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A “challenging” motorized market continued to drag down earnings in Monaco Coach Corp.’s fourth quarter, as the Coburg, Ore.-based builder reported a 53% decline in net income.
During the three-month period, ended Dec. 31, revenues were $306 million, down 4.8% compared to $321.5 million a year ago while net income fell to $2.5 million from $5.4 million.
For the full year, Monaco reported sales of $1.24 billion, approximately 10.8% lower than last year’s record revenues of $1.39 billion. Net income for the year was $2.6 million compared to $36.7 million earned in 2004.
Monaco, which on Wednesday delayed results to resolve accounting issues associated with its “Franchise for the Future” dealer program, said conditions may remain challenging as dealers weigh adding inventory against rising interest rates and uncertain demand.
The company noted that several “cost-cutting measures” implemented during the second half of the year helped generate profits during the fourth quarter.
“We were pleased that each business segment during the fourth quarter of 2005 reported an operating profit, and believe we have laid the groundwork for these positive operating trends to continue,” said Chairman and CEO Kay Toolson.
Excluding discontinued operations, motorized sales decreased 21.8% from 2004 while towable revenues increased 140%, boosted by orders from the Federal Emergency Management Agency (FEMA) for emergency housing in the Gulf Coast and the acquisition of Warsaw, Ind.-based R-Vision last November.
For the year motorized sales were $1 billion, down 17.5% from 2004, while towable sales increased 43.4% to $185.4 million.
Fourth-quarter sales from the company’s motorhome resorts operations were $7.3 million, up 24.9% from $5.9 million from year ago. For the year, the resorts segment reported sales rose to $33 million from $22.7 million during 2004.
Looking ahead, CFO Marty Daley said Monaco was “uniquely positioned to rebound this year, even in a moderately declining market.”
He added, “Monaco dealer inventory levels are at a comfortable level and our new product offerings as well as our existing, high quality and diverse portfolio of brands and models should position us well for 2006.”