Rexhall Industries Announces Third Quarter Results
LANCASTER, Calif.--Nov. 14, 2002--Rexhall Industries, Inc. today reported revenue and earnings for its third quarter ended September 30, 2002. Net revenues for the third quarter increased 2% to $12,872,000 from $12,673,000 for the same period in 2001. Gross profit for the third quarter was $1,042,000 versus $1,256,000 last year, which is a 17% decrease. Net loss from continuing operations for the quarter was $907,000, or $0.15 per diluted share, compared to a net loss from continuing operations of $497,000 or $0.08 per diluted share for the third quarter last year.Net revenues for the nine months ended September 30, 2002 increased 11% to $49,243,000 from $44,425,000 for the same period in 2001. Gross profit for the nine months was $4,719,000 versus $4,838,000 last year, which is a 2% decrease. Net loss from continuing operations for the period was $896,000, or $0.15 per diluted share, compared to a net loss from continuing operations of $22,000 or $0.00 per diluted share for the same nine months last year.
The Company noted that the audit and legal fees resulting from the extensive review of the Company's accounting records have amounted to approximately $750,000 before tax effects. Without these unusual costs, the net loss from continuing operations for the third quarter would have been approximately $457,000, or $0.08 per diluted share, compared to a net loss from continuing operations of $497,000 or $0.08 per diluted share for the third quarter last year. Also, net loss from continuing operations for the nine months ended September 30, 2002 would have been approximately $446,000, or $0.07 per diluted share, compared to a net loss from continuing operations of $22,000 or $0.00 per diluted share for the same nine months last year.
William J. Rex, President, Chairman and CEO, stated, "Management's focus was on the review of the Company's accounting records and working diligently to keep the Company's stock from being delisted from the NASDAQ. If there is any good news from this $750,000, it is that our shareholders should have more confidence in our financials after this scrutiny."
According to Executive Vice President, COO, and acting CFO Michael Bourne, "The day-to-day business did suffer while we were focused on the reviews and not getting delisted. This resulted in production challenges not being resolved timely, which caused approximately two weeks' worth of production to not get completed and shipped by quarter end. While we are still addressing some of the challenges that developed during the quarter, it is encouraging to be able to return our focus to `regular' business issues."
Mr. Bourne continued, "We were able to generate over $1.8 million in cash during the quarter, despite having about double the chassis inventory. This could be a blessing though, since we shouldn't have the challenge of inadequate chassis supply like we had at the beginning of this year. The lead-times of chassis suppliers typically increase dramatically after the industry's annual tradeshow in Louisville each year."
Mr. Rex concluded, "We plan to debut four new models at the Louisville show late in the fourth quarter. These new models include two triple-slide gas motor homes, a 34' entry-level diesel, and a 40' quadruple-slide diesel. We also plan to refocus on the gas-powered side of the market, as well as ensure our diesel offerings remain value leaders."
