Coachmen Industries, Inc. (NYSE: COA), Glaval Corporation and its affiliate, Dynamax Corporation, all of Elkhart, IN, have completed an agreement for the sale of the assets of COA Automotive, Coachmen Industries' van division. Glaval and Dynamax's purchase includes COA Automotive's product lines, equipment and designs. Officials from the companies agree that the end result is a win-win situation for all involved.

"Coachmen's strategic plan is to focus our assets on our core businesses and growth opportunities, thereby increasing stakeholder value," explained Claire C. Skinner, chairman of the board and CEO of Coachmen Industries, Inc. "For this reason, we have been examining our continued participation in the van conversion industry."

Van conversion product names that Glaval will acquire as part of the transaction include Greenbriar, Saratoga and Dearborn. Dynamax Corporation is also adding new ventures with the van campers and the Starflyte motorhome.

Van conversion production and sales offices moved to Glaval's facility in January. Dynamax will occupy the COA Automotive van camper and Starflyte plant for the next six months. Glaval will also take over warranty administration and service of units built in the past by the van division. The companies anticipate a seamless transition with both dealers and consumers.

"Ensuring that there will be jobs for all our people, as well as comparable wages and benefits, was a critical component during our talks with Glaval," Skinner said.

Kit Returns to Profitability in Fiscal 1999

In fiscal year 1999 Kit Manufacturing Company (Amex: KIT) reported net income at $373,000, or $0.34 per share, compared to a net loss of $357,000, or $0.32 per share, for the twelve months ended October 31, 1998.

Net sales, company-wide, rose 14% from the comparable quarter in the prior fiscal year. Manufactured housing sales reflected less than a 1% increase, while recreational vehicles posted a 27% increase in sales in comparison to the fourth quarter in fiscal 1998.

Kit reported a net loss of $11,000, or $0.01 per share, for the current fiscal quarter in comparison to a net loss of $329,000, or $0.30 per share, for the same period in 1998.

Jayco Recalls Certain 2000 Kiwi Travel Trailers

Jayco, Inc. announced the recall of certain 2000 model year Kiwi™. travel trailers. The recall involves approximately 150 Kiwi 17A travel trailers built between March and May, 1999.

During production, Jayco engineers discovered that the LP gas line underneath the floor is routed in a way that damage could occur from contact with the axle, resulting in poor performance of the product or a break in the LP gas line. This break could cause the LP tank to leak and may result in a fire or explosion. According to Jayco, no fires or explosions have been reported.

Jayco has notified all dealers of the recall and has contacted owners of record for the affected models instructing the owner to contact a Jayco dealership for correction of the defect. Meanwhile, Kiwi owners are advised to turn off the LP gas at the bottle and keep it turned off until a Jayco dealership has performed modifications.

KOA Senior Vice President Zimmerman Resigns

Kent Zimmerman, senior vice president of marketing at Kampgrounds of America, Inc. (KOA) resigned from the company. Zimmerman left the company at the end of last year.

Rexhall Sells Indiana Facility

Rexhall Industries, Inc. (Nasdaq: REXL) has sold its former manufacturing plant in Elkhart, IN. Rexhall said the sale is expected to result in a pre-tax gain of $400,000 to $500,000 in the quarter ending Dec. 31, 1999.

Rexhall halted production at its 97,000-square-foot Indiana factory nearly two years ago as it consolidated its operations in California.

RPTIA Elects New Officers and Board Members

Members of the Recreational Park Trailer Industry Association (RPTIA) participating in the Annual Meeting held at the RV/MH Heritage Foundation's Hall of Fame in Elkhart, Indiana re-elected two supplier members of the board for a three-year and one-year term respectively. Re-elected as Supplier Members were: Ted Huff, TR Arnold and Associates (2000-2003), and Tom Watson, LaSalle Bristol, Inc. (2000). Also reconfirmed, as the representative of Recreational Park Trailer Dealers was Dan Saltzgiver, Reichart's Camping Center, Inc. who will also serve for three years (2000 -2003). Officers for 2000 were also reelected including Bob Kropf, Kropf Industries, Inc. as RPTIA's president; Rick Woodcock, Cavco Industries, Inc. as vice president; David Berkey DNA Enterprises, Inc. as secretary and Tim Howard as treasurer.

