Monaco Coach Corporation Reports Third Quarter 2003 Results
COBURG, Ore., Oct. 21, 2003 -- Monaco Coach Corporation today reported revenue and earnings for its third quarter ended September 27, 2003. Third quarter earnings per share were 21 cents, on third quarter revenue of $303.2 million. Net income for the third quarter was $6.3 million. Operating income for the third quarter was $11.1 million. Third quarter unit sales of Monaco Coach Corporation products were 2,436 units. Third quarter motorhome sales totaled 1,751 units and third quarter towable recreational vehicles totaled 685 units.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991018/MONACO )
For the nine months ended September 27, 2003, earnings per share were 38 cents on revenue of $845.1 million. Net income for the nine months ended September 27, 2003 was $11.2 million. Operating income for the nine months ended September 27, 2003 was $20.5 million. Unit sales of Monaco Coach Corporation products for the nine months ended September 27, 2003 totaled 7,063 units. Nine-month motorhome sales totaled 5,157 units and nine-month towable recreational vehicles totaled 1,906 units.
According to Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson, "The retail market remained strong throughout the third quarter, and our retail dealer partners responded with increased orders, resulting in better than anticipated revenue. Combined with the successful reduction in our finished goods inventory, this positive sales environment is allowing us to gradually increase our overall production rates."
Toolson continued, "Our 2003 and 2004 models retailed well during the third quarter. We remained aggressive in terms of retail promotions to help move 2003 products throughout the quarter. Our retail dealers' inventories fell again in the third quarter as retail sales outpaced wholesale shipments."
Monaco Coach Corporation President John Nepute added, "We expect fourth quarter 2003 revenues in the range of $290 million to $300 million, due in part to holiday time off in the fourth quarter. As we increase production rates, we will continue to regain gross margins. Our goal is to achieve fourth quarter 2003 gross margins of approximately 12% to 12.5%. As retail promotions expire, we intend to reduce our sales, general and administrative expenses to between 8% and 8.25% of revenue in the fourth quarter 2003."
Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley stated, "We worked hard to improve our balance sheet in the third quarter of 2003. Our overall borrowings at the end of the third quarter 2003 fell to $32.5 million, down from $85 million at the end of the second quarter 2003. Our overall debt reduction was helped in part by a $6.5 million reduction related to the sale of the undeveloped Naples, Florida property we acquired from Outdoor Resorts of America. Our finished goods inventory fell to $20.9 million at the end of the third quarter 2003, down from $46.5 million at the end of the second quarter 2003."
Daley continued, "We currently expect 2004 revenue to be approximately $1.2 to $1.26 billion. We believe we can increase our gross margins to approximately 13.5%, and reduce our sales, general and administrative expenses to 7.25% of revenue by the end of 2004."
Headquartered in Coburg, Oregon, with additional manufacturing facilities in Indiana, Monaco Coach Corporation is one of the nation's leading manufacturers of recreational vehicles. The company offers customers luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and Royale Coach brand names.
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited: dollars in thousands, except share and per share data)
December 28, September 27,
2002 2003
ASSETS
Current assets:
Trade receivables, net $116,647 $105,949
Inventories 175,609 132,142
Resort lot inventory 26,883 14,972
Prepaid expenses 3,612 2,880
Deferred income taxes 33,379 33,047
Total current assets 356,130 288,990
Property, plant, and equipment, net 135,350 141,669
Debt issuance costs net of accumulated
amortization of $389, and $686, respectively 683 690
Goodwill, net of accumulated amortization
of $5,320 and $5,320, respectively 55,254 55,254
Total assets $547,417 $486,603
LIABILITIES
Current liabilities:
Book overdraft $3,518 $4,724
Line of credit 51,413 0
Current portion of long-term note payable 21,667 15,500
Accounts payable 78,055 77,504
Product liability reserve 21,322 20,626
Product warranty reserve 31,745 28,976
Income taxes payable 4,536 2,096
Accrued expenses and other liabilities 29,633 30,013
Total current liabilities 241,889 179,439
Long-term note payable 30,333 17,000
Deferred income taxes 14,568 16,932
286,790 213,371
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par, 1,934,783 shares
authorized, no shares outstanding
Common stock, $.01 par value; 50,000,000 shares
authorized, 28,871,144 and 29,093,637 issued
and outstanding, respectively 289 291
Additional paid-in capital 51,501 52,934
Retained earnings 208,837 220,007
Total stockholders' equity 260,627 273,232
Total liabilities and
stockholders' equity $547,417 $486,603
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited: dollars in thousands, except share and per share data)
Quarter Ended Nine-Months Ended
September 28, September 27, September 28, September 27,
2002 2003 2002 2003
Net sales $314,680 $303,178 $922,022 $845,113
Cost of sales 271,863 266,458 800,230 747,534
Gross profit 42,817 36,720 121,792 97,579
Selling, general,
and administrative
expenses 22,783 25,667 66,455 77,060
Operating income 20,034 11,053 55,337 20,519
Other income, net 3 64 47 502
Interest expense (633) (767) (2,000) (2,558)
Income before
income taxes 19,404 10,350 53,384 18,463
Provision for
income taxes 7,616 4,088 20,953 7,293
Net income $11,788 $6,262 $32,431 $11,170
Earnings per
common share:
Basic $.41 $.22 $1.13 $.38
Diluted $.40 $.21 $1.10 $.38
Weighted average
common shares
outstanding:
Basic 28,859,515 29,080,716 28,793,435 29,021,742
Diluted 29,527,539 29,625,959 29,604,369 29,478,842
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: dollars in thousands)
Nine-Months Ended
September 28, September 27,
2002 2003
Increase (Decrease) in Cash:
Cash flows from operating activities:
Net income $32,431 $11,170
Adjustments to reconcile net income to net cash
(used) provided by operating activities:
Loss on sale of assets 164 20
Depreciation and amortization 6,364 7,202
Deferred income taxes (1,511) 4,297
Changes in working capital accounts:
Trade receivables, net (28,668) 11,075
Inventories (40,468) 43,467
Resort lot inventory 4,712
Prepaid expenses (2,582) 724
Accounts payable 30,045 (551)
Product liability reserve 4,069 (696)
Product warranty reserve 1,368 (2,769)
Income taxes payable 13,234 (2,440)
Accrued expenses and other liabilities 11,043 633
Net cash provided by operating activities 25,489 76,844
Cash flows from investing activities:
Additions to property, plant, and equipment (13,055) (16,969)
Proceeds from sale of assets 384 2,051
Proceeds from sale of Naples property 6,650
Issuance of notes receivable 312
Net cash used in investing activities (12,359) (8,268)
Cash flows from financing activities:
Book overdraft 3,923 1,206
Payments on lines of credit, net (11,196) (51,413)
Payments on long-term notes payable (7,500) (19,500)
Debt issuance costs (304)
Issuance of common stock 1,643 1,435
Net cash used by financing activities (13,130) (68,576)
Net change in cash 0 0
Cash at beginning of period 0 0
Cash at end of period $0 $0