Investors have not been too kind to RV company stocks the last few days, apparently worried that sharply higher material prices will shrink RV builders’ profit margins.
The possibility that the “jobless recovery” will cool down the currently torrid RV market may also be on investors’ minds.
However, one exception has been the stock of National RV Holdings Inc., which set a new 52-week high Wednesday (March 10)
National RV shares climbed as high as $13.00 in New York Stock Exchange trading Wednesday, surpassing a previous 52-week high of $12.10 a share.
National RV stock closed at $12.00 on Wednesday, up 81 cents for the day.
Of course, National RV’s stock price had been beaten down, when compared with competing manufacturers, because it has posted net losses from the middle of 2001 until returning to profitability during the fourth quarter of last year.
A major reason why the company is back in the black is because of the dramatically improved market performance of its gas engine Class A motorhomes. That began during December 2002 when the company’s National RV division rolled back prices and updated interior features such as wood choices, said Carol Taylor-Clay, spokeswoman for the firm.
In addition to offering more contemporary wood choices such as maple and cherry, the interior upgrades included new textiles and nickel- and chrome-colored fixtures instead of brass, she said.
The lower prices allowed National RV to “buy volume” and show the dealer body and consumers that “the floorplans are more appealing, the slides are there, the curb appeal is there,” Taylor-Clay said.
The lower prices also allowed the company to reduce its inventory of unsold units and to rely less on discounts and rebates to move product, she said.
The more efficient operation of its factory in Perris, Calif., also led to lower warranty costs.
Since then, National RV has been able to raise its prices up to the point where they are on a par with the company’s chief competitors, Taylor-Clay said.
The changes were reflected in a 126% increase in shipments of National RV gas Class A’s during the fourth quarter of last year. The company’s gas Class A shipments also increased 46% when all of 2003 is compared with 2002.
In contrast, industrywide Class A shipments, including gas and diesel units, were up a more modest 4.8% in 2003, compared with 2002, according to the Recreation Vehicle Industry Association (RVIA).
National RV’s Country Coach diesel-pusher motorhome subsidiary in Oregon also contributed to the parent company’s improved performance. Country Coach diesel Class A shipments increased 35% in the fourth quarter and were up 6% for all of 2003.
Country Coach has doubled the size of its dealer body and the new entry-level highline Inspire diesel also contributed to that division’s improvement, Taylor-Clay said.
“National RV’s and Country Coach’s output are double what they were a year ago,” Taylor-Clay said during an interview last week. “We can continue increasing production during the next two quarters due to our (dealer order) backlogs.”