Thor Industries blows away street expectations!

[Silvertwinkie]

By the way, there is also a fantasitc article in the March issue of Fortune Magazine about Thor and how sales of Airstreams are really surpassing expectations by a mile (which would explain the results posted below to the financial community, but is something most of us have long understood for many years).

Looks like this forum could get a whole lot bigger!

Happy reading,

Eric


Thor Industries Earnings
Thursday February 27, 11:59 am ET

Thor Industries Inc. (NYSE:THO - News) - Jackson Center, Ohio
2nd Quar Jan. 31:
2003 2002
Sales $329,898,000 $267,906,000
Net income 15,369,000 7,678,000
Avg shrs (diluted) 28,556,802 27,937,616
Shr earns
Net income .54 .27


Thor Industries Inc.'s second-quarter earnings beat a Thomson First Call (News - Websites) mean estimate of 43 cents a share compiled from a survey of three analysts.

In the second quarter, the company said RV sales rose 37% to $276 million from $201.4 million a year ago. However, bus sales fell 19% to $53.9 million from $ 66.5 million.

New York Stock Exchange (News - Websites)-listed shares of Thor Industries recently traded at $ 25.57, up $1.09, or 4.5%, on composite volume of 61,800 shares. Average daily volume is 178,467 shares.

Thor Industries makes recreational vehicles including motor homes and travel trailers in North America.

[jcanavera]

Here is the story from their online version.

A Thor on Your Side
Streamlined: This growing RV maker's stock rose 86% in 2002.
FORTUNE
Tuesday, February 4, 2003
By Melanie Shanley


This might be the RV's 15 minutes. From the Osbournes' family motor home to Jack Nicholson's recreational ride in About Schmidt, the traditional vehicle of the American retiree is popping up across the pop culture terrain. And there's no bigger star in the RV business right now than Thor Industries (THO, $28). Shares of the fast-growing company (it now makes one out of every four motor homes sold) shot up 86% in 2002.

Thor's joy ride isn't over. Earnings for the vehicle maker are on pace to grow 48% this year, thanks in part to predictable demographics. "Baby-boomers are the target customers for RVs," says Red Chip research analyst Ruthanne Williams, "and that age group just keeps swelling." Plus, record-low interest rates have made the vehicles more affordable to potential buyers. In fact, the company has built up a six-month, $250 million backlog for products like its Dutchmen and Four Winds motor homes, Airstream trailers, and Champion midsized buses. Thor plans to make room for more growth with the addition of five new production plants in 2003.

The best news for investors is that despite last year's run-up, Thor trades at just ten times projected 2003 earnings--well below its historical average P/E of 16. That means it's not too late to climb onboard.

From the Feb. 17, 2003 Issue

[flyfisher]

Eric -

That's interesting information, and more power to them.

However, as a former finance person with large industrial corporation (recently retired), I would have some questions about Thor's longer range prospects, based solely on my visits to the Airstream Factory this past year and the year before.

I hope my comments aren't taken too negatively, but what I saw at Franklin Center was completely inconsistent with what you'd expect to see at a company whose sales and profits are on a steep upward path.

Maybe the Airstream plant is not typical of Thor's plants elsewhere.

However, what I saw last August was a plant that was seriously underutilized, unkempt , and operating at very low productivity.

Maybe Thor is just bleeding the Airstream factory for whatever they can bleed it for, but the apparent lack of maintenance on the facility doesn't give one the impression that Thor is in that business for the long haul. (Obviously in the short run profits can be inflated by postponing investment and maintenance decisions.)

I'd also be very concerned if I were a shareholder that they are just begging for problems from OSHA or other regulatory agencies, as there was apparent blatant disregard for health and safety issues throughout the plant.

AS much as I love the Airstream product, I couldn't help but think during my visits "Gee, think what they could do if they were better managed".

[Silvertwinkie]

Flyfisher,

I don't take your comments badly. I have never been to the factory and cannot comment on that. I agree that what you say does ask a larger question. Anyone else have this impression that went to the factory?

I can say that although I love my Airstream, the overall quality isn't what I expected. I expected Mercedes quality for the price the unit cost. I'd say (not to offend Cadillac owners), it has Cadillac quality, which would fit in line with your comments about the factory. In the end some of the quality control issues aren't really that serious and yes, the Bambi is the entry level product. If I wanted the Fleetwood, I'd have bought the Classic (but not sure the quality would be much better at that level either). Still, I am starting to understand why a lot of folks might be running out and buying the older products. Yet there is still a small feeling that my unit could have been paid a bit more attention to when it was built. It's just the little things that don't make sense.

