Robert W. Baird & Co. met with Thor Industries Inc. management and dealers during this week’s Elkhart County RV Open House. The following offers excerpts from Baird’s note to investors.
Notes from Elkhart show. We met with management and dealers at the dealer open house in Elkhart, Ind. The meetings showcased important extensions to the product portfolio. Dealers showed substantial interest in a new Class A product. Dealer inventory remains lean (motorhomes) to balanced (towables), according to our checks.
New products and positioning. Thor introduced a host of new products, most notably the new Vegas and Axis Class A models. Class A chassis have been in limited supply, with most manufacturers on allocation through early next year. To work around the supply constraint, and meet an attractive low price point near $70,000, Thor is building these new Class A models on Class C chassis – an apparent first in the industry.
Dealer inventory lean to balanced. Management characterized dealer inventory as lean to balanced, according to Thor – largely consistent with our checks. Expect strong motorhome backlogs as Thor and other manufacturers struggle to keep pace with demand while chassis supply remains limited.
Less discounting than last year. Promotional activity has become the norm in the RV industry, especially in towables, but Thor is discounting less than it did last year. Management indicated the pricing environment has improved substantially versus last year, likely the result of better management incentives and improved discipline under the leadership of new CEO Bob Martin.
Expanding into new markets. We gained a better appreciation for the upside associated with the recent Livin’ Lite RV LLC acquisition. The brand allows Thor to enter two new markets:
• Camping trailers: Thor will enter the high-end portion of the camping trailer segment, a market Thor had not addressed in the past.
• China: Thor is exporting American-made Livin’ Lite RVs to China – a remarkable development. Volume is small, but the opportunity holds promise as the Chinese middle class expands.
Thor Industries Inc. today (Sept. 11) announced it has named Colleen Zuhl as CFO, effective Oct. 1. According to a press release, Zuhl replaces Dominic Romeo, who will continue to work with Thor on a consulting basis for a variety of projects.
“We would like to thank Dom Romeo for coming out of retirement to assist us in taking significant transformative steps in a condensed time frame that set the foundation for our future growth,” said Bob Martin, Thor president and CEO. “Dom’s time with us was marked by significant successes of our company’s management team on which Dom played a key role. I personally appreciated his counsel on our strategic objectives. I also appreciate that we will have the ability to continue to work with him.”
Romeo noted, “I truly enjoyed my time as CFO of Thor and am very pleased with what our management team has accomplished. I leave the position knowing that Colleen will maintain the high standards established at Thor and that the company’s experienced finance team will continue its outstanding performance.”
Zuhl, 47, joined Thor in June 2011 and has served in a variety of roles, including vice president and corporate controller as well as interim CFO from October 2012 through February 2013. The entire finance, accounting and internal audit functions will report to Zuhl.
“We are pleased that Colleen has agreed to become our new CFO, as she has shown that her years of experience in the RV industry, her technical expertise and leadership skills make her the ideal candidate to maintain our positive momentum within the finance function,” Martin said. “I am confident in Colleen’s ability to shape the future of our finance group and provide valuable insights to our board and senior management team.”
Prior to her experience at Thor, Zuhl served as CFO for All American Group Inc. (formerly known as Coachmen Industries Inc.), which was a publicly traded company. Prior to her tenure at All American Group, Zuhl spent more than 15 years at Ernst & Young LLP, most recently as an audit senior manager. Zuhl is a graduate of Hillsdale College with a bachelor’s in accounting and mathematics.
As Thor prepares to file its fiscal 2013 financial statements, Romeo and Zuhl will share responsibility for the filing, and both will certify the report on behalf of the company.
In addition to Zuhl’s appointment as CFO, Thor named Jeff Tryka to the newly created position of director of corporate development and investor relations. In this role, Tryka will be responsible for all interactions with the investment community, including meetings with existing shareholders and potential investors, presentations at investor conferences and incoming inquiries from institutional and individual investors. Tryka will report directly to Martin.
Tryka, 43, has been involved in the RV industry for more than a decade, first as an equity analyst in the late 1990s and later as director of investor relations at Coachmen. He has been serving in the investor relations function at Thor on a consulting basis since October 2012. Tryka holds the Chartered Financial Analyst (CFA) designation and earned an MBA in Finance from the Kelley School of Business at Indiana University and a bachelor’s in accounting from Bucknell University.
