Land deal reinvigorates RV maker.

Byline: Tim Christie The Register-Guard

A $33.5 million infusion of cash from a real estate sale should enable National R.V. Holdings Inc. to weather its current financial storm, at least for the short term, an analyst who follows the company said Monday.

"This is going to help out," said Salomon Kamalodine, who follows the company for B. Riley & Company Inc. of Los Angeles. "It's hard to look out very far with these guys, but this should help them hold on for another year or two."

And if the company starts turning a profit next year, as its executives predict, then the cash could last longer, he said.

National R.V. Holdings Inc. is the Perris, Calif.-based parent company of Country Coach Inc., the 1,800-employee Junction City manufacturer of high-end motor homes. The cash-strapped company announced on Wednesday that it had struck a deal to sell its 50-acre property in Perris to another RV maker for $33.5 million, and then lease it back for up to 20 years.

National R.V. officials said the deal will allow the company to cut the outstanding balance on its $40 million line of credit and provide it with much-needed cash. Company officials did not return a phone call Monday.

As of Sept. 30, the company had outstanding loans of $24 million on the $40 million line of credit, according to its most recent quarterly report.

Kamalodine said the company was left with few options for raising cash. The company could have sold a piece of the business or issued more stock, he said, but neither option makes much sense. Selling equity when the company's stock price is so depressed - it's been well under $4 a share since last summer - probably isn't a good idea, nor is selling a piece of the business when the RV industry is in one of its cyclical downturns, he said.

Doing a property lease-back deal is a good way to raise cash without diluting shareholder value, he said, and National R.V. got more money for its land than most analysts expected.

"It buys them some time to turn the business around and scale it down and wait for the industry to recover," Kamalodine said.

The privately held company on the other side of the deal, Weekend Warrior Holdings, is heading in the opposite direction.

Perris-based Weekend Warrior specializes in making "toy haulers," trailers that combine space for storing motorcycles, ATVs and other gear with RV-like living space.

Weekend Warrior officials could not be reached for comment Monday. But Gary Denton, vice president of sales and marketing, told the Press-Enterprise newspaper in Riverside, Calif., that the company had outgrown its headquarters and last month bought an 80,000-square-foot former military building on 17 acres.

"We need room, baby," Denton told the newspaper. "We are in awe of our own growth."

National R.V. Holdings and Weekend Warrior have done business before. In 2004, Weekend Warrior bought National R.V.'s travel-trailer line and still leases 80,000-square-feet of space in the National R.V. plant in Perris, Denton told the Press-Enterprise.

The new deal caps a tumultuous period for money-losing National R.V. Last November, it rejected a takeover bid led by Bob Lee, the founder of Country Coach, and Los Angeles investment banker Bryant Riley.

In the second quarter, National R.V. spent more than $5 million fixing 70 motor homes built with bad fiberglass sidewall material. The company is suing the supplier.

In August, Lee quit the board, saying the company had refused to deal with "the ongoing crisis" that "threatens the very future of this company."

In October, the New York Stock Exchange delisted National R.V. because of its poor financial performance, moving it to a secondary exchange called NYSE Arca Exchange.

National R.V. has reported red ink in 17 of the past 21 quarters. It has lost $84.3 million since September 2001.

On the bright side, the company said its market share has increased 12.5 percent in the first eight months of the year, even as the industry experienced a 17.7 percent decline in wholesale shipments.