National RV Holdings Inc., Perris, Calif., reported that net losses widened during the company’s third quarter and nine months, impacted by a previously reported fiberglass sidewall issue and a weak Class A motorhome market.
“We continue to look for ways to reduce costs. We are also continuing our efforts to raise new capital and explore strategic alternatives, and are evaluating several opportunities on both fronts,” said CEO Brad Albrechtsen. “On a more positive note, we expect shipments to new dealers to total more than $5 million in the fourth quarter, which, combined with the successful new product launches, we believe will continue to support our growing market share and ultimately higher production and sales levels.”
The company, parent to motorhome builders National RV Inc., Perris, and Junction City, Ore.-based Country Coach Inc., incurred a $7.1 million net loss during the quarter, ended Sept. 30, compared to a net loss of $5.9 million a year ago while sales declined 15% to $92 million from $108.2 million.
For the nine months, National RV Holdings reported a net loss of $16.3 million versus a net loss of $12.8 million the previous year on a 12% drop in sales to $315.1 million from $357.1 million.
National RV Holdings said that new products at its Country Coach subsidiary, including the million-dollar-plus Rhapsody and newly launched Tribute and Inspire, were helping that division gain market share in the high-end coach and Class A diesel markets. Albrechtsen said National RV was having success with its mid-priced Pacifica and Surfside, an entry-level gas Class A.
“Unfortunately, the growth in market share experienced by both our divisions is not enough to offset the sales decline caused by the decline in industry Class A shipments,” he noted.
The company’s combined diesel and gas Class A motorhome shipments were down 14% in the first nine months compared to 2005 while industry Class A shipments were down 18%.
In response to declining sales, National RV Holdings adjusted its weekly motorhome production rate down from 50 in the second quarter to 43 in the third quarter, and expects fourth-quarter production to average approximately 38 to 40 units per week.
COO Tom Martini said that during the third quarter the company had repaired 74 motorhome affected by “defective materials,” which had aggravated losses.