In the end, I think that as long as they don't run into the issues you mentioned, they should be able to ride this wave out. They have more people like me buying these things now and I'm not retired, I'm in my early thirties. When the wave does slow, they may find themselves in a rut and maybe Thor will start to spin off units or maybe even sell some. My interactions with the factory over email and the phone have been very positive. So I'd like to believe that the essence of Airstream is still there, if not murked up by some of the corporate B.S. that happens when a "parent" company is calling the shots over the people in the trenches creating these wonderful beasts.

For now though, it means Thor is happy which means Airstream is in business, which makes me happy! :-)

Just my .02

Regards,

Eric

[jcanavera]

I'm probably far from being qualified to look at a plant and determine what is right or wrong. From what I read (this is company supplied information) since buying Airstream, Thor states that A/S has turned over 21 successive years of profit. It doesn't seem to me that 21 years of milking is going on. Under Thor's realm the Safari for example has been introduced and for the last few years has been their best selling unit.

Could these trailers be better? Is there a slippage of quality? I'm not sure. I can't compare the old Airstream against the new. I do think it is better than the SOB I bought new and owned for 4 years. I dumped it because I realized it was deteriorating faster that it should have. I have no reason to doubt that my Safari will survive to become a future vintage classic.

I think we have to be realistic in the fact that the quality of everything is changing. Remember when TV sets were a real piece of furniture and not a box of plastic? Is the quality the same? I'm not sure, but needless to say the work ethic of American workers is different and the attitude of business management is different also...these differences aren't always for the better.

If you want that new Airstream to be built just like those built 40 years ago, there will be a price to pay. The bottom line is whether the public will pay that price. There is a trade off in dollars here. Is my newer Safari the quality equivalent of the same age Classic? Not in my opinion. So why did I buy a product that is not the quality? The answer is saving $20,000 and a new tow vehicle.

Obviously the plant could probably turn over more trailers but probably at the expense of additional workers. So its probably a supply and demand situation. If the demand is there Thor will probably ramp up Airstream production within what they feel is justifiable without getting stuck if demand drops. I think many RV manufacturers have never forgotten the 70's and what gas prices and shortages did to the RV industry. I think most will stay lean during these rough economic times.

I've seen one other RV manufacturing facility, Hi-Lo, which is also owned by Thor, and really didn't see much difference from what I saw at Jackson Center. In most cases I don't think you can compare an RV facility with say, an automobile manufacturing plant.

There is a lot of interest in Airstream today. The retiring baby boomers are presenting one of the best opportunities ever for RV Manufacturers. Sales from Thor and all the other manufacturers support that. For them, times are good. Just watching TV, movies, and print advertising will show Airstream's poping up all over. Its American, it represents the good life, it represents everybody. If we don't plumet into economic chaos, and if Thor keeps a handle on quality, this company can be sitting in the cat bird's seat for many years to come.

Jack

[ALANSD]

From a retail market perspective, I have been watching sales and advertising of used Airstream motorhomes (Classic) for almost two years, and the trend has been quite positive. It seems that resale values have held on many models and increased on some.
I can't say as to what the trailer market has done, but I am quite encouraged by what I have observed.
I have saved many print outs as a reference.
as to the other issue-
So you think it might be a good time to buy Thor stock?

[jcanavera]

Originally posted by ALANSD
So you think it might be a good time to buy Thor stock?

Only if you have money to lose. While Thor's stock price appreciated greatly I'm concerned about outside influences that could affect the industry as a whole. If gas hits $2.00+ across the country this summer we could see a real downturn in the RV market. The potential war in Iraq. If the govt. screws around with our tow vehicles. It's just too speculative in my mind. Thor's dividend is $.01 a share so you are counting on appreciation to make some $$ on this one. We may have already missed out on the best run up at this point.

I'll probably relook at this in May or June.

Jack

[Chas]

Good analysis JC,

And, I don't think we will be waiting much longer for $2 a gallon fuel, I bet we get there before spring. Myself and others lined up today for $1.59 a gallon diesel, felt like it was a bargain!!

Might be a good time to pick up that V10 tow vehicle you've had your eye on real cheap! This will pass, remember Gulf War, Part I?

Chas

[Silvertwinkie]

I can see both sides of the story here and Jack, I agree with you too.

My only thing is simply this. The Bambi I bought cost more than any other 19' camper on the planet that is a stock factory build. I totally agree that times have changed, but you say if you want the good stuff you pay, well, I think I did pay. I looked at the Safari too and think it's a wonderful rig, but you paid too. That rig cost more than any other rig in it's class.

So yes, I love A/S (very much). Yes, I am happy that they are doing well. Yes, times change and even today's rigs will be classics. Even with my rigs weird things, I still love the little thing, but we did pay a pretty price for these new silvertwinkies. I don't believe Thor had a bunch to do with the Safari coming out. Those folks at A/S know what time it is.

