Monaco Coach Corp. reported a 17% gain in revenues and a nearly 60% improvement in net income during its fiscal 2006 first quarter, ended April 1.
First-quarter revenues were $385.1 million compared to $328.8 million a year ago while net income rose to $8.3 from $5.3 million.
The Coburg, Ore.-based manufacturer reported operating profits in all business units, citing the impact of restructuring along with the acquisition of towable builder R-Vision. Operating income for the first quarter increased to $14.5 million compared to $8.9 million for the first quarter of 2005.
“We are extremely pleased to report that the efforts of our teams in each business segment resulted in operating profits across the board: motorized, towables and motorhome resorts,” said Kay Toolson, chairman and CEO. “In particular, the motorized division faced the continuation of difficult market conditions throughout the quarter but was still able to produce operating profits of nearly $5 million. On the towable side, the addition of R-Vision to our portfolio of brands was accretive to our revenue and profits in the first quarter.”
Motorized sales in the first quarter of 2006 decreased 12.1% over the first quarter of 2005, which Monaco said reflected continued softness in the market.
Towable sales increased 243% to $114.4 million for the first quarter of 2006 compared to sales of $33.4 million in last year’s first quarter. The increase was primarily due to the addition of R-Vision and the completion of orders for the Federal Emergency Management Agency (FEMA).
Resort sales for the first quarter of 2006 were $15.7 million, up 196.6% from $5.3 million in the first quarter of 2005. Monaco also said it will be pursuing potential sites in Florida, the Carolinas and California.
Toolson also noted the following changes Monaco will be implementing to strengthen the company’s competitive position:
• Idling a motorized production line in Coburg, which will reduce motorized capacity 55 units per week.
• Redeploying production of those units to Wakarusa, Ind., which will consolidate manufacturing of all lower-priced motorized units in Indiana.
• Moving production of mid-priced diesel units from Indiana to one of the company’s two remaining manufacturing production lines in Coburg, which will consolidate manufacturing of all higher-priced motorized units in Oregon.
• Beginning production of R-Vision towable products on the idled motorized line in Coburg, which will substantially reduce distribution costs of these products to western markets.
“The net effect of these moves will be an overall reduction of motorized capacity by roughly 55 units per week and an increase in towable capacity of approximately 100 units per week,” said President John Nepute, noting the changes will require an expenditure of $1.5 million to $2 million that will be expensed over the next two quarters.