National RV Holdings Inc. reported today (April 22) that its first quarter net loss expanded to $4.1 million, compared with $3.3 million during the first three months of 2002.
The New York Stock Exchange-listed company’s first quarter total sales revenue declined 2% to $78.1 million, from $79.3 million a year earlier, despite the fact revenue from the sale of National RV-brand motorhomes increased 5% during the three months ended March 31.
However, revenue from the sale of Country Coach-brand highline motorhomes declined 4% and revenue from sales of National RV-brand towables declined 8% during the January-through-March period, when compared with the same period last year.
Wholesale shipments of National RV- and Country Coach-brand diesel engine motorhomes decreased 27% during the first quarter to 237 units but shipments of National RV-brand gas engine motorhomes increased 69% to 332 units, when compared with the first quarter of 2002, the company reported.
When combined, National RV shipped 14% more gas and diesel motorhomes to dealers during the first quarter, but its motorhome sales revenue increased only 5% due to the fact more gas engine units were included in the mix, according to the company.
Meanwhile, shipments of the company’s towable products during the first three months of this year also increased 7% to 390 units, but towables revenue declined due to a shift toward more low-priced, higher volume units, according to the company.
“(Profit) margins remained under pressure due to price incentives used to reduce inventories of older products, the sale of inventory built in the fourth quarter that carried excess overhead and the introduction of our new Tropi-Cal, Sea Breeze and Inspire products to the production floor,” said Brad Albrechtsen, CEO. “In addition to these internal challenges, our industry is dealing with several large manufacturers that have announced excess inventories resulting in discounting and production slowdowns.
“While we have to react to this industry pressure on pricing, the groundwork has been laid for improvement over the next several quarters,” Albrechtsen believes. “Our own discounting has begun to decrease and production changes made in the first quarter are beginning to take hold.
“We have been able to consolidate production lines to reduce supervision needs and have reduced direct labor as a result of decreasing work-in-process inventory,” he added. “We are pleased that we were able to reduce total inventory by over $7 million during the first quarter and expect to see further reductions in the second quarter.”
National RV believes it will reduce its finished goods and work-in-process inventory by $2 million to $4 million during the second quarter “even after a run-up due to show activity in late June,” said Mark Anderson, CFO.