Peterson Industries: The Early Years
Peterson Industries, Incorporated was formed in 1966 by Leonard and Blanche Peterson and son, Vaughn, in Smith Center, Kansas. The original purpose of the corporation was for the construction, sale and distribution of pickup campers manufactured under the Excel brand name. In 1966 there were thirty-seven RV/mobile home manufacturers in Kansas building everything from pickup toppers to class A motor homes. At the end of the first year in business, Peterson Industries employed the original Peterson family plus two employees. First year sales totaled $9,500.00
1969 brought the first production of travel trailers to Smith Center. The first travel trailer was shown and sold at the Denver RV Show in that year. While at the show, it was pointed out to us by a customer that we had forgotten to build any closets in the unit. We had to bring the trailer back home for modification before delivery
The first gas crisis came in 1973. The RV industry suffered a major setback due to this catastrophe. Over 50% of RV manufacturers nationwide went under. Peterson Industries survived through sound business management.
Peterson Industries saw our first major expansion in 1974 with the construction of a 12,000 square foot facility for the purpose of manufacturing travel trailer frames. This expansion also opened the door for us to begin manufacturing class C motor homes, which we continued to market until 1980.
The second gas crisis hit in 1979, which was followed by interest rates that rose over 20%! Again this threw the RV industry into a major depression and we saw Kansas based RV/mobile home manufacturers fall in number from over thirty-seven to today's level of five
The eighties began to show signs of recovery and opportunity for our industry. Peterson Industries built our first fifth wheel unit in 1980.The challenges facing Vaughn Peterson were many since his father had long since passed away and his mother had retired. Mike Nebel purchased interest in the company in 1981. Mike brought with him a level of enthusiasm and ingenuity that the company needed if Peterson Industries was to survive.
In 1983, just when things were on the upswing, a fire of unknown origin destroyed the entire main Peterson complex including the offices, construction drawings and all records. All that was left was the frame plant. Peterson Industries immediately set up production in five different locations throughout Smith Center. The first completed unit rolled out the door one month after the fire!
Top priority for the company was to build a new, completely modernized manufacturing facility, which was completed in 1984 with the new offices following in 1985. Including the current one, there have been nine plant expansions since 1983.
A major investment was made in 1987 with the purchase of an IBM System 36 main frame computer that today serves more than fifteen workstations with a fully integrated “industrial manufacturing and inventory control” operating system. Also, 1986 saw Excel quickly become known throughout the industry as a major innovator in design and construction quality. Among several “firsts” for the industry was the implementation of ducted roof air conditioning, one piece rubber roofs, dual sofa incliners and our exclusive drop “Z” main frame.
Two consecutive hail storms in 1988 caused over $100,000.00 in damage and lost production. This prompted the construction of two hail shelters for the purpose of storing our completed units.
The “top of the line” Knoble Esquire travel trailer and fifth wheel was also introduced that year. With the number of units produced and the popularity of Excel growing, we could see a need for a full time customer service department. The completion of a new three bay customer service facility came in 1989. This department has not only been a wise investment for Excel, but it also spurs an increased amount of retail activity for our local community. Customers bring their units in from all over the United States for service and repair. Many spend several days in Smith Center while waiting for their units to be repaired
The “Excel-lent” 90s
1990 was not a good year for some of the remaining Kansas RV manufacturers. Mobile Trailers of Junction City, and ElDorado Campers of Minneapolis, after many years of being major players, both closed their doors due to poor business practices. Another major contender, Yellowstone, also ceased operation that same year. Peterson Industries took advantage of Mobile Traveler's misfortune and purchased thirteen semi loads of plant equipment and supplies out of the Mobile Traveler plant.
Bryan Tillett purchased interest in Peterson Industries in 1990. Bryan developed and set up a purchasing department designed to carry the company through the nineties and into the next century utilizing a fully integrated “Manufacturing/Inventory Control” computer system. Bryan currently serves as President of the firm and oversees Sales, Marketing, Product development, and Administration.
Jumbo slide out rooms arrived in 1991. Living room slide outs had barely gotten popular by then. The changes in floorplans and design came at a staggering rate for the next three years.
By 1992, slide out sales were 75% of our business. Among the highlights of 1992, Excel became the #1 selling fifth wheels in Kansas, Nebraska, Iowa and South Dakota. We were ranked #4 in Minnesota and 6th in Missouri. We made our first appearance at the National RV Show in Louisville, Kentucky in 1992 as well. The all new Legacy model of fifth wheel with our exclusive “Super Storage” concept was born in 1992.
By 1993, slide out units has become 100% of our business. We were now incorporating them in travel trailers as well as fifth wheels.
One highlight of 1994 was an “Excel Family Reunion” hosted by our company. June brought over 275 trailers and nearly 600 people to Smith Center for a week of Kansas hospitality. Our customers left Smith Center with a positive feeling about our company as well as our community.