I have an off topic question too. My "sticker" says the black tank is 8 gallons on my 03 Bambi, the 2002 and 2003 brochures says 18 gallon black tank. The dealer tells me that 8 gallons was a typo, but the owner's manual says 8 gallons. So which is right. Back on topic, it's this crap that I find frustrating about the quality (maybe I just have a dealer that doesn't know jack, who knows, but A/S made him a dealer (off hand this is the same dealer that told me the fire extinguisher was an option). Also until I called A/S, they had the 2003 Bambi as having an upper bunk in front. Only after I called did they change the website, not to mention, the brochure had the old 16' Bambi pictured when there was no 16' Bambi for 03 (or at least that's what my brochure stated).

This is not a grip session about A/S, just pointing out inconsistanies and some of the B.S. I didn't expect from such a well known, well respected, legendary vehicle, high priced rig. I would have bought a Coachman or a Wilderness box if I wanted to go with a lesser rig and would have expected these kinds of things, but never from the mighty A/S. :-) I think Wally would turn in his grave if he saw some of the inconsistancies that I've seen these past 6 weeks.

Flyfish might have a vaild point too. I might not have believed it, but with all the mix ups, miscommunication, and some of the quality issues I've seen, who knows what the right answer is. I still think it's a wicked cool rig!

Oh and by the way, I saw my first $2.03 per gallon in the north suburbs here for the premium stuff at a Mobil station. Getting to...it's already here!

Regards,

Eric

[jcanavera]

Originally posted by Silvertwinkie
but you say if you want the good stuff you pay, well, I think I did pay. I looked at the Safari too and think it's a wonderful rig, but you paid too. That rig cost more than any other rig in it's class.

. I don't believe Thor had a bunch to do with the Safari coming out. Those folks at A/S know what time it is.

, it's this crap that I find frustrating about the quality (maybe I just have a dealer that doesn't know jack,I didn't expect from such a well known, well respected, legendary vehicle, high priced rig. I would have bought a Coachman or a Wilderness box if I wanted to go with a lesser rig and would have expected these kinds of things, but never from the mighty A/S. :-) I think Wally would turn in his grave if he saw some of the inconsistancies that

Eric, you will consider that Airstream has always been a premium priced trailer. All the way back to the first produced models. This is not a recent event. All those vintage units out there were purchased new by someone who dug deep like us.

Regarding the Safari, while Airstream has its own executives and is still locally managed, Thor is the one who has to give the nod to major directions they take, so the buck has to stop with them good or bad.

Personally I do not purchase anything major without doing my homework. Prior to seriously considering my purchase, I lurked and asked questions on other Internet sites and list serves (this one had not yet been born!). I walked into that dealership knowing a lot more than my salesperson did. Again a sign of the times. I remember buying a VCR years ago where the salesperson told me that a 4 head VCR would last twice as long as a two head. Go into an automobile dealership and try to talk to them about towing issues.

Memories are selective and not every A/S under Wally's watch was a gem either. Unless you are the original owner of one of these units you really don't know what the early impressions were. The person who will buy my home will never now the issues and grief I went through when I had this house built new.

Bottom line on these issues is that we communicate with Airstream and keep them in the loop about what's good and what's bad. They will stub their toes along the road but overall I have no regrets and the only thing I might change if I had to do it again, is to possibly look at buying a newer used unit. That initial hit on depreciation is somewhat painful.

Thanks for your thoughts!

Regards,

Jack

[WayWard Wind]

We purchased our 02 Bambi in June of 02 & the stats also listed the Black water tank at 8 gallons. I called the factory & they really didn't know, but figured it was 8 gallons. I of course, b/4 calling, had filled the tank by a gallon at a time & found it to be 20 gallons. The reason I called the factory was to hear thier remarks, as I to am somewhat disappointed as to the follow up support on what I thought was top of the line.
Bogfrog & Mr. Turbo

[lynn]

Has anyone visited the Airstream Factory recently? On a recent visit the tour guide mentioned a new roof had been installed on the main production facility,the inside of the main plant has been completely painted and new high intensity lighting had been installed. The exterior chain link fence has been redone and new drainage systems have been installed( maybe this is where Thor is draining Airstream--just kidding). It appears Airstream is working on improving their facility. Everything takes time and money!!!

[kamadeca]

Lynn,

Will be visiting the factory on Friday (March 7th) on our way to Florida. Will let the group know my impressions.

Malcolm
7 weeks to my new 25C! and counting.

[RoadKingMoe]

Originally posted by A.E. Milliman
We purchased our 02 Bambi in June of 02 & the stats also listed the Black water tank at 8 gallons.
Bogfrog & Mr. Turbo

In '02, the 19' Bambi came with an 8 gal black water tank before unit #514492, and an 18 gal tank after this unit. Not sure who you talked to, but at least the tech guys should've known this.

The overhead bunk was an option... dunno if it still is.

