Tuesday, November 28, 2006



RV Business
Monday, November 27, 2006

National R.V. Holdings Inc.’s management hopes to generate some momentum for its products at this week’s 44th Annual National RV Trade Show in light of its announcement late Wednesday (Nov. 22) that it will sell and then lease back its 50-acre Perris, Calif., property to Warrior Holdings Inc., which markets Weekend Warrior-branded recreational vehicles.

The transaction infuses $33.5 million of capital into beleaguered National RV, which is located in the same Southern California city, enabling it to substantially reduce the outstanding balance on its working capital line of credit. The deal, scheduled to close Dec. 21, calls for National RV to lease the Perris facility for 10 years with two five-year renewal options.

“This transaction will bring a substantial amount of capital into the company at a critical time,” stated Brad Albrechtsen, National’s CEO, in a news release. “We are pleased that our business partners will now be able to come to the Louisville Show seeing that the company has taken this significant step towards solving its liquidity challenges.”

The company builds Class A motorhomes through two wholly owned subsidiaries, National R.V. Inc., which targets the mainstream market, and Country Coach Inc. in Junction City, Ore., a more upscale builder. Albrechtsen said new products at its Country Coach subsidiary, including the million-dollar-plus Rhapsody and newly launched Tribute and Inspire, were helping that division gain market share. He also said National RV has been experiencing some success with its mid-priced, diesel-powered Pacifica and entry-level gas Surf Side.

National R.V. Holdings Inc. has struggled over the past six years, in part because the company is having to rebuild 72 motor homes due to defective fiberglass panels. “This had a tremendous impact on our cash flow,” Albrechtsen noted.

Adding to the company’s situation was the August resignation of Bob Lee, a longtime board member and investor, who said he had lost confidence in the company’s ability to survive.

On Nov. 10, the company reported a $7.1 million loss for the third quarter as sales fell by 15%, bringing the year’s loss to $16.3 million. Albrechtsen, saying he expected the loss to narrow in the fourth quarter, indicated at the time that the company had “offers in hand on recapitalization” of the company and said he hoped to make an announcement yet this quarter. The publicly held company’s stock has been trading near its 52-week low of $2.94 per share.

Meanwhile, the deal gives Warrior Holdings Inc., a pioneer toy hauler builder with annual sales of around $275 million, much needed manufacturing space. The privately held company, which recently bought an 80,000-square-foot former military building south of Riverside, Calif., unveiled its first motorized RV this fall. “We need room, baby,” Gary Denton, vice president of sales and marketing for Weekend Warrior, told the Riverside Press-Enterprise. “We are in awe of our own growth.”

Denton said Warrior founder Mark Warmoth believes it is a good time to invest in commercial real estate and could choose to build more factory space on the land in the future.

Weekend Warrior already had close ties to National RV, having purchased National’s travel-trailer lineup. Warrior still leases 80,000 square feet of space in National RV’s plant, the Press-Enterprise reported.

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