Thor Industries Inc. today (Aug. 28) announced that Crossroads RV, a wholly-owned subsidiary, has named Andy Cripe as president, effective Aug. 26.
“We are pleased to have Andy take a strong leadership role at Crossroads RV,” said Bob Martin, Thor president and CEO, in a press release. “Andy has a strong track record of performance at Keystone RV that should enable him to make an immediate impact on the operations of Crossroads. The ability to fill such an important position internally illustrates the strength and depth of Thor’s management bench.”
Cripe has been with Keystone RV for 10 years in a variety of roles including district manager and product manager of the Raptor brand as well as being the general manager responsible for brands including Hideout/Retreat, Passport and Cougar. Prior to his experience in the RV industry, Cripe spent time in the financial management program at General Electric, followed by a position with the accounting and consulting firm Ernst & Young. Cripe is a graduate of Indiana University with a bachelor’s in accounting, finance and marketing.
In addition to the appointment of Cripe as president, Crossroads RV named Matt Thompson to the newly created position of vice president of sales for Crossroads. The entire sales function at the subsidiary will report to Thompson in his new role.
Thompson is a 20-year veteran of the RV industry and has been with the Thor family of companies for more than a decade. He was previously a general manager at Crossroads RV, following several vice president positions at Thor Motor Coach, including two years as vice president of sales for the diesel business at Thor Motor Coach.
Scott Tuttle needed a partner. The founder of Livin’ Lite Recreational Vehicles LLC had always anticipated expansion, but Tuttle’s business plan didn’t account for the type of “explosive growth” that the Wakarusa, Ind.-based company has experienced since its founding in 2002.
“We were to the point where we had grown so quickly that taking that next step was going to be a challenge,” said Tuttle, also a former co-founder of Heartland Recreational Vehicles LLC. “I was going to have to personally finance that next growth stage, so I started thinking about a partner that could help us.”
Tuesday (Aug. 27), Tuttle’s “next step” took shape as Thor Industries Inc. announced the acquisition of Livin’ Lite, adding the company to its stable of towable manufacturers (see previous story by clicking here).
“It’s really a perfect fit,” Tuttle told RVBUSINESS.com. “I considered private equity firms, but that’s just a cash infusion. With Thor, we gain a huge dealer network, plus all their experience, expertise and resources. It made perfect sense. It’s one thing to grow, it’s another to grow right.”
Livin’ Lite also fits into Thor’s growth plan. Offering a product mix featuring a unique aluminum-and-composite construction that Tuttle said “has created a new weight class,” Livin’ Lite fills a gap in Thor’s portfolio.
“Adding such a creative RV maker to Thor’s strong stable of brands will enable us to expand our industry-leading position in new product development into camping trailers and truck campers,” said Thor President and CEO Bob Martin in Tuesday’s press release, adding that Livin’ Lite is expected to generate sales of approximately $24 million for calendar year 2013. “We see many opportunities for expanding Livin’ Lite’s market presence through the Thor dealer network, and the ability to leverage their lightweight aluminum and composite construction technology in other Thor products. This transaction represents a solid example of executing our strategic plan to grow our RV presence through the acquisition of brands and technologies that complement our existing business.”
Also a factor was Thor’s recent acquisition of the former Navistar Inc. facilities in Wakarusa. The vast complex was left vacant when Allied Specialty Vehicles purchased Navistar’s RV assets then moved operations to its campus in Decatur, Ind.
“Livin’ Lite has four buildings in Wakarusa – two that are just four years old – and we’re not going to abandon those facilities,” said Tuttle, noting the company employs around 120 workers. “But we are looking forward to possibly expanding our production into some of Thor’s buildings.”
Particularly with the pending launch of several new product lines. Adding to its lineup of travel trailers, toy haulers, camping trailers and truck campers, Livin’ Lite will be introducing a new fifth-wheel at next month’s Elkhart County RV Open House along with the Bearcat brand of off-road campers.
“We will be bringing to market fifth-wheels that hit three different segments,” Tuttle said. “At Open House we will show fifth-wheels in our Camplite ultralight series and our Quicksilver VRV line, which will be a bigger unit. Then, at Louisville, we’ll debut a ‘micro’ fifth-wheel” – a super light fifth-wheel that nobody else is making.”
Tuttle said the Bearcat would extend its camper lines, offering more rugged, durable construction.
