ELKHART, Ind., April 6, 2020 /PRNewswire/ -- Thor Industries, Inc. (NYSE: THO) today announced that the Company has implemented a combination of pay reductions and furloughs as it manages through the COVID-19 pandemic.
As a result of the current business climate, the Company and its subsidiaries have furloughed a number of valuable team members in many areas of its businesses. CEO Bob Martin reduced his base compensation to zero and will forgo all cash compensation until further notice. The remaining Named Executive Officers (NEOs) and other key executives of the Company will be taking at least a 40% reduction in base salary and will forego all other cash compensation resulting in an expected reduction of nearly 85% of their total compensation. Thor's Board of Directors have also reduced their cash compensation by 40% until further notice. Additionally, many employees across the Company have seen a reduction in cash compensation. The Company also noted that under current market and business circumstances, it does not expect it will be paying any cash bonuses until further notice, which it believes will be likely through the end of its fiscal year which ends July 31.
"We have been constantly evaluating the potential impact of COVID-19 since it spread to our markets became apparent. Our management team recommended our compensation reductions in late March as we were evaluating compensation-related measures as a result of our shutdown. Reducing my compensation to zero and the rest of our NEOs by nearly 85% during this time is just the right thing as we implement significant cost savings measures which include furloughs and compensation reductions, to our incredibly important team members. While currently we are in a strong cash position and have availability on our credit facility, the uncertainty surrounding the impact of the virus on our markets and the economy in general make prudent cash management our top priority after the safety of our people right now. Accordingly, we are aggressively managing our cash outflows with a focus on cash preservation as we work through this pandemic," said Bob Martin, President and CEO of Thor Industries.
"With our highly variable cost structure, we have been able to significantly reduce our overhead and expenses as a result of temporarily shutting down a majority of our manufacturing worldwide. It was important that we respond quickly to this challenge, and we have done exactly that which has resulted in significant expense reduction. We currently have significant cash on hand, and we have recently drawn down $250 million on our asset-backed line of credit out of abundance of caution for additional liquidity should it be needed. We expect to return to growth after the pandemic has passed," added Martin.
The Company also noted that Thor and its subsidiaries worldwide, are working to support the fight against COVID-19. Thor subsidiaries have made donations of face masks and other protective gear, as well as loaning travel trailers to be used by those affected, including the brave and tireless people who are fighting the pandemic on the front lines. The Company has been pleased to see support from dealer partners who have provided RV's to various agencies, first responders, and overburdened healthcare facilities in their communities.
"In these unprecedented times, strong leadership is essential. This includes an aggressive and dynamic cash management strategy, and both Thor's management and Board are fully aligned and acutely focused on the unique challenges posed by this pandemic. Consequently, we are confident in our ability to sustain our market leadership through this challenging time," said Andy Graves, Chairman of the Board of Thor Industries.
About Thor Industries, Inc.
Thor is the sole owner of operating subsidiaries that, combined, represent the world's largest manufacturer of recreational vehicles. For more information on the Company and its products, please go to www.thorindustries.com.
This release includes certain statements that are "forward-looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made based on management's current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward-looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations; raw material, commodity or chassis supply restrictions; component supply disruption related to the coronavirus outbreak; the impact of tariffs on material or other input costs; the level and magnitude of warranty claims incurred; legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; legal and compliance issues including those that may arise in conjunction with recently completed transactions; lower consumer confidence and the level of discretionary consumer spending; interest rate fluctuations; the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers; restrictive lending practices; management changes; the success of new and existing products, services and production facilities; consumer preferences; the ability to efficiently utilize existing production facilities; the pace of acquisitions and the successful closing, integration and financial impact thereof; the potential loss of existing customers of acquisitions; our ability to retain key management personnel of acquired companies; a shortage of necessary personnel for production; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; equity investment impairment charges; cost structure changes; competition; the impact of potential losses under repurchase or financed receivable agreements; the potential impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market and political conditions in the various countries in which our products are sold; the impact of changing emissions and other regulatory standards in the various jurisdictions in which our products are sold; and changes to our investment and capital allocation strategies or other facets of our strategic plan. Additional risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE ("EHG") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and EHG's business. These and other risks and uncertainties are discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2019 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended January 31, 2020.
We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.
Mark Trinske, Vice President of Investor Relations
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SOURCE Thor Industries, Inc.