[Silvertwinkie]

I looked into the tank from the head (not been used yet). I guesstimated that it is larger than 8 gallons. When it warmed up I was going to do the gallon at a time test since no one including the people at A/S could answer it, nor have I been able to receive any return emails on the subject.

They did tell me when I called A/S that the upper bunk was discontinued after the '02 Bambi run. '03 has no upperbunk even as an option and A/S updated their website after I called with the question.

I'd also like would like to make the comment that I agree with Jack's comments, but I still find it hard to believe and accept the sign of the times stuff, even though it's true. For example, Cisco Systems, like A/S has historically been more expensive than competitors, way more expensive. Yet calling Cisco for questions or support is one of the most plesant and complete events one could ever expect from a company from a customer's perspective. Cisco is like the Zen of support and info on their products! When you call a company and only seem to get a straight answer at times on a product, and that they authorize some dealers, not all, that are somewhat clueless, I feel that it is a area that needs improvement. I can't accept the comparision to buying a VCR or a car. Although I don't support that these vendors for VCRs and cars shouldn't know the products either, there are a thousands more options. Additionally, when I call the manufacturer, Chevy for example or email, if they don't have the answer, they get it to me. This happens only 90% of the time w/ A/S. Maybe Cisco went through this too at some point. Bottom line, is that I think quaility and correct info in customer communications as well as dealer selection (which Cisco also is very picky about too) is what you make of it as a company.

The Reader's Digest version of this saga is that A/S communications through it's phone, web and dealer is an area that needs improvement. I looked into the Bambi for almost a year and found this issue consistantly throughout the process and contiuning after the purchase. Would using a different dealer have yeided a different perspective? Perhaps, but as most of us know there are not a whole lot of games in town when it comes to buying or repairing A/S rigs.

Was I or would I ever consider anything besides an A/S in the future? Not sure, but it would have to be one heck of a rig for me to even think of not buying that 6 sleeper Safari next if and when the time comes as we get to be a larger family. Right now it's just the two of us and the pooch!

Regards,

Eric

[Rod Pease]

I like the long term outlook of Thor stock and am currently buying a few shares every month. I believe the world has changed after Sept. 11, and that demographics will out weigh all of other factors. The preretirement boomers will buy these and other RVs because of a general reluctance to fly, (certainly instead of flying to Europe or taking luxury cruises). I think that getting Thor at under 10X earnings makes it a bargin in todays market. The real profit at Thor has to be in the high end motorhome divisions.
Just a guess on my part but I now think that Thor may eventually spin off Airstream. Richard Riegel III age 36 son-in-law of Wade Thompson the TH of Thor is now the president of Airstream Inc. Thor was founded when Wade Thompson and Peter Orthwein put together a company in 1980 to buy out the then not profitable Airstream. Airstream was made profitable the 1st year under their management. Thor then used the profits and income from Airstream to continue to buy out other RV manufacturers.
The son inlaw is a fresh graduate (1998)of business school. How better to test his metal than by giving him the reins of the company that you started with?
I like the long term prospects of the company, it was trading at $40 a share in Dec. before the oil workers strike in Venezuela (which is still going on) and the increased Iraq war jitters. The strike in Ven. has a much greater impact on US price than Iraq since we don't get any oil from Iraq. How ever I would not be the first one to get cut trying to catch a falling knife. I am looking long term and will continue to average down for while.

[Rod Pease]

I have been in and out of the stock for several years.
I am currently out but with the accounting impropriety suddenly dropping the price it may be time to get back in some time soon. Why Bears are Betting Against Thor: Financial News - Yahoo! Finance

[pmclemore]

Careful, friends. Sometimes stocks fall because they are not worth the price and risk. Buy good funds and diversify. Buy on news like this only if you have play money.

Pat

[herrgirdner]

"Remember when TV sets were a real piece of furniture and not a box of plastic? Is the quality the same? I'm not sure, but needless to say the work ethic of American workers is different and the attitude of business management is different also...these differences aren't always for the better."
My opinion is that you picked a poor example. Back when the TV sets were substantial pieces of good looking furniture, the electronics were primitive, though for its day, they were on the bleeding edge of development. I fixed those TV sets for several years, before getting a regular job, and remember that the deflection yoke and the 6BQ6 horizontal deflection driver were pretty fragile. TV sets nowadays, though not beautiful, seldom fail; they're thrown away long before they crap out.
Back to Thor and Airstream. I imagine they are in the final stages of moving production overseas. Just a guess that they will wring every peny out of the existing plans and one day !surprise! close them.
just my opinion
regards

[markdoane]

I just know Monaco Coach is up 50% in four months. Maybe IBT would prefer a ride in a nice Monaco?
MNC: Basic Chart for MONACO COACH CP - Yahoo! Finance