National RV Holdings Inc. reports its third-quarter net losses grew larger, but the Perris, Calif.-based company will introduce new lower-priced products in an effort to return to profitability.
The New York Stock Exchange-listed firm lost $9.8 million in the third quarter, an amount that includes a $6.1 million noncash charge to recognize the impairment of goodwill related to National RV Holding’s acquisition of Country Coach Inc. in 1996.
National RV Holdings took the charge to reflect the decline in its stock price. The firm announced in late September it would report a third-quarter loss. The company’s stock fell as low as $4.77 a share, although it has been on the increase in recent days. National RV Holdings’ stock closed at $5.58 on Monday (Oct. 21).
The $9.8 million loss National RV Holdings incurred during the three months ended Sept. 30 compares with its $6.1 million net loss ing the third quarter of 2001.
During the first nine months of 2002, National RV Holdings was in the red $14.5 million, compared with a net loss of $7.9 million incurred in the same portion of 2001.
Meanwhile, the company’s total sales revenue increased 8% in the July-through-September period to $72.4 million, and its sales in the nine months Sept. 30 climbed 14% higher to $239.2 million.
However, it was the emphasis on higher-priced models that led to the higher sales revenue, but which also resulted in National RV Holdings’ operating losses, and forced the company to reverse its strategy and focus more on lproductgs at lower price levels.
“While some of our products are competing well in the marketplace, we are absent from some key price points,” said President and CEO Brad Albrechtsen. “Certain of the company’s products became less competitive as a result of price increases on the 2003 model introductions during the first half of 2002.”
To enter pricing levels where the company has no products, National RV Holdings will introduce, under the National RV brand, “triple-slide gas and diesel products and apply a greater focus on products manufactured on gas chassis that retail for under $100,000,” Albrechtsen said.
The recently released 1st Avenue editions of Country Coach’s Allure and Intrigue models, along with the planned introduction of a lower-priced Country Coach diesel, are other examples of National RV Holdings “taking steps to ensure the price competitiveness of each of its products,” he said.
The price repositioning also will involve National RV Holdings introducing “new features (currently) offered by some of our competitors,” Albrechtsen added.
To carry out the product repositioning, National RV Holdings rehired National RV Inc. founder Wayne Mertes and Country Coach founder Bob Lee. Both were in semiretirement, although they continued to serve as members of the National RV Holdings board.