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Monaco Coach Corp. said second-quarter net income will be approximately break-even and revenue will rise to $320 million from $305 million, as Class A motorhome shipments fell below estimates.
In a preliminary statement, the Coburg, Ore.-based motorhome and towable builder noted that due to the soft market “capacity utilization was less than expected,” which negatively impacted the company’s gross revenues.
“We believe the impact of higher interest rates and higher fuel prices on consumer confidence has adversely affected motorhome sales industrywide,” said John Nepute, president. “In light of this challenging operating environment, we expect the consolidation and reorganization of our production lines, announced last quarter, will more closely align us with today’s market, and we should begin to see increased efficiencies from these adjustments during the second half of the year.
“While the new configuration makes us a leaner organization, it still leaves us with plenty of capacity to react quickly when market conditions improve.”
The company said it also was implementing discounting to move 2006 product and help control inventories.
Monaco’s towable operations, bolstered by last year’s acquisition of Warsaw, Ind.-based R-Vision, were solid during the period, ended July 1. The firm also noted that its 2007 offerings, introduced during its recent national dealer meeting, were well received in the market.
“Acceptance of the 2007 models introduced at our Dealer Congress held at the end of June was extremely positive at every price point,” said Kay Toolson, chairman and CEO. “Our new 2007 product lineup places us squarely in the heart of the growing lower-priced market. We introduced several new Class B’s, B+’s and lower-priced Class C models, as well as lightweight, inexpensive travel trailers.”
Monaco will issue its second quarter earnings and hold a conference call on July 26.