National RV Reports Loss, Lowers Output
National RV Holdings Inc. reported a $1.4 million loss for the second quarter and the company announced it has lowered production rates at its Perris, Calif., manufacturing complex.
However, the Southern California-based company has increased output rates at its Country Coach subsidiary in Junction City, Ore.
Production rates in Perris were reduced because a “build-up of finished goods” developed. Output rates will be increased once market conditions improve.
“Weakening (dealer) lot traffic and slowing retail activity in the second half of the (second) quarter, particularly in the diesel segment, caused a build-up in finished goods of the National RV motorhome products,” said Brad Albrechtsen, president and CEO.
Meanwhile, Albrechtsen reported, “We have been able to reduce excess finished goods of our Country Coach products, allowing us to return to higher production at our Junction City facility.
“Our need to manage inventory in a difficult economic climate will challenge our goal of a profitable third quarter,” Albrechtsen added.
National RV’s $1.4 million net loss during the April-through-June period of this year compares with a net profit of $126,000 earned a year earlier. The loss occurred despite an 8% increase in total sales revenue to $87.5 million.
During the first half of this year, National RV incurred a net loss totaling $4.7 million, compared with a $1.8 million loss incurred a year earlier. The New York Stock Exchange-listed company’s sales revenue during the first six months of this year climbed 16% higher to $166.8 million.
During the second quarter, motorhome sales revenue at the National RV subsidiary grew by 24% and towables sales increased 27%. Country Coach sales revenue declined 2% during the April-through-June period.
Shipments of National RV and Country Coach diesel engine motorhomes declined 17% to 229 units during the second quarter, although the decline was largely due to the fact this year’s Family Motor Coach Association (FMCA) winter rally occurred during the first quarter, while it took place during the second quarter of 2001.
Meanwhile, shipments of National RV gas engine motorhomes increased 17% during the second quarter to 323 units and deliveries of the company’s towables products climbed 46% higher to 519 units.
National RV completed, during the second quarter, the installation of four new paint booths at its Perris facility for the production of “full-body paint” diesel motorcoaches. However, the paint booths did not go online soon enough to improve the cost of painting diesel coaches during the second quarter. But from now on, National RV believes its gross profit on fully painted diesel units will improve between 1% and 2% due to the paint booths.