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Monaco Coach Corp. will report a slightly above break-even second quarter as the company slashed prices and produced fewer units during the April-through-June period to lower its yard and dealer inventories.
“Retail activity is showing modest improvement and industry Class A motorhome sales year-to-date through May are up over 4% over the same period a year ago,” Chairman and CEO Kay Toolson said in a statement issued today (July 11). “Unlike last year and the first quarter of this year, our retail outperformed wholesale shipments in the second quarter. Our Class A retail sales through June outpaced the same period a year ago by over 10%.
“If the improving climate holds, it should begin to drive wholesale orders, reducing some of the market pressure we have experienced,” Toolson added.
However, “The wholesale environment remained challenging in the second quarter,” CFO Marty Daley said. “As a result, we continued an aggressive campaign of wholesale and retail promotions, pressuring our gross margins and raising our sales expenses. Additionally, lower production rates within our facilities further reduced gross margins. These pressures added to the challenge of reducing inventory while remaining profitable.”
Monaco took 1,800 orders during its national dealer meeting in Las Vegas June 24-26, “the vast majority of which were 2004 models,” President John Nepute said. “This show contributed to a significant strengthening of our current order backlog.
“In fact, we’re effectively sold out of 2003 model year product, which should improve our ability to capitalize on opportunities going forward. The dealer response to our 2004 models was exceptionally positive, and the overall tone of the meeting was optimistic.”
Monaco will issue its complete second-quarter earnings report around July 24, and, in addition to reporting earnings per share slightly above break-even, the company believes its sales revenue totaled $266 million to $268 million during the three months ended June 28.
Monaco reduced its unsold “yard” inventory to around $46 million as of late June, compared with $66 million as of late March, according to the company.