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Reflecting the soft state of the U.S. recreational vehicle marketplace this year, Affinity Group Holding Inc., (AGHI) parent company of Ventura, Calif.-based Affinity Group Inc. (AGI), reported moderately lower revenue and earnings for the quarter and six months ended June 30.
In its 10-Q filing with the Securities and Exchange Commission on Aug. 8 and during an earnings conference call today (Aug. 11), AGI reported revenue of $147.7 million for the second quarter of 2008, a decrease of $6.1 million, or 4%, from the comparable period in 2007. Revenues of $272.7 million for the first half of 2008 dipped by $9.0 million, or 3.2%, from 2007.
Net income for the second quarter of 2008 of $6.0 million was off $1.6 million from the same stanza in 2007, while net income for the first half of 2008 of $6.1 million fell $4 million from the previous year.
Mike Schneider, president and CEO of AGI, publisher of RVBusiness magazine, offered these highlights of Affinity operations:
• The Club Membership Division has remained essentially flat over the past 12 months. While the Good Sam Club experienced a softening of direct mail response rates in 2008, strict controls over acquisition costs have kept year-to-date operating profits above the comparable period for the prior year. And a host of new initiatives – specifically a redesigned website, the expanded reach of the Good Sam Authorized Dealer Network and new campground directory programs – have combined to boost acquisition and renewals during challenging times.
• Memberships have grown versus a year ago for both the Camping World’s President’s Club, primarily due to an increase in the number of store locations (14 net new stores in 2007 and five openings and one closure so far this year), and for Camp Club USA, which currently has about 44,000 members and is approaching 1,000 campgrounds in its growing network.
• In the Products and Services division, extended vehicle warranty sales have continued to grow significantly, with policies increasing 5.4% for the first six months of 2008 versus the comparable period in 2007.
• A loyalty credit card program, launched last fall through Barclays Bank, continues to grow rapidly and so far has signed on nearly 16,000 new accounts, with year-to-date retail spend on the portfolio of $25 million.
• A new partnership with Essex Credit Corp. to handle RV financing products, launched in the first quarter, has resulted year-to-date in $25.8 million loans funded. Last year at this time, a total of $7.9 million in loans had been funded.
• AGI’s publishing group reported a 1.3% decrease in revenue for the first half of 2008, versus ‘07, primarily due to reduced advertising revenue – a trend that was at least partially offset by the expansion of AGI’s consumer shows division. The nine RV and boat shows purchased from MAC Events LLC in January and the three RV and boat shows purchased from Mid America Expositions Inc. in February have produced incremental operating profit of $800,000 through June. “We continue to search for opportunities to grow our consumer show division through additional acquisitions or by starting up new shows from scratch,” Schneider said.