Monaco Coach Corporation Reports First Quarter Results

Apr 26, 2007, 01:00 ET from Monaco Coach Corporation

    COBURG, Ore., April 26 /PRNewswire-FirstCall/ -- Monaco Coach
 Corporation (NYSE:   MNC), one of the nation's leading manufacturers of
 recreational vehicles, today reported revenues and earnings for the first
 quarter ended March 31, 2007.
     (Logo: http://www.newscom.com/cgi-bin/prnh/19991018/MONACO )
     First quarter 2007 revenues were $322.2 million, down 16.3% compared to
 $385.1 million in revenues for the first quarter 2006. First quarter 2006
 revenues included $26.8 million of FEMA specific sales. First quarter 2007
 gross profit was $36.0 million, down from $48.4 million a year ago.
 Operating income for the first quarter 2007 was $3.6 million, compared to
 $14.5 million for the first quarter 2006. Net income for the first quarter
 2007 was $1.5 million, compared to $8.3 million a year ago. For the first
 quarter 2007, diluted earnings per share were $0.05 versus $0.28 for the
 same period last year.
     Kay Toolson, Chairman and Chief Executive Officer of Monaco Coach
 Corporation, stated, "We are pleased to report a profit for the quarter in
 the face of continuing challenges in the motorhome and towables markets. We
 are also encouraged by our internal Class A retail registrations, which
 showed a 4% increase for the first quarter of 2007, compared to the first
 quarter of 2006, and we are up 8% year-to-date through mid-April as
 compared to the same period last year. While we remain optimistic about
 improved demographics and long-term growth prospects for our company and
 the industry, rising fuel prices and lower consumer confidence give us
 reasons to be cautious in our short-term outlook."
     "Our first quarter results reflect positive changes in our business,
 including consolidation of subassembly plants and the realignment of our
 production lines, which are beginning to pay off through improved quality
 and increased efficiencies in production and product development. We are
 confident the steps that we have taken have helped create a successful 2008
 model line-up and will allow us to quickly respond to future market
 upturns," added Toolson.
     Gross profit margin for the Company decreased in the first quarter 2007
 to 11.2%, compared to 12.6% in the first quarter 2006. The decline in gross
 profit margin was partially the result of the absence of FEMA-related
 business, which benefited the towable segment in the first quarter 2006 by
 increased orders, and benefited the motorized segment through absorption of
 indirect expenses in the Company's Indiana motorized plant, where many of
 the FEMA units were built.
     John Nepute, President of Monaco Coach Corporation, stated, "While
 total revenues for the Company fell short of target, our motorized segment
 did well, improving gross profit margins sequentially from the 8.2% in the
 fourth quarter 2006 to 10.8% in the first quarter 2007. As expected,
 progress was made in labor productivity and absorption of indirect
 expenses. We are also very encouraged by the improvement in quality, which
 resulted in a reduction of warranty expense."
     "While our motorhome retail performance has been better than the
 overall motorhome RV market, we are still striving for one-to-one
 replacements on our dealer partners' lots. We are comfortable with the
 level of dealer inventory and, in part due to the reconfiguration of
 production and consolidation of motorized production lines, our overall
 backlog should continue to steadily diminish our need for promotional
 activity. The consolidation of similarly priced models on production lines
 has also resulted in a smoother transition into the new 2008 model year
 units."
     Nepute concluded, "On the towables side, we saw our retail activity
 decline in the first quarter of 2007. Accordingly, we have adjusted run
 rates in our towable plants. This segment of the business is more scalable
 and additional cost-saving measures will be implemented to improve
 operating results. 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."
     For the first quarter 2007, selling, general and administrative
 expenses were $32.4 million, compared to $34.0 million of sales for the
 first quarter 2006.
     Marty Daley, Chief Financial Officer, stated, "Incrementally, as
 compared to fourth quarter 2006, selling, general and administrative
 expenses in the first quarter 2007 were impacted by an increase in
 settlement costs and stock- based compensation. The total of other selling,
 general and administrative expenses was consistent between fourth quarter
 2006 and first quarter 2007."
     Daley continued, "We've maintained our focus on the Company's balance
 sheet, and will continue to manage our backlog to keep our level of
 finished goods in balance with the market. We are pleased to have ended the
 quarter with a cash balance of $29 million and finished goods inventory
 just over $20 million."
     Motorized Recreational Vehicle Segment
     Motorized sales in the first quarter 2007 decreased 3.7% from $255.0
 million in the first quarter 2006 to $245.5 million. Industry-wide Class A
 motorhome retail registrations, as reported by Statistical Surveys, Inc.,
 were down 12.6% year-to-date through February 2007. The Company reported a
 3.9% increase in market share for the same period.
     Segment gross profit for the first quarter 2007 was $26.5 million, or
 10.8% of sales, compared to $25.0 million, or 9.8% of sales, for the first
 quarter 2006. Selling, general and administrative expenses including
 corporate overhead were $23.2 million, compared to $20.1 million for the
 first quarter a year ago.
     Unit sales of the Motorized RV Segment for the quarter ended March 31,
 2007 totaled 1,460, down 9.6% from 1,615 units for the prior year period.
