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Airxcel Inc., a Wichita, Kan., company that makes air conditioners and furnaces for recreational vehicles, is enjoying an unexpected boom caused by Hurricane Katrina.
According to the Wichita Eagle, the Federal Emergency Management Agency (FEMA) has ordered about 95,000 recreational vehicles as part of the recovery effort, said Mel Adams, Airxcel’s chief executive.
That means the company has put its production workers on Saturday shifts to get the company’s air conditioners and furnaces out the door. Adams expects the surge to last through February.
Sales will be up 25% for the last quarter, he said. He expects sales for the year, because of the hurricane, to be up 7% or 8% over last year’s $184 million. That will send the company to a record year of slightly over $200 million in sales.
RV items are only part of Airxcel, through its RV Products subsidiary. The company’s other subsidiaries in Tennessee and Georgia make appliances for RVs, as well as heaters and air conditioning for over-the-road trucks, boats, modular classrooms and telecommunications shelters.
For the company, the FEMA orders come at a welcome time, Adams said. Rising gas prices and interest rates have hurt overall RV sales. Adams said he expects sales of RV products to remain solid for the first half of next year as dealers restock from the Katrina buyout.
But the second half of 2006, always the weaker part of the year for the industry, looks particularly soft for sales because gas prices and interest rates may very well still be high, Adams said. He expects sales of the company’s RV products to be down 2.5%.
But, by 2007, Adams expects the public to adjust to higher prices, factor them into their thinking and start buying RVs again.
The industry has strong fundamentals because the population is both getting older and richer – and the world beyond the U.S. is looking scarier than ever.
“The more things are disturbing in the world, the more you think about vacationing in the U.S.,” he said.