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National RV Holdings Inc. reports its net losses expanded during the fourth quarter and all of 2002.
The Perris, Calif., company lost $6.9 million during the October-through-December period, compared with a net loss of $3.6 million during the same portion of 2001.
The manufacturer of Class A motorhomes, travel trailers and fifth-wheels also lost a total of $21.4 million for all of 2002, compared with a net loss of $11.5 million in 2001.
The $21.4 million loss during the 12 months ended Dec. 31 includes a $6.1 million noncash charge for goodwill impairment related to National RV Holdings’ acquisition of highline motorhome manufacturer Country Coach Inc. in 1996.
National RV Holdings’ fourth-quarter sales revenue declined 12% to $61 million, although its 2002 sales increased 7% to $300.3 million.
“Coming into the fourth quarter, we knew we would be challenged with pricing issues on our National RV-brand products,” said Brad Albrechtsen, president and CEO. “Additionally, slow retail turn rates on Country Coach’s older-style Allure and Intrigue products were using up dealer flooring needed to allow the wholesale shipment of the new First Avenue edition of these products.
“Through a series of rebate and discount programs, we have cleared out most of the older Country Coach products from the dealer channel and made the National RV products more price competitive,” Albrechtsen said. “While these steps were costly to our fourth-quarter performance, with discounts and rebates equaling 7.5% of sales in the quarter, they were necessary to help our products be competitive moving forward.
“The repricing of National RV-brand products was introduced to the dealer body during the fourth quarter and will take some time before retail buyers become fully aware of the products’ added value,” Albrechtsen continued. “In the meantime, demand remained low on these products through much of the fourth quarter, causing us to reduce production and further erode profitability.”