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Coachmen Industries Inc. reported a 94% increase in net income and $865 million in revenues for the full year ended Dec. 31, while a softness in the retail sector affected profits during the company’s fourth quarter.
According to the Elkhart, Ind.-based RV and system-built homes manufacturer, sales for the fourth quarter increased 9% to $204 million versus $188 million during the same period last year. For the full year, revenues increased 24% to $865 million compared with $698 million in 2003.
Net income for the quarter, including a $1.7 million after-tax gain from the sale of RV dealership Colfax Country RV LLC in North Carolina, was $3.6 million compared with $2 million in the fourth quarter of 2003. For the year, net income increased by 94% to $13.4 million compared with $6.9 million last year.
Claire C. Skinner, Coachmen chairman and CEO, said, “2004 was a gratifying year for Coachmen Industries, as we successfully delivered an improvement of 94% in net income from continuing operations. This was accomplished despite significant costs that were incurred in executing upon our growth strategies, as well as several unanticipated challenges including significant raw material cost inflation, interference with our plans to bring the Coleman brand to market, and an industry-wide softening in the RV industry during the latter part of the year. Although we have seen some improvements in recent weeks, RV dealer inventories remain high, so sustained improvement in the market will depend on the results of upcoming winter and spring retail shows.”
Coachmen noted that the company’s RV segment embarked on two strategic growth initiatives during 2004 – the ramping up of a business unit resulting from a licensing agreement with The Coleman Co. Inc. and the opening of the new West Coast Service Center in Southern California. The Coleman initiative was “derailed by legal entanglements” stemming from Coleman’s former licensing agreement with Fleetwood Enterprises Inc.
Specific to Coachmen’s RV segment, fourth quarter sales were $135.7 million, up 6.9% from the $127 million last year; wholesale unit shipments for the fourth quarter increased by 4.6% to 4,227 units; gross profit for the segment was $10.3 million, or 7.6% of sales, compared with $10.6 million, or 8.4% of sales in the same period last year.
Coachmen said production levels were adjusted in the quarter to reflect lower demand, which adversely affected gross margins due to lower overhead absorption and labor variances
For the full year, RV segment sales increased 27.5% to $606 million, from $475 million in 2003 while gross profit for the segment was $60.1 million, or 9.9% of sales, compared with $45.1 million, or 9.5% of sales last year.
Wholesale unit shipments increased by 10.1% in 2004 to 20,633 units, including:
* Motorized products grew 28.5% to 6,533 units, with Class A motorhomes rising 23.5% to 3,659 units and Class C motorhomes increasing 35.4% to 2,874 units.
* Rear diesel motorhomes increased 46.8% to 1,042 units.
* Shipments of non-motorized products increased by 3.2% to 14,100 units, with travel trailers down 0.7% to 7,230 units and fifth-wheels down 11.2% to 1,873 units, while camping trailers increased 16.9% to 4,997 units.