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A few weeks after announcing a major layoff and production cutbacks, Monaco Coach Corp. Chairman and CEO Kay Toolson said the industry is doing better.
“Our market is showing signs of improvement,” Toolson said today (April 23).
Monaco, a New York Stock Exchange-listed company, laid off workers and lowered its production rates because, beginning in mid-February, the company’s dealers were reluctant to order new product.
Worries about negative economic consequences from a war in Iraq were responsible for much of the dealers’ reluctance to order new product during most of February and March, particularly in the case of mid- to highline motorhomes, the market segment where most of Monaco’s brands are positioned.
Monaco first reacted by offering wholesale price discounts, which helps explain why the company’s first-quarter earnings declined 55% to $4.3 million, compared with $9.7 million earned during the first three months of 2002.
Monaco’s sales revenue also declined 7% during the three months ended March 29 to $273.6 million, compared with $293.6 million during the same portion of last year.
However, in Monaco’s first-quarter earnings statement, Toolson reported, “As of today, our internal tracking indicates that our motorized retail sales are up more than 10% year-to-date over the same period last year. Our dealer partners are beginning to experience heavier lot traffic, strengthening their outlook and optimism.”
Meanwhile, Monaco President John Nepute said, “We continue to focus on reducing our finished goods inventory between now and the end of the second quarter, an important part of our overall debt-reduction strategy. The improvement in retail demand should help us reach this goal as retail dealers replenish units sold from their inventory.
“Although we are encouraged by the strengthening retail market,” Nepute said, “we expect second-quarter sales similar to the first quarter.”
Monaco wholesaled 1,698 motorhomes and 669 towable RV units during the first quarter, the company stated.