A leader at Flexsteel Industries Inc. in Dubuque, Iowa, said this overall downturn in the RV industry is lasting longer than expected, according to a report by Dubuque Telegraph Herald.
“We thought we would have seen a greater turnaround by this time than what we have,” said Ron Klosterman, president and CEO of Flexsteel, in a conference call with investors following the release of a company earnings report last month.
The Dubuque-based furniture maker makes RV materials, along with other commercial and residential products. The company’s sales of RV materials have faltered in recent years, in 2009 falling a staggering 71% compared to 2008. Some improvement was evident by 2010, when Flexsteel’s vehicle seating sales were up, although the commercial sales category as a whole dropped 14% in year-to-year comparisons.
In the most recent quarter, Flexsteel reported a 32% increase in net income, a company record. Income rose from $2.5 million in the third quarter of last year to $3.3 million. That rise was largely driven by residential net sales; commercial sales were relatively flat.
Although the recreational vehicle industry has historically seen some substantial dips in volume, the business typically bounces back with “pretty good strength,” according to Klosterman.
“This is a little bit different than what has happened in the past. We are having a harder time seeing when that jump in volume might happen,” he said.
Klosterman said the industry’s original equipment manufacturers aren’t producing as much as the Dubuque firm would like to see and the industry’s trade organization is projecting growth in the low single digits for the balance of calendar 2012.
“Even their optimism is pretty temperate,” Klosterman said.
But at Couler Valley RV in Dubuque, last month was a record breaker. “We had a great, absolutely fabulous April. We grossed the most we’ve ever grossed in 24 years,” said Doug Gauer, who owns Couler Valley.
The business recently hired two new employees, which Gauer said were the first hires in about seven years. He attributed the strong month in part to the unseasonably warm spring weather.
“Good weather does spark a lot of enthusiasm for going camping,” Gauer said.
Similarly, in recent weeks business has slowed slightly as the weather has cooled.
But Gauer said other factors have contributed to Couler Valley’s perseverance, like a long-standing history of service in the community and the status of the overall Dubuque economy.
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After two years of a tough market for recreational-vehicle sales, Doug Gauer, of Couler Valley RV in Dubuque, Iowa, has seen some signs of improvement, the Dubuque Telegraph Herald reported.
“This year looks pretty good so far,” said Gauer, who was displaying some RV models at the Big Boy Toy Show at the Five Flags Center Sunday afternoon (Jan. 30).
Gauer and several other tri-state area RV dealers displayed some of their models at the show, which is presented by the Telegraph Herald.
The hard times the industry has dealt with in recent years have been evident at Dubuque-based furniture maker Flexsteel Industries Inc., which reported a 71% drop in sales of RV materials in 2009.
In 2010, Flexsteel’s vehicle seating sales were up, although the commercial sales category as a whole dropped 14% in year-to-year comparisons.
For his part, Gauer thinks the industry has responded well to the difficult market conditions in recent years and doesn’t think that increasing gas prices will take a toll on this year’s potential sales.
Camping and recreational vehicles are a way of life for a lot of families, Gauer said, and they will find a way to keep their traditions going.
“If it is in your blood, it stays in your blood,” he said. “An RV is an investment, something the whole family can do.”
Gauer and his wife, Sue Gauer, own Dubuque-based Couler Valley RV.
This year, Gauer said, people are shopping earlier than in years past. He said RV companies have done a lot to revamp their products in the wake of the recession.
Prices have stayed relatively flat, said Gauer. He added that there is a wide range of prices in the products, which can include anything from small trailers to entire homes and cost anywhere from $6,000 to $300,000.
Nearby, Dave Brown had two recreational vehicles on display that were priced at $49,000 and $80,000.
Brown, owner of Brown’s Sales and Leasing in Guttenberg and Elkader, said he hasn’t been seeing a lot of early shoppers but is anticipating that more consumers will be buying when the weather warms up.
Gauer and Brown agreed that most of the people at the Big Boy Toy Show Sunday were browsing rather than buying.
Most of the questions Brown fielded dealt with whether his business takes trade-ins, how much the RVs on display could tow, and what the monthly payments would be.
Brown said interest rates are low right now.
Gas prices, which have been blamed for stifling RV sales after spikes in recent years, do not worry Gauer. He sees concern over fuel costs as more psychological than pragmatic.
“You don’t pull your camper to work every day,” Gauer said. “A couple of dollars a gallon more shouldn’t affect people.”
Gauer is quick to point out the advantages of traveling with an RV, which he believes is cleaner and more comfortable than hotel lodging.
“I sleep better in my camper than in my own home,” Gauer said.