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The industrywide shortage of RV ovens and ranges that began this fall has forced Coachmen Industries Inc. Chairman and CEO Claire Skinner to lower her forecast for Coachmen’s 2003 earnings.
However, because suppliers of ovens and ranges believe the shortage will be resolved sometime in February, Skinner believes Coachmen will turn in a strong earnings performance in 2004.
Skinner estimated Coachmen, a New York Stock Exchange-listed company, would earn $6.4 million to $7 million for all of 2003. Earlier, she forecast the company would earn $8 million this year.
Coachmen earned $5.4 million during the first nine months of the year.
Skinner also revealed that Coachmen will not need to take a noncash charge against its fourth quarter earnings to account for goodwill impairment.
Concerning the shortage of ovens and ranges because of production difficulties at the tier 2 supplier of thermostats and valves, Skinner said, “We often are receiving these parts later than needed to complete the units on the assembly line, causing significant amounts of off-line rework and costly manufacturing inefficiencies associated with installing missing components.
“We are managing the situation by making sure that all wholesale and retail sold orders receive first priority for completion when the parts become available. Further, we have substituted microwave or convection ovens where possible and are offering an ‘oven-delete’ option as well.”
Skinner said Coachmen received a record amount of orders during the National RV Trade Show in Louisville Dec. 2-4. However, she said orders received from dealers at Louisville “will not generally be realized (as sales revenue) until 2004.”
Coachmen’s Louisville sales, which amounted to a little more than $100 million, a 75% increase over the 2002 Louisville show, “bodes very well for solid growth and success in 2004. However, they will have little impact on our fourth-quarter results.”