 Diesel Class A units shipped were 1,112 versus 1,143, gas Class A units
 shipped were 198 versus 357, and Class C units shipped were 150 versus 115.
     Towable Recreational Vehicle Segment
     The Company reported towable sales of $69.5 million for the first
 quarter 2007, compared to sales of $114.4 million for the first quarter
 2006. Deducting FEMA sales in the first quarter of 2006 of $26.8 million,
 towable sales would have decreased 20.7%. Travel trailer and fifth-wheel
 registrations for the overall market, according to Statistical Surveys,
 reported a year-to-date decline of 8.5% through February 2007.
     Gross margin for the first quarter 2007 for the towable segment was
 $4.7 million, or 6.8% of sales, compared to $14.3 million, or 12.5% of
 sales for the first quarter 2006. Selling, general and administrative
 expenses including corporate overhead were $6.4 million, compared to $9.4
 million for the first quarter 2006.
     For the first quarter 2007, towable unit sales were 4,289 units, down
 from 7,217 units for the same period a year ago, which included 2,019 FEMA
 related units.
     Motorhome Resorts Segment
     Resort sales for the first quarter 2007 were $7.2 million, down 54.0%
 from $15.7 million in the first quarter 2006. Continued poor weather in
 both Las Vegas, Nevada, and Indio, California, and extended road closures
 limiting access to the Las Vegas resort led to the reduction of lot sales.
 In the first quarter 2007, the Company sold 25 lots at the Indio resort and
 four lots at the Las Vegas resort. Currently 38 lots are available in Indio
 and 51 lots are available in Las Vegas. Operating income for the segment
 was $2.0 million, down from $4.8 million for the same period last year.
     The Company has purchased additional land in the Palm Springs,
 California, area and very recently closed on a site in Naples, Florida.
 Both locations plan to have lots for sale by the beginning of 2008.
     2007 Business Outlook
     "The improvement from the fourth quarter 2006 to the first quarter 2007
 was largely due to adjustments we made to our business model last year,"
 said Daley. "While we have not observed the improvement in the retail
 market we were anticipating, at our current run rates and backlog, we will
 not be modifying our previously stated second quarter earnings
 expectations. However, if the originally anticipated uptick in the retail
 markets fails to materialize in the second half of the year, our 2007
 fiscal year results will likely come in at the low end of our previously
 released guidance."
     Conference Call to be Held
     Monaco Coach Corporation will conduct a conference call in conjunction
 with this news release at 2:00 p.m. Eastern Time, Thursday, April 26, 2007.
 Members of the news media, investors, and the general public are invited to
 access a live broadcast of the conference call via the Investor Relations
 page of the Company's website at www.monaco-online.com. The event will be
 archived and available for replay for the next 90 days.
     About Monaco Coach Corporation
     Dedicated to quality and service, Monaco Coach Corporation is one of
 the nation's leading manufacturers of motorized and towable recreational
 vehicles. Headquartered in Coburg, Oregon, with substantial manufacturing
 facilities in Indiana, Monaco Coach employs approximately 5,300 people. The
 Company offers entry-level priced towable RVs up to custom made luxury
 recreational vehicle models under the Monaco, Holiday Rambler, Safari,
 Beaver, McKenzie, R-Vision and Dodge brand names. Monaco Coach maintains RV
 service centers in Harrisburg, Ore., Elkhart, Ind., and Wildwood, Fla.
     Ranked as the number one manufacturer of diesel-powered motorhomes,
 Monaco Coach is a leader in innovative RVs designed to meet the needs of a
 broad range of customers with varied interests. Monaco Coach Corporation
 trades on the New York Stock Exchange under the symbol "MNC," and the
 Company is included in the S&P Small-Cap 600 stock index. For additional
 information about Monaco Coach Corporation, please visit
 www.monaco-online.com or www.trail-lite.com.
     The statements above regarding the Company's expectation for further
 gains in fiscal 2007 as a result of future market upturns, improved
 manufacturing efficiencies, increases in market share in the towables
 segment, improved prospects for the Motorized RV Segment in fiscal 2007,
 sales of remaining available lots at the Company's existing resorts in the
 first half of fiscal 2007, and in the "2007 Business Outlook" section
 regarding improving retail sales and expectations for revenues, gross
 profit margin and SG&A expenses in fiscal 2007 are forward-looking
 statements subject to various risks and uncertainties that could cause
 actual results to differ materially from these statements, including
 unforeseen declines in the wholesale and retail markets for recreational
 vehicles, consumers' preference for certain models and resort lots, failure
 to realize gains from the motorized manufacturing efficiencies as
 anticipated, a decline in consumer confidence, an increase in interest
 rates affecting retail and wholesale financing, an increase in price or
 availability of fuel, and a downturn in the equity markets. Please refer to
 the Company's SEC reports for additional risks and uncertainties, including
 but not limited to the most recent Form 10-Q, the annual report on Form
 10-K for 2006, and the 2006 Annual Report to Shareholders for additional
 factors. These filings can be accessed over the Internet at
 http://www.sec.gov.
     CONTACT:  Craig Wanichek
               Director of Investor Relations
               Monaco Coach Corporation
               (541) 681-8029
               craig.wanichek@monacocoach.com
 
