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<I>Indy Star</I>: Coachmen on Road to Recovery

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You know things aren’t so great at a company when its focus is something called an “intensive recovery plan,” states Daniel Lee in the May 29 edition of the Indianapolis Star.
That’s the name of the major initiative these days at Coachmen Industries Inc. The Elkhart, Ind., company, which makes recreational vehicles and homes, racked up $26.4 million in losses in 2005 as its revenue fell 12.5% from the year before.
Coachmen shareholders also took a punch in 2005, with the company’s shares losing roughly 30% in value. Last year was so bad, Lee points out, that the company’s chairman and chief executive, Claire Skinner, did not receive a performance bonus for the first time since 2001. “The intensive recovery plan is focused around reshaping Coachmen to be a much more solid performer when times are good but to still remain profitable when markets are soft,” said Jeff Tryka, Coachmen’s director of investor relations.
Tryka said Coachmen has taken “surgical action” to focus the company on its core businesses of RVs and systems-built homes, which are factory-built but affixed to a foundation.
Coachmen closed a plant in Tennessee and sold its Miller Building Systems unit, which sold structures used by telecommunication companies and other commercial buildings. The company also cut about 14% of its salaried work force, a reduction of about 140 jobs.
Coachmen’s recent results are improved. The company posted a profit of $2.9 million for the first quarter of 2006, although sales were down 15.4 percent from the year before.
Investors, though, don’t seem quite ready to jump aboard. Shares of Coachmen closed at $11.40 Friday, a slight drop from where they started 2006. “The motorhome industry certainly is suffering right now I think because of the higher gas prices,” said Bill Barker, a senior analyst for financial Web site Motley Fool. However, he added that Coachmen’s financial performance has been unimpressive even factoring in the wider troubles in the RV industry.
Barker points to the performance of Coachmen rival Thor Industries Inc., an Ohio RV company that has seen its stock price soar 62% in the past 52 weeks. That compares with a 52-week drop of 7% for Coachmen shares.
Tryka said Coachmen didn’t meet performance targets to merit executive bonuses in 2005.
Skinner was paid $432,585 in annual and long-term compensation in 2005, down from $808,815 in 2004, according to Coachmen’s proxy statement. The company’s executives, however, have had plenty of compensation goodies in recent years. Skinner, for instance, received a performance bonus of $410,429 in 2004 – a year Coachmen’s stock fell roughly 3%.
Coachmen also has “grossed up” some restricted stock grants and moving expenses for execs, meaning that it not only pays for the perk but also the executives’ personal taxes on it.
But, hey, not paying executive bonuses is a good step when you’re in need of an “intensive recovery.”

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