
    
    
    
    65,055Corporate
    
    
    267,482
    
    
    
    250,600
    
    
    
    249,884Total
    
    $
    1,011,842
    
    
    $
    857,879
    
    
    $
    762,587Depreciation and amortization
expense:Recreation vehiclesTowables
    
    $
    8,012
    
    
    $
    6,505
    
    
    $
    4,976Motorized
    
    
    4,365
    
    
    
    2,672
    
    
    
    2,203Total recreation vehicles
    
    
    12,377
    
    
    
    9,177
    
    
    
    7,179Buses
    
    
    1,629
    
    
    
    1,556
    
    
    
    1,238Corporate
    
    
    40
    
    
    
    42
    
    
    
    38Total
    
    $
    14,046
    
    
    $
    10,775
    
    
    $
    8,455Capital expenditures:Recreation vehiclesTowables
    
    $
    23,575
    
    
    $
    32,371
    
    
    $
    17,673Motorized
    
    
    2,955
    
    
    
    14,562
    
    
    
    2,815Total recreation vehicles
    
    
    26,530
    
    
    
    46,933
    
    
    
    20,488Buses
    
    
    4,395
    
    
    
    683
    
    
    
    6,430Corporate
    
    
    83
    
    
    
    54
    
    
    
    22Total
    
    $
    31,008
    
    
    $
    47,670
    
    
    $
    26,940
 45




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##### Table of Contents



M. WARRANTY
  Year Ended
    
    Year Ended
    
    Year EndedJuly 31, 2006
    
    July 31, 2005
    
    July 31, 2004Beginning Balance
    
    $
    55,118
    
    
    $
    45,829
    
    
    $
    35,115Provision
    
    
    63,137
    
    
    
    60,084
    
    
    
    53,030Payments
    
    
    (58,460
    )
    
    
    (51,940
    )
    
    
    (46,041
    )Acquisitions
    
    
    
    
    
    
    1,145
    
    
    
    3,725Ending Balance
    
    $
    59,795
    
    
    $
    55,118
    
    
    $
    45,829
 N. SUBSEQUENT EVENT
  46