                               (Tables to follow)
 
 
                              MONACO COACH CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                               (dollars in thousands)
 
                                                   December 30,     March 31,
                                                       2006           2007
                                                                   (unaudited)
     ASSETS
     Current assets:
       Cash                                            $4,984        $29,026
       Trade receivables, net                          81,588         88,399
       Inventories, net                               155,871        153,945
       Resort lot inventory                             7,997          6,783
       Prepaid expenses                                 5,624          5,261
       Income taxes receivable                          6,901              0
       Deferred income taxes                           38,038         39,802
         Total current assets                         301,003        323,216
 
     Property, plant, and equipment, net              153,895        151,570
     Land held for development                         16,300         16,300
     Investment in joint venture                            0          4,394
     Debt issuance costs net of accumulated
      amortization of $912, and $990, respectively        540            655
     Goodwill                                          86,412         86,412
 
         Total assets                                $558,150       $582,547
 
     LIABILITIES
     Current liabilities:
       Book overdraft                                  16,626              0
       Current portion of long-term debt                5,714          5,714
       Line of credit                                   2,036              0
       Income taxes payable                                 0          2,557
       Accounts payable                                72,591        107,936
       Product liability reserve                       15,764         16,509
       Product warranty reserve                        33,804         34,547
       Accrued expenses and other liabilities          44,364         47,383
       Discontinued operations                            298            288
         Total current liabilities                    191,197        214,934
 
     Long-term debt, less current portion              29,071         27,643
     Deferred income taxes                             21,678         21,219
     Other long-term liabilities                          883            833
         Total liabilities                            242,829        264,629
 
     STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value; 1,934,783
      shares authorized, no shares outstanding
     Common stock, $.01 par value; 50,000,000
      shares authorized, 29,769,356 and
      29,936,837 issued and outstanding,
      respectively                                        298            299
 
     Additional paid-in capital                        63,722         66,610
     Retained earnings                                251,301        251,009
         Total stockholders' equity                   315,321        317,918
 
         Total liabilities and
          stockholders' equity                       $558,150       $582,547
 
 
 
                              MONACO COACH CORPORATION
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         (Unaudited: dollars in thousands, except share and per share data)
 
                                                          Quarter Ended
                                                     April 1,      March 31,
                                                       2006           2007
 
     Net sales                                       $385,068       $322,244
     Cost of sales                                    336,619        286,248
       Gross profit                                    48,449         35,996
 
     Selling, general, and administrative expenses     33,979         32,358
       Operating income                                14,470          3,638
 
     Other income, net                                    132            113
     Interest expense                                  (1,252)          (967)
     Loss from investment in joint venture                  0           (278)
       Income before income taxes                      13,350          2,506
 
     Provision for income taxes                         5,057          1,007
 
         Net income                                    $8,293         $1,499
 
     Earnings per common share:
       Basic                                            $0.28          $0.05
       Diluted                                          $0.28          $0.05
 
