Coachmen Reports 2Q, 6-Month Profits
While “challenging market conditions” pulled down second quarter and six-month revenues for Coachmen Industries Inc., the recreational vehicle and manufactured housing builder showed a profit during both periods compared to net losses a year ago.
“In the face of difficult markets, we have put together back-to-back profitable quarters with the successful completion of many of the actions under our Intensive Recovery Plan and improvements in our housing group,” commented Claire Skinner, chairman and CEO for the Elkhart, Ind.-based company. “We have also just returned from our annual recreational vehicle Dealer Seminar, where dealers responded with overwhelming enthusiasm to our new 2007 products, which bodes well for further improvement in the second half of the year.”
Sales for the second quarter, ended June 30, dipped 18% to $155.3 million compared to $190 million during the same period last year while the company reported a net profit of $0.3 million versus a net loss of $1.5 million.
For the six months, sales totaled $317.9 million versus $382.3 million last year and net income was $3.2 million compared with a net loss of $2.8 million.
Both periods reflected results from discontinued operations, as Coachmen’s recovery plan included the divestiture of several interests, primarily on the MH side. Coachmen also sold its corporate aircraft, real estate located in Florida and two buildings that were part of its former Georgie Boy Manufacturing LLC complex in Michigan.
The company reported that RV operations continued to be impacted by softness in the Class A market. Second-quarter sales declined 21.4% to $111.1 million from $141.4 million last year. Coachmen also cited warranty matters stemming from sidewalls and camping trailer lift system issues as adversely affecting earnings.
For the quarter, RV Group wholesale unit shipments of all product types decreased by 23.2% to 3,894 units while shipments of motorized products fell 21.9% to 1,122 units and towable deliveries decreased by 23.7% to 2,772 units.
Coachmen said a major component of the RV Group’s recovery plan involved the streamlining and repositioning of many of its product lines. The company reported that the total number of product lines has been reduced by 37%, and 48% of all models are new for 2007.
“Over the last nine months, we have focused on actions that will improve our margins,” Skinner said. “Non-producing assets have been sold, production facilities have been rationalized, reductions in work force completed, and internal product development processes and product designs have been dramatically revamped and simplified.
“These steps have lowered our break-even hurdles, and should increase margins when we see improvement in the challenged motorhome and Midwest housing markets. The company is stronger than it was just six months ago, and better positioned to take advantage of whatever opportunities may arise.”