Sales of motor homes remain grim (previous blog here). They're a huge, gas-guzzling purchase, and it's much harder to get loans nowadays. The following isn't good news.
Monaco Coach Corp. on Monday said it hired a financial adviser to help improve the struggling recreational vehicle maker’s liquidity. Such announcements normally mean a company is seeking a buyer.
Coburg-based Monaco said Imperial Capital LLC could also help it find joint venture partners.
Monaco also retained Avondale Partners LLC to evaluate strategies for Monaco’s Signature Motorhome Resorts business and BMO Capital Markets to work with both Bison Manufacturing LLC, its equine trailer division, and Roadmaster LLC, its specialty trailer division.
Monaco shares ended 2008 down 94 percent for the calendar year. The company drastically reduced its workforce and production, closing two plants in Indiana, and slashed executive salaries.
The company is having major cash flow problems and needs help...from pockets deep enough to survive the weak economy. As is so often the case nowadays, it doesn't help that Monaco has a fair amount of debt.
Being a penny stock, Monaco is flirting with being delisted from the NYSE. A little price spike before Christmas bought it some time, but it closed today at $0.68 a share. It was dropped from the S&P Small Cap 600 index last week.
Fellow Oregon RV-maker Country Coach last week told employees that it could close unless it gets financing by Feb. 28, according to the Register-Guard newspaper in Eugene.
Country Coach has about 500 employees; the workers are currently on unpaid furlough. The company had about 1,700 employees in mid-2006. Last year, Monaco laid off about 1,900 employees in Indiana, and its 1,800 workers in Coburg are currently on an unpaid furlough. But, Governor Kulongoski has been fairly quiet on the subject...after all, they're not green jobs. Speaking of that, I wonder what's happened to his specially equipped, $400,000 motorhome?
Middlebury, Ind., based Coachmen Industries Inc. agreed last month to sell its RV assets to Forest River Inc., an RV company owned by Warren Buffet’s Berkshire Hathaway Inc.
Monaco has also attracted investors.
Tulsa, Okla., private equity fund Prescott Capital Management Group — which owned about 520,000 shares of Monaco stock in June — as of last week now owns more than 4.6 million shares, making it the company’s single largest shareholder at 15.4 percent.
At its current share price, 4.6 million shares is just over $3.1 million. It doesn't take too many of Monaco's top-of-the-line motor homes to reach that total.
I think their problem is simply that there are enough - or too many - RV's out there already.
I suspect it's a product that seriously outlasts it's normal owners...
Posted by: Jeff Shultz | January 06, 2009 at 09:42
I think the easy credit that was available helped create an artificially high demand for a number of major purchases, like homes, motor homes, expensive cars and trucks, etc. Now we've got too much RV production capacity compared to what demand will probably be for years. Evidently the manufacturers were planning that the wave of baby boomers would provide a boost in the market for RVs. Found a few factoids in this article:
Posted by: RoguePundit | January 06, 2009 at 13:41