     Weighted-average common shares outstanding:
       Basic                                       29,636,222     29,829,697
       Diluted                                     29,828,187     30,405,671
 
 
 
                              MONACO COACH CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Unaudited: dollars in thousands)
 
                                                           Quarter Ended
                                                      April 1,      March 31,
                                                        2006           2007
 
     Increase (Decrease) in Cash:
 
     Cash flows from operating activities:
       Net income                                      $8,293         $1,499
       Adjustments to reconcile net income to net
        cash provided by (used in) operating
        activities:
         Gain on sale of assets                           (16)          (113)
         Depreciation and amortization                  3,374          3,537
         Deferred income taxes                         (4,320)        (2,223)
         Stock based compensation expense                 331          1,826
         Changes in working capital accounts:
           Trade receivables, net                     (24,115)        (6,811)
           Inventories                                    914         (2,134)
           Resort lot inventory                         2,554          1,214
           Prepaid expenses                               400            361
           Accounts payable                            22,741         35,345
           Product liability reserve                     (635)           745
           Product warranty reserve                       963            743
           Income taxes payable                         7,951          9,458
           Accrued expenses and other liabilities       9,972          3,019
           Deferred revenue                                 0            (50)
           Discontinued operations                        720            (10)
             Net cash provided by operating
              activities                               29,127         46,406
 
     Cash flows from investing activities:
       Additions to property, plant, and equipment     (3,746)        (1,770)
       Investment in joint venture                          0            (88)
       Proceeds from sale of assets                        17            505
             Net cash used in investing activities     (3,729)        (1,353)
 
     Cash flows from financing activities:
       Book overdraft                                 (14,529)       (16,626)
       Payments on lines of credit, net                (2,500)        (2,036)
       Payments on long-term notes payable                  0         (1,428)
       Debt issuance costs                                  0           (193)
       Dividends paid                                  (1,780)        (1,791)
       Issuance of common stock                         1,137            927
       Tax benefit of stock options exercised               0            136
       Discontinued operations                             75              0
             Net cash used in financing activities    (17,597)       (21,011)
 
     Net change in cash                                 7,801         24,042
     Cash at beginning of period                          586          4,984
 
     Cash at end of period                             $8,387        $29,026
 
 
 
                              MONACO COACH CORPORATION
                                 SEGMENT REPORTING
                         (Unaudited: dollars in thousands)
 
     Results of Consolidated Operations
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $385,068   100.00%     $322,244      100.00%
     Cost of sales              336,619    87.42%      286,248       88.83%
       Gross profit              48,449    12.58%       35,996       11.17%
 
     Selling, general and
      administrative expenses    33,979     8.82%       32,358       10.04%
       Operating income          14,470     3.76%        3,638        1.13%
 
     Other income and interest
      expense                     1,120     0.29%        1,132        0.35%
       Income before income
        taxes                    13,350     3.47%        2,506        0.78%
 
     Income taxes                 5,057     1.31%        1,007        0.31%
 
       Net income                $8,293     2.15%       $1,499        0.47%
 
 
     Motorized Recreational Vehicle Segment
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $254,954   100.00%     $245,548      100.00%
     Cost of sales              230,001    90.21%      219,061       89.21%
       Gross profit              24,953     9.79%       26,487       10.79%
 
     Selling, general and
      administrative expenses
      and corporate overhead     20,133     7.90%       23,155        9.43%
 
       Operating income          $4,820     1.89%       $3,332        1.36%
 
 
     Towable Recreational Vehicle Segment
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $114,413   100.00%      $69,480      100.00%
     Cost of sales              100,133    87.52%       64,753       93.20%
       Gross profit              14,280    12.48%        4,727        6.80%
 
     Selling, general and
      administrative expenses
      and corporate overhead      9,408     8.22%        6,372        9.17%
 
       Operating income (loss)   $4,872     4.26%     $(1,645)       -2.37%
 
 
     Motorhome Resorts Segment
 
                            Quarter Ended  % of    Quarter Ended     % of
                            April 1, 2006  Sales   March 31, 2007    Sales
 
     Net sales                  $15,701   100.00%       $7,216      100.00%
     Cost of sales                6,485    41.30%        2,434       33.73%
       Gross profit               9,216    58.70%        4,782       66.27%
 
     Selling, general and
      administrative expenses
      and corporate overhead      4,438    28.27%        2,831       39.23%
 
       Operating income          $4,778    30.43%       $1,951       27.04%
 
 

