Monaco Coach Corporation Announces Preliminary Second Quarter Results

COBURG, Ore., July 21 -- Monaco Coach Corporation today announced preliminary results for the quarter ended July 2, 2005. The company estimates that second quarter revenues will be approximately $306 million. Earnings per share will be approximately 3 cents. Earnings include a one-time expense of approximately 5 cents per share as a result of relocating the Beaver Manufacturing facility. This compares to revenues of $358 million and earnings of 40 cents per share for the second quarter 2004.

Kay Toolson, Chairman and C.E.O. stated, "Our business faced many challenging conditions during the second quarter. Orders from dealers for recreational vehicles were tempered due to concerns about retail sales. There was significant discounting by manufactures, and lower run rates reduced plant efficiencies. Despite the overall difficult market conditions, our dealer meeting at the end of June was very upbeat. Our 2006 models and our Franchise for the Future initiative were both very well received."

In reaction to the softer than expected retail environment and to ensure the sale of 2005 model year products prior to the model year change over, a combination of discounts, retail incentives and other promotional activity was necessary.

The 2006 products were introduced at the dealer meeting at the end of June. The release of these products late in the quarter did not materially impact revenues. The Company has reported no discounting of 2006 products.

Monaco Coach Corporation has remained focused on establishing and maintaining production levels below the amount of retail sales. "Dealer inventory levels of our products have been reduced and are currently at an acceptable level," said John Nepute, President. "Our production run rate coupled with lower dealer inventory levels is consistent with our forecasts for the retail markets. This balance should reduce the need for wholesale discounting and additional sales promotional activities going forward."

Marty Daley, Chief Financial Officer said, "Start-up costs associated with Franchise for the Future, implementation costs related to information system upgrades and increased sales and dealer promotions led to higher SG&A costs in the second quarter as compared to the first quarter of this year."

Headquartered in Coburg, Oregon, with additional manufacturing facilities in Indiana, Monaco Coach Corporation employs more than 5,500 people and is one of the nation's leading manufacturers of recreational vehicles. The Company offers entry-level priced towable RVs up to custom made luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver and McKenzie brand names. For additional information about Monaco Coach Corporation please visit www.monaco-online.com.