National R.V. Holdings Reports Third Quarter Results
PERRIS, Calif., Oct. 28, 2003 -- For the third quarter ended September 30, 2003, National R.V. Holdings, Inc. today reported a net loss of $0.3 million, or $0.03 per share, compared with a net loss of $9.8 million, or $1.00 per share, last year, which included a charge of $6.1 million, or $0.62 per share for the complete impairment of the Company's goodwill. Net sales for the quarter were $91.3 million, up 26% from $72.4 million last year.
A net loss for the nine months was $7.1 million, or $0.72 per share, compared with a net loss of $14.5 million, or $1.49 per share last year, including the aforementioned goodwill impairment charge. Net sales for the nine months were $242.9 million, up 2% from $239.2 million last year.
"We are pleased with our increase in sales for the quarter," said Brad Albrechtsen, National R.V. Holding's president and CEO. "We are seeing the impact of our new product launches, including our National RV Tropi-Cal diesel unit and our Country Coach Inspire diesel unit. We are also currently seeing demand in excess of our production rates on many of our products and are working toward increasing production, particularly at our Perris facility," continued Albrechtsen. "We know from experience the costs associated with attempting to increase production too quickly and are taking a more measured and deliberate approach to meeting the demand.
"We are fast approaching profitability," stated Albrechtsen, "thanks to increasing demand and continued cost cutting efforts. The fourth quarter is historically seasonally slower with added margin pressure due to holiday shut-downs, so we are not anticipating significant improvement in Q4 compared to Q3, but so far demand remains strong."
The Company reported that its gross profit margin percentage improvement was achieved primarily through higher production volumes, reduced warranty costs and reduced discounting. Pricing pressure that existed in the highline segment seems to have lessened as industry-wide excess inventories have diminished.
Revenues in the quarter for the National RV division were $48.1 million, up 15% from $42.0 last year. Revenues in the quarter for the Country Coach division were $42.0 million, up 34% from $31.3 million last year. National RV revenues for the nine months were $149.9 million, up 4% from $144.2 million last year. Country Coach revenues for the nine months were $91.2 million, down 2% from $93.4 million last year.
Third quarter wholesale unit shipments of diesel motorhomes were 297, up 41% from 211 units last year. Quarterly shipments of gas motorhomes were 321, up 38% from 232 units last year. Quarterly shipments of towable products were 355, down 7% from 383 units last year.
Wholesale unit shipments of diesel motorhomes for the nine months were 752, down 2% from 765 units last year. Shipments of gas motorhomes for the nine months were 946, up 26% from 752 units last year. Year-to-date shipments of towable products were 1,220, down 4% from 1,266 units last year.
Quarterly selling, general and administrative expenses were $4.8 million, down 17% from $5.8 million last year. As a percentage of sales, quarterly SG&A expenses were 5.2% versus 8.0% last year. SG&A expenses for the nine months were $14.9 million, down 13% from $17.2 million last year. As a percentage of sales, year-to-date SG&A expenses were 6.2% versus 7.2% last year.
The Company reported that cash decreased by approximately $3.6 million during the third quarter, due primarily to a $10.4 million increase in accounts receivable partially offset by a decrease of $1.3 million in inventory, a $0.5 million increase in accounts payable, a $1.4 million increase in book overdraft, $3.2 million of net advances against the line-of-credit and $0.5 million of proceeds for issuance of common stock from the exercise of stock options.
"Total inventory dropped by $1.3 million during the quarter, coming mainly from reductions in finished goods and work-in-process, offset by increases in raw materials and chassis. We saw the expected improvements in work-in-process at our Country Coach division and continued improvement in finished goods at our National RV division," said Chief Financial Officer Mark Andersen. "Production increases at National RV led to increases in raw materials and work-in-process inventory that limited our effort to reduce total inventory during the quarter. Our best opportunity for further reductions in the fourth quarter is from finished goods at Country Coach."
National R.V. Holdings will host a live webcast to review third quarter results today, October 28, 2003, at 2 p.m. Eastern. A link to the conference call can be found on the Company's website at www.nrvh.com and will be archived and available for 90 days.
