Class A motorhome manufacturer Rexhall Industries Inc. reports its first quarter net loss expanded to $430,000, compared with a net loss of $57,000 incurred during the first three months of 2003.
Additionally, the Lancaster, Calif.-based company’s sales revenue plunged 63% during the first three months of this year to $4.8 million, compared with $12.9 million during the same portion of last year.
Rexhall delivered only 51 units to its dealers during the first three months of this year, compared with 152 motorhomes shipped a year earlier. The company, in part, blamed the sharp sales decline on much less dealer inventory financing being available from “external sources,” thus diminishing the inventory carrying capacity of Rexhall dealers, the company reported in a Securities & Exchange Commission (SEC) document.
“In contrast, many of the company’s larger competitors provide flooring for its dealers, making it easier for dealers to do business with the larger manufacturer,” Rexhall reports in the SEC document.
Rexhall management also believes “its premature announcement of the new T-Rex floorplans has caused sales of its standard-line products to suffer, while its dealers opt to ‘wait and see’ how the T-Rex will be received by the public, and to reserve its limited flooring for the T-Rex.”
The $430,000 net loss that Rexhall incurred during the first three months of this year follows net losses of $2.4 million in 2003, $935,000 in 2002 and $2 million in 2001. A continuation of losses “could reduce the company’s liquidity,” Rexhall reports in the SEC filing. “This could have a negative effect on the company’s ability to maintain production schedules, manufacture products of high quality and develop and manufacturer new products that will achieve market acceptance.
“This could, in turn, have a negative impact on the company’s sales and earnings,” Rexhall continued in the SEC document. “If the company continues to suffer losses, the company could be unable to implement its business and financial strategies or meet its obligations when due.”