Starcraft Announces Fiscal First Quarter Earnings; Revenues Up 10%, Earnings Down; Directors Approve 5% Stock Dividend
GOSHEN, Ind.--Feb. 9, 2004--Starcraft Corporation announced today financial results for the first quarter of fiscal 2004 ending Dec. 2, 20038, 2003. For the first quarter of fiscal 2004, compared with the fiscal 2003 quarter:-- Revenues increased 10 percent to $43.8 million.
-- Net income decreased to $1.3 million, or $0.25 per share diluted.
Net sales for the first quarter of fiscal 2004 were $43.8 million, versus $39.9 million for the first quarter of fiscal 2003. Net income was $1.3 million ($0.27 per basic and $0.25 per diluted share), versus $2.0 million ($0.42 per basic and $0.39 per diluted share) in the prior year quarter.
Fiscal first quarter sales increased compared with the year-earlier period principally because of strong sales from OEM second-stage manufacturing programs at the Texas facility, sales at the Canadian plant which was not in operation in the prior year first quarter and new sales from acquired companies in late 2003. Although the Canadian plant and new acquisitions contributed $5.8 million in sales in the first quarter of fiscal 2004, operating income generated from these operations was minimal.
Mike Schoeffler, Co-CEO of Starcraft, said, and "The 2004 model year began with softer than expected sales, particularly in our Canadian operation. In addition, we had higher marketing expenses related to new product introductions, and incurred costs to complete our merger with Wheel to Wheel. Despite those costs, higher income taxes, and acquisition-related expenses that we will incur as the year progresses, we expect fiscal 2004 to be a good year, but not comparable to 2003."
Net income before minority interest for the 2004 fiscal first quarter was $2.7 million, down from $3.7 million in the first quarter last year. Minority interest of $1.4 million reflects the portion of first quarter earnings from Starcraft's Tecstar operations attributed to Wheel to Wheel, Inc., its partner in Tecstar. Starcraft merged with Wheel to Wheel on January 16, 2004. From that date, all of Tecstar's earnings will be included in Starcraft's future consolidated results.
Starcraft's effective income tax expense was reflective of state and Canadian taxes only. Federal income taxes continue to be offset by tax loss carry forwards, which are expected to be fully utilized during the second quarter of Fiscal 2004.
As previously announced, Tecstar also signed new distribution arrangements with GM's SPO division during the first quarter. It will exclusively offer certain parts through GM dealers, including ten styles of certified 20-inch wheels, caps and lug nut covers for Chevrolet Silverado and GMC Sierra trucks. New Tecstar-supplied accessory components will be available for the H2 Hummer and other Hummer vehicles as they roll out during 2004. These agreements are expected to add $40 million in annualized revenues when fully launched.
Co-CEO Jeff Beitzel said "The first half of fiscal 2004 will be a transition period for Starcraft. We are substantially expanding our products and engineering service capabilities through the merger, and through the recent acquisition of three operations that offer new niche market opportunities in plastics molding, robotic painting and second-stage manufacturing.
Beitzel added, "New businesses, and design and engineering talent have made Starcraft a stronger, more diversified business than ever before. Our challenge for fiscal 2004 is to capture more of the niche market opportunities with OEMs that have made us so successful, and to provide our customers with the highest quality, most innovative solutions in the industry. Now that the merger is behind us, we can all focus on a common goal to enhance shareholder value."
STOCK DIVIDEND
Separately, the Company announced that its Board of Directors has declared a 5% stock dividend to be issued on March 19, 2004, to shareholders of record as of February 20, 2004. The Company currently has approximately 8.4 million basic common shares outstanding.
"Confident with the opportunities flowing from our merger with Wheel to Wheel, our Board of Directors felt that it was appropriate to declare the 5% dividend at this time," Chairman Kelly Rose said. "The stock dividend provides our shareholders with a well deserved benefit, while hopefully providing additional liquidity to the stock."
Starcraft said the issuance of the stock dividend would affect its previously issued earnings per share guidance for the fiscal year ending October 3, 2004. Starcraft now expects fully diluted earnings per share to be in a range of $1.29 to $1.38 for fiscal 2004, which was adjusted for the additional outstanding shares to be issued in the stock dividend. Revenue and net income guidance remain unchanged.
INVESTOR CONFERENCE CALL
The Company will host a conference call on February 10, 2004, at 2 p.m. Eastern Time to discuss its year-end results. Investors may participate in the teleconference call by calling 800-299-8538 and providing the conference ID number 63315691. A tape replay of the call will be available two hours after the conclusion of the conference call through February 17, 2004, by dialing 888-286-8010 and providing the replay pass code #89996276.
Starcraft Corporation is a leading supplier to the OEM automotive supply market. It also supplies after-market parts and accessories to wholesale and retail customers throughout the United States.
This news release contains forward-looking statements regarding Starcraft's business operations and outlook, prospective revenues, earnings and earnings per share, and for new business. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, level of customer demand, competitive pressures and other important factors detailed in the Company's Form 10-K for fiscal 2003 filed with the Securities and Exchange Commission.
STARCRAFT CORPORATION
CONSOLIDATED FINANCIAL RESULTS
FIRST QUARTER, FISCAL 2004
Dollars in Thousands, except EPS
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Three Months Ended
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December 28, December 29,
Statement of Operations (unaudited): 2003 2002
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Net Sales $ 43,798 $ 39,882
Cost of Goods Sold 36,152 31,015
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Gross Profit 7,646 8,867
Selling and Promotion Expenses 629 383
General and Administrative Expenses 4,017 4,489
Operating Income 3,000 3,995
Nonoperating (Expense) Income:
Interest, Net (73) (113)
Other Income, Net - 43
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(73) (70)
Income Before Income Taxes
and Minority Interest 2,927 3,925
Income Taxes 197 238
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Income After Income Taxes
and Before Minority Interest 2,730 3,687
Minority Interest in Income of Subsidiary 1,407 1,734
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NET INCOME $ 1,323 $ 1,953
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Basic Earnings Per Share 0.27 $ 0.42
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Diluted Earnings Per Share $ 0.25 $ 0.39
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Weighted Average Number of
Basic Common Shares Outstanding 4,860 4,685
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Weighted Average Number of
Diluted Common Shares Outstanding 5,396 5,035
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Balance Sheets:
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Dec. 28, Sept. 28, Dec. 28, Sept. 28,
2003 2003 2003 2003
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(Unaudited) (Audited) (Unaudited) (Audited)
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Current Current
Assets: Liabilities:
Cash Current
$1,145 $836 Maturities $0 $0
Accounts and Accounts
Notes Payable,
Receivable 26,744 29,182 Trade 21,682 19,549
Inventories Accrued
14,748 10,060 Expenses 2,567 7,572
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Other Total
Current Current
Assets 8,943 9,002 Liabilities 24,249 27,121
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Total Current Long-term
Assets 51,580 49,080 Debt 16,662 9,148
Property and Minority
Equipment, Interest
net 10,790 9,136 8,228 9,821
Other Assets Shareholders'
1,107 514 Equity 14,338 12,640
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$63,477 $58,730 $63,477 $58,730
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