Press Releases
National RV announces loss. But not all news is bad

National R.V. Holdings, Inc., the owner of National RV, Inc. (NRV) and Country Coach, Inc. announced Friday its financial results for its second quarter and six months ended June 30, 2006.

Net sales were $110.2 million for the second quarter of 2006, a decline of 11% from $123.2 million in the second quarter of 2005. For the six months ended June 30, 2006, net sales declined 10% to $223.1 million from $248.8 million in the same period last year.

For the second quarter and the six months ended June 30, 2006, the company reported a net loss of $7.1 million and $9.2 million, respectively, compared to a net loss of $5.4 million and $6.9 million for the comparable periods in 2005.

The company estimates that of the $7.1 million loss for the second quarter, more than $5 million was attributable to the defective fiberglass material issue at National RV, and $1.1 million was attributable to a reserve established in the quarter to address a recall of tires which the company has determined were defective. The defective tires were supplied by a supplier and used on some Country Coach units built between 1995 and 2000.

"This continues to be a challenging time for the class A motorhome industry," stated Brad Albrechtsen, National R.V. Holdings' president and chief executive officer. "With the continued decline in the second quarter, industry unit shipments are down nearly one third from their level two years ago. We are pleased that our products continue to out-perform the market. However, with the declining shipments and the costs of dealing with defective fiberglass material at NRV, we no longer expect to be profitable in 2006. Production rates and costs have been adjusted such that once we get through the costs associated with the fiberglass issue, we remain optimistic that we can generate positive earnings from operations by the fourth quarter.

The company's combined diesel and gas Class A motorhome shipments were down 13% in the first half of 2006 compared to 2005, while the average selling price increased three percent to $165,000 in the first half of 2006, compared to $160,000 in 2005.

Although the company experienced a decline in units shipped in both the second quarter and year-to-date 2006, the industry-wide decline was greater, according to the Recreation Vehicle Industry Association (RVIA), resulting in improved market share for the company. The RVIA reported that shipments of Class A motorhomes were down 17.5% for the six months ended June 30, 2006, compared to the same period in 2005. Statistical Surveys, Inc. reports, in its most recently published information, that National RV Holdings' share of the Class A motorhome market increased 17.5% during the first five months of 2006.

In April 2006, the company discovered that a serious flaw existed in the fiberglass sidewall material supplied by Crane Composites, Inc. and Crane Co. and used on a number of the motorhomes manufactured at NRV in Perris, California. Over the course of the last four months, the company has repaired and sold most of the affected motorhomes.



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