Monaco Coach Corporation Reports Fourth Quarter and Fiscal Year 2002 Results
COBURG, Ore., Jan. 28, 2003; Monaco Coach Corporation today reported revenue and earnings for its fourth quarter and fiscal year ended December 28, 2002. Fourth quarter revenue increased approximately 15% to $300.7 million, versus $261.6 million for the same period a year ago. Operating income for the fourth quarter increased approximately 58% to $20.6 million, versus $13.0 million for the same period a year ago. Net income for the fourth quarter increased approximately 59% to $12.1 million, versus $7.6 million for the same period a year ago. Fourth quarter earnings per share increased approximately 58% to 41 cents, versus 26 cents for the same period a year ago.For the fiscal year ended December 28, 2002, earnings per share were $1.51 on revenue of $1.22 billion, versus 85 cents on revenue of $937.1 million for the same period a year ago. Operating income for the fiscal year ended December 28, 2002 was $75.9 million, versus $42.7 million for the same period a year ago. Net income for the fiscal year ended December 28, 2002 was $44.5 million, versus $24.9 million for the same period a year ago.
"We remain bullish on our industry outlook, despite persistent economic challenges," stated Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson. "While many market segments remain very competitive, we're focused intently on product development and market share in the gasoline and diesel-powered motorhome and towable market segments. Our towable production expansion project remains on track, and we should have additional towable production capacity available by mid-year."
Fourth quarter 2002 unit sales of Monaco Coach Corporation products increased by 10% to 2,677 units, up from 2,429 for the same period a year ago. Fourth quarter motorhome sales totaled 1,946 units and fourth quarter towable recreational vehicles totaled 731 units. Unit sales of Monaco Coach Corporation products for the fiscal year ended December 28, 2002 totaled 11,211 units, up from 9,491 for the same period a year ago. Fiscal-year motorhome sales totaled 8,005 units and fiscal-year towable recreational vehicles totaled 3,206 units. Year-end order backlog was approximately $230 million, compared to approximately $270 million at the close of the third quarter of 2002 and up from approximately $208 million a year ago.
According to Monaco Coach Corporation President John Nepute, "The retail market rebounded nicely in 2002. Barring prolonged military action or significant economic event, we anticipate similar industry growth in 2003. We worked diligently in 2002 to add distribution, particularly for our Safari and Beaver brands. We also introduced several new motorhomes in 2002, allowing us to grow shelf space on dealer lots."
Nepute continued, "Given the competitive conditions that exist, we are going to be more aggressive with retail sales promotions designed to increase market share and ensure that our models are turning on dealer lots. By carefully balancing production levels with demand, we believe we can grow our 2003 revenue by 8%-12%. Presently, we believe our first quarter 2003 revenue will increase at a more modest rate than our expectations for the full year."
Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley added, "We're pleased that our gross margin rose consistent with our expectations to 13.74% in the fourth quarter and that our sales, general and administrative expenses fell to 6.9% of sales during the fourth quarter. We presently anticipate gross margin and sales, general and administrative expenses in 2003 to average 13.75% and 7.4% respectively, reflecting our efforts to provide valuable retail promotions to our dealers and regain market share."
Daley added, "We're in line with our expectations regarding our investment with Outdoor Resorts of America (ORA) to develop two luxury recreational vehicle resorts. We expect to close the sale of undeveloped property in Naples, Florida, in the second quarter of this year. The net proceeds from the sale of the Florida property will reduce our debt associated with the ORA project by approximately $6.5 million. In Las Vegas, Nevada, we have sold 33 of 202 phase one developed lots, with 12 additional lots in escrow. At the Indio, California, location, we've received approval to begin closing on 21 of 136 phase one developed lots in escrow. Management at both locations report excellent interest from prospective lot buyers."
Headquartered in Coburg, Oregon, with additional manufacturing facilities in Indiana, Monaco Coach Corporation is one of the nation's leading manufacturers of recreational vehicles. The company offers customers luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and Royale Coach brand names.
