RVII, Ackley 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:
  • Ackley’s 2023 sales were $9.4mm, having declined annually since reaching $11.3mm in 2020. This resulted from a combination of the Covid pandemic, loss of Mr. Ackley, and sales staff retirements. R-V’s sales have grown 77% over this period and we are confident in the ability to generate growth at Ackley.
  • 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
  • Ackley has typically implemented wage increases at your individual anniversary date. We are switching this in 2024 to a semi-annual review for all employees, which will consider both Ackley & R-V’s performance. This is typically done in December and June, but we have deferred this review until we achieve our YTD bookings targets in the majority of our markets (6 of 11). We will revisit this monthly and will consider changes as they arise for those who assume new roles or responsibilities. Our goal is also to pay year-end bonuses as we did last year.
Actions Being Taken
  • Todd Midgette was initially hired to assist with our design roll manufacturing transition from Pamarco to Precision Rolls Services in Virginia. Todd’s role has been expanded to Manager – Special Projects reporting to Dave Pressler. Todd has extensive plant management experience. In addition to managing Ackley’s roll business, Todd will assist with the facility evaluation, manufacturing procedures/efficiencies, along with assistance implementing our new weekly backlog management, and other priority projects as assigned by Ackley & R-V executive management.
  • We are focused on increasing our proactive sales & marketing efforts to secure bookings. This means more client calls, visits, trade shows, along with thorough cost estimates and creative supplier sourcing. The (10) trade shows where we will be exhibiting or attending represent the largest investment Ackley has made in the past six years.
  • We have also added to our field service team with the addition of Barron Himmelberger. Barron was a former service technician for our Genesis Packaging division and has been training with Ron, Mark, Jonathan, and others.
  • Overtime will be actively managed to align with our backlog and customer demand. This may mean the typical (50) hours per week may not always be available for everyone.
  • We will look to shift overflow work from other R-V markets if there is open capacity.
  • Our current lease expires in August. We are evaluating all options including an extension at the current facility along with larger facilities that would be within a reasonable distance from the current location. We will keep you updated as we get closer to a decision.

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. Ackley has a 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 June. 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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