2006 National RV Dolphin
SEE ALSO: RV BUYERS GUIDE
PERRIS, Calif., March 20 -- National R.V. Holdings, Inc. (the "Company"), the owner of RV manufacturer National RV, Inc., today announced preliminary, unaudited financial results for its fourth quarter and year ended December 31, 2006.
Net sales declined to $82.0 million in the fourth quarter of 2006, down 23% from $106.5 million in the fourth quarter of 2005. For the year ended December 31, 2006, net sales decreased 14%, to $397.1 million, down from $463.6 million in 2005.
The Company reported a net loss of $8.1 million for the fourth quarter of 2006 and $24.3 million for the 2006 fiscal year, compared to a net loss of $7.0 million for the fourth quarter of 2005 and $19.8 million for the 2005 fiscal year. These figures correspond to a net loss of $0.78 per diluted share for the fourth quarter of 2006 and $2.35 per diluted share for the year, compared to a net loss of $0.67 per diluted share for the fourth quarter of 2005 and $1.91 per diluted share for the 2005 fiscal year.
"After beginning 2006 showing significant progress in our turnaround efforts, with continued market share gains and reduced losses, the supplier defective fiberglass issue resulted in substantial unexpected costs and created a liquidity strain, which was compounded by a continued decline in the Class A industry and our own ensuing strategic process. This created an environment of severe uncertainty that began to significantly adversely affect the Company, its employees, suppliers, customers, and dealers," stated Brad Albrechtsen, the Company's president and chief executive officer. "The challenges increased in the third and fourth quarters of 2006, and continued into the first quarter of 2007. As a result, we expect continued losses through the next couple of quarters."
"The turning point was the sale of Country Coach on February 20, 2007, which resulted in the infusion of $38 million of cash and enabled us to pay off our line of credit, pay down our suppliers, and end the uncertainty of the process. We are pleased to be in a position where we can once again turn our full attention to providing our dealers and customers with some of the finest motorhomes in the industry," continued Albrechtsen. "The Company is in the process of dramatically resizing itself to be profitable at current demand levels, including significantly reducing our operating footprint by consolidating onto a portion of the Perris property, and analyzing other alternatives. We are looking at and implementing numerous strategic initiatives to increase sales, lower costs, and increase margins."
The Company also announced that it continues to consider the option to execute the sale/leaseback transaction as a way to generate additional capital and liquidity and plans to make that decision within the next few weeks.
Wholesale unit shipments of diesel motorhomes for the quarter ended December 31, 2006 were 235, down 27% from 324 units shipped during the same period last year. Shipments of gas motorhomes for the fourth quarter of 2006 were 226, also down 27% compared to the 308 gas units sold during the same period last year. Total unit shipments for the fourth quarter of 2005 were 461, a decrease of 27% over the fourth quarter of 2005.
For the year ended December 31, 2006, the Company's wholesale unit shipments of diesel motorhomes were 1,187, down 16% from 1,411 units during 2005. Wholesale unit shipments of gas motorhomes were 1,137 for the twelve months of 2006, down 18% from 1,381 units shipped during 2005. The Company's combined diesel and gas Class A motorhome shipments were down 17% in 2006 compared to 2005, while the average selling price increased 3% to $171,000, compared to $166,000 in 2005. According to the Recreation Vehicle Industry Association, industry-wide shipments of Class A motorhomes were down 14% in 2006 compared to 2005.
The gross profit margin for the quarter ended December 31, 2006 was 0.2% compared to 2.0% for the same period last year. For the year ended December 31, 2006, the gross profit margin was 1.6% compared to 2.6% for the year ended December 31, 2005. The lower gross margins in 2006 were due to costs associated with the supplier-caused fiberglass sidewall problem, significant investments in new product introductions, and lower production rates leading to lower fixed-cost absorption.
Operating expenses for the fourth quarter of 2006 declined 15% to $7.1 million, or 8.6% of net sales, compared to $8.3 million, or 7.8% of net sales, for the fourth quarter of 2005. For the year, operating expenses were $27.6 million, or 6.9% of net sales, which compares to $30.1 million, or 6.5% of net sales, for the prior year, a decrease of 8.5%. Reductions in selling, marketing and expenditures related to compliance with Sarbanes-Oxley in 2006 compared to 2005, were somewhat offset by increases in costs associated with the strategic process the Company was involved in during the latter part of the year.
As a result of the sale of the Country Coach subsidiary, the pro forma net book value of the Company as of December 31, 2006 increases by $6.9 million from $36.1 million to $43.0 million. The loss for the year ended December 31, 2006 excluding Country Coach increased by $0.7 million from $24.3 million to $25.0 million. The complete pro forma financial statement is expected to be filed within the next few days on Form 8K/A with the Securities and Exchange Commission.
About National R.V. Holdings, Inc.
National R.V. Holdings, Inc., through its wholly-owned subsidiary, National RV, Inc., is one of the nation's leading producers of motorized recreational vehicles, often referred to as RVs or motorhomes. From its Perris, California facility, NRV designs, manufactures and markets Class A gas and diesel motorhomes under model names Dolphin, Pacifica, Sea Breeze, Surf Side, Tradewinds and Tropi-Cal. NRV began manufacturing RVs in 1964. Based upon retail registrations for the year ended December 31, 2006, the Company, through its NRV subsidiary, is the seventh largest domestic manufacturer of Class A motorhomes. On February 20, 2007, the Company, sold its wholly-owned subsidiary Country Coach, Inc., which designed, manufactured and marketed high-end (Highline) Class A diesel motorhomes from its Junction City, Oregon facility.
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