Thor is increasing production at some of its RV facilities in response to “higher than organically expected dealer demand” in the weeks since resuming manufacturing operations in the US.
“The flexibility of our operating model allows us to quickly ramp-up production when and where needed and is a key component of our ability to rapidly adapt to sudden changes in market conditions,” the company announced Friday, May 29.
Thor Industries today, May 29, provided operational updates in conjunction with the official start of the North America summer camping and RV travel season. The RV industry leader said its “primary objective is to help people safely enjoy the outdoors in a sustainable way, while creating unique and lasting memories with family and friends.”
The Thor companies are working closely with key suppliers to minimize any potential disruptions, the company announced, but are seeing “supply constraints” in some essential areas for OEMs.
“Chassis supply constraints within our European supplier base are expected to cause intermittent temporary line shut-downs or reduced output in the near-term,” the company announced.
Throughout late-April and May, Thor’s companies in North America and Europe resumed operations, with the exception of a production facility in the U.K. which is expected to open in mid-June. The priority of all facilities is on employee safety, the company said, which has been supported by a comprehensive set of strict safety protocols.
The protocols are updated as needed to reflect the current recommendations and best practices from the CDC, WHO and applicable governmental agencies to help ensure the on-going safety of employees, their families and the communities in which they operate.
“We believe strongly in the future of Thor and the RV industry,” CEO Bob Martin said. “While our third quarter results were certainly negatively impacted by COVID-19, as we look ahead, we believe that the current environment will provide us the opportunity to introduce even more people to the life-long benefits the RV-life style offers.”
Prior to the onset of the COVID-19, Thor experienced a strong early start to the selling season, with high optimism from both North American and European dealers. Dealer inventory levels were appropriate for the spring season prior to the impact of COVID-19. The strong start to the selling season was significantly interrupted by the impact of COVID-19 as Thor temporarily shutdown all of its North American and European operations. Despite the lack of production, during the temporary shut-down of Thor facilities in March and April, dealers continued to sell retail units – further reducing dealer inventory levels.
As the country begins to exit the various governmental restrictions, Thor said it is now experiencing even stronger demand from its independent dealer base – with a focus and urgency on the remainder of the 2020 selling season. Within the US, in particular, dealers are now experiencing low inventory levels of certain products.
“In addition to providing a personal space that allows people to maintain social distance in a safe manner, (the RV life) also allows people to connect with loved-ones, provides the ability to get away for short, frequent breaks or longer adventures, and helps people reconnect to nature or explore some of the many attractions that are often just a drive away,” Martin said.
As a result of the current business climate and outlook, the Company and its subsidiaries have called back a high number of our valuable team members. In addition, the compensation of all employed team members who were subject to reductions in salary and bonuses, including our CEO and other Named Executive Officers, will return to their original terms beginning on June 1, 2020. Likewise, Thor’s Board of Directors compensation will also return to their original terms.
At the outset of the pandemic, out of an abundance of caution and given the lack of clarity on the duration or the severity of the pandemic on Thor or the industry, Thor strategically borrowed $250 million from its Asset Based Loan facility. Today, May 29th, Thor is repaying that $250 million draw based on increased confidence in the company’s outlook.
Thor Industries will release its third fiscal quarter financial results before the open of the stock market on June 8, 2020, and will concurrently provide a comprehensive question and answer document and a slide presentation that can be accessed on the Company’s website at http://ir.thorindustries.com/.