Thor Industries Inc. reported a 24.2% increase in sales for the company’s fiscal second quarter, ended Jan. 31.
Preliminary consolidated sales in the second quarter were $741.4 million compared with $597 million in the second quarter last year. RV sales were $636.1 million, up 27% from $501 million the previous year. Towable sales jumped 17.6% to $522.4 million from $444.2 million a year ago while motorized sales more than doubled to $113.7 million from $56.8 million. Bus sales were $105.3 million, up 9.7% from $96 million in the second quarter last year.
For the six months, sales totaled $1.62 billion, a 27.6% increase from $1.27 billion last year. RV sales gained 32.1% to $1.4 billion compared with $1.06 billion the year prior. Towable sales during the period rose 23% to $1.16 billion compared with $943.3 million last year and motorized sales increased to $235.9 million from $119.3 million. Bus sales were $219.5 million, up 5.9% from $207.3 million last year.
Cash, cash equivalents and investments on Jan. 31 were $107.2 million. Thor said the decrease in cash balances was due in large part to the payment of the $1.50 per share special dividend declared by the board and paid in December 2012.
Consolidated backlog on Jan. 31 was $822 million, up 27.1% from $646.9 million last year. RV backlog was $616.6 million, an increase of 49.4% from $412.8 million at the end of the second quarter of fiscal 2012. Towable RV backlog increased 25.2% to $375.4 million and motorized RV backlog more than doubled to $241.2 million Bus backlog was $205.4 million compared to $234.1 million at the end of the second quarter of fiscal 2012.
“Thor achieved solid gains in revenue for the second quarter as the momentum of our RV products introduced in the fall continued at Louisville in late November,” said said Peter B. Orthwein, Thor Chairman and CEO. “Indications from the early RV retail shows have been very positive, with increased traffic and higher sales levels, reflecting continued strength in our industry. Despite the improvements in RV sales, the overall environment in the towables market remains very competitive and elevated levels of incentives associated with orders placed at the fall Open House are reflected in our sales and our second-quarter operating results that we expect to report on March 7. In addition, the bus business continued to be characterized by aggressive competition during the second quarter.”
Thor Industries Inc. gained the most in three months after the maker of RVs and buses said sales surged 30% to a fiscal first-quarter record.
Bloomberg reported that Thor shares climbed 12% to $44.96 in midday trading after advancing as much as 14%, the most intraday since Aug. 3. The Jackson Center, Ohio-based company’s stock had risen 46% this year through yesterday.
Sales for the quarter ended Oct. 31 rose to $876.8 million, Thor said in releasing preliminary results. The average of analysts’ estimates compiled by Bloomberg was $745.5 million. Thor said in a statement that its order backlog at the end of October was $720.4 million, up 41% from a year earlier.
According to Bloomberg, sales of recreational vehicles are monitored as a sign of an improving economy because motorhomes and travel trailers are discretionary purchases that consumers defer during a slump.
The Recreation Vehicle Dealers Association (RVDA) will honor RV brands built by 13 manufacturers with its Quality Circle Award Nov. 26, prior to opening of the National RV Trade Show in Louisville, Ky.
According to a press release, these brands/manufacturers received at least 15 dealer responses and scored 80% or above for overall dealer satisfaction in the association’s 19th Annual Dealer Satisfaction Index (DSI) survey.
“The DSI Quality Circle Award recognizes the high level of success these manufacturers have had in working with their dealer business partners,” said RVDA Chairman Jeff Hirsch of Kingston, N.H.-based Campers Inn. “Their commitment to continuously improving products and services ultimately helps dealers serve customers better and preserves our industry’s share of consumers’ discretionary dollars.”
