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Wichita District Office Success Stories

Wichita District Office Success Stories

Phil Brokenicky inside kitchen of New Horizons RV Corp model

It was an unlikely decision for Phil Brokenicky, a former commercial banker and CFO for a large distribution company, who at the age of 52 decided to buy and manage an established manufacturing company. Brokenicky recalls it was a ‘gut decision’.

After working for someone else his whole life, an inner voice called him to be his own boss.

At first Brokenicky thought of buying a bank or a car dealership, but a good friend suggested he contact Harold Johnson, who was looking to sell his company, New Horizons RV Corporation, an established ‘5th wheel’ recreational vehicle manufacturer located in Junction City (KS) that sells its products directly to the consumer.

Already in his 50’s, it was not easy for Brokenicky to give up the secure CFO job he had held for 10 years and assume a lot of debt to purchase a company he thought had some potential. After thinking about it for three weeks, he met with the owner, Harold Johnson, for four hours to work-out the details. The negotiations went on for a few more months, until they inked a deal.

His goal? “I wanted a solid equitable position in a business,” said Brokenicky. “When I studied financial statements as a banker, the people I felt who really had something were those who held equity in their businesses”, he added.

Since it was founded by Harold Johnson in 1989, New Horizons RV Corporation had developed a reputation of manufacturing the best built fifth wheel recreational vehicles in the country. In fact, the company earned the only 5-star rating for full-time towable RVs that the RV Consumer Group (rv.org) has awarded - for over a decade.

When Brokenicky purchased the company in 2002, it employed 31 people. “I offered the employees to continue working for the company, and thankfully all of them accepted,” said Brokenicky. “Having no background in engineering or production, I put myself on the ‘front line’ by working as the sales manager while running the company. I did this to learn all aspects of our products and to hear what our customers wanted,” he continued.

A mentor of Brokenicky once told him that there are two ways to make change happen: evolution or revolution. “The favorable way to change a business, of course, is through evolution,” said Brokenicky. From 2002 until 2008, his strategy was to encourage continual improvements to the product line while implementing small incremental price increases. “I wanted to build on our reputation of producing the best constructed products in our market, by improving the quality of the RV interiors and designing the exterior to appear ‘less boxy’,” said Brokenicky. “The process improvements were made on the production line, as the company does not have a research and development department. I consider our operation more ‘high touch’ than ‘high tech’,” he continued. Over those first six years, the company gathered more data and feedback from its customers to help steer the design improvements little by little.

Within the first year of ownership, Brokenicky introduced a recognition and reward program for employees who submit good ideas to improve the production process, safety or design. This reward and recognition policy was good for employee morale and engagement. Brokenicky said his number one challenge is to attract and retain good employees. “When I hire someone, I hire the ‘person’ not necessarily the skill-set that he or she offers. You can teach people skills, but rarely can you change a person’s character,” said Brokenicky.  “I have been very fortunate to employ the people working here,” he added.

Everything changed in 2008.

When the deep recession hit in 2008, it was a devastating blow to the company. “We are selling a lifestyle, not a product,” said Brokenicky. “Sales dried-up when our primary market of the 55+ year old demographic group suffered substantial losses to their retirement savings,” he continued.

Brokenicky decided then that he was going to see things through until the economy improved. At the time he had 40 employees, including his three children working there.

“I figured that when the economy recovered there would be some pent up demand for our products, and that some of our competitors would go out of business,” said Brokenicky. “My intuition was right; however I was wrong on how long the recession would last. I put a lot more money into the company than I ever imagined I would have to do,” he added.

New Horizons RV has always built pre-sold products. They build RVs according to the customer’s specifications. However, to avoid lay-offs and keep his staff busy during the dark days from 2008 until 2011, the company made some spec RV models that didn’t sell. “We limped along until the first quarter of 2009, when I decided to lay-off some employees it was a decision 5 months too late,” said Brodenicky.

Brokenicky was determined to survive the recession with a better, more improved product line. While some manufacturers cut-back on the quality and workmanship during an economic downturn to save cash, Brokenicky ‘stuck to his guns’ and did the opposite. After a substantial lay-off, he kept seven key employees on to design the prototype of a high-end model called “Majestic”. They incorporated everything into the design of Majestic that RV owners wanted in a fifth wheel unit.

“Managing cash flow is always a struggle,” said Brokenicky. “In 2013, I was very fortunate to have Judd Liebau, Community Bank President of Intrust Bank in Junction City, work with me on refinancing when my bank at the time did not. Judd Liebau helped me refinance the working capital, real estate and our whole book of business at good rates with a SBA CAPLine and 7(a) loan. New Horizons RV Corporation is in a much healthier position now thanks to Intrust Bank and the SBA,” he emphasized.

Back at pre-recession level.

The RV industry is now producing and selling at 2007 levels again. “Our book of new orders has never been this strong,” said Brokenicky.

The manufacturers that survived the recession are bigger, and the future bodes well for the industry with the baby-boomer generation hitting retirement age. As a true entrepreneur, Brokenicky continues to be the driving force behind new innovations in order to keep New Horizons at the cutting edge of luxury fifth wheel and travel trailer production.

Phil Brokenicky said his faith and family are the most important things in his life. He relied upon both faith and family to see him through the difficult circumstances caused by the recession.

When asked for some advice he would give to an entrepreneur, he said “when you take on a new venture, have double the working capital that you first thought you needed.”

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