Thor loans another 10m to Camping World

[Mike Leary]

Just came through Tucson, one of the big boxes had a ton of new AS trailers; bought from dealers that went belly-up?

[Denis4x4]

I'm familiar with the Affinity Group and if I were to read between the lines, I could see Thor using leverage and equity in that operation to put the fear of God into the WBCCI and replace the Blue Beret with a quality publication. After all, Thor owns the trade marks!

[Al - K4GLU]

I think if you go back and read the Press Release it says that Thor was loaning the money to Camping World to enable CW to buy RV's made by Thor to sell on their lots. Seriously doubt Thor has any interest in buying CW.

Mike Leary curious to know where you saw all the Airstream's in Tucson. I was there a couple of weeks ago and Beaudry had 2 2007's that I think were new but I really didn't go look at them real close. Oasis RV in Tucson is now only a Service Center - they no longer do sales. Wonder if they came from them?

[hampstead38]

CW Press Release

LINCOLNSHIRE, Ill. -- Marcus Lemonis, president and CEO of FreedomRoads and Camping World, told RV Industry News today the $10 million loan to the company's owner is part of a long-term strategic initiative.

"The loan provides working capital to FreedomRoads, it is not restructured debt," Lemonis said. "FreedomRoads has no debt other than floorplan. We have no bonds or debt of any kind."

FreedomRoads sought working capital to help grow their market share in 2009, he explained. "This business environment, particularly in 2008, was not an enhancement of working capital. If anything, market conditions exerted a neutral impact, if not a drain on capital for most businesses in our industry," said Lemonis.

As a company that provided $250 million in wholesale products to FreedomRoads last year, Thor was one of the business' largest partners. The $10 million loan announced this week is an enhancement of the relationship with Thor, said Lemonis. "There are only a handful of RV manufacturers we intend to do business with going forward, and Thor will get the lion’s share of that business," said Lemonis. "They will become our preferred vendor."

In the words of Colonel Sherman T. Potter, "Horse fritters." Or perhaps more politely, this is corporate spin. You don't take $20 million at 12 percent for one year as part of a "long term strategic initiative," unless that initiative consists of rolling over for the people giving you the loan. Two-year treasury bonds are under 1 percent; even if you tack on a thousand basis points you still don't reach 12 percent. With strategic business partners like Thor... who needs loan sharks?

In my opinion, there is a great deal more than meet the eye to the "enhancement of our relationship with Thor." And my gut instinct is that no one is going to get a straight answer out of Lemonis... not until some other pieces fall into place.

[Minnie's Mate]

Apparently Thor isn't worried about going under if they are lending cash. They'll get $100,000/month in interest. ...
Gene

$100,000/month would yield $1,200,000/year in interest=usury=illegal. 12% APR=10,000/month=120,000/year. Roughly speaking.

By the mid-30's, FDR's policies had cut unemployment in half, so more trailers could be bought. It was a very bad time, but not everyone suffered as much as others.
Gene

In 1938, unemployment was back up to 20%+, nearly what it was at its peak of 24% at the height of the depression.

I got my information from the NY Times this morning.

Gene

I'm sorry, but that says a lot and it's not comprehensive and balanced. I read the highlights of the Times every day as just one of the sources of my daily information sources and it is not comprehensive or balanced.

Many very long bills have been dumped on Congress over the years. Reps and senators have large staffs. Those are the people who actually read these things (and come up with myths like the mouse story). The Washington Post and NY Times managed to read through it, surely the staff members could. The basic bill has been around for several weeks—the amendments come frequently and once the original bill was read, all you have to do is read the amendments, not read the whole thing over and over. Waving the bill around and then dropping on the floor was theater for a TV clip, not the reality of legislative drafting. Everyone would like more time and the fact is there isn't more time. Even in normal years legislators never have enough time to look carefully at everything. I'm not sure there's any solution to that excepot abolish the government.

Gene

This was not a normal bill, though. This is the largest, most expensive bill ever and it should have been read and understood by every representative and senator before they voted on it.

It was estimated that at the speed an average college graduate reads it would take more than 12 hours to read the more than 1,100 pages of this bill. This would make it impossible for anyone to read considering the bill wasn't made available until 11:00 PM the night before voting was scheduled.

BTW folks, the salt marsh harvest mouse story was about a property owner in Speaker Pelosi's district that wanted to build a house on his property 90 feet above the high tide mark of the Pacific Ocean. He was refused a permit to build this house because it would interfere with the habitat of the salt marsh harvest mouse when the sea level of the Pacific Ocean rises as the polar ice caps melt due to human caused global warming...something that most of the worlds most respected climatologist deny or question really exist.

Because of the big profit margin, Airstream over time should show profit, and, also tend to carry the other lines because of the reputation factor. There could also be some sentimentality since Thor started with Airstream.

