Holiday RV/Recreation USA Returns to Profitability
15 June 2000
Acquisitions, Double-Digit Same-Store Growth Drive Sales, Posts 90% Increase in Sales in Second Quarter
ORLANDO, Fla. - Holiday RV Superstores, Inc., operator of Recreation USA,
today reported modest profitability on a 90 percent increase in net sales for
its second quarter ended April 30, 2000, reflecting the Company's continued
investments in acquisitions and building a national RV dealer brand.
Recreation USA, the nation's largest publicly traded retailer of
recreational vehicles and boats, posted net revenue of $49.9 million in the
fiscal 2000 second quarter, compared with net revenue of $26.3 million in the
prior year period. The Company said new store acquisitions, coupled with a
14 percent increase in same store sales, contributed to the dramatic sales
increase.
"We remain on track with our accelerated growth plan as illustrated by
gains in same-stores sales and the completion of another acquisition, Little
Valley, during the quarter," said Ronald G. Huneycutt, Recreation USA
president and chief executive officer. "We remain optimistic about the
remainder of fiscal 2000, despite interest rate hikes and gas prices. We have
no intention of slowing our pace in our quest to assume the leadership role in
the RV dealership market."
Recreation USA returned to profitability in the second quarter, reversing
a net loss in the 2000 first quarter. Compared with the prior year, the
Company said net income narrowed to $153,091, or $0.02 per basic and diluted
share, in the 2000 second quarter, versus net income of $842,555, or $0.12 per
basic and diluted share, in the same period in 1999. The anticipated decrease
reflects higher operating expenses from the Company's recent acquisitions, as
well as added investments in information technology, marketing and management
resources in preparation for further national expansion. The Company acquired
Virginia-based Little Valley Auto & RV Sales and the five-store County Line RV
chain in Florida during the first six months of 2000.
Notably, Recreation USA's gross margin remained stable in the quarter at
16.2 percent, reflecting its efforts to quickly integrate acquired stores and
apply its operational and cost efficiencies across a growing number of stores.
"We are building our cost structure to support our growth plans, which in
the short-term is compressing our operating margins," Huneycutt said. "Other
initiatives, such as working to shift our product mix toward higher margins
segments and adjusting our pricing to ensure we are market leaders, are also
pushing down profit margins. However, these up front investments and
operating transitions are necessary to establish Recreation USA as the
national retailer of choice and the dominant player over the long-term."
"We are building the platform for a national presence and national brand
that serves RV customers in all areas of the country and through all channels
of distribution," said Michael Riley, chairman of Recreation USA. "Our launch
in the second quarter of our e-commerce site, http://www.recusa.com , was another
critical step in establishing Recreation USA as the recognized leader."
For the six months ended April 30, 2000, Recreation USA reported net
revenues of $83.9 million, an 89 percent increase over net revenues of $44.4
million in the first six months of fiscal 1999. The increase reflects
primarily the addition of newly acquired stores, as well as modest same-store
increases.
The Company posted a net loss of $39,921 or $0.01 per basic and diluted
share, in the fiscal 2000 six-month period, compared with net income of $1.3
million, or $0.18 per basic and diluted share, in the 1999 six-month period.
The change principally reflects higher interest expense resulting from the
acquisitions made by Recreation USA in fiscal 2000.
"In the coming quarters, we will continue to push for top-line growth
through acquisitions and increased comp-store sales as we aim to build the
mass to see a return on our investments in operations and infrastructure, "
Riley said.
Recreation USA, the nation's only publicly traded chain of RV and boat
dealerships, operates 14 dealership locations in California, Florida, New
Mexico, South Carolina, Virginia and West Virginia. Recreation USA
dealerships sell, service and finance more than 60 RV and 10 boat brands.
HOLIDAY RV SUPERSTORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
04/30/2000 04/30/1999 04/30/2000 04/30/1999
Sales and Services
Revenue $49,849,728 $26,258,070 $83,888,401 $44,441,064
Cost of Sales
And Service 41,764,470 22,009,604 70,268,258 37,122,537
Gross Profit 8,085,258 4,248,466 13,620,143 7,318,527
Selling, General
And Administrative
Expenses 6,670,234 2,761,418 11,696,095 5,190,565
Income from
operations 1,415,024 1,487,048 1,924,048 2,127,962
Interest Income 75,278 136,094 135,868 250,732
Interest Expense 1,204,911 241,887 2,042,637 589,312
Gain on the Sale
of Asset --- --- --- 316,747
Income before
income taxes 285,391 1,381,255 17,279 2,106,129
Income Taxes 132,300 538,700 57,200 821,400
Net (Loss) Income $153,091 $842,555 $(39,921) $1,284,729
Basic and Diluted
Earnings (Loss) Per
Common Share $0.02 $0.12 $(0.01) $0.18
Weighed Average Number
of Shares-Basic 7,267,100 7,166,500 7,240,400 7,180,600
Weighted Average Number
of Shares-Diluted 7,459,000 7,256,800 7,445,000 7,263,700
