RVII, Hartnett Company Update

March 2024 | Company Update

Entering 2024 we expected a more challenging year due to customer order delays, lower bookings (new orders) in several markets, higher interest rates, and the upcoming presidential election. As we approach the end of the 1st quarter and R-V’s 50th anniversary in June, those expectations have become reality. Despite solid overall bookings totals for January and February, we have not achieved our targets in several markets, primarily due to the factors we expected.

Summary:

• Our YTD bookings are only above projections in 3 of our 11 markets (Paper, Nuclear, and Genesis). Our primary focus is always to ensure our decisions balance both stability and growth. Factors such as sales/marketing, process improvement, wages, overtime, and capital expenditures, are all considered. Over the past 50 years, R-V’s conservative approach and diverse business model have been key factors to overcome challenging years such as 2001 (9/11), 2008 (financial crisis), and 2020 (COVID pandemic).

Impact on Wages & Bonuses

• Similar to past practice at Hartnett, we review everyone’s wages on semi-annual basis, which considers overall economic conditions, along with our specific factors such as workload, profitability, etc. (Hartnett’s & R-V’s). The first review was scheduled to occur in March, but we are deferring this review until we achieve our YTD bookings targets in the majority of our markets (6 of 11). We will continue to provide regular updates after we close our 1st quarter.


Actions Being Taken

• We have been increasing our proactive sales & marketing efforts to secure bookings in all markets. This means more client calls, visits, trade shows, along with thorough cost estimates and creative supplier sourcing. We have also increased our field service/ parts teams at Beta Star, Ackley, and Hartnett to continue expanding this business. We have some good capital project opportunities and hope to secure them in March and April.

A tougher environment in 2024 provides a challenge to improve in all areas and outperform our competition by adding value to our current and prospective customers. Hartnett has a long history of great products and people, and we are committed to helping grow the business. Our decisions remain guided by our mission to improve each of your lives while ensuring the sustained long-term health of the business.

Thank you for your support following our acquisition in September. Change is often uncomfortable, but we will be transparent with the facts behind our decisions. Control what you can control – attitude, effort, communication, teamwork, safety, quality, hours performance – and we will continue to be successful.

Please let me know if you have questions, feedback, or want a better understanding of any terminology or topics addressed in this letter. We will continue to provide regular updates, so you are informed about the status of wage increases and bonuses.

Kirk
Email: kirkp@rvii.com
Phone/Text: (484)532-6030

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