RV maker Rexhall Industries Inc. posted a net revenue decrease of 48% to $5.1 million for the second quarter ending June 30, the company reported in a Securities & Exchange Commission (SEC) document Monday (Aug. 16).
Gross profit decreased 66% to $438,000 for the same quarter, while gross margin was 9% as compared to 13% last year, according to the SEC filing.
Wholesale shipments of the Lancaster, Calif.-based company’s gas motorhome weres down 48%, while diesel shipments slipped 50% when compared to last year’s second quarter.
“The company continues to struggle with low sales due to the diminishing dealer network which management believes has resulted from competition from Rexhall’s largest competitors who were able to provide more favorable flooring financial arrangements for their dealer networks,” the company stated.
“Along with this factor, many of Rexhall’s dealers had exclusive territory agreements that have allowed them to maintain extremely low inventory levels of motorhomes and therefore order fewer units from the company,” the document continued. “Since most of these exclusivity agreements have expired, Rexhall may now start an aggressive campaign to initiate new dealerships primarily concentrating in the 11 western states. This concentration will offer the company the opportunity to make a strong effort seeking to earn back a portion of the market, which it has lost over the last few years.”