National R.V. Holdings, Inc. Announces First Quarter Results and Financing

PERRIS, Calif., May 15, 2007 -- National R.V. Holdings, Inc. (the "Company") today announced the financial results for its first quarter ended March 31, 2007.

Net sales from continuing operations declined to $21.9 million in the first quarter of 2007, down 59.9% from $54.6 million in the first quarter of 2006. The Company reported a loss from continuing operations of $8.8 million for the first quarter of 2007, compared to $2.5 million in the first quarter of 2006. These figures correspond to a loss from continuing operations of $0.85 per diluted share for the first quarter of 2007 compared to a loss from continuing operations of $0.24 per diluted share for the first quarter of 2006. The Company reported a net loss of $4.0 million for the first quarter of 2007, compared to $2.1 million in the prior year's first quarter, after reflecting a $7.3 million gain on the sale of Country Coach, Inc. and a $2.4 million loss reported by the discontinued operation. The net loss per share was $0.38 per diluted share for the first quarter of 2007 as compared to a net loss of $0.20 per diluted share for the first quarter last year.

The Company also announced that in order to refinance its balance sheet and put its assets to better use, it is moving forward on the execution of the sale and leaseback transaction with First Industrial Acquisitions, Inc. ("First Industrial). Under the terms of the agreement, the sales price is $31.75 million, and the Company will be entering into a 10-year, triple-net lease with approximately $2.7 million in annual lease payments, which increase 3% per year. The lease will include two 5-year renewal options. The transaction is scheduled to close later this month.

"The Crane Composites fiberglass problem discovered one year ago, led to a precipitous downward spiral in sales, which in turn caused a severe strain on our liquidity and created significant uncertainty amongst our customers," stated Brad Albrechtsen, the Company's chief executive officer. "These first quarter results hopefully reflect the bottom of that spiral and we believe that we are finally headed back up. We have significantly reduced overhead going forward, are once again well capitalized, are partnering with new dealers, and are introducing new and innovative products."

In elaborating on the restructuring and refinancing, Albrechtsen further stated, "On an annualized basis, when we complete our restructuring later this quarter, we expect to have reduced our costs by $13 to $15 million dollars compared to 2006. These cost reductions include substantial reductions in accounting and SOX compliance-related costs, a nearly 45% reduction in non-direct personnel, and the replacement of nearly $3 million of interest expense with interest income and purchase discounts, offset partially by lease payments. Combined with these substantial reductions in costs," continued Albrechtsen, "we have launched a commercial public relations campaign that combines a strategically directed media blitz highlighting our products and management team, with an ambitious effort on the part of senior management to get out and visit all of our dealer partners. All of these efforts are beginning to bear fruit as we are seeing demand for our products once again improve."

Wholesale unit shipments from continuing operations of diesel motorhomes for the quarter ended March 31, 2007 were 50, down 71% from 172 units shipped during the same period last year. Shipments of gas motorhomes for the first quarter of 2007 were 165, down 55% compared to the 368 gas units sold during the same period last year. Total unit shipments from continuing operations for the first quarter of 2007 were 215, a decrease of 60% over the first quarter of 2006, while the average selling price increased 1% to $102,000, compared to $101,000 in the first quarter of 2006.

The Company reported a gross loss from continuing operations for the quarter ended March 31, 2007 of 21.8% compared to a gross profit of 3.2% for the same period last year. The lower gross margins in the first quarter of 2007 were due to significantly lower sales volumes and the associated lower production rates leading to lower fixed-cost absorption, higher sales incentives and higher warranty costs.

Operating expenses from continuing operations for the first quarter of 2007 declined 6.4% to $3.7 million, or 16.7% of net sales, compared to $3.9 million, or 7.2% of net sales, for the first quarter of 2006. Reductions in personnel, marketing expenses and lower share-based compensation costs during the first quarter of 2007, were somewhat offset by increases in costs associated with the strategic process the Company was involved in during the quarter, along with increased litigation and loan costs.

About National R.V. Holdings, Inc.

National R.V. Holdings, Inc., through its wholly-owned subsidiary, National RV, Inc., is one of the nation's leading producers of motorized recreational vehicles, often referred to as RVs or motorhomes. From its Perris, California facility, NRV designs, manufactures and markets Class A gas and diesel motorhomes under model names Surf Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds. NRV began manufacturing RVs in 1964. Based upon retail registrations for the year ended December 31, 2006, the Company, through its NRV subsidiary, is the seventh largest domestic manufacturer of Class A motorhomes.