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THOR Industries (THO) announced that it has made a strategic investment in Dragonfly Energy, a deep cycle lithium-ion battery producer to the RV industry. In May Dragonfly entered into a merger agreement for a business combination transaction with Chardan NexTech Acquisition 2 (CNTQ). THOR's equity investment has been completed and is being made ahead of Dragonfly's previously announced business combination with Chardan NexTech Acquisition 2. Funding of the business combination includes a $75M senior secured term loan for which Energy Impact Partners is lead arranger, a $5M equity investment from Chardan NexTech Investments 2, and a $150M Chardan Equity Facility from Chardan, an affiliate of CNTQ's sponsor.
Thor Industries announced that Mark Trinske, Vice President of Investor Relations, will be retiring at the end of the company's fiscal year on July 31. As part of the planned transition, Michael Cieslak, CFA, Thor 's Investor Relations Manager will be responsible for Thor's investor relations efforts going forward. Cieslak joined the company in February 2020 with a background in investor relations and financial planning and analysis.
THOR Industries announced that on June 24, 2022, the Board of Directors of THOR Industries reaffirmed its authorization to company management to utilize up to $250M to purchase shares of the company's common stock through December 21, 2024, with $151,678,891.47 remaining on the authorization as of June 24, 2022 and authorized company management to utilize up to an additional $448,321,168.53 to purchase shares of the company's common stock through July 31, 2025, bringing the total authorization to $600M and extending the duration of the program by approximately seven months.
Baird analyst Craig Kennison lowered the firm's price target on Thor Industries to $100 from $120 and keeps an Outperform rating on the shares. The analyst noted they reported upside to revenue and earnings, driven by higher margins. He said after strong shipments to start the year, the company has "pulled back" towable production, and noted it agrees with the low end of RVIA's forecast as it works to align wholesale production with retail demand.
"I am pleased to report this quarter that THOR once again managed through an uncertain business environment to achieve record net sales and profitability across many of our brands. Our teams have done an exceptional job navigating continued supply chain and labor constraints while still fulfilling ongoing dealer and consumer demand for our products. Net sales for our fiscal third quarter increased 34.6%, net income attributable to THOR grew 89.9% and our gross margin improved by 270 basis points compared to the fiscal third quarter of 2021. Our growth and profitability is a result of our ongoing commitment to prudent operational and financial management," said Bob Martin, President and CEO of THOR Industries. "At the end of our fiscal third quarter, due to the outstanding production efforts of our team members, our independent dealer inventories of towable RV products were at more historically normal levels. Due to continued high demand for our motorized RVs and persistent global chassis supply constraints, our independent dealer inventories of motorized products were still below optimal levels. We do not expect motorized RV inventory levels to return to more historically normal levels until early in calendar 2023. We continue to make progress in managing and fulfilling our order backlog. In the third quarter, we decreased our backlog by more than 3% to $13.88 billion compared to the third fiscal quarter of 2021. This calendar year, we have reduced the backlog, which was $17.73 billion as of January 31, 2022, by 21.7% at the end of our third fiscal quarter on April 30, 2022. We are very pleased with our progress, and we believe that the current backlog, while still elevated, is indicative of healthy long-term demand for our RV products. As we have reported, we actively verify the backlog on an ongoing basis and will continue to do so to make sure that it is aligned with both our dealers' inventory needs and retail demand. To be clear, the current level of our backlog remains elevated, and we continue to be focused on opportunities to lower it to more traditional levels. We remain disciplined in aligning production to meet current demand without overproducing and overloading our independent dealer channel. In order to align production with retail demand, we pulled back on towable production in the latter half of our fiscal third quarter. On a historical basis, we have prudently and proactively managed our production rates category-by-category based on market conditions, and we are doing so again today," said Martin.
"The RV industry's calendar 2022 retail selling season has been impacted by the current macroeconomic conditions faced by consumers, and while North American industry retail towable demand is anticipated to be lower than the historically high levels of recent quarters, it remains robust as enthusiasm for the RV lifestyle continues to grow. Motorized industry retail demand continues to outpace the industry's ability to produce given the limitations on chassis supply. Industry retail registrations in the first calendar quarter of 2022, while below the record levels of 2021, exceeded both 2020 and 2019 registrations in both North America and Germany. We believe retail demand for the remainder of our Fiscal Year 2022 and the beginning of Fiscal 2023 will be strong, barring additional macroeconomic impacts, and we expect calendar year 2022 North American RV industry retail sales of between 460,000 and 480,000 units, which would represent one of the best years of North American RV retail sales on record," continued Woelfer. "Based on the recent moderation of North American retail demand, the RV Industry Association recently reduced its North American wholesale forecast for calendar year 2022 shipments to be between 537,800 and 561,900 units with a most likely total of 549,900 units. We agree with the revised lower end of the wholesale RVIA's forecast, and we believe it is in alignment with our forecasted RV industry retail sales as a number of the wholesale units shipped so far this year were used to restock dealer towable inventories to more normalized levels. Looking ahead to the second half of the calendar year, we expect RV Industry wholesale shipments and retail RV sales to be closer to one-to-one parity, as we work to manage wholesale production to align with retail demand. As the world's leading RV manufacturer, we recognize the importance of maintaining production discipline as we strive to fulfill dealer orders that are in balance with retail sales forecasts. Our production discipline is greatly valued among our dealer partners as we work to protect the long-term interests of our customers and the industry," concluded Woelfer. "As always, we remain focused on driving growth, profitability and long-term value for all of our stakeholders. We are currently implementing many strategic and innovative initiatives to expand our industry leadership position in fiscal year 2023 and beyond. We look forward to sharing our long-term vision, priorities and financial targets with you at our Investor Day in late June," added Martin.
