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National RV Holdings Inc. reported a steep decline in second quarter earnings due to the softer Class A motorhome market.

The company’s earnings fell 86% to $1.2 million during the three months ended June 30, and its sales were down 29% to $74.5 million during the period.

During the first half of this year, National RV’s earnings declined 51% to $7.7 million and its sales revenue was down 14% to $179.8 million.

National RV’s “aggressive sales incentive programs” contributed to the lower second quarter earnings, said Wayne Mertes, president and CEO. The incentives reduced dealer inventories of older National RV units and now inventories are “more in line with prior years’ levels,” Mertes said.

“While we are seeing some improvement in our backlog of orders now that our 2001 models are in production, we are still selling into a weak market in which there is considerable industry-wide discounting,” Mertes continued. “We anticipate that this environment will continue to put pressure on both revenues and earnings for the foreseeable future.”