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National RV Holdings Inc. reported its first quarter net loss expanded despite a 27% increase in sales revenue.
The Perris, Calif.-based company lost $3.3 million during the three months ended March 31, compared with a $1.9 million loss incurred during the first three months of 2001.
National RV’s sales during the first quarter totaled $79.3 million, compared with $62.4 million a year earlier.
“We are not satisfied with our first quarter performance,” said Brad Albrechtsen, president and CEO.
Manufacturing inefficiencies “stemming principally from lower than optimal production rates and 2003 model year changeover costs for both Country Coach and National RV brand products” were major reasons for the company’s bigger loss, Albrechtsen said.
Other factors included “significant, but declining, discounting on Country Coach products to reduce excess inventory, the relocation of National RV towables manufacturing to a new facility and the recognition of certain costs related to the discontinuation of our Prevost bus conversion production line” also contributed to the loss, he said.
Until this year, National RV introduced its new model year products during the summer, but the company decided, this year, to introduce its 2003 products during the Family Motor Coach Association (FMCA) gathering in Georgia last month. While introducing new model year product during the first quarter increased National RV’s expenses, Albrechtsen said, “It allows us to enter the second quarter with more competitive and profitable products.”
Dealers and retail buyers have responded well to National RV’s new products and production of National RV-brand motorhomes is set to increase by 20%, which will improve overhead cost absorption, he said.
With more competitive products, the company also can enact its “first meaningful price increases on National RV products in two years,” Albrechtsen added.