MONACO COACH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited: dollars in thousands) December 29, December 28, 2001 2002 ASSETS Current assets: Trade receivables, net $82,885 $116,647 Inventories 127,075 175,609 Resort lot inventory -- 26,883 Prepaid expenses 2,063 3,612 Deferred income taxes 27,327 33,379 Total current assets 239,350 356,130 Notes receivable 8,157 -- Property, plant and equipment, net 122,795 135,350 Debt issuance costs, net 940 683 Goodwill, net of accumulated amortization of $5,320 and $5,320, respectively 55,856 55,254 Total assets $427,098 $547,417 LIABILITIES Current liabilities: Book overdraft $5,889 $3,518 Line of credit 26,004 51,413 Current portion of long-term note payable 10,000 21,667 Accounts payable 66,859 78,055 Product liability reserve 19,856 21,322 Product warranty reserve 27,799 31,745 Income taxes payable 0 4,536 Accrued expenses and other liabilities 19,249 29,633 Total current liabilities 175,656 241,889 Long-term note payable 30,000 30,333 Deferred income taxes 8,312 14,568 213,968 286,790 STOCKHOLDERS' EQUITY Common stock, $.01 par value; 50,000,000 shares authorized, 28,632,774 and 28,871,144 issued and outstanding respectively 286 289 Additional paid-in capital 48,522 51,501 Retained earnings 164,322 208,837 Total stockholders' equity 213,130 260,627 Total liabilities and stockholders' equity $427,098 $547,417 MONACO COACH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited: dollars in thousands, except share and per share data) Quarter Ended Year Ended December 29, December 28, December 29, December 28, 2001 2002 2001* 2002 Net sales $261,590 $300,667 $937,073 $1,222,689 Cost of sales 229,440 259,329 823,083 1,059,560 Gross profit 32,150 41,338 113,990 163,129 Selling, general and administrative expenses 19,010 20,748 70,687 87,202 Amortization of goodwill 161 -- 645 -- Operating income 12,979 20,590 42,658 75,927 Other income, net 15 58 334 105 Interest expense (719) (752) (2,357) (2,752) Income before income taxes 12,275 19,896 40,635 73,280 Provision for income taxes 4,656 7,812 15,716 28,765 Net income $7,619 $12,084 $24,919 $44,515 Earnings per common share: Basic $ .27 $ .42 $ .87 $ 1.55 Diluted $ .26 $ .41 $ .85 $ 1.51 Weighted average common shares outstanding: Basic 28,605,844 28,869,584 28,531,593 28,812,473 Diluted 29,430,962 29,480,563 29,288,688 29,573,420 * Includes results from Safari and Beaver divisions acquired on August 6, 2001 MONACO COACH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited: dollars in thousands) Year Ended Dec 29, Dec 28, 2001 2002 Increase (Decrease) in Cash: Cash flows from operating activities: Net income $24,919 $44,515 Adjustments to reconcile net income to net cash provided (used) by operating activities: Gain on sale of assets (74) 178 Depreciation and amortization 7,543 8,585 Deferred income taxes 6,005 (1,574) Changes in working capital accounts: Trade receivables, net (13,154) (33,932) Inventories 12,682 (48,534) Resort lot inventory -- (98) Prepaid expenses (903) (1,650) Accounts payable (10,318) 10,301 Product liability reserve (1,639) 1,237 Product warranty reserve (1,958) 3,835 Income taxes payable 0 9,597 Accrued expenses and other liabilities (2,123) 8,888 Net cash provided by operating activities 20,980 1,348 Cash flows from investing activities: Additions to property, plant and equipment (10,210) (18,735) Proceeds from sale of assets 106 387 Payment for business acquisition (24,320) (21,085) Issuance of notes receivable (5,357) (385) Collections from notes receivable -- 500 Net cash used in investing activities (39,781) (39,318) Cash flows from financing activities: Book overdraft (10,840) (2,371) Payments) borrowings on lines of credit, net (10,930) 25,414 Borrowings on long-term note payable 40,000 22,000 Payment on long-term note payable -- (10,000) Debt issuance costs (1,015) (55) Issuance of common stock 1,586 2,982 Net cash provided by financing activities 18,801 37,970 Net change in cash 0 0 Cash at beginning of period 0 0 Cash at end of period $0 $0