Toohey, who had earlier won his spurs with a recreational land marketing company, joined Thousand Trails because he saw the company's right-to-use concept as a necessity. "In the middle '70s," he says, "developers were having problems with lead times and environmental considerations. This caused the price of a developed lot to go up so high that the average person couldn't afford it. It caused a slowdown in the industry. I saw Trails as the answer to the problem."
Nor was he the only one who saw the light. Crack salespeople were leaving the land marketing companies in droves, and Toohey encouraged some of the best to join Thousand Trails with him. Then, in place of the largely improvised tactics of previous sales campaigns, Toohey substituted a polished, well-oiled arsenal of proven, professional techniques. And just in case someone forgot where the trigger was, Toohey put the new methods down in manuals and put the manuals in training programs, neither of which had existed before. Toohey also came up with two other ideas whose worth has been apparent ever since: the sleeping bag premium and $50 cash payment to any member who gets a friend to join. "I'd like to take credit for the turnaround myself," Toohey says, "but it was really the salespeople we were able to hire."
Kuolt, like Toohey, also qualifies his success, because even though sales advanced sharply, the cost of staffing and preparing new preserves caused operating expenses to rise even faster, producing a loss of $194,000 in 1976. "Damn," Kuolt thought, "The machine kicks over, but can I take it on a trip?"
Only a year later, Kuolt at least got a chance to take his flivver once around the block. The attention given to the sales force paid off handsomely. "These guys," Toohey says, "had a product they could believe in and they started working 50 hours a week." In 1977, outstanding memberships more than tripled and sales, at $7.7 million, were more than six times greater than the year before. For the first time in five years, Thousand Trails reported positive earnings of just over $1 million. "I always knew," Kuolt comments, "that if we got enough people to walk around the preserve, to smell it and touch it, the idea would sell. That year proved it without a doubt."
But still Kuolt wasn't satisfied. Just underneath the awesome rumbling of all that horsepower, Kuolt heard the first telltale sound of too much debt rubbing against too little equity. In 1977, the company's debt-to-equity ratio was already 4 to 1 and climbing. Nor did the next year relieve the strain as three more preserves were added. By 1979, the pinging had changed to hammer blows. "That year was very close," Kays says. "We had been building on a pretty flimsy base, but it's hard to say things were actually done wrong in the past. Maybe property acquisition and construction could've been done at a slower pace. Plus, all that Mickey Mouse financing didn't help matters much." But the next two years would mark the end of cartoon financing; Thousand Trails went public in December and, then, in mid-1980, secured its first major bank loan.
Frank L. Bryant, executive managing director at the Los Angeles-based investment banking firm, Bateman Eichler Hill Richards Inc., remembers Thousand Trails's debut vividly: "It was one of the most difficult underwritings I've ever done, and I've done a hundred of them. We were going uphill in a market that was going straight down on any recreation-related stock that required the consumer to use gas." Bryant says investors were worried that higher gas prices and possible shortages might convince RV owners to stay home. "Even though we could show investors that memberships and campground visits actually went up -- even during the oil embargo," he says, "they were still jittery." So Bryant broke the deal into two parts: $4 million in 13% convertible subordinated debentures and 300,000 shares of common stock. Encouraged by the combination of yield and a play in the stock, investors bought out the issue on December 12, 1979, giving the company almost $6 million in balancesheet ballast. "I believed in that issue," Bryant says, "because I believed in Milt Kuolt. I thought he had done a Herculean job of building the company, in absolutely bootstrapping it."
In the spring of 1980, Gil Dempsey, a vice-president in the commercial loan division of the First National Bank of Boston, reached a similar conclusion. "Typically," he says, "we get involved in growth companies that have financed themselves piecemeal, anyway they can. You can say to a guy, 'Why did you finance that way?' And he'll say, 'Well, what the hell was I supposed to do?' That's just the way it is in a lot of growth companies. We give him credit for getting as far as he has." In this case, Dempsey's credit amounted to a revolving line worth $10 million. Thousand Trails had come of age: It was a public company in good standing; it had been recognized by a major financial institution; and it had brought its debt-to-equity ratio down to a manageable 2 to 1.
Life on the campground moves along at its own blissful pace. The sun is coming out at Chehalis, and Jerry Andres is saying it's time to go just as Dale Sturdevant is making a point. Sturdevant is 50 years old and lives in nearby Napavine, Wash. He says he's been a member of Thousand Trails since 1973 and was on hand when Kuolt started to improve the site. Many's the time he's watched Kuolt slog his way up nearly cleared roads already muddied and deeply rutted by crisscrossing bulldozers. "Iagreed 100% with the way Milt had things lined up in his dreams," he says. "If Milt was my father, I'd brag about it." Sometimes you've just got to believe.
