Rexhall Industries Announces Profitable First Quarter
LANCASTER, Calif.--May 13, 2002--Rexhall Industries, Inc. today announced higher revenues and income for its first quarter ended March 31, 2002 compared to the first quarter of 2001.Net revenues for the first quarter ended March 31, 2002 increased 14% to $17,407,000 from $15,310,000 for the same quarter in 2001. Gross profit for the quarter was $2,078,000 versus $1,734,000 last year, which is a 20% increase. Net income for the quarter was $181,000, or $0.06 per diluted share, compared with net income of $119,000 or $0.04 per diluted share last year.
"It appears that Rexhall and the Class `A' market are gaining momentum, which might be a good indication that the economy as a whole is on its way to a slow, but steady recovery," stated William J. Rex, Rexhall Industries President, Chairman and Chief Executive Officer. "Industry-wide shipments increased nearly 16% over the previous quarter ended December 31, 2001, while Rexhall's shipments increased 32% versus last quarter. This was our best quarter of shipments in more than a year."
Mr. Rex continued, "Our dealers are seeing growing retail demand and are responding with more orders. It also appears that retail sales are keeping up with the increase in shipments to dealers, so we're not just filling up the dealers' lots."
Rexhall Industries Executive Vice President and Chief Operating Officer Michael Bourne added, "It wasn't until April before some of our major suppliers, especially chassis suppliers, were able to catch up to our increase in demand. This led to a constant juggling of production schedules, which when coupled with some other operating inefficiencies that are inherent with a 33% increase in production, created pressure on our margins. While our gross margins were better than the same quarter last year, they were not where we want them to be. We expect some additional pressure on our margins this quarter due to model year changeover, but we are making some improvements to our production lines and inventory management that should reap benefits in the last half of 2002."
Mr. Rex concluded, "We are continuing to sign on new dealers, but we are being very selective due to current lead times. The improvements we are making to our plant, operating processes and products should allow us to handle the next rate increase more smoothly, which we anticipate will be sometime after new model year launch late in the second quarter. Our order backlog is still greater than two months of production, which leads to longer lead-times than we'd like."
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31, 2002 March 31, 2001
Net Revenues $ 17,407,000 $ 15,310,000
Cost of Sales 15,329,000 13,576,000
Gross Profit 2,078,000 1,734,000
Selling, General, Administrative
and Other Expenses 1,765,000 1,297,000
Income from Continuing Operations
Before Income Taxes 13,000 437,000
Income Tax Expense 126,000 175,000
Income from Continuing Operations 187,000 262,000
Loss from Discontinued Operations
(net of applicable income tax
benefit of nil and $93,000 in
2002 and 2001, respectively) (6,000) (143,000)
Net Income $ 181,000 $ 119,000
Basic and Diluted Income from
Continuing Operations --
Per Share $ .06 $ .09
Basic and Diluted Loss from
Discontinued Operations --
Per Share $ .00 ($ .05)
Basic and Diluted Income --
Per Share $ .06 $ .04
Weighted Average Shares
Outstanding
Basic and Diluted 3,036,000 3,056,000
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, 2002 December 31, 2001
ASSETS
CURRENT ASSETS
Cash $ 5,536,000 $ 8,662,000
Accounts Receivables, net 4,342,000 2,051,000
Income Tax Receivable 660,000 786,000
Inventories 11,651,000 12,546,000
Deferred Income Taxes 964,000 964,000
Other Current Assets 340,000 461,000
Current Assets of Discontinued
Operations 2,417,000 4,689,000
TOTAL CURRENT ASSETS 25,910,000 30,159,000
Property and Equipment at Cost
Net of Accumulated Depreciation 5,791,000 5,760,000
Property Held for Sale -- 122,000
Other Assets 153,000 151,000
Non-Current Assets of
Discontinued Operations 55,000 160,000
TOTAL ASSETS $31,909,000 $36,352,000
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 3,363,000 $ 3,423,000
Line of Credit 194,000 3,053,000
Notes Payable and Current
Portion of Long-Term Debt 35,000 34,000
Warranty Allowance 817,000 699,000
Accrued Legal 721,000 802,000
Dealer Incentives 1,101,000 1,139,000
Other Accrued Liabilities 1,779,000 1,376,000
Accrued Compensation and
Benefits 512,000 367,000
Current Liabilities of
Discontinued Operations 2,262,000 4,509,000
TOTAL CURRENT LIABILITIES 10,784,000 15,402,000
Long-Term Debt, less Current
Portion 662,000 671,000
TOTAL LIABILITIES 11,446,000 16,073,000
STOCKHOLDERS' EQUITY
Preferred Stock -- no par value,
Authorized, 1,000,000 shares;
no shares outstanding at
March 31, 2002 and
December 31, 2001
Common Stock -- no par value,
Authorized, 10,000,000 shares;
issued and outstanding 3,036,000
at March 31, 2002 and
December 31, 2001 6,139,000 6,139,000
Loan Receivable from Exercise
of Options (43,000) (46,000)
Retained Earnings 14,367,000 14,186,000
TOTAL STOCKHOLDERS' EQUITY 20,463,000 20,279,000
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $31,909,000 $36,352,000
Rexhall Industries, Inc. (www.rexhall.com) designs, manufactures and sells various models of Class A motorhomes used for leisure travel and outdoor activities. Rexhall's five lines of Class A motorhomes, sold through more than 100 dealer locations across the U.S., Canada and Europe, include RoseAir, RexAir, Aerbus, Vision and American Clipper.
FORWARD-LOOKING STATEMENTS: Our statements of our intentions or expectations, trends, and references to backlogs are "forward-looking statements" based on assumptions and on facts known to us today. Those assumptions will become less valid over time, but we do not intend to update this report. Rexhall's business is both seasonal and cyclical. Most of Rexhall's competitors are substantially larger, and many of its suppliers and dealers also have greater economic power, so that the volume and prices of both supplies and sales may be adversely affected by competitive pressures. The economy today appears to be recovering, but the recovery continues to be fragile and may not continue. Management intends to remain aware of these factors and react to them, but cannot predict their timing or significance.
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