The towable RV manufacturers/brands receiving awards are (in alphabetical order by manufacturer): Airstream Inc.; CrossRoads RV (Zinger/Z-1/SE/Hampton); Forest River Inc. (Flagstaff travel trailers and fifth-wheels, Palomino RV travel trailers and fifth-wheels, Rockwood/Roo expandables, Sierra/Sandpiper, Indiana-built Surveyor/r-pod); Heartland RV LLC (Big Country/Elk Ridge, Bighorn/Landmark, Cyclone/Road Warrior/Torque, North Trail/Wilderness, Prowler); Jayco Inc. (Eagle/Super Lite/HT, camping trailers, Jay Feather/Select, Jay Flight/Swift/SLX, Pinnacle, White Hawk); Keystone RV Co. (Bullet/Premier, Cougar/X-lite, Passport, Raptor); KZRV LP (Durango, Sportsmen/Sportsmen Classic, Spree/Spree Escape); Lance Camper Manufacturing Corp. (truck campers); and Prime Time Manufacturing Inc. (LaCrosse/Trace, Crusader/Sanibel).
The six motorized RV brands/manufacturers receiving awards are (in alphabetical order): Forest River; Jayco/Entegra; Leisure Travel Vans/Triple E RV; Pleasure-Way Industries Ltd.; Tiffin Motorhomes Inc.; and Winnebago/Itasca/ERA.
When rating the brands/manufacturers, RVDA asks dealers to express, confidentially, their level of satisfaction on eight core issues: Sales support; sales territory; vehicle design; vehicle reliability/quality; competitive price/value; parts support; dealership warranty support; overall dealer communications
The 19th Annual DSI survey was conducted between April and July 2012. Four hundred and sixty-one dealers responded to the DSI this year and provided 2,709 brand ratings, an average of nearly six per dealer. A summary of the DSI survey aggregate results will appear in the November issue of RV Executive Today.
Wholesale shipments to retailers of all RVs continued to improve in 2012, reporting totals of 18,976 units in RVIA’s September survey of manufacturers – a gain of 12.7% over the same month one year ago. On a seasonally adjusted basis, shipments in September were at an annualized rate of 254,400 units, down 10.6% from the August pace and the lowest annualized total since January of this year. Even so, actual September shipments of all towable RVs were up 10.3% from the same month one year ago while all motorhome shipments were up 34.6%.
Comparing the past nine-month period to the same period one year ago, all RVs were reported at 221,281 units in 2012, a gain of 10.7% year-to-date. Travel trailer shipments have grown by 16,446 units this year and continue to command the largest unit volume of all vehicle types. Fifth-wheel travel trailers have gained 3,986 units while Class A motorhomes were up 719 units and Class C motorhomes improved by 385 units compared to this same period one year ago. Only folding camping trailers were lower in volume through September this year as compared to the corresponding nine-month period in 2011.
A federal judge gave his final approval Thursday (Sept. 27) to a $42.6 million class-action settlement between companies that made and installed government-issued trailers after hurricanes in 2005 and Gulf Coast storm victims who claim they were exposed to hazardous fumes while living in the shelters.
The Associated Press reported that U.S. District Judge Kurt Engelhardt ruled from the bench after hearing from attorneys who brokered a deal resolving nearly all remaining court claims over elevated levels of formaldehyde in trailers provided by the Federal Emergency Management Agency (FEMA) following hurricanes Katrina and Rita.
Roughly 55,000 residents of Louisiana, Mississippi, Alabama and Texas will be eligible for shares of $37.5 million paid by more than two dozen manufacturers. They also can get shares of a separate $5.1 million settlement with FEMA contractors that installed and maintained the units.
Gerald Meunier, a lead plaintiffs’ attorney, said the deal provides residents with “somewhat modest” compensation but allows both sides to avoid the expense and risks of protracted litigation.
“Dollar amounts alone do not determine whether a settlement is fair and reasonable,” he said.
Jim Percy, a lawyer for the trailer makers, said Engelhardt would have had to try cases individually or transfer suits to other jurisdictions if the settlement wasn’t reached.
“It was not going to end quickly, and it was going to be even more monumental for all the parties concerned,” he said.
Formaldehyde, a chemical commonly found in building materials, can cause breathing problems and is classified as a carcinogen. Government tests on hundreds of trailers in Louisiana and Mississippi found formaldehyde levels that were, on average, about five times what people are exposed to in most modern homes.