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30, September 30,
2002 2001
------------ ------------
Net Revenues $12,872,000 $12,673,000
Cost of Sales 11,830,000 11,417,000
------------ ------------
Gross Profit 1,042,000 1,256,000
Operating Expenses:
Selling, General, Administrative Expenses
and Other Expenses 2,559,000 2,084,000
------------ ------------
Loss from Continuing Operations
before Income Taxes (1,517,000) (828,000)
Income Tax Benefit (610,000) (331,000)
------------ ------------
Loss from Continuing Operations (907,000) (497,000)
Loss from Discontinued Operations
(net of applicable income tax benefit
of $103,000 in 2001) -- (158,000)
------------ ------------
Net Loss ($907,000) ($655,000)
============ ============
Basic and Diluted Income
from Continuing Operations - Per Share ($0.15) ($0.08)
Basic and Diluted Loss
from Discontinued Operations - Per Share -- ($0.03)
------------ ------------
Basic and Diluted Income - Per Share ($0.15) ($0.11)
============ ============
Weighted Average Shares Outstanding
Basic and Diluted 6,060,000 6,095,000
============ ============
Nine Months Ended
September 30, September 30,
2002 2001
------------ ------------
Net Revenues $49,243,000 $44,425,000
Cost of Sales 44,524,000 39,587,000
------------ ------------
Gross Profit 4,719,000 4,838,000
Operating Expenses:
Selling, General, Administrative Expenses
and Other Expenses 6,213,000 4,874,000
------------ ------------
Loss from Continuing Operations
before Income Taxes (1,494,000) (36,000)
Income Tax Benefit (598,000) (14,000)
------------ ------------
Loss from Continuing Operations (896,000) (22,000)
Loss from Discontinued Operations
(net of applicable income tax benefit
of $247,000 in 2001) -- (382,000)
------------ ------------
Net Loss ($896,000) ($404,000)
============ ============
Basic and Diluted Income
from Continuing Operations - Per Share ($0.15) ($0.00)
Basic and Diluted Loss
from Discontinued Operations - Per Share -- ($0.07)
------------ ------------
Basic and Diluted Income - Per Share ($0.15) ($0.07)
============ ============
Weighted Average Shares Outstanding
Basic and Diluted 6,060,000 6,095,000
============ ============
REXHALL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS September 30, December 31,
------ 2002 2001
------------ ------------
CURRENT ASSETS
Cash $4,887,000 $8,662,000
Accounts Receivables, net 2,023,000 2,051,000
Income Tax Receivable 1,310,000 786,000
Inventories 16,833,000 12,546,000
Deferred Income Taxes 964,000 964,000
Other Current Assets 162,000 461,000
Current Assets of Discontinued Operations 587,000 4,689,000
------------ ------------
TOTAL CURRENT ASSETS 26,766,000 30,159,000
Property and Equipment at Cost Net
of Accumulated Depreciation 5,615,000 5,760,000
Property Held for Sale -- 122,000
Other Assets 153,000 151,000
Non-Current Assets of Discontinued
Operations 37,000 160,000
------------ ------------
TOTAL ASSETS $32,571,000 $36,352,000
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
CURRENT LIABILITIES
Accounts Payable $2,182,000 $3,423,000
Chassis Vendor Line of Credit 4,910,000 3,053,000
Notes Payable and Current Portion
of Long-Term Debt 36,000 34,000
Accrued Warranty 916,000 699,000
Accrued Legal 791,000 802,000
Accrued Dealer Incentives 1,087,000 1,139,000
Other Accrued Liabilities 1,927,000 1,376,000
Accrued Compensation and Benefits 418,000 367,000
Current Liabilities of Discontinued
Operations 424,000 4,509,000
------------ ------------
TOTAL CURRENT LIABILITIES 12,691,000 15,402,000
Long-Term Debt, less Current Portion 643,000 671,000
------------ ------------
TOTAL LIABILITIES 13,334,000 16,073,000
------------ ------------
STOCKHOLDERS' EQUITY
Preferred Stock - no par value,
Authorized, 1,000,000 shares;
no shares outstanding at September
30, 2002 and December 31, 2001 -- --
Common Stock - no par value,
Authorized, 10,000,000 shares;
issued and outstanding
6,060,000 at September 30, 2002
and December 31, 2001 5,986,000 6,139,000
Loan Receivable from Exercise of Options (39,000) (46,000)
Retained Earnings 13,290,000 14,186,000
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 19,237,000 20,279,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $32,571,000 $36,352,000
============ ============
BOOK VALUE PER SHARE $3.17 $3.33
============ ============
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 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 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 seasonal and cyclical, and sales in the next few months are typically lower. Consumer confidence levels have fallen significantly, and that may reduce future sales. Threats of war and increased fuel prices could adversely affect the entire industry. Most of Rexhall's competitors are substantially larger, and many of its suppliers and dealers have greater economic power, so that the volume and prices of both supplies and sales may be adversely affected by competitive action. Management intends to remain aware of these factors and react to them, but cannot predict their timing or significance.
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