SOURCE Monaco Coach Corporation
    COBURG, Ore., April 26 /PRNewswire-FirstCall/ -- Monaco Coach
 Corporation (NYSE:   MNC), one of the nation's leading manufacturers of
 recreational vehicles, today reported revenues and earnings for the first
 quarter ended March 31, 2007.
     (Logo: http://www.newscom.com/cgi-bin/prnh/19991018/MONACO )
     First quarter 2007 revenues were $322.2 million, down 16.3% compared to
 $385.1 million in revenues for the first quarter 2006. First quarter 2006
 revenues included $26.8 million of FEMA specific sales. First quarter 2007
 gross profit was $36.0 million, down from $48.4 million a year ago.
 Operating income for the first quarter 2007 was $3.6 million, compared to
 $14.5 million for the first quarter 2006. Net income for the first quarter
 2007 was $1.5 million, compared to $8.3 million a year ago. For the first
 quarter 2007, diluted earnings per share were $0.05 versus $0.28 for the
 same period last year.
     Kay Toolson, Chairman and Chief Executive Officer of Monaco Coach
 Corporation, stated, "We are pleased to report a profit for the quarter in
 the face of continuing challenges in the motorhome and towables markets. We
 are also encouraged by our internal Class A retail registrations, which
 showed a 4% increase for the first quarter of 2007, compared to the first
 quarter of 2006, and we are up 8% year-to-date through mid-April as
 compared to the same period last year. While we remain optimistic about
 improved demographics and long-term growth prospects for our company and
 the industry, rising fuel prices and lower consumer confidence give us
 reasons to be cautious in our short-term outlook."
     "Our first quarter results reflect positive changes in our business,
 including consolidation of subassembly plants and the realignment of our
 production lines, which are beginning to pay off through improved quality
 and increased efficiencies in production and product development. We are
 confident the steps that we have taken have helped create a successful 2008
 model line-up and will allow us to quickly respond to future market
 upturns," added Toolson.
     Gross profit margin for the Company decreased in the first quarter 2007
 to 11.2%, compared to 12.6% in the first quarter 2006. The decline in gross
 profit margin was partially the result of the absence of FEMA-related
 business, which benefited the towable segment in the first quarter 2006 by
 increased orders, and benefited the motorized segment through absorption of
 indirect expenses in the Company's Indiana motorized plant, where many of
 the FEMA units were built.
     John Nepute, President of Monaco Coach Corporation, stated, "While
 total revenues for the Company fell short of target, our motorized segment
 did well, improving gross profit margins sequentially from the 8.2% in the
 fourth quarter 2006 to 10.8% in the first quarter 2007. As expected,
 progress was made in labor productivity and absorption of indirect
 expenses. We are also very encouraged by the improvement in quality, which
 resulted in a reduction of warranty expense."
     "While our motorhome retail performance has been better than the
 overall motorhome RV market, we are still striving for one-to-one
 replacements on our dealer partners' lots. We are comfortable with the
 level of dealer inventory and, in part due to the reconfiguration of
 production and consolidation of motorized production lines, our overall
 backlog should continue to steadily diminish our need for promotional
 activity. The consolidation of similarly priced models on production lines
 has also resulted in a smoother transition into the new 2008 model year
 units."
     Nepute concluded, "On the towables side, we saw our retail activity
 decline in the first quarter of 2007. Accordingly, we have adjusted run
 rates in our towable plants. This segment of the business is more scalable
 and additional cost-saving measures will be implemented to improve
 operating results. 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."
     For the first quarter 2007, selling, general and administrative
 expenses were $32.4 million, compared to $34.0 million of sales for the
 first quarter 2006.
     Marty Daley, Chief Financial Officer, stated, "Incrementally, as
 compared to fourth quarter 2006, selling, general and administrative
 expenses in the first quarter 2007 were impacted by an increase in
 settlement costs and stock- based compensation. The total of other selling,
 general and administrative expenses was consistent between fourth quarter
 2006 and first quarter 2007."
     Daley continued, "We've maintained our focus on the Company's balance
 sheet, and will continue to manage our backlog to keep our level of
 finished goods in balance with the market. We are pleased to have ended the
 quarter with a cash balance of $29 million and finished goods inventory
 just over $20 million."
     Motorized Recreational Vehicle Segment
     Motorized sales in the first quarter 2007 decreased 3.7% from $255.0
 million in the first quarter 2006 to $245.5 million. Industry-wide Class A
 motorhome retail registrations, as reported by Statistical Surveys, Inc.,
 were down 12.6% year-to-date through February 2007. The Company reported a
 3.9% increase in market share for the same period.
     Segment gross profit for the first quarter 2007 was $26.5 million, or
 10.8% of sales, compared to $25.0 million, or 9.8% of sales, for the first
 quarter 2006. Selling, general and administrative expenses including
 corporate overhead were $23.2 million, compared to $20.1 million for the
 first quarter a year ago.
     Unit sales of the Motorized RV Segment for the quarter ended March 31,
 2007 totaled 1,460, down 9.6% from 1,615 units for the prior year period.
