Perris, Calif.-based National RV Holdings Inc. reported a $19.8 million net loss for its full year, but is “expecting a return to profitability in 2006” as a result of production efficiencies, inventory reduction and new product development that narrowed losses and grew sales in the fourth quarter.
“We still have work to do. We are simultaneously evaluating strategic alternatives while continuing our efforts to become profitable,” said Brad Albrechtsen, president and CEO of National RV Holdings. “…Our growing market share combined with our cost-cutting efforts are increasing our confidence in being profitable in 2006.”
In an unaudited, preliminary report, the motorhome builder, parent to Perris-based National RV Inc. and Country Coach Inc., Junction City, Ore., showed a 5% increase in fourth-quarter sales to $106.5 million from $101.9 million the previous year. During the three-month period, the company reported a net loss of $7 million compared with a net loss of $12.7 million a year ago.
CFO Tom Martini noted, “During the fourth quarter, we continued to focus on improving our cash flow by moving out finished goods and lowering our inventory levels.”
For the year, sales increased 6% to $463.6 million from $436.8 million in 2004 while the firm recorded a net loss of $19.8 million compared with a net loss of $9.5 million.
The firm said it incurred lower gross profit margins for the quarter and year-end due to significant discounting resulting from a weakening Class A market and higher overall costs.
National RV Holdings reported flat diesel motorhome shipments for the quarter and the full year compared to 2004 while deliveries of gas motorhomes grew 21% in the fourth quarter, but declined 12% for the 12 months.
National RV Holdings noted that quarterly and year-end results did not reflect an income tax benefit due to “a full tax valuation allowance established in 2004.”
The builder previously reported cumulative accounting problems that delayed its 2004 financial report and threatened status on the New York Stock Exchange (NYSE). In finalizing its 2005 statement, it also determined an error in reporting “leasehold improvement” at Country Coach, requiring a “restatement of prior periods.”
The company said that “material weaknesses” in its financial reporting had been addressed during the past year and a letter outlining the firm’s strategic plan resulted in “approval and acceptance by the NYSE.”