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TWHBEA Faces Tough Decisions



The Tennessee Walking Horse Breeders’ & Exhibitors’ Association (TWHBEA) has endured a long run of decreasing memberships, registrations and transfers and the decline in revenues is catching up to the breed registry.  TWHBEA and several of the past executive committees have continued to cut expenses but the cuts have come at a cost to programs TWHBEA has and have not been able to keep up with the pace of declining revenues.

In an email to the International Board of Directors, President Tracy Boyd communicated the following:

03/21/13

Dear TWHBEA Directors,

I want to begin by thanking each one of you for your service to TWHBEA and the Tennessee Walking Horse. It is my honor to serve as your president, and I appreciate all of you who serve on behalf of our great horse. Despite the challenges we face as an association, I have thoroughly enjoyed these first four months in office. I am fortunate to serve with a wonderful executive committee whose passion for our horse and dedication to TWHBEA are an inspiration to me. I am equally appreciative to our hardworking staff, led by the finest executive in our industry, Ron Thomas.

With that said, there is a harsh reality to this correspondence. And, as directors of this association, I have an obligation to keep you informed. Ladies and gentlemen, TWHBEA is facing what is perhaps the most challenging economic outlook in its history.  Our three primary sources of revenue – memberships, registrations and transfers – continue to decline at unprecedented rates. In addition, we have seen a drastic decrease in the number of mares bred over the past several years, which clearly indicates a continued downward trend in first-time foal registrations.

I want each of you to know that Mr. Thomas has done an amazing job cutting and controlling expenses. He provides me with our cash receipts and ending bank balances on a daily basis.  At each of our executive committee meetings, he and Administrative/Fiscal/Audit Division Vice President Rob Cornelius present a crystal clear picture of our financial situation. The executive committee has responded by adopting measures aimed at maximizing the revenue possibilities that are available to us. They include the “No Horse Left Behind” Grace Period, the Family Membership option and the Diligent Discount Program. To reduce executive travel expenses, the executive committee, rather than meet every month in Lewisburg as it has traditionally done, agreed to cut its number of in-person meetings in half. All other meetings are now conducted via teleconference.

I have called for an extended meeting of the executive committee that will take place prior to the May semi-annual directors’ meeting. Heeding the advice of Senior Vice President Buster Black, my goal for this meeting will be to set a realistic, narrow corporate focus aimed at strengthening TWHBEA as a business.

We are down to eight employees occupying a 17,000 square-foot building which costs $140,000.00 annually to maintain. To give you some perspective, just 10 years ago we had between 25 and 30 employees and the association was operating on a $4 million budget. The building has become an under-utilized asset that is expensive to maintain. Eight employees only need about 3,000 square-feet of space in which to operate. Our executive committee has discussed every option available to us, including further staff reductions, going to a four-day work week and leasing part of the building. And, sadly, we have even discussed selling the building. Like you, none of us on the executive committee wants these things to happen “on our watch.” However, the true measure of leadership is confronting these problems head-on, removing the emotional element and making those tough decisions that, in the end, are best for the long-term health of the organization.

Tuesday (3/19/13) Ron Thomas sent the executive committee an email that paints a very clear picture of our financial situation. I thought it was tremendously well-written, and, as our association’s accountant Greg Cook described it, “also heartbreaking.” Upon receipt of Mr. Thomas’ email, I immediately received a phone call from Jason Bachert, our Owners/Exhibitors/International Division Vice President. He recommended that I present this information to you, the directors, and I agreed. He provided me with the wonderful analogy of his church, that unbeknownst to the congregation, was having serious financial difficulties. Once the members were made aware of the situation, they circled the wagons and quickly raised the necessary funds to put the church back on sound financial footing. I’m not suggesting that this information will generate that kind of response, but I do hope it will motivate you to send in that old transfer, or finally register that filly, or force that family member to renew their lapsed membership. Just imagine, if every member of our association got us one new member, we would instantly double our membership to more than 16,000 (another point made by Mr. Bachert).

I apologize for the length of this report. It saddens me to be the bearer of bad news, but I feel strongly that you as directors need to know what we as an association are facing. Please read Mr. Thomas’ summary to the executive committee carefully along with the attached reports. Help us within your state or region to make a positive difference. I am confident that together we will succeed in our sworn duty to protect TWHBEA and the Tennessee Walking Horse.

All my best,
Tracy

The email clearly points out the current executive committee is faced with some tough decisions.  The building in Lewisburg has been the face of TWHBEA but looks to be more than the association needs at this time.  Declining registrations, transfers and memberships look to be trends that will continue.  Thomas is no stranger to the economics of the Tennessee Walking Horse industry, serving as Chief Executive Officer of the Tennessee Walking Horse National Celebration prior to his current role as Executive Director of TWHBEA.

Thomas’ letter to his executive committee clearly points out the issues facing the executive committee.

2013 Executive Committee

Dear Ladies and Gentlemen:

Three documents are enclosed for your review.  At mid-month our finances are not looking very promising.  In my usual “don’t shoot the messenger” mode, I have the following description of the three documents.

The information attached was submitted by Diane White at my request to give us a close look at the middle of the month.  The Voice revenue will get better as sales are completed for the next edition. 

The Financial Report reveals that our actual revenue received through March 19th is $55,000 below that of last year.  This number is very critical.  On this report you also see that the Futurity account is not doing very well at all.  Interest is definitely lagging in our Futurity endeavor.

The accounts payable document is a reflection of other reports.  Expenses are in line and revenue is down;  therefore, we currently owe $70,420 in accounts payable and have $35,468 in cash.  Not good.  We are already 60 days behind again to Kentucky and will receive another invoice from them on Friday of this week. 

So, where do we go and what do we do???  As an Executive Committee I believe that we must face the tough reality of where we are.  Things are changing, people are doing things differently, they are not breeding as many mares, they are not registering until the foals are sold, and they do not transfer unless they absolutely have to do that.  In addition, members are not renewing as we have seen. 

We must consider some tough decisions about the future of our registry.  If the income is not going to sustain our efforts, then we must re-evaluate what we are doing.  Sometimes making tough decisions is just that…tough.  I want the membership and directors to be proud of you for your leadership in these difficult times.    Collectively you will map the course for our survival.  We will all work together to make well-thought-out decisions, to research every possible option, and to do those things with care and compassion  for our employees and members who depend on us. 

I serve at your pleasure.  It is an honor to work with you and with the staff.  I urge you to realize that none of these messages is meant to be negative, merely a reflection of where we are.  I owe you that.  You deserve that.  You being informed is an important component of solving our issues.  Thank you for your understanding and for your much-needed help during these difficult days.  I am always very grateful.

Very Best Regards,

Ron Thomas, Executive Director

Click here to view the Memorandum from Diane White to Ron Thomas regarding March financials

Click here to view the Accounts Payable document

Click here to view the Financial Report

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