Gene

Most of the RV buying public don't even realize that Airstreams are still being made much less that Thor is the parent company of Airstream or the other brands that are made by Thor, therefore, they don't associate those brands with Airstreams for Cache' or sentimental reasons.


Gene, I am not meaning to pick on you. I only quote you because you happen to be the most prolific poster in this thread and, where similar opinions are expressed, your post are more complete and representative.

Also, moderators, I am not trying to ruffle the political ire on this thread, but thought there were a couple of issues that needed to be cleared up from a historical stand point.

[hampstead38]

I'm not getting into any of the political, economic or historical issues... I'm just going to suggest you use "cachet."

[Minnie's Mate]

I, we, stand corrected.

[Gene]

Originally Posted by hampstead38

I'm just going to suggest you use "cachet."

Thanks, I didn't take French in school.

Some math: $10,000,000 at 12% = $1,200,000 ÷ 12 = $100,000. Since there are two loans the total is $20,000,000 and $200,000/mo. interest. I don't know whether they are paying monthly, quarterly, or what. I just used a month to make to easier to grasp. It may be usury in some states, but not in most of them. In Colorado, the limit used to be around 45%; it may have changed in recent years.

The re-deepening of the Depression after the 1936 election was caused by removing stimulus and balancing the budget.

I used to read the Wall St. Journal. I rarely agreed with the Op-Ed pages, but the news was fairly objective. Then I read both the Journal and NY Times. I felt buried in newspapers. I don't always agree with the Op-Ed in the Times, but often do. When both papers covered the same story, the stories weren't that different and both appeared objective, though the Journal usually had more of a business news slant. Having read many newspapers, some good, more bad, over the years, I believe the Times' news pages to be objective. I dropped the Journal when Murdoch took over because he has a history of interfering with the news side of newspapers. I also watch news and business channels during the day—sort of watch, as I do other things. There is some news mixed in with the garbage on cable news.

Beyond what anyone reads, I think it's important to have some skepticism about what you read. Years of reading everything I can seems to me to help understand when a story is objective or not, and then come to my own conclusions. However, we all see the news through our personal filters and what one person believes is "fair and balanced" another may think is blather.

Reading the stimulus bill—nobody reads through an entire bill as it is amended. You read the amendments and check to see how they affect the bill. The bill was before Congress for weeks. The staff would divide up the bill into parts so each staffer would have a handle on it. When a legislative body has finite time and infinite problems to deal with, the process looks sloppy and sometimes is. I've testified before Colorado legislative committees on several bills, written a few myself, and the process is pretty strange, but not as bad as people make it out to be. I've been asked idiotic questions and very intelligent ones. I found most legislators to be sincere in their desire to make things better, though they differed greatly in their beliefs and competence. I guess people get what they deserve when they elect their representatives.

Mice: the important thing is there was nothing about mice in the stimulus bill. The closest we come to mice is the mouse fur in some Airstream models.

So what was this thread about anyway? Oh, Thor has cash, thinks they can lend some out, and did at a historically high rate of interest. Considering what lenders are getting now on these type of loans, and the risks of an RV oriented company, I think CW got a low rate. I would expect it to be around 15%. Maybe it's "discounted" for the advantages Thor got from CW on the supplier side of the deal.

Gene

[mutcth]

Originally Posted by hampstead38

In the words of Colonel Sherman T. Potter, "Horse fritters." Or perhaps more politely, this is corporate spin. You don't take $20 million at 12 percent for one year as part of a "long term strategic initiative," unless that initiative consists of rolling over for the people giving you the loan. Two-year treasury bonds are under 1 percent; even if you tack on a thousand basis points you still don't reach 12 percent. With strategic business partners like Thor... who needs loan sharks?

In my opinion, there is a great deal more than meet the eye to the "enhancement of our relationship with Thor."

I enjoyed the MASH reference - but it sounds an awful lot like this loan from Thor was mostly an extension of credit for floorplan. It lets CW borrow money to buy units from Thor (or refinance the units they already bought), park them on the lots, and sell them. I would assume that CW's lines of credit have dried up recently. It also helps justify the 12% interest rate; this isn't intended to be long-term debt.

Tangentially, I visited CW for the first time this weekend, looking for accessories. Yikes - they really do mark things up there. Glad I knew to just look first, then comparsion shop online when I got home....

[Mike Leary]

Originally Posted by Al - K4GLU

Mike Leary curious to know where you saw all the Airstream's in Tucson. I was there a couple of weeks ago and Beaudry had 2 2007's that I think were new but I really didn't go look at them real close. Oasis RV in Tucson is now only a Service Center - they no longer do sales. Wonder if they came from them?

Good question; there must have been fifteen of them at Beaudry. Suppose they're storing them in the dry climate until spring? Could be part of the AS/KOA deal, too.