 Diesel Class A units shipped were 1,112 versus 1,143, gas Class A units
 shipped were 198 versus 357, and Class C units shipped were 150 versus 115.
     Towable Recreational Vehicle Segment
     The Company reported towable sales of $69.5 million for the first
 quarter 2007, compared to sales of $114.4 million for the first quarter
 2006. Deducting FEMA sales in the first quarter of 2006 of $26.8 million,
 towable sales would have decreased 20.7%. Travel trailer and fifth-wheel
 registrations for the overall market, according to Statistical Surveys,
 reported a year-to-date decline of 8.5% through February 2007.
     Gross margin for the first quarter 2007 for the towable segment was
 $4.7 million, or 6.8% of sales, compared to $14.3 million, or 12.5% of
 sales for the first quarter 2006. Selling, general and administrative
 expenses including corporate overhead were $6.4 million, compared to $9.4
 million for the first quarter 2006.
     For the first quarter 2007, towable unit sales were 4,289 units, down
 from 7,217 units for the same period a year ago, which included 2,019 FEMA
 related units.
     Motorhome Resorts Segment
     Resort sales for the first quarter 2007 were $7.2 million, down 54.0%
 from $15.7 million in the first quarter 2006. Continued poor weather in
 both Las Vegas, Nevada, and Indio, California, and extended road closures
 limiting access to the Las Vegas resort led to the reduction of lot sales.
 In the first quarter 2007, the Company sold 25 lots at the Indio resort and
 four lots at the Las Vegas resort. Currently 38 lots are available in Indio
 and 51 lots are available in Las Vegas. Operating income for the segment
 was $2.0 million, down from $4.8 million for the same period last year.
     The Company has purchased additional land in the Palm Springs,
 California, area and very recently closed on a site in Naples, Florida.
 Both locations plan to have lots for sale by the beginning of 2008.
     2007 Business Outlook
     "The improvement from the fourth quarter 2006 to the first quarter 2007
 was largely due to adjustments we made to our business model last year,"
 said Daley. "While we have not observed the improvement in the retail
 market we were anticipating, at our current run rates and backlog, we will
 not be modifying our previously stated second quarter earnings
 expectations. However, if the originally anticipated uptick in the retail
 markets fails to materialize in the second half of the year, our 2007
 fiscal year results will likely come in at the low end of our previously
 released guidance."
     Conference Call to be Held
     Monaco Coach Corporation will conduct a conference call in conjunction
 with this news release at 2:00 p.m. Eastern Time, Thursday, April 26, 2007.
 Members of the news media, investors, and the general public are invited to
 access a live broadcast of the conference call via the Investor Relations
 page of the Company's website at www.monaco-online.com. The event will be
 archived and available for replay for the next 90 days.
     About Monaco Coach Corporation
     Dedicated to quality and service, Monaco Coach Corporation is one of
 the nation's leading manufacturers of motorized and towable recreational
 vehicles. Headquartered in Coburg, Oregon, with substantial manufacturing
 facilities in Indiana, Monaco Coach employs approximately 5,300 people. The
 Company offers entry-level priced towable RVs up to custom made luxury
 recreational vehicle models under the Monaco, Holiday Rambler, Safari,
 Beaver, McKenzie, R-Vision and Dodge brand names. Monaco Coach maintains RV
 service centers in Harrisburg, Ore., Elkhart, Ind., and Wildwood, Fla.
     Ranked as the number one manufacturer of diesel-powered motorhomes,
 Monaco Coach is a leader in innovative RVs designed to meet the needs of a
 broad range of customers with varied interests. Monaco Coach Corporation
 trades on the New York Stock Exchange under the symbol "MNC," and the
 Company is included in the S&P Small-Cap 600 stock index. For additional
 information about Monaco Coach Corporation, please visit
 www.monaco-online.com or www.trail-lite.com.
     The statements above regarding the Company's expectation for further
 gains in fiscal 2007 as a result of future market upturns, improved
 manufacturing efficiencies, increases in market share in the towables
 segment, improved prospects for the Motorized RV Segment in fiscal 2007,
 sales of remaining available lots at the Company's existing resorts in the
 first half of fiscal 2007, and in the "2007 Business Outlook" section
 regarding improving retail sales and expectations for revenues, gross
 profit margin and SG&A expenses in fiscal 2007 are forward-looking
 statements subject to various risks and uncertainties that could cause
 actual results to differ materially from these statements, including
 unforeseen declines in the wholesale and retail markets for recreational
 vehicles, consumers' preference for certain models and resort lots, failure
 to realize gains from the motorized manufacturing efficiencies as
 anticipated, a decline in consumer confidence, an increase in interest
 rates affecting retail and wholesale financing, an increase in price or
 availability of fuel, and a downturn in the equity markets. Please refer to
 the Company's SEC reports for additional risks and uncertainties, including
 but not limited to the most recent Form 10-Q, the annual report on Form
 10-K for 2006, and the 2006 Annual Report to Shareholders for additional
 factors. These filings can be accessed over the Internet at
 http://www.sec.gov.
     CONTACT:  Craig Wanichek
               Director of Investor Relations
               Monaco Coach Corporation
               (541) 681-8029
               craig.wanichek@monacocoach.com
 