Keystone RV Names West Coast Management Team as New Facilities Opens

Keystone RV Company, headquartered in Goshen, IN, opened a new manufacturing facility in January in Pendleton, OR, to produce travel trailers and fifth-wheels. The management team consists of Ed Lilley, general manager, Bob Scheer, sales manager, and Marshall Malone, manufacturing manager.

The Oregon plant will manufacture Keystone's new product, the Columbia, an aluminum-framed, laminated product which was designed specifically to meet the camping needs of west coast customers.

Cole Davis, Keystone's president and CEO, said "The expansion will allow Keystone to strengthen its west coast market share at a lower per-unit cost. The freight cost from Indiana is now a significant percentage of the total unit cost for a dealer on the west coast. By manufacturing regionally, we will not only reduce freight costs, but we will also enhance our ability to design products that appeal specifically to our west coast customer."

Allison Transmission Selects Site for Parts Distribution Facility

Allison Transmission Division of General Motors has selected a site for its new parts distribution facility in Indianapolis, company officials announced.

Located in the AmeriPlex complex south of the Indianapolis International Airport, the 27-acre site will be home to Allison Transmission's new 390,000 square-foot Parts Distribution Center (PDC).

Construction began in January and the project is scheduled for completion in the summer of 2000. The facility will employ about 240.

All-Rite and Dutchmen Join Forces to Supply Aftermarket Metal

All-Rite, a supplier of repair parts to the RV aftermarket, says that Dutchmen/Four Winds has selected All-Rite as the exclusive aftermarket supplier for their recently discontinued line of Colonial white aluminum siding.

All-Rite will continue to offer custom replacement siding for all Dutchmen and Four Winds vehiclcs and can match exact colors, patterns and edges as specified in Dutchmen schematics.

All-Rite has been a supplier and manufacturer in the RV and Mobile Home repair and remodeling markets for over 25 years.

Lazy Days Sales Rep Wins a Harley in Workhorse Promotion

John Margalski (behind motorcycle), Workhorse director of RV sales, introduces the Go Hog Wild grand prize drawing at the National RV Trade Show in Louisville, KY.

Kevin Mullis, a sales rep from Lazy  Days RV Supercenter, Seffner, FL., is the proud new owner of a new Harley-Davidson motorcycle, thanks to the Go Hog Wild sales promotion from Workhorse Custom Chassis.

Mullis was one of hundreds who participated in the promotion. Since July 1999, Workhorse has provided special gift incentives to RV sales reps who have sold motorhomes built on Workhorse chassis.

National RV Park Institute Schedules 2000 Spring Session

The National RV Park Institute, a training school in the basics of RV park operations, will hold classes this spring, April 2-7, 2000 at Far Horizons 49er Village in Plymouth, CA.

The intensive week-long session earns about half (40) of the credits needed for the ARVC CPO designation and is a combination of classroom and in-the-field study covering a variety of park management topics. Some of the classes include customer service, inspection of facilities, RV park development, emergency planning, computer operations, front desk management, budgeting, marketing and promotion, legal aspects of park management and operations, economic analysis, restroom and pool maintenance. The classes are taught by experts in their field and provide a true "hands-on" learning experience.

For more information or to receive a complete prospectus, contact Executive Services Group, PO Box 5578, Auburn, CA. 95604, (530) 823-1076 or fax (530) 823-6331.

A'Weigh We Go RV Weight Safety Program Expands

John Anderson, president of A'Weigh We Go, said they will add another RV Weight Safety Team to their staff in 2000. Walter Cannon and his wife Amy will join Neil LeKander, a retired Goodyear Tire engineer, and his wife Pat, and Curt Peircey, a retired Connecticut State trooper, and his wife Carole, presenting RV Weight Safety seminars and providing individual wheel weighing services, at RV rallies and shows throughout North America.

Anderson said, "Walter and Amy will concentrate on RV shows, advancing our goal of reaching consumers before they make their RV purchase. Thanks to financial support from our sponsors, who are committed to the long term health and growth of our industry, we are able to continue and expand our program, working in cooperation with all segments of the industry, including manufacturers, suppliers, dealers, and consumers. Together, we are making a difference!"

Coachmen Depends on ServiceDealer Council to Help Keep Customers Satisfied

Coachmen RV Company's business strategy of keeping customers saitisfied includes bringing togethersome of the best and brightest in the RV service arena - Coachmen RV dealers. And more specifically, the service and parts managers from Coachmen RV dealerships.

