Monday, April 28, 2008

Coachmen Posts Profit & Market Share Gains Despite Lower Revenues

“We are certainly pleased to report our first quarterly profit since the second quarter of 2006 and our best quarterly results since the end of 2004. In addition, we continued to increase our market RV share in key RV product categories,” commented Richard M. Lavers, President and Chief Executive Officer. “Although our bottom line profits of $1.3 million are modest, they are profits, and represent an $11.8 million improvement in pre-tax results in the face of a 7% decrease in revenues. Company-wide, our gross profits increased over 750% and our operating expenses declined by over 23%, on 7% fewer revenues. I commend our management team, and thank every one of our employees for all the efforts that went into generating these results.”

Recreational Vehicle Group

“The results of all our efforts over the past eighteen months to reduce costs, increase capacity utilization and improve margins were evident in the quarter,” said Michael R. Terlep, President of the Coachmen RV Group. “We continued to face significant challenges in the RV Group as both wholesale and retail market conditions deteriorated during the quarter, but even in face of these challenging conditions our revenues rebounded substantially from the depressed levels of the fourth quarter of 2007. Our gross margins improved by over six full percentage points and would have shown more improvement but for a seasonal increase in sales of lower-margin rental units.”

The Company’s Recreational Vehicle Group reported sales of $90.5 million during the first quarter of 2008, down 13.1% from the $104.2 million reported for the same period last year. Despite the continued softening of revenues, gross margins for the RV Group improved 6.5 percentage points to $5.2 million compared with a loss of $0.9 million last year. The improvement in gross profit was primarily the result of significant improvements in product design which resulted in better margins, increased capacity utilization as the result of consolidation activities, lower warranty expenses resulting from continued efforts to improve product quality and material costs savings due to the Group’s efforts in strategic sourcing. The RV Group generated a pre-tax loss for the quarter of $1.1 million compared with a pre-tax loss of $8.0 million for the year-ago quarter, representing an 87% improvement.
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