                               (Tables to follow)
 
 
                              MONACO COACH CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                               (dollars in thousands)
 
                                                   December 30,     March 31,
                                                       2006           2007
                                                                   (unaudited)
     ASSETS
     Current assets:
       Cash                                            $4,984        $29,026
       Trade receivables, net                          81,588         88,399
       Inventories, net                               155,871        153,945
       Resort lot inventory                             7,997          6,783
       Prepaid expenses                                 5,624          5,261
       Income taxes receivable                          6,901              0
       Deferred income taxes                           38,038         39,802
         Total current assets                         301,003        323,216
 
     Property, plant, and equipment, net              153,895        151,570
     Land held for development                         16,300         16,300
     Investment in joint venture                            0          4,394
     Debt issuance costs net of accumulated
      amortization of $912, and $990, respectively        540            655
     Goodwill                                          86,412         86,412
 
         Total assets                                $558,150       $582,547
 
     LIABILITIES
     Current liabilities:
       Book overdraft                                  16,626              0
       Current portion of long-term debt                5,714          5,714
       Line of credit                                   2,036              0
       Income taxes payable                                 0          2,557
       Accounts payable                                72,591        107,936
       Product liability reserve                       15,764         16,509
       Product warranty reserve                        33,804         34,547
       Accrued expenses and other liabilities          44,364         47,383
       Discontinued operations                            298            288
         Total current liabilities                    191,197        214,934
 
     Long-term debt, less current portion              29,071         27,643
     Deferred income taxes                             21,678         21,219
     Other long-term liabilities                          883            833
         Total liabilities                            242,829        264,629
 
     STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value; 1,934,783
      shares authorized, no shares outstanding
     Common stock, $.01 par value; 50,000,000
      shares authorized, 29,769,356 and
      29,936,837 issued and outstanding,
      respectively                                        298            299
 
     Additional paid-in capital                        63,722         66,610
     Retained earnings                                251,301        251,009
         Total stockholders' equity                   315,321        317,918
 
         Total liabilities and
          stockholders' equity                       $558,150       $582,547
 
 
 
                              MONACO COACH CORPORATION
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         (Unaudited: dollars in thousands, except share and per share data)
 
                                                          Quarter Ended
                                                     April 1,      March 31,
                                                       2006           2007
 
     Net sales                                       $385,068       $322,244
     Cost of sales                                    336,619        286,248
       Gross profit                                    48,449         35,996
 
     Selling, general, and administrative expenses     33,979         32,358
       Operating income                                14,470          3,638
 
     Other income, net                                    132            113
     Interest expense                                  (1,252)          (967)
     Loss from investment in joint venture                  0           (278)
       Income before income taxes                      13,350          2,506
 
     Provision for income taxes                         5,057          1,007
 
         Net income                                    $8,293         $1,499
 
     Earnings per common share:
       Basic                                            $0.28          $0.05
       Diluted                                          $0.28          $0.05
 
     Weighted-average common shares outstanding:
       Basic                                       29,636,222     29,829,697
       Diluted                                     29,828,187     30,405,671
 
 
 
