Monaco Coach Corp., recovered from the excessive inventory it had accumulated last spring to the point that it began increasing production rates in the fourth quarter of 2003 and that trend is continuing, with company officials projecting a good year for the RV industry in 2004.
In its fourth-quarter and full-year 2003 earnings report issued today (Feb. 3), Monaco states that its earnings declined 9% in the three months ended Jan. 3 to $11 million and its full-year 2003 earnings fell 50% to $22.2 million.
However, Monaco’s sales revenue increased 7% in the fourth quarter to $322.9 million, though its 2003 sales were down 4% to $1.17 billion.
The company’s full-year earnings were down because of lower production rates in the middle of last year and wholesale price reductions that were needed to move excess inventory that had accumulated when the RV market was soft around the time of the war in Iraq.
But Monaco, the leading diesel pusher Class A motorhome manufacturer, began increasing production rates during the fourth quarter, and that trend is continuing in the first quarter of 2004, President John Nepute said.
“Reasonable dealer inventory levels and continued retail sales strength have allowed for further reduction in our finished goods inventory and also contributed to record order backlogs,” Nepute reported. “These positive wholesale and retail indicators have given us confidence to continue increasing production rates into the first quarter of 2004.”
Monaco Chairman and CEO Kay Toolson said the company received a record amount of orders from dealers at the National RV Trade Show in December. “Dealers responded favorably to many innovative floorplan designs offered in our core diesel products.
“Additionally, our efforts to improve the value of our gasoline-powered motorhomes and towable products were rewarded by tremendous dealer response,” Toolson said.
During the first quarter of this year, Monaco’s sales revenue will range from $340 million to $350 million, and for all of 2004, it will total from $1.35 billion to $1.4 billion, according to Marty Daley, vice president and CFO.
Monaco’s earnings for 2004 should range from $45 million to $49 million, or $1.55 to $1.70 per share, based on 29.1 million shares outstanding, Daley estimated.