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1st quarter profits fall 82 percent at Monaco.

Byline: Tim Christie The Register-Guard

COBURG - Profits fell 82 percent at Monaco Coach Corp. in the first quarter of 2007, compared with the same period in 2006, which included more than $25 million in sales to FEMA.

The company, one of Lane County's largest private employers with about 2,200 workers, on Thursday reported net income of $1.5 million in the first quarter, compared with $8.3 million for the same period a year ago. Earnings per share were 5 cents, down from 28 cents a year ago.

Revenues were down 16.3 percent, to $322.2 million, from $385.1 million in the first quarter of 2006.

Chief Executive Officer Kay Toolson said he's optimistic about the long-term growth prospects for Monaco and the industry, but "rising fuel prices and lower consumer confidence give us reasons to be cautious in our short-term outlook."

Monaco President John Nepute said that while total revenues fell short of target, the motorized segment did well, improving gross profit margins from 8.2 percent in the fourth quarter to 10.8 percent in the first quarter. The company made progress in labor productivity and in absorbing indirect expenses, as well as in quality, which resulted in a reduction of warranty expense, he said.

Sales of motorized RVs decreased 3.7 percent, from $255 million in the first quarter of 2006 to $245.5 million. That compares with an industrywide decline of 12.6 percent in the first two months of the year, according to Statistical Surveys Inc. Monaco's market share increased 3.9 percent.

Sales of towables decreased 39 percent, from $114.4 million in the first quarter of 2006 to $69.5 million. Not counting Hurricane Katrina-related sales of trailers to FEMA in the first quarter of 2006, towable sales would have fallen 20.8 percent.

The company will take additional cost-saving measures in this segment, Nepute said. "In spite of short-term market dynamics, we view this as a growing segment of our business and believe recent product offerings will enable us to gain market share and thereby increase efficiencies in our towable plants."

In Monaco's motor home resorts unit, sales were down 54 percent in the first quarter, to $7.2 million compared with $15.7 million a year ago. Company officials blamed poor weather in Las Vegas and Indio, Calif., as well as extended road closures limiting access to the Las Vegas resort for the reduction of lot sales.

Chief Financial Officer Marty Dailey said that if the retail market doesn't improve as anticipated in the second half of 2007, the company's fiscal year results probably will come in at the low end of its previously released estimates. In February, Monaco said it expected annual sales ranging between $1.37 billion and $1.45 billion.
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Title Annotation:Business; The RV maker reported $1.5 million in income, compared with $8.3 million a year ago
Publication:The Register-Guard (Eugene, OR)
Article Type:Financial report
Date:Apr 27, 2007
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