Turning Wheel RV Center Moves Ahead of Obama Plan

Friday, April 17th, 2009

Unlike some companies who are waiting for some action from U.S. President Barack Obama, Turning Wheel RV Center announced that “After a comprehensive review, we have taken what we believe are bold steps to restructure the Company’s balance sheet and reformulate its business strategy,” stated Marco Martinez, Turning Wheel RV’s President.

One such bold step is that on April 9th, 2009, the Company voluntarily entered into an agreement with its Floor Plan financing lender, which allows for the Company to completely reduce its inventory and avoid the cash drain related to operating its business using Floor Plan financing. Floor Plan financing is a loan under which RV dealerships typically borrow money from lenders to purchase inventory from manufacturers for sale to RV buyers.

Floor Plan financing can create significant cash shortages for RV dealers due to the requirement to pay down the loan on certain aged units in their inventories despite dwindling sales. As a result of the agreement with its lender, Turning Wheel RV is now positioned to rebuild its inventory without the use of Floor Plan financing. “We believe the agreement with our lender significantly strengthens our balance sheet,” Martinez added.

Like most other RV dealerships in the U.S., Turning Wheel’s business operations have been significantly affected by the severe economic climate. However, unlike some RV dealerships that have simply given up or others that are bleeding financially while waiting around for the benefits of President Obama’s stimulus package and the economy to rebound, Turning Wheel RV decided it had to take bold action to secure its position in the current challenging environment.

Earlier this year, the Company engaged the New York-based investment banking firm The Reid Group LLC as advisors to assist the Company with a restructuring and to reformulate its business strategy.

(Source) Press

Tags: Barack Obama, bold step, bold steps, business operations, business strategy, cash shortages, economic climate, inventories, rv buyers, rv center, rv dealers, rv dealerships, stimulus package

Posted in Business, Cars, Industry | 0 Comments