In the wake of yesterday’s announcement that Monaco Coach Corp. was cutting its work force to around 150 people, shares of the Coburg, Ore.-based builder plummeted 40 cents to end at 6 cents per share.
As reported by the Register-Guard, Eugene, Ore., one stark measure of Monaco’s woes is that the company’s market capitalization – or the value of its outstanding stock – was $1.8 million at day’s end. That’s roughly equal to the retail price of three of its top-of-the-line Signature motorhomes.
In a separate report by Smart Money, it was estimated that Monaco could be purchased for around $2 million. The publication speculated that a buyer would be assuming $75 million in debt.
The Register-Guard reported that the outlook for Monaco is “bleak,” but reflects what’s going on in the RV industry, said analyst Frank Magdlen, research director of the Robins Group in Portland.
“This is an industry that’s being impacted worse than Detroit” by the recession, he said. “It’s not happy news at all.”
Industrywide, wholesale shipments of Class A motorhomes declined 54% in 2008, according to the Recreation Vehicle Industry Association (RVIA). Richard Curtin of the University of Michigan, the RVIA’s chief forecaster, predicts the industry will ship just 7,400 Class A motorhomes this year, down from about 40,000 units as recently as 2006.
That means if Monaco were to maintain its market share of about 20%, it would ship just 1,400 Class A coaches this year, Magdlen said.
“That’s not enough to keep your factory open,” he said.
Monday’s announcement may not spell the end of Monaco, however, Magdlen said.
“I think it gets resurrected one way or another,” he said. “The brand ought to be worth something. … Somebody would probably want the name.”