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Entegra Problems

We almost purchased an Entegra. It was one of three manufacturers that we seriously considered for our new coach back in 2015. The other two? Newmar and Tiffin. We went with Newmar and, despite a number of issues, we are fine with our decision.

Entegra had a good reputation prior to being acquired by Thor. And there were concerns that the acquisition would have a negative impact on Entegra.

Thor’s stock has been on quite a roll lately.

Thor’s quarterly revenue fell over 21 percent from last year. The stock took a big tumble last week after Thor released poor fiscal first-quarter results. RV sales had a 24 percent drop.

I caught an interview that Thor’s CEO, Bob Martin, did with Jim Cramer where he blamed rising tariffs on Aluminum and Steel for the negative impact on earnings.

To counteract the rising costs of production, Martin intended to cut raw costs and de-content its higher end motorcoaches. De-content means taking ancillary products and features out of these coaches. Less is more.

So what does this mean for Entegra owners?

This thread on the IRV2 forum, Has Thor changed Entegra, highlights the dilemma facing buyers of new coaches. Good product? Good service?

I suspect for most buyers, a purchase that begins to close in on half a million, can influence your opinion in one of two ways: I made a good decision or I made a bad decision. And the reason is simple enough. All of these coaches will have issues. All of them. And when you have a lot of issues, you begin to question your decision.

I am of the view that anyone looking to purchase a coach from Entegra, Newmar or Tiffin, should expect to have issues and should expect to have mixed results in terms of how the issues get resolved. This is part of the ownership experience.

I follow Glenn and Julia over at Our Great Escape. And they posted their experience here. They have a pretty harsh bottom line:

Shame on you Entegra, Bontrager stood up in front of an audience of 100 people who were Entegra owners at the 2016 Springfest and told everyone that you had always been a family business and would always be a family business with family values bla bla bla and then 3 months down the road sold out to Thor Industries. You then through Tadd Jenkins (the then president of Entegra coach) tried to calm the worried owners and told us that there would be absolutely no change apart from the name above the door, everything else will remain the same, same management team etc etc. Tadd was then pushed out closely followed by Chuck Lasley who took over from Tadd and a few other key people. This is a direct quote from Derek Bontrager :

“The day we stop listening to our customers is the day our demise begins and no one understands that better than we do.”

JOKE!

Are they listening??? Do they lie to their owners? You answer the question. I know the answer!

This is their YouTube video that describes their experience picking up their coach after servicing. Sadly, their experience is not unique.

Entegra Qwest

Not quite what I expected.

Entegra has now started posting some details about their new lineup of Class C coaches on their Facebook page and on their website.

Looks like the Entegra web team haven’t spent much time on building up a slick marketing presentation for the new product. No dedicated page for the Qwest as yet. Even the QWest brochure looks a bit, well, anemic. You can download the pdf here.

The brochure contains no photo gallery of the exterior or interior. A couple of small thumbnails and a couple of floorplans. And a fact sheet. At least with their coach brochure, you get a sense of excitement about owning their product.

Doesn’t come across to me that they are all that enthused about their new class C lineup.

Maybe someone forced them to do it against their will? The Qwest looks very close to the Jayco class C.

I guess I was expecting better. Looks more like a nameplate change to an existing platform with some minor refinements.

Entegra Enters Class A Gas and Class C

I came across this press release from Entegra:

Entegra Coach recently announced the expansion of its family of luxury products to include luxury Class C and luxury gas Class A members.

“The name Entegra Coach is synonymous with luxury motorhomes,” said Andy Baer, GM of Entegra Coach. “Expanding into smaller coaches allows us to better support our loyal Entegra Owners by providing luxury options prior to, and after, their large diesel coach lifestyle. … In addition, now multiple generations of families can enjoy the Entegra Coach lifestyle together, while in the luxury of their own coach.”

We almost bought an Entegra.

This one actually:

It was the first coach that we walked through when we went to the Hershey Show way back in September of 2015. Loved it. And the salesperson was very keen to cut us a great deal. If we bought the coach right then.

“Canadians buy from us all the time!” He told us.

We were not there to buy from a U.S. dealer though. We were there to do our research. And we ultimately decided on a Newmar Dutch Star.

We bought our coach from a Canadian dealer. Primarily for warranty support and relative ease of access. And our Canadian dealer, the Hitch House, has been terrific.

Entegra became part of Thor. Thor was founded in 1980 when two entrepreneurs acquired Airstream. Then Thor made a string of acquisitions leading up to Jayco.

Thor had a knockout quarter with record sales of $2.23 billion, up over 30% and record net income of $128.4 million, up over 63%.

I had posted about Thor in December of 2016. At that time, the share price was $105 USD.