FEMA isn’t a party to the settlements and had downplayed formaldehyde risks for months before those test results were announced in February 2008. As early as 2006, trailer occupants began reporting headaches, nosebleeds and difficulty breathing.
Only three plaintiffs have opted out of the settlement with the trailer makers. Engelhardt opened the floor to objections during Thursday’s hearing, but nobody spoke up. The judge said he didn’t receive any formal, written objections, either.
Engelhardt presided over three trials for claims against FEMA trailer manufacturers and installers after he was picked in 2007 to oversee hundreds of consolidated lawsuits. The juries in all three trials sided with the companies and didn’t award any damages.
Plaintiffs’ lawyers have accused the trailer makers of using shoddy building materials and methods in a rush to meet FEMA’s unprecedented demand for temporary housing.
Meunier, however, said it was difficult for plaintiffs’ attorneys to prove a link between formaldehyde exposure and residents’ health problems because many trailers couldn’t be tested until months or even years after the fact. Many residents never sought treatment for their symptoms, he added.
“It was both challenging in the legal and factual sense,” he said.
A group of companies that includes Gulf Stream Coach Inc., Forest River Inc., Vanguard LLC and Monaco Coach Corp. will pay $20 million of the $37.5 million settlement with the trailer makers.
Shaw Environmental Inc., Bechtel Corp., Fluor Enterprises Inc. and CH2M Hill Constructors Inc. are among the FEMA contractors that agreed to pay shares of the separate $5.1 million settlement.
Only a handful of formaldehyde-related claims are still pending, including those against FEMA by a group of Texas residents.
RV wholesale shipments in August surged 15.7% ahead of the same month last year reaching 24,460 units, the strongest August monthly total in five years. Shipments of all towable RVs were up 14.6% but it was motorhomes which grew the most, improving 27.3% over prior year totals. Year-to-date, RV shipments have now improved by 10.5% to 202,305 units and represent an annualized pace of more than 276,600 units. All RV product categories except folding camping trailers have improved this year, with conventional travel trailers growing by the most units while truck campers have grown by the largest percentage gain.
Elkhart County’s 5th Annual RV Open House Week appears to be taking yet another step forward as a legitimate national industry trade event, judging by the number of companies and the expanded array of new model year RVs on display Monday (Sept. 17) prior to the more earnest Open House kickoff on Tuesday morning.
All in all, it was a pretty positive picture in the RV-building center of Elkhart, Ind., offering another vignette of an industry that clearly continues its gradual but consistent comeback from the recent global downturn.
From the RV/MH Hall of Fame, where Thor Industries Inc. was ready to begin hosting dealers with a divisional layout of more than 300 units, to Forest River Inc.’s already busy displays at its Dynamax facility on County Road 6, companies were coordinating sales staffs and fine tuning displays on Monday that, again, were clearly larger, more detailed and, in some cases, more professional than those of previous years.
The industrial park drive into the Hall of Fame has literally exploded with displays. Several companies, including Howe, Ind.-based DRV LLC and its sister division Cruiser RV LLC, Wakarusa, Ind.-based Livin’ Lite Recreational Vehicles LLC and Middlebury, Ind.-based EverGreen Recreational Vehicles LLC and its divisional sibling LIFESTYLE Luxury RV, have set up shop in a big way on land opened up for the week by cooperative developers – all of those virtually paving the way into competitor Thor’s impressive, mulch-covered exhibit area.
Across the street on the northwest corner of County Roads 17 and 6, is a highly visible display set up by new manufacturing entrant Augusta RV, a fledgling towable builder that started up in January in Bristol, Ind.
Down C.R. 6 at KZRV LP’s display, with the company’s senior management in place and the soft drinks already chilled, is an array of new SportTrek towables from KZ’s new Venture RV division founded in July and headquartered in Shipshewana.
Farther to the west on Monday, Open Range RV Inc. unveiled its 10,000th unit to a small gathering of local and industry press while a steady flow of U.S. and Canadian dealers were already showing up at the doors of area supplier like Lexington Corp., Lippert Components Inc. and Coast Distributions Systems Inc., which was serving the area’s popular Nelson’s Golden-Glo chicken and a few libations to a good crowd of dealers at the company’s Husky towing products Technical Center on C.R. 17.