                              MONACO COACH CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Unaudited: dollars in thousands)
 
                                                           Quarter Ended
                                                      April 1,      March 31,
                                                        2006           2007
 
     Increase (Decrease) in Cash:
 
     Cash flows from operating activities:
       Net income                                      $8,293         $1,499
       Adjustments to reconcile net income to net
        cash provided by (used in) operating
        activities:
         Gain on sale of assets                           (16)          (113)
         Depreciation and amortization                  3,374          3,537
         Deferred income taxes                         (4,320)        (2,223)
         Stock based compensation expense                 331          1,826
         Changes in working capital accounts:
           Trade receivables, net                     (24,115)        (6,811)
           Inventories                                    914         (2,134)
           Resort lot inventory                         2,554          1,214
           Prepaid expenses                               400            361
           Accounts payable                            22,741         35,345
           Product liability reserve                     (635)           745
           Product warranty reserve                       963            743
           Income taxes payable                         7,951          9,458
           Accrued expenses and other liabilities       9,972          3,019
           Deferred revenue                                 0            (50)
           Discontinued operations                        720            (10)
             Net cash provided by operating
              activities                               29,127         46,406
 
     Cash flows from investing activities:
       Additions to property, plant, and equipment     (3,746)        (1,770)
       Investment in joint venture                          0            (88)
       Proceeds from sale of assets                        17            505
             Net cash used in investing activities     (3,729)        (1,353)
 
     Cash flows from financing activities:
       Book overdraft                                 (14,529)       (16,626)
       Payments on lines of credit, net                (2,500)        (2,036)
       Payments on long-term notes payable                  0         (1,428)
       Debt issuance costs                                  0           (193)
       Dividends paid                                  (1,780)        (1,791)
       Issuance of common stock                         1,137            927
       Tax benefit of stock options exercised               0            136
       Discontinued operations                             75              0
             Net cash used in financing activities    (17,597)       (21,011)
 
     Net change in cash                                 7,801         24,042
     Cash at beginning of period                          586          4,984
 
     Cash at end of period                             $8,387        $29,026
 
 
 
                              MONACO COACH CORPORATION
                                 SEGMENT REPORTING
                         (Unaudited: dollars in thousands)
 
     Results of Consolidated Operations
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $385,068   100.00%     $322,244      100.00%
     Cost of sales              336,619    87.42%      286,248       88.83%
       Gross profit              48,449    12.58%       35,996       11.17%
 
     Selling, general and
      administrative expenses    33,979     8.82%       32,358       10.04%
       Operating income          14,470     3.76%        3,638        1.13%
 
     Other income and interest
      expense                     1,120     0.29%        1,132        0.35%
       Income before income
        taxes                    13,350     3.47%        2,506        0.78%
 
     Income taxes                 5,057     1.31%        1,007        0.31%
 
       Net income                $8,293     2.15%       $1,499        0.47%
 
 
     Motorized Recreational Vehicle Segment
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $254,954   100.00%     $245,548      100.00%
     Cost of sales              230,001    90.21%      219,061       89.21%
       Gross profit              24,953     9.79%       26,487       10.79%
 
     Selling, general and
      administrative expenses
      and corporate overhead     20,133     7.90%       23,155        9.43%
 
       Operating income          $4,820     1.89%       $3,332        1.36%
 
 
     Towable Recreational Vehicle Segment
 
                            Quarter Ended  % of     Quarter Ended    % of
                            April 1, 2006  Sales    March 31, 2007   Sales
 
     Net sales                 $114,413   100.00%      $69,480      100.00%
     Cost of sales              100,133    87.52%       64,753       93.20%
       Gross profit              14,280    12.48%        4,727        6.80%
 
     Selling, general and
      administrative expenses
      and corporate overhead      9,408     8.22%        6,372        9.17%
 
       Operating income (loss)   $4,872     4.26%     $(1,645)       -2.37%
 
 
     Motorhome Resorts Segment
 
                            Quarter Ended  % of    Quarter Ended     % of
                            April 1, 2006  Sales   March 31, 2007    Sales
 
     Net sales                  $15,701   100.00%       $7,216      100.00%
     Cost of sales                6,485    41.30%        2,434       33.73%
       Gross profit               9,216    58.70%        4,782       66.27%
 
     Selling, general and
      administrative expenses
      and corporate overhead      4,438    28.27%        2,831       39.23%
 
       Operating income          $4,778    30.43%       $1,951       27.04%
 
 SOURCE Monaco Coach Corporation