RDO Equipment Co. Reports Fiscal 2003 Year End Results
FARGO, N.D.--April 3, 2003--RDO Equipment Co. announced today that the Company's operations for the fiscal year ended January 31, 2003 produced net income of $3,007,000 or $0.23 per share, compared to a net loss of $2,430,000 or $(0.18) per share, for the previous fiscal year. During the fourth quarter of the recently completed fiscal year the Company recorded a net loss of $882,000 or $(0.07) per share, compared to a net loss of $2,555,000, or $(0.19) per share, for the same period in fiscal 2002. Economic uncertainty and anticipation of war resulted in diminished demand for construction equipment during the quarter. The results, however, also reflect the asset reduction and business simplification initiatives of the Company during the last few years.Revenues for the year ended January 31, 2003 were $534.5 million, versus $549.9 million in the prior year which is a decline of 2.8 percent. Fourth quarter revenues totaled $102.4 million and are down $8.3 million, or 7.5 percent, from the same quarter one year ago. Truck division revenues were down $20.8 million for the year and $7.2 million for the quarter. This reflects the sale of the majority of the Company's truck operations at various times during the past two years. Construction equipment division revenues were down $15.6 million or 5.3 percent for the year, and $2.3 million, or 3.8 percent, for the quarter. Demand for construction equipment has continued to be soft during the past year. Agricultural equipment revenues were up $21.0 million or 12.4 percent compared to last year and up $1.3 million or 4.0 percent in the fourth quarter. The Company's agricultural equipment operations are located in areas experiencing favorable growing conditions which positively influences demand for equipment.
Gross profit as a percentage of total revenue was 17.6 percent for the year and 18.4 percent for the quarter, compared to 17.0 percent and 16.5 percent for the same periods one year ago.
Selling, general and administrative (SG&A) expenses were $87.6 million, or 16.4 percent of total revenues for the year, and $20.1 million, or 19.6 percent of total revenues for the quarter. This compares to $91.3 million, or 16.6 percent of revenues, and $21.8 million or 19.7 percent of revenues for the same periods of fiscal 2002.
Total assets were $202.6 million, compared to $216.6 million one year ago. The Company's equity stood at $89.1 million or 43.9 percent of assets at year end.
RDO Equipment Co. specializes in the distribution, sale, service, rental and finance of equipment and trucks to the agricultural, construction, manufacturing, transportation and warehousing industries, as well as to public service entities, government agencies and utilities. These operations, which consist of 45 retail stores in 9 states, include one of the largest networks of John Deere construction and agricultural stores in North America. Information about the Company, including recent news and product information, is available on the Internet at - www.rdoequipment.com.
As previously announced, on March 6, 2003 the Company received an updated letter from Ronald D. Offutt, its Chairman of the Board and Chief Executive Officer, proposing to acquire at a purchase price of $6.01 per share all of the outstanding shares of the Class A common stock of the Company that Mr. Offutt does not currently own or control. The Special Committee of non-management directors that was formed to review and evaluate the offer from Mr. Offutt announced on March 7, 2003 that if Mr. Offutt formally commences a tender offer as proposed, the Special Committee intends to recommend that stockholders tender their shares, assuming no material changes have occurred prior to the formal commencement of Mr. Offutt's tender offer that would alter the views of the Committee or its financial advisors. Mr. Offutt stated in his March 6, 2003 letter that he intended to cause RDO Tender Co., an acquisition entity Mr. Offutt intends to form, to commence within four to six weeks a formal tender offer by filing tender offer materials with the Securities and Exchange Commission and mailing such materials to Company stockholders.
SELECTED FINANCIAL AND OPERATING DATA
(in thousands, except store and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
January 31, January 31,
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2003 2002 2003 2002
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Revenue Data:
Total segmented revenues $102,395 $110,678 $534,464 $549,920
Construction 56.8% 54.7% 52.6% 53.9%
Agricultural 33.3% 29.6% 35.5% 30.7%
Truck 9.9% 15.7% 11.9% 15.4%
Construction revenue mix $ 58,214 $ 60,544 $280,977 $296,582
Equipment sales 65.1% 66.3% 68.7% 69.0%
Parts and service 34.9% 33.7% 31.3% 31.0%
Agricultural revenue mix $ 34,076 $ 32,789 $189,765 $168,800
Equipment sales 71.7% 70.8% 74.8% 71.9%
Parts and service 28.3% 29.2% 25.2% 28.1%
Truck revenue mix $ 10,105 $ 17,345 $ 63,722 $ 84,538
Truck sales 72.1% 71.6% 72.6% 72.1%
Parts and service 27.9% 28.4% 27.4% 27.9%
Income Statement Data:
Revenues:
Equipment and truck sales $ 69,609 $ 75,771 $381,205 $386,888
Parts and service 32,786 34,907 153,259 163,032
-------- -------- -------- --------
Total revenues 102,395 110,678 534,464 549,920
Cost of revenues 83,579 92,469 440,660 456,697
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Gross profit 18,816 18,209 93,804 93,223
Selling, general and
administrative expenses 20,061 21,758 87,558 91,321
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Operating income (loss) (1,245) (3,549) 6,246 1,902
Interest expense 418 919 2,331 6,649
Gain on sale of dealerships --- --- 734 ---
Interest income 168 210 448 697
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Income (loss) before income
taxes (1,495) (4,258) 5,097 (4,050)
Provision for (benefit from)
income taxes (613) (1,703) 2,090 (1,620)
-------- -------- -------- --------
Net income (loss) (882) (2,555) 3,007 (2,430)
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Net income (loss) per share -
basic and diluted $ (0.07) $ (0.19) $ 0.23 $ (0.18)
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Operating Data:
Comparable store revenues
increase (decrease) 0% (6)% 2% (8)%
Stores open at beginning of
period 45 48 47 53
Stores acquired 0 0 0 0
Stores
consolidated/sold/closed 0 (1) (2) (6)
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Stores open at end of period 45 47 45 47
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Net purchases (sales) of rental
equipment $ (62) $ (69) $ 906 $ (654)
Net purchases of property and
equipment 1,768 316 3,283 888
Treasury stock purchases 10 417 1,806 426
Depreciation and amortization 1,186 1,512 4,541 6,003
January 31,
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2003 2002
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Balance Sheet Data:
Working capital $ 44,526 $ 48,904
Inventories 125,048 128,504
Total assets 202,666 216,594
Interest-bearing floorplan
payables 44,114 66,157
Noninterest-bearing floorplan
payables 32,638 31,259
Total floor plan payables 76,752 97,416
Total debt 8,488 4,969
Stockholders' equity 89,058 87,857