Recreation USA Announced Results for Fiscal
2000
Dealership Posts Higher Revenues, Institutes Cost-Containment Measures
To Improve Bottom Line
FT. LAUDERDALE, Fla., Jan. 30 Holiday RV Superstores, Inc.
today announced the results of fiscal 2000, highlighted by
double-digit revenue growth, including higher same-store sales during a period
when sales decreased industry-wide.
The Ft. Lauderdale, Fla. recreational vehicle and marine retailer, which
operates under the tradename Recreation USA, reported an 87 percent increase
in net revenues to $152.4 million for the year ended October 31, 2000.
Recreation USA doubled in size during fiscal 1999, acquiring seven dealerships
to expand their national footprint to 14 locations in seven states.
Improvements in same-store sales, combined with revenue from dealerships
acquired during the year, drove the top-line growth.
By comparison, the RV industry saw a decline of 5.3 percent for the first
11 months of 2000. On a pro forma basis, integrating all of Recreation USA's
acquisitions, net revenue was comparable to fiscal 1999.
Recreation USA posted a net loss of $3.2 million, or $0.42 per share, for
fiscal 2000, compared with net income of $2.2 million, or $0.30 per share, for
fiscal 1999. The Company said that higher interest expense on its expanded
inventory, along with high operating expenses related to its acquisition
strategy, contributed to the net loss.
Interest expense during fiscal 2000 increased by nearly 350 percent, in
large part due to higher interest rates combined with the increased levels of
inventory from acquisitions.
"While we are pleased that our sales performance is substantially better
than that of our peers, we are disappointed that this did not translate to a
positive bottom line," said Michael Riley, chairman of Recreation USA. "Our
entire industry has been struggling with higher financing costs associated
with floor planning, higher interest rates for consumers and rising gas
prices. These factors, in combination with a skittish stock market, softened
consumer confidence in 2000.
"The sales success we achieved during the recent Tampa Super Show bodes
well for the season ahead. We look forward to building the Recreation USA
brand during 2001."
The Company reported higher selling, general and administrative (SG&A)
expenses for the just-completed year. Recreation USA attributed the increase
to mergers and acquisition costs and to higher corporate expenses related to
its continued consolidation of the RV dealership industry.
To better manage its costs, the Company has instituted a cost-containment
plan to eliminate $2.5 million in expenses from its 2001 budget. Recreation
USA plans to eliminate duplicate corporate positions, reduce overtime and
contract labor at individual dealerships and tighten travel budgets. The
Company is also taking steps to better manage its inventories, including
consolidating the number of vendors it deals with and working with lenders to
secure better floor plan financing packages.
"We remain confident in the long-term health of our industry, and in the
viability of the Recreation USA business model," Riley said. "We feel these
measures will allow us to better manage our continued growth."
Recreation USA reported that its gross margin decreased from 17.2 percent
in fiscal 1999 to 16.4 percent in fiscal 2000. The Company attributed this
decrease to lower demand, as well as to a lower percentage of revenues from
service and parts, which offer higher margins.
"We recognize the as-yet untapped potential in building the service
portion of our operations," said Ronald G. Huneycutt, president and CEO. "RV
owners routinely complain that they cannot find reliable service options.
This unmet -- and growing need -- provides us with tremendous opportunities.
"We have begun to introduce key initiatives related to the launch of our
branded, coast-to-coast service product, which we will debut in 2001.
Recreation USA plans to invest in new equipment and personnel in order to
capture a more significant share of this highly lucrative market."
Recreation USA plans to file its form 10-K with the Securities and
Exchange Commission on or before Tuesday, Feb. 13. The Company requested an
extension on Monday, Jan. 29, due to the number of acquisitions it made during
fiscal 2000 and the difficulty of obtaining financial information from those
acquisitions in a timely manner. It also requested the extension in order to
ensure that its new floor plan financing arrangements would be finalized prior
to filing its form 10-K.
"Floor plan financing is an important part of our operations and necessary
to provide the liquidity and cash flows needed to operate," Huneycutt said.
"It is obvious that Recreation USA cannot complete its growth strategy without
adequate floor plan lines in place. We are in the midst of negotiations to
finalize these financing plans, and anticipate these discussions will be
completed by February 13."
About Recreation USA
With the additions of Emerald Coast and Village RV, Recreation USA will
operate 19 dealerships in Alabama, California, Florida, Kentucky, New Mexico,
South Carolina, Virginia and West Virginia. Recreation USA, the nation's only
publicly traded national retailer, sells, services and finances more than
90 RV and 13 boat brands. The Company also markets its offerings through its
Internet site at http://www.RecUSA.com .
The statements contained in this news release include certain predictions
and projections that may be considered forward-looking statements under
security laws. These statements involve a number of risks and uncertainties
that could cause results to differ materially including, but not limited to,
the performance of the recreational vehicle or boat industries, certain
customers or affiliated companies, as well as other economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices.
Holiday RV Superstores, Incorporated and Subsidiaries
Consolidated Condensed Statements of Income
FISCAL YEAR ENDED
10/31/00 10/31/99
Total Revenue $152,367,346 $81,396,290
Cost of Sales 127,374,405 67,369,410
Gross Profit 24,992,941 14,026,880
Selling, General and Administrative
Expenses 25,031,909 10,291,795
Operating (Loss)/ Income (38,968) 3,735,085
Interest Income 117,788 554,557
Interest Expense (5,094,560) (1,133,687)
Gain on Sale of Assets 35,845 318,820
(Loss)/Income Before Income Taxes (4,979,895) 3,474,775
Income Taxes (Benefit)/Expense (1,775,120) 1,321,000
Net (Loss)/Income $(3,204,775) $2,153,775
(Loss)/Earnings Per Share - Basic $(0.42) $0.30
(Loss)/Earnings Per Share - Diluted $(0.42) $0.30
Basic Shares Outstanding 7,592,397 7,184,200
Diluted Shares Outstanding 7,592,397 7,304,700