National R.V. Holdings, Inc. is a leading manufacturer of Class A motorhomes and travel trailers. From its Junction City facility, the Company designs, manufactures and markets Country Coach high-end (Highline) Class A diesel motorhomes under brand names including Inspire, Allure, Intrigue, Magna, Affinity and Lexa, and bus conversions under the Country Coach Prevost brand. From its Perris, California facility, the Company designs, manufactures and markets National RV Class A gas and diesel motorhomes under brand names including Sea Breeze, Dolphin, Tropi-Cal, Tradewinds and Islander, and travel trailers under brand names including Surf Side Lite, Splash, Rage'n, Blaze'n, Sea Breeze and Palisades.
This release and other statements by the Company contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties including, without limitation, the cyclical nature of the recreational vehicle industry; seasonality and potential fluctuations in the Company's operating results; the Company's dependence on chassis suppliers; potential liabilities under repurchase agreements; competition; government regulation; warranty claims; product liability; and dependence on certain dealers and concentration of dealers in certain regions. Certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested are set forth in the Company's filings with the Securities and Exchange Commission (SEC) and the Company's public announcements, copies of which are available from the SEC or from the Company upon request.
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Net sales $ 91,314 $ 72,417 $ 242,886 $ 239,204
Cost of goods sold 86,942 72,461 238,927 235,639
Gross profit (loss) 4,372 (44) 3,959 3,565
Selling expenses 3,101 4,126 9,186 10,953
General and
administrative
expenses 1,683 1,673 5,760 6,242
Impairment for Goodwill -- 6,126 -- 6,126
Operating loss (412) (11,969) (10,987) (19,756)
Interest expense 85 51 309 142
Other income (2) (45) (6) (444)
Loss before
income taxes (495) (11,975) (11,290) (19,454)
Benefit for income
taxes (191) (2,164) (4,189) (4,931)
Net loss $(304) $(9,811) $(7,101) $(14,523)
Loss per common share:
Basic $(0.03) $(1.00) $(0.72) $(1.49)
Diluted $(0.03) $(1.00) $(0.72) $(1.49)
Weighted average
number of shares
Basic 9,835 9,825 9,833 9,774
Diluted 9,835 9,825 9,833 9,774
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
September 30, December 31,
2003 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $11 $14
Trade receivables, less allowance for
doubtful accounts ($308 and $276,
respectively) 21,404 9,829
Inventories 63,910 72,532
Deferred income taxes 6,152 6,005
Income taxes receivable -- 7,015
Prepaid expenses 1,506 2,134
Total current assets 92,983 97,529
Property, plant and equipment, net 41,461 43,230
Long-term deferred income taxes 4,107 367
Other 1,190 1,013
$139,741 $142,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $3,216 $4,943
Book overdraft 1,442 943
Current portion of long-term debt 22 22
Accounts payable 19,739 13,483
Accrued expenses 20,496 22,291
Total current liabilities 44,915 41,682
Long-term accrued expenses 7,242 6,273
Long-term debt 2 19
Total liabilities 52,159 47,974
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.01 par value;
5,000 shares authorized, 4,000
issued and outstanding -- --
Common stock - $.01 par value; 25,000,000
shares authorized, 9,986,828 and 9,832,161
issued and outstanding, respectively 100 98
Additional paid-in capital 34,817 34,302
Retained earnings 52,665 59,765
Total stockholders' equity 87,582 94,165
$139,741 $142,139
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months
Ended September 30,
2003 2002
Cash flows from operating activities:
Net loss $ (7,101) $ (14,523)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 2,959 2,847
Impairment of goodwill 6,126
Loss (gain) on asset disposal 3 (359)
Changes in assets and liabilities:
(Increase) decrease in trade receivables (11,575) 2,525
Decrease in inventories 8,622 8,008
Decrease in income taxes receivable 7,015 1,990
Decrease (increase) in prepaid expenses 628 (1,445)
Increase in book overdraft 499 3,569
Increase (decrease) in accounts payable 6,256 (10,044)
(Decrease) increase in accrued expenses (826) 2,861
Increase in deferred income taxes (3,887) (459)
Net cash provided by operating activities 2,593 1,096
Cash flows from investing activities:
(Increase) decrease in other assets (177) 216
Proceeds from sale of assets 3 2,424
Purchases of property, plant and equipment (1,196) (4,069)
Net cash used in investing activities (1,370) (1,429)
Cash flows from financing activities:
Net (payments on) advances under
line of credit (1,727) 1,114
Principal payments on long-term debt (17) (16)
Proceeds from issuance of common stock 518 1,170
Net cash (used in) provided
by financing activities (1,226) 2,268
Net (decrease) increase in cash (3) 1,935
Cash, beginning of period 14 22
Cash, end of period 11 1,957