Coachmen Industries Inc. today (July 25) reported a nearly 10% decrease in revenues and a net loss of $1.5 million for its second quarter, confirming earnings estimates issued in a preliminary report July 11.
Claire C. Skinner, chairman and CEO for the Elkhart, Ind-based builder, noted, “As mentioned in our release of July 11, we had expected to see improvements in both our RV and housing and building markets during the second quarter, which did not occur. Accordingly, we implemented a number of aggressive steps to reduce costs, improve efficiency and pave the way for improved performance.”
Corporatewide, approximately 120 positions or 12.5% of the salaried work force were eliminated during the quarter. In addition, the company reduced its hourly work force by 10% across both of its business segments through a combination of layoffs and normal employee attrition.
Coachmen said that throughout the second quarter, the RV segment continued to face an industrywide oversupply of vehicles at the dealer and manufacturer levels, which negatively impacted sales and shipments.
Sales for the second quarter declined to $209 million from $231 million during the same period last year. The net loss of $1.5 million compared with net income from continuing operations of $5.1 million in the year prior.
Coachmen reported that sales in the company’s RV division fell 10.4% to $145.7 million while manufactured housing operations reported a 7.6% decrease. The builder attributed the performance to “an industry-wide softening in recreational vehicles and weakness in the company’s core Midwest residential single-family housing markets.”
Through the first six months of 2005, revenues declined 3.4% to $414 million from $429 million last year while the company reported a loss from continuing operations of $2.9 million compared with net income of $5.7 million.
In order to bring production more in line with retail, RV production capacity was reduced through the consolidation of three towable facilities into two and two Class C mini-motorhome production lines into one.
Other cost-cutting measures included the consolidation of RV service operations and the streamlining of product lines.
Coachmen did report a positive response to its new 2006 models from the retail body. At the dealer meetings in June for Coachmen Industries subsidiaries Coachmen Recreational Vehicle Co. LLC, Elkhart, and Georgie Boy Manufacturing LLC, Edwardsburg, Mich., dealers placed initial orders for 4,978 units worth $198 million, which was a 40% increase over the 2004 seminars, the previous best in the company’s history.