The management of National RV Holdings Inc., parent to National RV Inc. (NRV) and Country Coach Inc., maintained Friday (Aug. 11) that the company is making progress toward becoming profitable once again and that it is not considering any form of liquidation.
In a conference call with Wall Street analysts following release of its financial report, which showed net losses of $7.1 million and $9.2 million for the second quarter and six months ending June 30, respectively, president and CEO Brad Albrechtsen said, “If the NRV division was still losing the type of money it lost in 2005, that would be discussed.”
But, he continued, despite the soft market, NRV has gained market share in the last two years and were it not for the problem with what the company claims were defective sidewalls, the division is close to being profitable.
The Perris, Calif.-based builder has filed an initial claim totaling $8 million against the supplier of fiberglass sidewalls for the NRV division. The company estimated that more than $5 million of the $7.1 million loss in the second quarter was due to the fiberglass sidewall issue.
Over the course of the last four months, the company repaired and sold most of the defected motorhomes. Albrechtsen hopes to resolve the legal dispute in 2007.
With the declining shipments and cost of the fiberglass issue, “we no longer expect to be profitable in 2006,” he stated in a prepared release.
Looking to the 2007 selling season, Albrechtsen said the company has between 50 and 70 new units on display at the Family Motor Coach Association (FMCA) show under way in North Carolina. Proceeds from that show will help pay down the company’s new line of credit which was increased on Thursday to $50 million.
He projected the company’s two divisions would produce between 1,800 and 2,000 units this year. He said production has been adjusted downward to about 50 units per week between the two operations through the third quarter to avoid overbuilding.
Albrechtsen said the company has offered some dealer incentives “but nothing like a year ago or even six months ago. Our dealer lot inventories are in line with where they were a year ago.”
When asked to delineate the company’s product acceptance by geographic markets, Albrechtsen identified no weak areas for the Country Coach line, though it continues to add dealers in some areas, but named the Midwest and Northeast as being underrepresented for the NRV brand.
“We have had some success and are up year-over-year in terms of market share but not where we would like to be,” Albrechtsen said. Statistical Surveys reported this week that the company’s share of the Class A gas motorhome market through June was 8%, up 1.2% year-to-date, while its Class A diesel share was 7.5%, up 0.9% year-to-date.
Year-to-date, the company’s wholesale unit shipments of diesel motorhomes were 665, down 15% from 785 units during 2005. Wholesale shipments of gas motorhomes were 691 for the first six months of this year, down 10% from 770 units shipped during the same period a year ago. Combined gas and diesel shipments were down 13% for the first half from a year ago, while Class A shipments industrywide were down 17.5%.