“We have always had off-road packages for our campers,” he said. “But the Bearcat will be built to haul ATVs and motorcycles that people normally tow with a trailer. They’ll have all-terrain tires and come in all shapes and sizes while still hitting an affordable price point.”
Beyond that, Tuttle said Livin’ Lite is poised to accommodate the new trend toward lighter-weight trucks and even all-electric vehicles that are in the planning stages.
“Because of new emission regulations, truck manufacturers, and the auto industry in general, are building units with better gas mileage,” he said. “But that means they will have less power, especially an all-electric truck. When that hits the market, we will have a vehicle that will work.”
Elkhart, Ind.-based Thor Industries Inc. has named Debi Reigsecker to head its corporate travel operations as it seeks to source travel services internally to improve speed and efficiency while controlling costs.
“We are pleased to welcome Debi to Thor as our corporate travel manager,” said Bob Martin, Thor president and CEO. “Debi has worked with Thor and its subsidiaries extensively in managing our travel and accommodations and will help to make travel planning more efficient and cost effective for all of Thor.”
Riegsecker is a Certified Travel Consultant (CTC) and has spent more than 30 years as a corporate travel agent, most recently with Menno Travel in Goshen, Ind. She is a native of Elkhart County and a graduate of Northridge High School in Middlebury. She also holds a bachelor’s degree in speech communication and telecommunication from Indiana University in Bloomington.
Thor Industries Inc. today (Aug. 27) announced that it acquired the assets of innovative recreational vehicle maker Livin’ Lite Recreational Vehicles LLC through a wholly-owned subsidiary. According to a press release, the purchase is subject to customary closing conditions and is expected to be completed by Aug. 30.
“We are pleased to welcome Livin’ Lite to the Thor family of RV brands. Adding such a creative RV maker to Thor’s strong stable of brands will enable us to expand our industry-leading position in new product development into camping trailers and truck campers,” said Bob Martin, president and CEO for Elkhart, Ind.-based Thor. “We see many opportunities for expanding Livin’ Lite’s market presence through the Thor dealer network, and the ability to leverage their lightweight aluminum and composite construction technology in other Thor products. This transaction represents a solid example of executing our strategic plan to grow our RV presence through the acquisition of brands and technologies that complement our existing business.”
Founded by former Heartland RV LLC co-founder and executive Scott Tuttle, Wakarusa, Ind.-based Livin’ Lite is known for its advanced lightweight aluminum construction applied to a variety of smaller RVs, including travel trailers, toy haulers, camping trailers and truck campers. Livin’ Lite also markets its products in partnership with a number of leading consumer brands including Jeep. Having recently been named to Inc. Magazine’s list of fastest growing companies for the third consecutive year, Livin’ Lite is expected to generate sales of approximately $24 million for calendar year 2013.
“We are excited to join forces with Thor, the leading company in the RV industry, and we are looking forward to the new growth opportunities we should see as a result,” said Tuttle, president, CEO and founder of Livin’ Lite. “We have worked diligently to grow Livin’ Lite over the past five years and expect to extend that growth as we bring the distribution, operational and financial strengths of Thor to bear on our business. As the newest company to join Thor, we also expect to add to our combined development efforts as we apply our proprietary technology to a broader array of existing product lines and bring our combined market strength to camping trailers and truck campers.”
Thor expects to offer Livin’ Lite’s current 35 models to its current dealer network upon closing of the transaction. The company also expects Livin’ Lite will continue to operate out of its existing Wakarusa facilities with minimal disruption to its current business resulting from the acquisition.
For the first time in memory, the industry’s two RV-building volume leaders, Thor Industries Inc. and Forest River Inc., are in a dead heat for retail market share in both towable and motorized RVs, according to Statistical Surveys Inc., Grand Rapids, Mich.
At least they were at mid-year, with the two Elkhart, Ind.-based manufacturers each occupying exactly 35.4% of the “all towable” market. In fact, they were only nine units apart through June – Thor at 39,803 units vs. Forest River at 39,794. At the same time, Thor’s towable RV unit sales were up 8.8% and its market share was down slightly to 1.7%, while Forest River’s unit sales were up 19.5% and its market share grew 8% for the six-month period.
The picture is much the same on the motorized side of the ledger because Forest River through June was accounting for 25.2% of the retail market based on sales of 3,769 units vs. Thor with a 25% market share on 3,747 retails — a margin of only 22 units.