The current quote for Thor is $153 USD. Really big jump on their results. Yikes.

Companies like Thor don’t fit into my investment portfolio although given the incredible surge in the RV industry, perhaps I should have taken a bit of a position in Thor. It looks like easy money now doesn’t it?

Hard to say how long the ride might last for Thor.

This move by Entegra to get into Class C and Class A gas coaches is interesting. The new products were to be featured today at the RVIA show in Louisville. One luxury diesel Class C coach, the Entegra Qwest, two luxury gas Class C coaches, the Entegra Odyssey and Esteem, and one luxury gas Class A coach, the Entegra Emblem.

Nothing up on the Entegra website as yet.

I’ll have to check back and see what they are doing on this front.

With all of this demand and new product, it is bound to start getting crowded at the RV parks.

Andy Pargh has a couple of interesting posts about Entegra that he wrote back in June of 2016 here and here.

For whatever it might be worth, Andy went on to purchase a Prevost.

 

Thor Industries

We almost bought an Entegra Coach. This one actually:

It was the first one that we saw at the 2015 RV Show in Hershey, Pennsylvania. Loved it. For a number of reasons, though, we went with the Castaway, a Newmar Dutch Star. We do not regret our decision.

So, what does the Entegra coach have to do with Thor Industries?

Thor holds an extensive set of RV subsidiaries including Airstream, Dutchmen, Heartland, Keystone, and Thor.

Earlier this year, Thor acquired Jayco and its subsidiaries which included Jayco, Starcraft, Highland Ridge and, yes, Entegra.

So, how did the stock market react to the acquisition? The chart below tells that story:

I am an active investor but I do not trade in the RV industry. A bit too volatile for my tastes. Obviously the stock market really liked the Thor acquisition deal. Very impressive stock performance.

Entegra owners? Well, let’s just say that they seem a little concerned about some of the changes taking place as a result of the acquisition.

Thor seems to be doing very well so far as they announced at the end of November record results for their fiscal 2017 first quarter. Sales up by 66%, net income up by 56%, diluted EPS up 55% and their backlogs more than doubled over their fiscal 2016 first quarter.

Thor believes that 2017 will be one of the strongest years for wholesale shipments for the industry since the 1970s.

Window Shopping at the Hershey RV Show

Our plan was to attend the Hershey RV show Friday and Saturday.

We arrived on Friday to a pretty quiet day at the show. We were there from 10am until about 7pm. Long day but we had a lot of fun.

I’ll spend a bit of time posting about our window shopping first. The Hershey RV was our opportunity to relook at a number of coaches and to see if we had any tinge of buyer’s remorse. The short answer? None whatsoever. Although there was one coach that was very tempting.

There are four coaches that compete very closely: Entegra, Tiffin, American Coach and Newmar. Sure, there are other coaches from Thor, Fleetwood and Winnebago, but realistically, those four coaches would be at the top of our shopping list if we were looking to buy this year.

Having lived in the Castaway since June and having run the coach on several long road trips, we have more than a bit of a feel for the Newmar product. We love it and if we were to make a purchase decision today, we would still go with the Newmar Dutch Star. It is a wonderful coach and the Newmar support has been terrific.

Entegra was a strong candidate for us last year. Going through the coaches at the show this year, I could see why. The Entegra products offer a lot for the dollar. Now, I could nitpick on a number of items with the Entegra coaches, which is true for all of these coaches as not one is perfect, but the main issue for us was the floorplan. We could not find a floorplan we really loved in a 40-foot coach in the Entegra line. I’m not sure what impact the Thor acquisition may have on the Entegra line. Most M&A activities are conducted to build scale and lower costs. I guess we will have to wait and see what, if anything, this acquisition might due to the Entegra customer base. What that acquisition concern us if we were buying this year? Hard to say.

For us, the Tiffin line was nice but not to our liking. Again primarily due to floorplans in a 40-foot coach. We had quickly ruled their products out of the running last year when we were going through our finalist list. The one and only dealer in Ontario, McPhail’s of Harriston, was a significant distance from our home. And then there was a lot of online feedback about required trips to Red Bay, Alabama to deal with warranty items.

As we went through the Entegra and Tiffin coaches, we were reassured in our decision to buy the Castaway from Newmar.

That said, the American Coach products were very impressive. We really liked the American Dream. Beautiful coach and a really nice floorplan albeit at 42 feet and just a wee bit more expensive than the Dutch Star. Okay, maybe a lot more expensive. Very nice coach.

Oh, and I did find my Basecamp at the show. Such a cool little travel trailer.

airstreambasecamp

Lots more to share about the Hershey RV show so stay tuned.