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Citing the effects of deteriorating market conditions, motorhome builder Winnebago Industries Inc. reported a net loss for the company’s fourth quarter on a 64.1% decline in revenue.
“As difficult as conditions have been all fiscal year, the company’s fourth quarter was even more challenging,” said Bob Olson, chairman, CEO and president of the Forest City, Iowa-based firm. “While fuel prices stabilized somewhat during the quarter, the U.S. economy continued to falter, with the availability of credit and rising interest rates becoming major concerns for both our retail customers and our dealers.”
Sales for the fourth quarter, ended Aug. 30, fell to $85.3 million from $237.7 million in the year-ago period while the company reported a fourth-quarter net loss of $12.7 million compared with net income of $14.8 million.
Winnebago’s operating loss during the period was $18.9 million versus $20.7 million a year ago, reflecting a $4.7 million charge resulting from the closing of the its Charles City, Iowa, manufacturing facility.
Revenue for fiscal year 2008 was $604.4 million, a decrease of 30.5% versus $870.2 million for the previous year, and net income declined to $2.8 million from $41.6 million.
Winnebago noted that fourth-quarter performance was “negatively impacted by a sharp decline in motorhome deliveries which resulted in a significant reduction in plant utilization.” Also, heavy discounting and sale of a “higher mix of lower-priced products” cut into profits.
Included in the company’s fourth-quarter loss was approximately $750,000 in severance-related costs due to work force reductions across all facilities. Olson noted that the company cut approximately 600 full-time hourly and salaried employees during the quarter and another 300 since the quarter closed, reducing the work force by 42% to around 1,930 employees.
“It is extremely difficult to lose valued employees, but it is also imperative to reduce our overhead costs to more closely align to the current motorhome market,” he said. “In addition to work force reductions, we continue to look at various other cost savings initiatives to operate as efficiently as possible with lower volumes.”