National RV Holdings Inc. reports its second-quarter net losses expanded to $2.7 million, from $1.4 million a year earlier, in part because of the pressure on profit margins resulting from industrywide excess inventories of highline motorhomes.
Additionally, National RV’s sales revenue declined 16% during the April-through-June period to $73.5 million, compared with $87.5 million a year earlier.
During the first half of this year, National RV, a New York Stock Exchange-listed company, lost $6.8 million, compared with $4.7 million lost during the first half of 2002.
The company’s sales revenue also declined 9% during the first half of this year to $151.6 million, compared with $166.8 million a year earlier.
“Our results for the quarter were mixed,” CEO Brad Albrechtsen said. “As expected, margins remained under pressure in the ‘highline’ segment due to industrywide excess inventories. We were not able to reduce discounts as much as anticipated, though discounts did come down nearly 1% of sales compared to first quarter 2003.
“Production efficiencies at our Perris, Calif., facility added to our margin improvement even though the workers’ compensation costs at this facility continue to increase, reducing our gross profit percentage by 1.5% for the quarter. Our Junction City, Ore., (Country Coach) facility struggled during the quarter with the continued ramp-up of the Inspire production line and the introduction of 2004 models. We believe the production problems at Country Coach are temporary and that much of the inventory buildup will be reduced by mid third quarter.”
Albrechtsen expecteddiscounting of highline products to decline the industry moves ts excess stock..
“We also expect improved profitability on National RV-brand products due to a planned production increase to meet improving retail demand.”
Wholesale shipments of Inspire diesel pushers began in May and the new brand was well-received, as was the reintroduced National RV Sea Breeze gas and National RV Tropi-Cal diesel Class A’s, he said.
Meanwhile, the parent company reported Country Coach sales revenue declined 33% during the three months ended June 30 and National RV motorhome sales revenue was down 6%, when the second quarter of this year is compared with the same period a year earlier. National RV towables sales revenue increased 3% in the second quarter.
In terms of units, shipments to dealers of National RV and Country Coach diesel pushers declined 5% in the second quarter to 218 units and gas Class A shipments decreased 9% to 293 units. Shipments of towables dropped 8% to 475 units.