Monaco Coach Corp. reported a wider net loss for its third quarter, ended Sept. 30, citing the impact of a “challenging” motorhome market and recent softness in the towable sector.
Revenues for the third quarter fell 1.5% to $292.5 million from $297 million a year ago while the Coburg, Ore.-based company reported a net loss of $7.1 million compared with a net loss of $6 million.
For the nine months, revenues were $998.8 million, a 7.4% increase from $930.3 million the previous year. Net income during the period rose to $1.6 million versus $115,000 last year.
Monaco Chairman and CEO Kay Toolson said that stabilized interest rates and lower fuel prices “should help stimulate retail buying interest,” and that the company’s internal numbers showed improvement in October which “bodes well for the upcoming national RV trade show in Louisville, Ky.”
President John Nepute noted that profit margins during the quarter were negatively impacted by “lower run rates, higher material costs and increased sales allowances.”
Monaco posted motorized sales of $220.2 million during the quarter, down 10.4% from $245.8 million last year while unit sales dropped 10.6% to 1,341. For the first nine months, motorhome sales fell 12% to $700.7 million.
Monaco’s towable division, benefiting from strong performance at its R-Vision Inc. subsidiary, reported an increase in third-quarter sales to $70.5 million from $43.2 million a year ago and unit sales rose to 3,977 from 1,967.
“Sales contributions and higher margins from R-Vision continued to positively affect sales and gross margin in the towable RV segment,” said Nepute. “Gross margin for the quarter was impacted by softening retail sales, which led to lower run rates in all of our towable plants.”
The company reported that the expansion in its motorhome resort business is underway with the acquisition of land for two new motorhome resort developments. Third-quarter sales in the segment declined to $1.9 million from $8 million the previous year primarily due to “a build up of lots in escrow in the first and second quarters of 2005 that closed in the third quarter of 2005.”
Looking ahead, Monaco Vice President and CFO Marty Daly noted, “We expect seasonal declines in the towable segment, but we anticipate strengthening motorized sales for the remainder of the year and in 2007.”