Recreation USA Reports Third-Quarter Results
Recreation USA Reports Third-Quarter Results
RV Dealership Chain Narrows Loss Despite Tough Market Conditions
FT. LAUDERDALE, Fla., Sept. 14 Holiday RV Superstores,
Inc. today announced its financial results for the third
quarter of fiscal 2001.
The Ft. Lauderdale, Fla. recreational vehicle and marine retailer, which
is doing business under the tradename Recreation USA, narrowed its net loss
nearly 9 percent to $427,000, or $0.05 per share, on sales of $36.4 million
for the quarter ended July 31, 2001, compared with a net loss of $469,000, or
$0.06 per share, on sales of $38.6 million for the same period in fiscal 2000.
Although the Company experienced lower revenues due to a change in its
sales mix and softer industry conditions, Recreation USA was able to improve
its bottom line by lowering overhead expenses, reducing inventory and
streamlining its operations. Specifically, Recreation USA reduced its
selling, general and administrative (SG&A) expense 23 percent on a same-store
compared with the same period in fiscal 2000, even though SG&A expense
increased slightly during the just-completed quarter. The Company also
reduced its vehicle and marine inventory by 40 percent from the beginning of
fiscal 2001 to the end of the third quarter, where it stands at $34.6 million.
"Everyone in our industry is feeling the pinch of these challenging
economic conditions," said Marcus Lemonis, president and chief executive
officer of Recreation USA. "Even though our revenues are down, we did a
better job in containing costs during the third quarter, and our results
reflect these improvements in our operating performance. We have worked to
shift the sales emphasis from new to used vehicles, improve our finance and
insurance operations, lower our inventories and streamline our operations."
Recreation USA reported that it is continuing to lower inventory levels
and stock more lower-priced, new and used recreation vehicles that better fit
the budgets of cost-conscious consumers. This product shift helped the
Company maintain its gross profit margin as a percentage of sale compared to
the year-ago quarter.
Despite recent increases in floor plan interest rates, floor plan expenses
dropped approximately $1.5 million to $1 million quarter over quarter,
reflecting both lower inventory levels and improved turnover. The loss
reported also reflected other income of $398,000 from the recovery in excess
of carrying value for assets destroyed in the Clermont, Fla. fire. Recreation
USA is currently rebuilding the dealership, which is scheduled to open in the
first quarter of fiscal 2002.
Recreation USA said its board and senior management continue to explore
ways to improve profitability at its 16 dealership locations. The Company,
which is also exploring the possibility of establishing new stores in
lucrative markets, has sharpened its focus on cost-management.
"Our commitment to reducing costs in this difficult economy will aid our
return to profitability," Lemonis said. "Recreation USA's value-added
options, such as superior service and warranty programs, set us apart from our
competition. We plan to implement these best practices throughout all our
dealerships and continue to concentrate on inventory management in order to
run a leaner, more efficient operation.
"In the long run, demographics continue to be in our favor: Aging baby
boomers represent a prime market for the RV industry, and forecasts predict
that this age group will invest heavily in leisure products and activities.
By fiscal 2002, we expect the RV market to reflect this upturn; meanwhile,
Recreation USA will continue to step-up operating efficiency and customer
service."
About Recreation USA:
The nation's leading RV dealer chain, Recreation USA operates 16
dealerships in California, Florida, Kentucky, New Mexico, South Carolina,
Virginia and West Virginia. As the nation's only publicly traded national
retailer, Recreation USA sells, services and finances more than 90 RV and 13
boat brands.
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 OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
07/31/2001 07/31/2000 07/31/2001 07/31/2000
Sales and service
revenue $36,397,399 $38,565,943 $111,271,643 $122,454,344
Cost of sales and
service 29,712,651 31,509,100 92,036,250 101,777,358
Gross profit 6,684,748 7,056,843 19,235,393 20,676,986
Selling, general
and administrative
expenses 6,539,580 6,348,376 19,942,129 18,044,471
Income (loss)
from
operations 145,168 708,467 (706,736) 2,632,515
Other income
(expense):
Casualty Gain,
Clermont,
Florida fire 398,379 - 358,562 -
Interest Income - 47,318 - 183,186
Interest expense (968,167) (1,477,019) (3,598,090) (3,519,656)
Note conversion
expense - - (1,377,581) -
Total other income
(expense) (569,788) (1,429,701) (4,617,109) (3,336,470)
Loss before income
taxes (benefit) (424,620) (721,234) (5,323,845) (703,955)
Income taxes
(benefit) 2,740 (252,200) (378,096) (195,000)
Net loss $(427,360) $(469,034) $(4,945,749) $(508,955)
Loss per common
share $(0.05) $(0.06) $(0.59) $(0.07)
Basic and
Diluted
Weighted average
number of shares -
Basic 8,852,000 7,339,300 8,313,832 7,274,000
Diluted 8,852,000 7,339,300 8,313,832 7,274,000
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