New RecTeq CEO

[hallsofmontezuma]

I'll just share my thoughts from the perspective of someone who's owned and sold multiple businesses, dealt with hired CEOs, etc.
Bringing an external CEO onboard and/or selling a business/taking in investors is often part of the natural course of running a business, specifically staying in business and/or growing. This may be necessary to continue to provide a solid product in an increasingly competitive environment. A founder may have had what it took to get the company to a certain point, but to get to the next level, or to even maintain their market position, may take someone else with a different skillset. Founders also get burned out, or otherwise realize that for the good of the company, its employees, and their current and future customers, fresh leadership is required.
When I sold my last company, many of our 3+ million users were upset, that they were no longer using a product from a small, US-based company which was being bought by what they perceived as a larger, global company.
However, the new owners had the ability to take things to a level I never could have. The product is better than ever, they've been able to maintain the high standard of customer support we always had, and nearly all the employees still work there two years later, with higher salaries and a (mostly) better benefits package.

 

[SouthernArcher]

Change is inevitable when it comes to companies that grow. It sucks hearing about a company that everyone really loves and enjoys, making a big change. The first thought that comes to your mind is that things will get worse. Fortunately, RECTEQ is a very unique company, and knows their user base better than most. Their customer service is second to none, and they’ve always gone above and beyond to address most issues as well. Companies in todays market, must be able to pivot and make rapid changes to maintain market share and their consumer base. New leadership and blood can positively impact the way this company is able to adapt and change with the market as it becomes more and more saturated with copy cat companies.

 

[WooPigFoodie]

https://www.businesswire.com/news/home/20220718005311/en/recteq-Appoints-Ralph-Santana-as-New-CEO

So the pitch here is to bring in an experienced CEO with knowledge and deep experience in growth and plenty of P&L experience driving dollars to the profit line before their eventual IPO. They’re taking good cues from Traeger, who’s stock bit the shed after the IPO and ihas fallen to about $3.56 right now. So long as the profit drive does not come from degrading quality but instead from more significant marketing about quality, this is good for Recteq. I saw today that the updated app now shows proposed cooking times and recipe ideas. Traeger really wins the market in their recipes and social media presence.

 

[Runninstuff]

Just my $0.02

Seems to me that this will change the way RT will proceed in the future. The reason you would bring on an executive from a publicly traded company would be that most likely they are going to take RT public.

If that were to be the plan, I would imagine the warranty period will shorten, and they will start manufacturing most, if not all components overseas to reduce cost. Not to mention the reduction in the amount of "we'll ship you out a new one".

Anyone know if the warranty can be "changed" on the fly?

It is already made in China.

 

[PigSooiee]

The new app barely has any recipes. Before there were so many good choices but all gone. Really disappointed

 

[Partimewages]

JMHO I bought my first RecTec RT680 in 2012. It's a great product and with a few upgrades It's still running strong. I don't know if the new ones are just as good or not. But one time I had an issue on a Sunday and Roy called me back to help. That is customer service! They have been at this close to 15 years they have to be tired even if they love what they are doing.
I'm going to give them the benefit of the doubt. Maybe they will now have time to focus on the things we all enjoyed before. Maybe they retire and enjoy themselves. I don't know but I do know nothing stays the same and only time will tell.

 

[Casadetrevino]

In one sense I am happy that a US company has grown and become successful. However, my sentiment matches those who have posted above about the concern that what matters most to us users will change. Time will tell if what matters most to the owners matches what matters most to us. History shows us that companies loose touch when they grow and hire marketing pros. They start operating more from the head and less with the heart and the old users recognize it and feel it.
All this reminds me of a sign I saw at a locally owned pizza joint in NYC.

 

[Threadcutter]

I'll just share my thoughts from the perspective of someone who's owned and sold multiple businesses, dealt with hired CEOs, etc.
Bringing an external CEO onboard and/or selling a business/taking in investors is often part of the natural course of running a business, specifically staying in business and/or growing. This may be necessary to continue to provide a solid product in an increasingly competitive environment. A founder may have had what it took to get the company to a certain point, but to get to the next level, or to even maintain their market position, may take someone else with a different skillset. Founders also get burned out, or otherwise realize that for the good of the company, its employees, and their current and future customers, fresh leadership is required.
When I sold my last company, many of our 3+ million users were upset, that they were no longer using a product from a small, US-based company which was being bought by what they perceived as a larger, global company.
However, the new owners had the ability to take things to a level I never could have. The product is better than ever, they've been able to maintain the high standard of customer support we always had, and nearly all the employees still work there two years later, with higher salaries and a (mostly) better benefits package.

Agreed. However, I have seen many instances of new CEO's/Management being brought in that were moderately to grossly under-equipped, underprepared and incompetent. They all get "talked up" coming in the door and it usually takes 6 to 12 months before the warts start appearing on the bad ones.

Usually, people like that are gone in 12 to 18 months, but the damage to the organization has already been done. And, the bad ones are usually handed a nice severance package to go away quietly and not make a stink. Then, those that remain are left to clean up the mess.

Seems like the more that an "incomer" is hyped up, the further they will eventually fall.

 

[Bobrectec]

Looks like we will soon have speaker options for our grills. Who's stoked? I know I am!

