Approximately $4 million in one-time costs will “go away” in the fourth quarter, but this will not be enough to return National RV Holdings Inc. to profitability, CEO Brad Albrechtsen said in a conference call to analysts on Friday (Nov. 10).
Third-quarter costs for the Perris, Calif.-based parent company of National RV Inc. and Country Coach Inc. included $1.5 million related to new product start-up for Country Coach Class A motorhomes, $1.5 million for building the worker’s compensation reserve and $1 million in leftover issues with defective sidewall materials.
Albrechtsen did not quantify the size of the expected fourth-quarter loss, other than to say it would be “significantly lower” than the $7.1 million loss incurred in the third quarter ending Sept. 30.
“We continue to look for ways to reduce costs. We also are continuing our efforts to raise new capital and explore strategic alternatives, and are evaluating several opportunities on both fronts,” he said.
When pressed to expand on this point raised in the prepared quarterly statement, he replied, “We really can’t right now. We aren’t free to say more than we said…It is our belief we will have something to say this quarter.”
Albrechtsen noted that the Country Coach operation, based in Junction City, Ore., “was profitable for the quarter as they have been for the past several years,” while the National RV operation in Perris was not. He did not divulge figures for either operation.
In terms of factory utilization, he estimated that Country Coach reached a utilization rate of around 75% in the quarter and expects it to remain at that level in the fourth quarter. The comparable figure for National RV was between 30% and 40%.
Weekly production rates have come steadily down during the year, from 60 units in the first quarter to 50 in the second quarter, 43 in the third quarter and a projected 38 to 40 units in the final quarter, he said.
Albrechtsen said he did not see many encouraging signs for an industry recovery anytime soon.
Year-to-date, the company’s wholesale unit shipments of diesel motorhomes were 952, down 12% from 1,087 units during the first nine months of 2005. Wholesale unit shipments of gas motorhomes were 911 for the first nine months of 2006, down 15% from 1,073 units shipped during the same period a year ago. Overall, the company’s combined diesel and Class A motorhome shipments were down 14% from a year ago.