Thor Industries Inc. Chairman Wade F.B. Thompson told an institutional investors conference in New York last month that “the RV business is ripe for consolidation and we aim to be the consolidator.”
Thompson and Thor took a big step towards consolidating the towables segment of the industry with the acquisition, last November, of Keystone RV Co., which doubled Thor’s retail market share in the travel trailer/fifth-wheel segment to 25.9% last year (including Keystone’s contribution for the full year), according to Statistical Surveys Inc., an independent market research firm.
“It (the Keystone acquisition) was a major step for us as it has provided us with a dominant role in the towable segment, the industry’s largest and therefore, we now have purchasing power far superior to any other manufacturer in the industry,” Thompson told the Sidoti & Co. Emerging Growth Institutional Investor Forum on April 11.
(The transcript of Thor’s presentation can be seen on the Securities & Exchange Commission website, www.sec.gov.)
As a result of becoming the RV industry’s largest producer in terms of unit volume, Thompson told the institutional investors, “We have achieved approximately $10 million in annualized purchasing savings. Some of this was effective Jan. 1, all of it should be in place by June 1.”
Obtaining quantity discounts from suppliers is crucial because RV manufacturers spend 65% of their proceeds from sales to dealers on materials and components such as frames, refrigerators, air conditioners, axles and tires, Thompson said.
“We have 28% more purchasing power than Fleetwood,” Thompson added. “Excluding fold downs, which is a $170 million declining segment, we have 40% more purchasing power than Fleetwood.”
Fleetwood Enterprises Inc., Riverside, Calif., was No. 2 in retail market share in the combined travel trailer/fifth-wheel category in 2001 with a 15% market share, Statistical Surveys reported.
No. 3 in terms of retail market share in the travel trailer/fifth-wheel category last year was Forest River Inc., Goshen, Ind., at 13.1%. Then there was a steep drop-off to No. 4 Jayco Inc., Middlebury, Ind., at 7.3% last year.
Thompson also told the investor forum that Thor had no debt and $31 million in cash as of the end of January. “We are a generator of cash,” Thompson said.
Additionally, Thompson believes Thor will achieve $1.1 billion in sales revenue (including mid-size bus sales revenue which accounts for 25% of Thor’s total sales) during its fiscal year that will end on July 31. (Last week, Thor reported $847 million in total sales for the nine months ended April 30.)
Although Thor is the leader in travel trailers and fifth-wheels, it ranked No. 5 in the combined Class A and Class C motorhome category with a 7.9% retail market share in 2001, according to Statistical Surveys.
However, Thompson told the institutional investors that Thor’s Four Winds subsidiary will introduce a new diesel pusher Class A to the retail market in July which will “fill a major product gap for us.”
During the last several weeks, the investment community has rewarded Thor, an New York Stock Exchange-listed firm, by bidding its stock price above $60 a share. Today (May 8), Thor stock closed 99 cents higher at $62.50, a new 52-week high.