With the sale of its recreational vehicle business pending, Coachmen Industries Inc. already is projecting big things for the reorganized company, including the new bus it is producing.
The Fort Wayne Journal-Gazette reported that the Arboc Spirit of Mobility bus is a handicapped-accessible vehicle that is being marketed to bus companies, assisted-living facilities, airports, hotels and resorts. Instead of an exterior lift, the Arboc Mobility model sits low to the ground and has a retractable ramp.
Testing to ensure government compliance has not been completed, but Coachmen officials are expecting to sell 400 to 500 units next year, making the division profitable, said company CEO Richard Lavers.
Coachmen is manufacturing the Arboc buses as part of a joint venture and is entitled to up to 50% of the net profits. Each bus ranges from 21 to 28 feet long, has up to eight wheelchair positions and a total capacity of 23 people, depending on the model. It is available with a gas, diesel or hybrid engine.
Lavers said during a recent conference call in which he explained the decision to sell the RV division that the collapse of the RV markets, along with the global economic slowdown left the company strapped for cash. He said the time has come for Coachmen to leave the RV business and concentrate on profitable ventures.
“Coachmen Industries Inc. is in business to make money,” Lavers said during the call. “It is not in the business to make RVs … It is our judgment that the RV markets are not going to improve significantly anytime soon.”
Middlebury, Ind.-based Coachmen announced Nov. 21 it would sell its RV business to competitor Forest River Inc., owned by Warren Buffett’s Berkshire Hathaway Inc. The deal, which requires shareholder approval, is expected to reduce much of Coachmen’s red ink. The company reported a $14.5-million net loss in the third quarter and a $16.1-million loss through the first nine months this year.
A shareholder meeting to vote on the RV division sale could be scheduled this month.
Coachmen plans to become largely a manufactured housing and specialty vehicle manufacturer, but has not ruled out eventually returning to the RV business. The proposed sale restricts Coachmen from making traditional RVs for at least five years.
The sale is estimated to be worth about $42 million and would generate about $20 million in working capital for the company.
Lavers said Coachmen’s lead bank already has indicated it would work with the company to restructure its debt. Once company restructuring is completed, he said it will be in position to attract more equity or long-term debt financing if needed.
Coachmen indicated it had a $55-million line of credit to meet seasonal working capital needs, and as of Sept. 30 had about $22.5 million available for additional borrowing, according to filings with the Securities and Exchange Commission. Any debt restructuring likely would be done after the deal closes, company officials said