Shipments of Georgie Boy Manufacturing Inc. Class A motorhomes increased 69% and production volume at the Coachmen Industries Inc. subsidiary was up 87% when the first three months of this year are compared with the same period last year, Coachmen Chairman and CEO Claire Skinner reported during a conference call with investment analysts last week.
“The demand for Georgie Boy’s new 2004 models is very strong,” Skinner said.
The strong improvement at Georgie Boy and the opening of a new Class C motorhome assembly plant in Middlebury, Ind., lthis past summer contributed to Coachmen’s 41.6% increase in Class A shipments and 42.5% increase in Class C deliveries when the first quarter of this year is compared with the same portion of last year, she said.
The exact number of Georgie Boy units delivered was not revealed.
In addition to providing more space for building Class C’s, the new plant in Middlebury freed up more space for assembling Class A’s at Coachmen’s Middlebury production complex.
Meanwhile, the increases in Coachmen’s towable RV shipments during the first quarter were modest at least in part because of “inefficiencies” related to Coachmen’s move of some travel-trailer and fifth-wheel production in March from Goshen, Ind., to nearby Middlebury, said Matt Schafer, president and COO.
Coachmen’s travel-trailer shipments increased only 0.9% and its fifth-wheel deliveries were up 3.3% in the first quarter over last year.
However, Schafer said, “Our newly acquired facility already is operating with greater efficiency than we experienced in our old plant.”
In general, Coachmen, which also builds modular homes and commercial structures, increased RV production rates “nearly 11% at existing facilities during the quarter,” Schafer added.
Coachmen bought a 114,000-square-foot assembly plant from competitor Jayco Inc. during the first quarter and it signed an agreement to buy a second plant from Jayco. Coachmen plans to take possession of the second plant, a 147,000-square-foot facility, in July.
The two factories are located next to each other on 12 acres about five miles north of Middlebury. Coachmen will pay “approximately $5 million” for the two plants, an amount CFO Joe Tomczak described as “opportunistic.”
The factory that Coachmen intends to acquire from Jayco in the summer will be used for building Coleman by Coachmen units.
“We are proceeding full-speed ahead with our plans (to produce a full-line of new Coleman-brand RVs) despite the legal maneuvers you may have heard about,” Shafer said. “We have the appropriate legal protection in place and are confident we and The Coleman Co. will prevail in the legal dispute with Fleetwood. We look forward to introducing our first Coleman by Coachmen products in the fall.”
Fleetwood Enterprises Inc. had the right to market folding campers under the Coleman brand name from 1989 until Coleman broke off the licensing agreement last year. A Kansas state court judge has ruled that Coleman had the right to break off the contract with Fleetwood, but Fleetwood has an appeal pending.
Meanwhile, Skinner noted that the RV oven shortage apparently is over.
“We’re very pleased to report that it appears the oven issue is behind us and we do not anticipate any materials shortages to impact us in the second quarter,” she said.
The oven shortage expenses that Coachmen incurred during the first quarter were “marginal,” because the company shipped units with range tops, instead of ovens, during the first three months of this year, Skinner said.
Most of the oven shortage-related expenses that Coachmen incurred were during the fourth quarter of 2003, when the company installed ovens in units that had been completed earlier.