Innovation has not slowed down for Peterson Industries. 1994 saw construction begin on our newest 25,000 square foot addition. Upon completion, we now have over 110,000 square feet of manufacturing facility under one roof. The addition houses another new innovation, our exclusive “Positive Pressure Lamination System” for fiberglass slide wall construction. Fiberglass exteriors accounted for over 30% of our business in 1995 and close to 50% in 1996.
A major highlight for the company in 1995 was when we received a rating by the “RV Consumer Group” (A nationwide nonprofit watchdog organization for the RV consumer) as being one of the top 10% in the entire industry, as related to value and durability. 1996 was another record year for the firm.
Curtis Peterson, a 20-year employee of the company, purchased interest in January. Curtis developed the customer service department that had made our reputation for service second to none. In May 1996, Mike Nebel left the firm to pursue other business interests.
1997 was another innovative year for Peterson Industries. We developed one of the shortest triple slide-out units in the industry, a 32' Rear Galley fifth wheel. One major innovation for Excel is the all-new flush floor slide-out room. This new concept features a patented “self-leveling” slide out mechanism to give the dealer and the customer a trouble free, adjustment free slide-out room.
The spring of 1998 saw an 8,000 square foot addition to the Finish Department and Customer Service area. Also that spring we began manufacturing our own superior quality exterior access doors. We now offer exterior baggage doors that are unparalleled in the industry.
Another new feature we introduced for 1998 was one of the most unique ideas to hit the industry in quite some time. We featured a Gas Fire Place, available in several models. This unit sparked so much interest that you may have seen it on the cover of the January 1998 issue of “RV Trade Digest”, followed by a full feature article in the July 1998 issue of “Trailer Life”, the premier RV magazine, and again on the cover of the Christmas issue
The New Millennium
With our 2000 model year, we began seeing the need for a more computerized manufacturing process. We invested in more CNC routing and sawing equipment, as well as expanded our computer assisted design (CAD) department. We also researched the implementation of robotics in such areas as the Frame Plant and Cabinet Department.
Model year 2001 began with Peterson Industries enjoying one of the best years in the history of our company. The need for more Frame Plant area, necessitated an expansion of 13,600 square feet to be utilized for that reason, bringing our total facility to approximately 116,000 square feet under roof. The new expansion featured a 110 foot long bridge crane, a “floor level” indoor loading dock, a new paint booth featuring an electrostatic paint system, and a variety of new fabrication equipment. One interesting occurrence was that our Limited Edition captured nearly 38% of our entire sales for FY2001.
In fiscal 2002 we expanded our office, bringing our square feet of office to 9,600. We also built an expansion to our plant to house a new CNC flat panel saw that we bought online in February. The new addition allowed us to expand our Cabinet Area as well as consolidate our Saw Department into one location.
Kelly Lyon purchased an interest in the company in November. Kelly brings with him good leadership skills, as well as a sound mechanical understanding of the operation. Kelly is Vice President-Production and remains in charge of Production.
We experienced somewhat of a business slowdown mainly due to the attack on the World Trade Center and the fact that we let our dealer base erode to under thirty accounts. We ended with good sales for 2002 fiscal year, however, profits were not where we hoped they would be. We made the decision to show at the National RVIA show in Louisville, KY in December. We picked up five new dealerships from the show directly, resulting in over $1.4 million in increased sales revenue. We also made the decision to go national with our sales.
With a small dealer base mostly full of product, 2003 started out extremely slow. Our National Dealer Show resulted in lower than normal sales to sustain us through the winter months. Through perseverance, hard work, and working an extremely busy show season, we eventually pulled out of the economic slump that most of the Nation was experiencing.
In February we hosted our first customer appreciation luncheon in Arizona with about 300 guests in attendance. Our fifth Excel Family Reunion was held in May. We had about 540 units and 1,200 guests in Smith Center for the event.
By mid summer, sales had rebounded and business was full steam ahead. Our 2003 National Dealer Show was held in October and we received enough orders to keep us busy until April. We built an expansion to the west end of the facility last winter and spring, which will house a new prototyping area as well as increase our slide-out building department. Fiscal 2004 ended up being our best sales year by dollar volume, exceeding FY2003 by $2.3 million, or 15.7%. This increase was also reflected in the total number of units produced for FY2004 - 413 - which was an increase of 57 units over the 2003 model year.
For the first time in recent history, our 2004 annual Dealer Show was held at the plant instead of the armory. The dealers were optimistic and open to buy. Our inventory mix wasn't quite right to sell completely out at the show but our futures were committed through March.
Fiscal year 2005 began slow and stayed slow the entire year. A host of economic pressures strained the recreational vehicle marketplace this year. Climbing fuel prices and interest rates, combined with falling consumer confidence challenged our industry, which is largely dependent on discretionary dollars. Many manufacturers and dealers alike (especially those specializing in motorized units) were against the ropes when along came hurricanes Katrina and Rita, acting as the saving grace for many, and actually bailing some out of pending disaster. Katrina however, had little or no positive immediate effect on our sector of the market.
