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Monaco Coach Corp. reports its net earnings nearly tripled during the first quarter of this year, when compared with the first quarter of 2003, which was relatively weak, especially for diesel pushers, because of low consumer confidence due to the build-up towards the eventual invasion of Iraq.
Monaco, the leading diesel pusher producer, earned $11.9 million during the three months ended April 3, compared with $4.3 million earned during the first quarter of 2003.
The company’s sales revenue increased 30% during the first three months of this year to a record $355 million, compared with $273.6 million a year earlier.
Monaco also shipped a record 3,136 units to its dealers during the first three months of this year, including 2,142 motorhomes, a 26% increase over the 1,698 motorhomes it delivered to its dealers a year earlier.
Monaco also completed the expansion of its towable RV assembly plant in Elkhart, Ind., late last summer and its towables shipments increased by 49% in the first quarter to 994 units, compared with 669 units delivered a year earlier.
“Retail demand for recreational vehicles remains strong and the debut of our first 2005 motorhome models was met with very positive dealer and consumer response at recent retail shows,” said Kay Toolson, chairman and CEO.
Monaco’s towables sales volume reached record levels due to demand for its new toy haulers and lower-priced trailers, Toolson added.
Meanwhile, Monaco has passed “modest price increases” on all of its products on to its dealers to reflect higher prices for various commodity materials including steel, copper, aluminum and “many petroleum-based products,” said John Nepute, president. Monaco’s freight costs also increased during the first quarter due to higher fuel prices, he added.
The higher commodity prices and a shift towards producing more lower profit-margin products did somewhat squeeze Monaco’s first quarter profit margins, said Marty Daley, vice president and CFO. But those factors were offset by “greater labor efficiencies, reduced warranty and legal settlement expenses and lower indirect manufacturing costs,” Daley added.
As a result of the robust retail demand for RVs, Daley believes Monaco’s second quarter sales revenue will end up in the $360 million to $370 million range, compared with Monaco’s sales of $268 million during the April-through-June portion of last year.
Monaco’s gross profit margins, most likely, will be in the 12.45% to 12.65% range in the second quarter, Daley added.