Thor Seeks ‘Related’ Businesses for Acquisition
Editor’s Note: Thompson Research Group (TRG) tracks the RV industry for its investor clients. Following are excerpts from a recent TRG clint newsletter, based on the investment firm’s meetings with management of Thor Industries Inc.:
- Backlogs for the quarter ending in January are the highest since Hurricane Katrina demand. Towable backlogs equal $369 million or 90 days and motorized backlogs equal $80 million or 60 days The latter includes an order for 550 rental units from Cruise America which will be filled through June.
- Repos are significangly improved; dealer used inventory is low. For the first six months of Thor’s fiscal year ending in January, repos are valued at $2 million vs. $19 million last year. Management confirmed that used RV dealer inventories are at historic lows.
- Wholesale financing much improved, retail getting better. Management confirmed GE is starting to take over wholesale financing for dealers that were once floored by Textron, which exited the RV wholesale financing market approximatley a year ago. The retail lending market has improved from last year’s virtual grounding halt of all lending. That said, the lending practices have changed meaningfully and are more prudent (i.e., down payments of 10%-20%, average FICO score of 750).
- Thor management expressed an interest in utilizing its cash position to acquire “related” businesses.