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Smaller RV dealers, on average, were marginally profitable during the first four months of this year, according to consultant firm The Spader Companies.
Meanwhile, smaller dealers, which the Spader firm defines as those with less than $5 million in annual sales, also reported marginal increases in new RV unit sales revenue despite carrying smaller new RV unit inventories, in dollar terms, as of April 30.
The average smaller dealer earned a net profit of $7,315 during the first four months of this year, compared with a net loss of $8,227 incurred during the first four months of 2001, the Spader firm reported.
Smaller dealer’s new RV unit sales revenue, on average, increased 2.8% during the first four months of this year to $660,203 and their total sales revenue was up 1.8% to $1,072,139.
However, smaller dealers carried new RV unit inventories valued at $1,011,097 as of April 30, which represented a 7.5% decline from the $1,092,768 in new RV inventory that they stocked as of April 30, 2001.
As was the case with larger RV dealers, lower interest costs played a significant role in improving the financial performance of smaller dealers during the first third of this year. The average smaller dealer had $16,254 in interest expenses during the first four months of this year, a 48% decline from the $31,461 in interest expenses incurred during the first four months of 2001.
Otherwise, the average smaller dealer incurred marginal year-to-year increases in personnel and advertising expenses which were basically offset by marginal declines fixed and semi-fixed expenses, the Spader firm added.
Interest costs were lower because the Federal Reserve began lowering rates, by small increments, early in 2001, and continued lowering rates throughout last year. The Fed has kept rates unchanged at exceptionally low levels since late last year.