The council recently convened for its 1999 session. Coachmen's Service Dealer Council meets annually at the company's manufacturing complex in Middlebury, IN. According to Jerry McCarthy, Coachmen RV's vice president of service operations, the general purpose of the two-day event is to bring dealers and the manufacturer together to share ideas, strategies and concepts for improving customer service. "The complete focus is on planning for the furture," McCarthy said.

Members of Coachmen RV's Service Dealer Council

(Left to right) Dave Locken, R'N'R Holiday RV, Inc., Spokane, WA; Randy Davis, York RV Service & Sales, Prescott, AZ; Truman "Buzz" Brown, Holiday World of Houston, LLC, Houston, TX; Joe Deolivira, Giant RV World, Inc., Raynham, MA; Dave DeHaan, DeHaan Auto & RV Center, Elkhorn, WI; Kelly Rowell, Regional Service Manager at Coachmen RV in Georgia; Al Boothby, Midstate RV Center, Byron, GA; Russ Engelbart, Lasso E Camper Sales, Anamosa, IA; Greg Dewalt, Dewalt's Recreational Vehicles, Easton, PA; Eddy Wells, Colfax Country RV Sales, Colfax, NC; Donnie Coker, Bus Supply Co., Inc., McComb, MS; Jim Duncan, Jr., Duncan's Motor & Trailer Sales, Inc., Akron, OH; Jerry McCarthy (behind), Coachmen RV's vice president of service operations; and Steve Brummett, Wheeler's Las Vegas RV, Las Vegas, NV.

"In the broadest sense, the council  devotes its attention to customer service. Specific areas for council discussion include the need for qualified service technicians and service capacity, the ability to meet the needs and expectations of dealer and retail customers (with a focus on relationship management), and improving lines of communication between Coachmen and its dealers."

For Coachmen RV, the immediate future of the RV industry includes the emergence of the quality-conscious baby boom generation. According to McCarthy, Coachmen intends to lead the way for the industry to meet and exceed the expectations of the new wave of buyers that is coming into the market. The council meets to discuss what it can do to keep the customer satisfied.

Twelve dealers, from a variety of regions across the country, serve on the council. Council members are parts and service professionals who are part of their respective dealership's management team. The length of a council member's tenure is two years. Council member Al Boothby of Midstate RV Center in Byron, GA, said, "By changing dealers who serve on the council every two years, you're constantly mixing things up and getting different opinions and ways of thinking."

An Analysis of the RV Industry by Lambert, Edwards & Associates, Inc.

READY TO ROLL:

Demographics, economy driving
RV sector into the new millennium

Fueled by a booming economy, nearly full employment, plentiful gas and low interest rates, the $16 billion RV industry is ready to cruise into the new millennium.

One out of every 10 households in the United States now owns a recreational vehicle, or RV. Experts project that number will increase 21 percent to 10.4 million households by the year 2010 as Baby Boomers and Generation Xers recognize the affordability, flexibility and comfort of combining travel and recreation.

That translates into growth opportunities for the industry's original equipment manufacturers (OEMs), their suppliers and distributors. Unlike the more mature automotive industry, RV manufacturers and retailers have not been ravaged by consolidation, labor unrest, mergers and acquisitions, foreign competition, price pressures, over-capacity and Internet sales.

The industry faces challenges on at least three fronts:

Capacity: Record sales in 1999 ­ the best year for RVs in more than two decades ­ have made it difficult for OEMs and suppliers to keep pace with demand. Despite start-up companies entering the field, the RV industry faces a lack of capacity, particularly when it comes to chassis and replacement parts.

Quality: A J.D. Powers & Associates survey commissioned by the Recreational Vehicle Industry Association (RVIA) found quality surfaced as the number one consumer complaint. Experts say future sales to finicky Boomers could hinge on just how well the RV industry addresses this concern.

Valuation: As an industry segment, the 15 publicly traded RV manufacturers, suppliers and dealers remain undervalued, which has discouraged mergers, acquisitions and equity offerings to fund growth. Most stocks now trade at multiples of 10-12 times earnings. Given market conditions, industry observer Doug Turner thinks RV stocks should be trading in the 15-18 range while the 20-25 range would be justified for companies like Winnebago Industries, Inc. (NYSE: WGO), Holiday RV Superstores, Inc. (Nasdaq: RVEE), National RV Holdings, Inc. (NYSE: NVH) and Rexhall Industries, Inc. (Nasdaq: REXL).

