With its core recreational vehicle and manufactured housing markets being battered by a “financial hurricane,” Coachmen Industries Inc. reported a wider net loss for its third quarter, ended Sept. 30, on a 40% decline in revenue.
“Both of our primary market segments are down by roughly 50% industrywide,” said Richard M. Lavers, president and CEO of the Middlebury, Ind.-based builder, noting that the housing segment did turn a pre-tax profit despite the adverse conditions.
In its report, Coachmen also said that it had entered into an agreement with a major automaker in China to bring RVs into the Chinese marketplace. “The Chinese manufacturer will act as our importer, distributor and sales partner,” Lavers said.
Sales for the third quarter were $74.8 million compared to $123.9 million in the year-ago quarter while the company reported a net loss of $14.5 million versus a net loss of $4.3 million.
For the nine months, revenue dropped 27.5% to $292.8 million from $403.9 million. However, the net loss for the period narrowed to $16.1 million compared with a net loss of $24.9 million the year prior.
Lavers attributed the improved performance to ongoing cost-cutting measures.
“In spite of severe discounting and lower-than-expected sales, we improved cash flow and reduced our finished goods inventories,” he said. “We decreased our borrowing and have experienced significant financial improvements over 2007 despite worsening economic conditions.”
RV shipments for the quarter were down sharply as motorized deliveries declined 63% and towable shipments dropped 38.5%. Michael R Terlep, president of Coachmen RV Group, said those numbers mirror the industry as a whole.
“These are not mere market adjustments; they are reflections of the financial market crisis and the declining U.S. economy,” he said. “We continue to navigate through these unprecedented conditions with capacity consolidation, expense and cost reductions and improved inventory management.”