 

[Bustergut]

https://www.businesswire.com/news/home/20220718005311/en/recteq-Appoints-Ralph-Santana-as-New-CEO

Once I saw where a private equity company "made a significant investment", I knew things were going to change - and not for the better. Look for stellar customer service to go downhill, parts quality changing, and material thickness heading toward tinfoil durability. I would love to know who owns the majority interest of the company here but I suspect I know, and it ain't Ron and Ray. This guy will manage the company with bonuses in mind and probably a future public offering. Sorry to be so negative, but I've seen this all before. Sad.

 

[Maule Guy]

CEO good news bad news.

"extensive P&L experience" translates into "how do we enhance the profit margin?" Companies need to make a profit to stay in business and design new and improve current products. If this can be done without the sacrifice of quality, more power to the new CEO.

Interesting that I see nothing even remotely related to the RecTeq market place. Everything seems to be consumer electronics related.

The marketing expertise could be a bonus if it is properly aimed and top notch customer service came under that heading.

End of the day, Norwest will want a return on their investment probably by 2026 and the new guy's job is to increase the company's value in the remaining four years.

The one thing that is not stated is Santana's salary. If for example he is paid $500k then the resulting sales would have to increase by a $1M gross to break even with a 50% Gross margin (not net profit margin).

 

[SmokeOCD]

Looks like we will soon have speaker options for our grills. Who's stoked? I know I am!

The music probably won't come through the speakers until after the party is over....

 

[TheRicker]

I would imagine “the new RecTeq story” will be much like Traeger’s story…original owners sell to an investment firm/corporate environment, moved (to Utah), and became more prominent across the marketing spectrum.

I was a 15-year owner of the Traeger BBQ-075. I saw how their story changed. The quality of the metal appeared to be less (thinner?) but gotta admit you can get a Traeger from almost anywhere now (I bought mine directly from the factory back then). Their website and email marketing is top notch…with new recipes released almost weekly. I’m not bragging on their grills. Just reflecting on how the company changed/morphed. That’s what I see happening with RecTeq…becoming more of a marketing machine.

 

[Mozekian]

Be glad those of you that purchased grills in the last few years, you got in before the fall off of materials, which is soon to come. But then again, as I type this, my 1250 comp cart has a wheel that is locking up.

So not al that glitters with this company in its current form is gold.

 

[opus]

CEO good news bad news.

"extensive P&L experience" translates into "how do we enhance the profit margin?" Companies need to make a profit to stay in business and design new and improve current products. If this can be done without the sacrifice of quality, more power to the new CEO.

Interesting that I see nothing even remotely related to the RecTeq market place. Everything seems to be consumer electronics related.

The marketing expertise could be a bonus if it is properly aimed and top notch customer service came under that heading.

End of the day, Norwest will want a return on their investment probably by 2026 and the new guy's job is to increase the company's value in the remaining four years.

The one thing that is not stated is Santana's salary. If for example he is paid $500k then the resulting sales would have to increase by a $1M gross to break even with a 50% Gross margin (not net profit margin).

I didn't investigate if they hired him away from HARMON or if he had quit/asked to leave but I'm guessing his salary there was in the millions. I would think the same would be true at RT.

 

[opus]

Agreed. However, I have seen many instances of new CEO's/Management being brought in that were moderately to grossly under-equipped, underprepared and incompetent. They all get "talked up" coming in the door and it usually takes 6 to 12 months before the warts start appearing on the bad ones.

Usually, people like that are gone in 12 to 18 months, but the damage to the organization has already been done. And, the bad ones are usually handed a nice severance package to go away quietly and not make a stink. Then, those that remain are left to clean up the mess.

Seems like the more that an "incomer" is hyped up, the further they will eventually fall.

It seems the "bad" ones make out better than the good ones. I don't know why they keep getting hired. My last job the CEO was making millions plus stock and then got a huge "package" which paid him benefits for years and a huge office in New York for a year while he "looked" for another job. Needless to say all the lower people that got laid off got nothing.

 

[Motodad1776]

Quality will go down, tech support will get worse......bet on it. I am so sick of hearing/seeing so many successful American made companies selling out to a global country/company, it is simply NEVER the same after that happens. USA.....the country that loves to sell out, instead of staying "made in the USA".

 

[Ruwallydog]

I guess my thoughts are pretty much summed up by “if I wanted a Traeger I would have bought one.” That’s not what appealed to me initially and can assure you my next pellet grill won’t be a recteq

 

[Jim6820]

When a specialty-niche company like Recteq is new, it rides high on the enthusiasm and passion of the founder(s). Product quality and customer satisfaction are major business drivers. Customers are happy!

At some point, however, the specialty-niche business founders start burning out and look for a way to reduce their time commitment and convert some or all of their equity into cash. This is pretty normal, but it is disconcerting to loyal customers who see product quality begin to suffer and customer service start to decline. Customers are not as happy!

The good news is that another enterprising entrepreneur is out there somewhere, so the cycle repeats. Those customers who are fortunate enough to recognize the emergence of a new product of interest to them will get in on the ground floor and enjoy the benefits until the cycle eventually repeats again. Customers are happy once more!

 

[rdrcr]

Quality will go down, tech support will get worse......bet on it. I am so sick of hearing/seeing so many successful American made companies selling out to a global country/company, it is simply NEVER the same after that happens. USA.....the country that loves to sell out, instead of staying "made in the USA".

But they were never made in the USA