Rexhall Industries Inc., Lancaster, Calif., reported a 28% drop in sales for the second quarter ending June 30 compared to the same period last year. The company said profits had declined even further – to $360,000 for the quarter compared to $1.2 million last year.

Sales for the quarter were $15.1 million, compared to $20.9 million last year. Net earnings for the first six month of the year were $1.3 million compared to $2.5 million in 1999.

Year-to-date sales were $35.8 million, a 21% slip from the same period last year.

President and CEO William J. Rex. attributed the decline to higher interest rates and gasoline prices and the bankruptcy in March of RV Supercenter, Mesa, Ariz., which last year accounted for orders amounting to 16% of Rexhall’s wholesale shipments. While remaining optimistic about the future of the RV industry, Rex was not confident the company will turn things around in the short term.

“The current economic environment appears as if it will continue into the next few quarters and it is unknown when, if at all, the company will be able to replace the lost revenues from its key dealer in Arizona,” Rex said.