A major improvement for 2005 was the construction of our new Customer Service Facility located south of Highway 36. We think this facility is vital to retain our ability to give the best customer service in the industry while keeping our costs under control. This $400,000 facility includes 12 service bays, a retail store, and a large customer lounge. In July we hired Jack Yenne to manage the facility, which opened in September.
2006 was not a good year for the RV industry. Record high fuel prices combined with political uncertainty, mainly the Iraq war, seemed to stall any momentum that was created in late summer and fall of 2005. Peterson Industries took advantage of this time to make several adjustments. For model year 2006, we introduced interiors made of “Brazilian cherry” maple. We had major supply problems to work through but since its introduction we have sold over $7.3 million in units with maple interiors. At our National trade show in Louisville, KY in November 2005, we had a large amount of interest for our product from Canadian dealers. We spent the next several months getting CSA approval and began shipping coaches in April 2006 to our first Canadian dealer, Advantage Trailer World, in Edmonton, Alberta. Fiscal year 2006 was one of our poorest years in our history, but in comparison with many of our competitors, we survived in good shape.
Fiscal year 2007 began much as 2006 left off. Our fall dealer show was average as dealers continued to reduce their inventories.
Louisville 2006 produced three new dealerships, one of which was our second Canadian dealership. With the strength of the Canadian exchange rate, along with their booming oil market, it looks as if the Canadian market could prove to be beneficial for us, as we have sold nearly $1.5 million in Canada to date.
The spring show season was marginal, however our dealers attended over 140 shows. One interesting fact is that for Fiscal year 2007, retail sold units averaged 61 days on the dealers' lot compared to 136-day average for FY 2006.
As the fiscal year moved along, our order backlog increased. Contributing to the larger backlog was a new floor plan called the “TKE”. We built this model in three lengths, 33', 35', and 36'. These three units accounted for 27.5% of our total production.
By the end of fiscal year 2007, our order backlog increased to levels that we hadn't seen since before 9/11/2001. Our sales ended with a 23.6% increase over Fy2006.
With our current product mix, along with improved design, and warranty issues trending in a very positive direction, fiscal year 2008 appeared as if it could be our best year in the history of our company. Through the first five months (Oct - Feb) of Fy2008, our profits were as good as we had seen in recent years. However, the 2007 RVIA show in Louisville, KY was very weak. That show, combined with a modest Excel Dealer Show, concerned us, so we began watching the trends very closely. In December, we terminated our relationship with one of our partners, Kelly Lyon.
As the spring shows came, oil prices skyrocketed to record highs. Then came the sub-prime lending crisis, followed by a tightening of wholesale and retail financing options. Include the uncertainty that normally coincides with an election year and the “Perfect Storm” began to brew for the RV industry. Within a period of approximately 18 months no fewer than 15 RV manufacturers, as well as numerous suppliers closed their doors. Long tenured, well-respected manufacturers such as National RV, Western Rec (Alpenlite), Alpha, King of the Road, Travel Supreme, and Teton ceased operations.
The landscape drew increasingly dim as wholesale floorplan companies began calling in dealer floorplans. They were requiring major cash input from dealers to decrease their exposure on aged inventory. This left most dealers without a source of financing to bring in fresh merchandise, while forcing them to take large losses on aging, tired product. Many dealerships folded under the pressure.
Peterson Industries was fortunate that most of our dealers were smaller and not as vulnerable to the high overhead, large curtailments, and interest payments that many of the major dealers suffered. Although we were forced to repurchase a handful of dealers, overall we came through the worst of the storm fairly clean.
One of the things we are most proud of is that during the slow period, we didn’t just sit around hoping and waiting for business to come back. With the industry trend of exterior body paint coming, we built a paint booth to accommodate partial and full body paint options. We also realized that over 2/3 of our business for the past 6 years had been in our high end Limited line. This market had definitely slowed the most, so we began prototyping a moderately priced full-time unit, and called it “Winslow”. Until the slowdown, our Limited Edition models had accounted for over 2/3 of our total sales. Since the high end segment of the market was hit the hardest, the timing of the Winslow was ideal. We introduced the Winslow at our 2009 Excel Family Reunion in June and it became an instant hit, currently accounting for half of our sales.
Moving into model year 2011, we made hundreds of changes to our product line. Among the most significant were the exterior profile and front cap. Hickory interiors are dominating around 95% of our sales. We have addressed every known warranty issue and are currently producing the highest quality product to ever come out of our facility Having gone from a high of 156 employees in 2007 to a low of only 29 in 2008, we are currently at around 80 employees. We are producing an average of 4 units per week. Our goal is to produce one more trailer per week, getting us to five.
Peterson Industries has become known throughout the industry for being innovative. After a 14 year hiatus from producing travel trailers, we have just introduced the industry’s ONLY basement model travel trailer. With over 120 cubic feet of basement storage, this model is sure to appeal to full-timers who don’t like the steps in a 5th wheel.
Although the current economy is very tough, we believe when the economy improves, and it will, that Peterson Industries, Inc. will be in a position to take advantage of other’s misfortune.
Excel has become one of the most respected names in the entire RV industry.
1966 - 2015