Monaco Coach Corp. announced a nearly 15% decline in revenues for the company’s second quarter due to a soft retail market, heavy discounting on 2005 product and plant inefficiencies resulting from production cutbacks.
Monaco’s preliminary report showed sales during the three-month period, ended July 2, were approximately $306 million compared with $358 million last year.
The Coburg, Ore.-based company estimated earnings per share for the quarter would be 3 cents, falling below analysts’ expectations and down from 40 cents per share in the year prior.
Monaco said second quarter earnings include a one-time expense of approximately 5 cents per share as a result of relocating the company’s Beaver motorhome manufacturing facility from Bend, Ore., to Coburg.
Monaco will issue its second quarter earnings report on July 27.
Kay Toolson, chairman and CEO stated: “Our business faced many challenging conditions during the second quarter. Orders from dealers for recreational vehicles were tempered due to concerns about retail sales. There was significant discounting by manufacturers, and lower run rates reduced plant efficiencies.
“Despite the overall difficult market conditions, our dealer meeting at the end of June was very upbeat. Our 2006 models and our Franchise for the Future initiative were both very well received.”
Monaco said it has continued to correct production schedules to match the retail environment, and did not foresee any discounting on 2006 products.
“Dealer inventory levels of our products have been reduced and are currently at an acceptable level,” said John Nepute, president. “Our production run rate coupled with lower dealer inventory levels is consistent with our forecasts for the retail markets. This balance should reduce the need for wholesale discounting and additional sales promotional activities going forward.”