Retail sales of Thor Industries Inc. RV products were up 33% during the five months ended March 31, Chairman Wade Thompson told a gathering of investment bankers in New York City today (April 11).
Thompson gave his presentation on a day when Thor shares climbed to a new 52-week high of $56. Thor stock closed today at $55.51, up 31 cents for the day in New York Stock Exchange trading.
A major contributor to the increase is Keystone RV Co., which Thor acquired on Nov. 9, and Keystone’s pre-tax net income soared 300% higher during the period from Nov. 9 through Feb. 28, Thompson told those gathered today for the Sidoti & Co. Emerging Growth Institutional Investor Forum.
Keystone’s sales revenue also was up 70% during the Nov. 9-through-Feb. 28 period, he added.
Meanwhile, pre-tax net income for all of Thor’s other RV manufacturing subsidiaries increased 84% during the four months ended Feb. 28.
Thompson said his goal for Thor, combining results from its RV and bus operations, is to achieve 20% net income growth annually.
He added that he believes the RV industry is “ripe for consolidation” because it is a $7 billion in annual sales industry with 75 independent manufacturers.
The acquisition of Keystone was successful because Keystone’s strategy of “spreading products among more dealers” in order to obtain “superior economic downturn protection” is similar to “Thor’s market strategy of independently managed companies competing in the marketplace,” Thompson said.
Also, Keystone has a “shortened product development cycle” which “expedites delivery of new products to market.” This is accomplished because the “product development footprint is duplicated for each new product line, making the model flexible and expandable,” Thompson told the gathering.
In turn, Thor has helped Keystone by providing “centralized support services” which “free-up group presidents to focus on changing market conditions and product development.” Shared support services among Thor’s subsidiaries “eliminated redundant costs,” Thompson added.