Tuesday, July 12, 2005

Coachmen RV Reduces Workforce, Earnings Outlook

Coachmen Industries, Inc. today announced that it expects to report a small loss of between $0.5 million and $1.5 million for the second quarter ending June 30, 2005. Final second quarter results and Segment details will be released on July 25, 2005 with a conference call to discuss results on July 26.

During the second quarter, the RV Group continued to experience sales and margin pressure due to an industry-wide softening of wholesale shipments. Excessive inventories at the dealer and manufacturer level, coupled with the model-year changeover process, led to significant discounting and sales incentives by most manufacturers. In order to bring output more in line with demand, RV Group production rates were reduced in most facilities, which put further downward pressure on margins due to lower overhead absorption and production inefficiencies. In addition to these margin pressures, the cost of heavier discounting associated with model change and current market conditions, retail consumer incentives, and dealer-related write-offs resulted in a reduction in pre-tax profit of approximately $2.7 million in the quarter. Full Story...

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