Opportunities go hand-in-hand with those challenges. With more than 190 manufacturers and 3,500 dealers across the United States, the industry remains fragmented ­ and ripe for consolidation. In recent years, however, the consolidation has been limited to a few small acquisitions in the OEM side. In the dealer segment, the first rumblings of consolidation are coming from Holiday RV Superstores, which is buying its competition as it aims to become a $1 billion super retailer.

Consolidation is imminent on the dealer side of the business and is being led by Holiday RV Superstores Inc., the nation's only publicly traded dealership. The Florida retailer group acquired another larger Florida dealer group with five stores in what Automotive News called the first efforts at industry consolidation.

Internet selling has also not taken hold yet in the RV industry, according to Tom Walworth, president of Statistical Surveys, Inc. He said, "Everyone gets real wide-eyed" when the Internet is mentioned, but servicing product remains a key unanswered question. Unlike auto dealers, who consider new car sales as loss leaders for their showrooms, RV dealers expect a healthy 18-30 percent profit on the new vehicles they sell, according to Walworth.

Service remains a critical problem for the industry and Walworth sees service and repair as the industry's "weak link." RV owners who experience problems while traveling often find it difficult to locate a dealership to service their motorhomes. When they are successful in finding a repair facility, it's usually someone who also handles truck repairs ­ meaning the RV owner becomes the lowest priority in the repair schedule.

The service area is ripe, Walworth said, for a nationwide chain of service centers like the "quick change" oil and muffler automotive franchises that have become ubiquitous in the 1990s.

Dealers and manufacturers remain at odds on some key issues. When sales are sluggish, manufacturers have passed incentives like free flooring or free screened-in rooms onto dealers. Walworth said that sometimes these deals were passed onto consumers, but sometimes they were simply pocketed.

While RV-related companies continue to address manufacturing, supply chain and quality issues, the one area that remains out of their immediate control may hold a key to the future: valuations. The stock market's relative lack of interest in the sector to date has kept valuations low relative to growth rates. That, in turn, has kept RV companies from using equity capital to grow; instead plant expansions, acquisitions and efforts to increase distribution have been funded primarily through cash flow from operations.

With growth rates and favorable demographics playing in the RV industry's favor, a future embrace by Wall Street could help propel the entire industry to new heights, analysts say. The thinking is this: Higher valuations would encourage existing RV companies to use equity in merger-and-acquisition transactions or to raise capital through follow-on stock offerings. Higher valuations would also likely encourage more niche companies to tap the market through initial public offerings (IPOs).

During the 1980s, very few RV companies were publicly traded. Today, more than a dozen manufacturers, suppliers and dealers are public. Still, Walworth said that the industry will only benefit as a sector if more companies turn to Wall Street to fund their growth. Introducing more players, he said, will bring analyst interest and broker attention to the segment as a whole.

To a certain extent, Wall Street has already contributed to the RV industry's strength, says Foremost's Randy Sellhorn.

"Right now, there's just so much money floating around," he said. "People are becoming wealthy out of the stock market and they're converting that wealth into toys ­ and that's what motorhomes are."

About the authors: This story was excerpted from a report prepared by Lambert, Edwards & Associates, Inc., a Grand Rapids, MI public and investor relations firm. The firm's RV practice area is headed by Jeffrey T. Lambert, who formerly served as director of IR at Spartan Motors, Inc., and Mary Ann Sabo, an award-winning journalist who covered the automotive and manufacturing industries prior to joining LE&A. For a complete copy of "RV Industry: Ready to Roll," phone 616.233.0500

RVIA Annual Meeting Scheduled for March

RVIA's 2000 Annual Meeting, scheduled for March 9-13 in Lajolla, CA, will feature a roster of speakers to help attendees improve profitability.

Leading off the seminar schedule on March 11 will be economist, author and futurist David L. Smith, who will provide an outlook for the economy and Wall Street.

Dr. Roger Blackwell, professor of marketing at Ohio State and president of his own consulting firm, will then present "From Mind to Market."

Finally, a third seminar on business succession and estate planning is being added to the program.

The 2000 Annual Meeting is being held at the Hilton Grande Torrey Pines.

RVN