The rather respectable — yet heated — competition between these two hard-hitting industry leaders, occupying together more than 70% of the U.S. towable marketplace, has been going on for a good while. But the numbers haven’t been quite this close, keeping in mind that, as Stat Surveys President Tom Walworth points out, “you still have to take into account the fact that Forest River’s towable RV product lines include some lower-priced folding camping trailers, a market in which Thor isn’t involved.”
But the real news here is to what extent Forest River is pressing its case in both towable and motorized RVs, even while both companies continue to post impressive growth during the current economic recovery. Thor, for its part, recently posted its first $2 billion quarter, and revenues for Forest River, a Berkshire Hathaway Inc. subsidiary, were running at least 22% ahead of last year through June, Forest River President and CEO Pete Liegl confirms.
“I think that Forest River has been narrowing the gap,” said Walworth. “Both Forest River and Thor have aggressively gone after the market and they’ve put out a bunch of new product that has allowed them both to maintain their leadership in the market.”
Behind Forest River and Thor on the motorized side is Winnebago Industries Inc., with an 18.1% share of the market. In third place in tow-type RV retail sales is Middlebury, Ind.-based Jayco Inc., which occupied 11.2% of the market through June.
“Think about that,” said Walworth. “The top two (towable builders) are 70% of the market. Jayco brings it up to 81% of the market and the next five players take it up to 90% of the market. I mean, it’s a very top-heavy industry and more so all the time. The two big players have gained market share in an up market. The only thing to consider is that if the market becomes really hot, that usually opens the doors for the smaller startups to come in.
He added, “You know, through this, we’ll probably introduce one or two new manufacturers here who could someday end up being major ones. That’s usually because the majors and the other competitors can’t meet the dealers’ supply times, opening the door for some of the startups to get involved.”
It’s official. As of Wednesday (Aug. 14) morning Thor Industries Inc. is centered in the heart of Elkhart, Ind.
“We’re proud to be part of the downtown area,” said Bob Martin, Thor president and CEO standing next to company co-founder and chairman Peter Orthwein. According to a report by The Elkhart Truth, the company and the Greater Elkhart Chamber of Commerce held a ribbon cutting to officially open the headquarters of one of the top players in the recreational vehicle industry.
“The building had been empty for six years,” Martin said of the site at 601 E. Beardsley Ave., a spot with a view of the St. Joseph River and Island Park. “A lot of people in the community had noticed that it was empty here. People have known it as the Coachmen building or something like that from many years ago, so we wanted to put our own touches on it. We’re very proud of all this.”
Kyle Hannon, president of the chamber, called the building “a monument to corporate headquarters in Elkhart, it’s a monument to the RV industry.”
Dick Moore, Elkhart’s mayor, welcomed Orthwein, and said, “We recognize Thor, of course, as a leader in the RV industry and how important it is to stimulating our economy with all of the jobs that you do.”
Moore also said, “We’re just so very pleased that you’re here.”
“We’re proud to be part of Elkhart, we’re proud to be part of the community and we’re proud to have our corporate offices in downtown Elkhart,” said Martin, who grew up in Elkhart and Bristol.
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Thor Industries Inc. announced that Don Emahiser has resigned as president of CrossRoads RV to pursue other interests, effective Aug. 9. CrossRoads RV is a Thor subsidiary that produces travel trailers and fifth-wheel RVs in Topeka, Ind.
“We appreciate Don’s service to our company and wish him well on his future endeavors. Fortunately, we have a strong bench of management talent at Thor and CrossRoads that should help ensure this management transition is smooth,” said Bob Martin, Thor president and CEO, in a press release. “We will begin the process of hiring a new president for CrossRoads immediately and we hope to have the search completed within our fiscal first quarter.
“In the interim, I will be working closely with the management team at CrossRoads to ensure that our operations continue running effectively and we continue to provide our dealers with the service and products they expect.”
Thor Industries Inc., headquartered in Elkhart, Ind., has been named to this year’s 50 Best U.S. Manufacturers list compiled by Industry Week magazine. The builder was ranked No. 37 in the listing.
The publication bases the rankings on key areas over a three-year period, including profit margin and revenue growth.
Thor, which has several local subsidiaries in Elkhart, Goshen and Nappanee, announced July 31 its decision to sell its bus business, which had annual sales of $448.8 million over the previous year, to Allied Specialty Vehicles for $100 million in cash.