At Gulf Stream Coach Inc.’s opening casino night party, Chef Stanley’s sumptuous shrimp was a hit with an SRO dinner crowd that included an appearance by Olympic gold medalist diver David Boudia and served as yet another example of just how much this industry is on the mend.
As Gulf Stream’s President Dan Shea pointed out during his company’s opening night soiree, life is pretty good right now for the towable RV manufacturing company, just as it is for an array of other companies.
That’s the picture that most of us will probably take away from this year’s Open House.
“Yeah, it’s been very good this year,” Shea told RVBUSINESS.com. “We’ve established relationships with a number of new dealers and introduced a number of new products – particularly here at the Open House – that are going over very well and we’re looking forward to a great year next year.”
The bulk of Elkhart County RV Open House Week in northern Indiana doesn’t start until today (Sept. 18), but Monday’s early events had manufacturers hopeful for a good week as hundreds of RV dealers from around the U.S. and Canada came to the area.
The Elkhart Truth reported that in addition to the tourism boost, increased dealer attendance means increased dealer interest. That, in turn, likely means increased dealer orders, which is good for the local economy.
“This is a good little pump in the arm for the community, no question,” said Paul Campbell of Gulf Stream Coach Inc. as dealers walked by, checking out roughly 50 units on display Monday afternoon at the company’s Nappanee headquarters.
“We’re surprised at the interest and the number of people who are here. We’re gratified there have been hundreds,” Campbell said. Hundreds showed up Monday, and thousands will stop through the displays along County Road 6 in Elkhart through Thursday, according to registrations received by Forest River Inc. and Thor Industries Inc., the biggest manufacturers.
At Gulf Stream, dealers looked at new features like a slide-out that greatly expands bathroom space, or a new cover for slideout sections, one developed by Lippert Components Inc. A group of dealers checked out the new feature, offering critiques and concerns about whether the black color might warm up the interiors for their customers.
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The self-styled “Recreational Vehicle Capital of the World” will have that title showcased this week as thousands of dealers from across the region converge on Elkhart County for the 5th Annual RV Open House.
The Goshen News reported that the Open House, originally begun five years ago by RV manufacturer Forest River Inc. as a smaller, company-only event, has since grown to include nearly every RV builder in the area in what has become one of the biggest centralized RV sales events of its kind.
Beginning Tuesday and running through Thursday, the RV Open House is strictly reserved for dealers in most cases and generally not open to the public. Instead, the event focuses primarily on giving dealers their first real look at all the new and improved offerings from area RV manufacturers that may grace their showroom floors in the coming year.
Among those with plans to participate in the event this year is RV manufacturing giant Thor Industries, whose displays will be located exclusively on the property of Elkhart’s RV Hall of Fame.
“We have over 300 units at the RV Hall of Fame,” said Bob Martin, president and chief operating officer of Thor Industries. “We have products from all of our divisions: Keystone, Dutchmen, CrossRoads, Heartland, Airstream and Thor Motorcoach. So we’ll have separate displays for each of those and then one larger Thor Industries display.”
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Casino nights, hog roasts, live bands, catered meals, golf and new products will accompany acres upon acres upon acres of RVs greeting thousands of dealers at the ever-growing Elkhart County RV Open House Week this week in northern Indiana.
As reported by the Elkhart Truth, RVs will line County Road 6 on Elkhart’s northeast side, but the events will spread beyond that, to Elkhart’s south side, Nappanee, Middlebury and Shipshewana.
Last year an estimated crowd of more than 3,000 dealers attended the informal string of events in Elkhart County, and the biggest exhibitors, Forest River and Thor, expect the crowd to be even larger this year. Forest River has 75 more dealers registered this year, meaning about 500 more registered attendees, and they were still getting last-minute additions Friday, according to a company spokeswoman.
The displays will be larger, with new models coming from nearly everyone, at least one new RV company joining in, and a new RV factory highlighted.
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