National R.V. Holdings Reports Year-End Results and Profitable Fourth Quarter
PERRIS, Calif., Feb. 17, 2004 -- For the fourth quarter ended December 31, 2003, National R.V. Holdings, Inc. today reported net income of $0.5 million, or $0.05 per share, compared with a net loss of $6.9 million, or $0.70 per share, last year. Net sales for the quarter were $99.1 million, up 62% from $61.0 million last year.
A net loss for the year ended December 31, 2003 was $8.3 million, or $0.84 per share, compared with a net loss of $21.4 million, or $2.19 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 twelve months were $342.0 million, up 14% from $300.3 million last year.
"We are very happy with our improving results, which reflect increasing demand coupled with a continued focus on key challenges affecting our gross profit margins," said Brad Albrechtsen, National R.V. Holdings' President and CEO. "Our diesel business was consistent with last quarter while we enjoyed a significant increase in gas motorhome deliveries. With dealers on allocation for National RV products, we are focused on continuing to increase our production rates at that division to meet the strong demand. Our Country Coach division is also showing strong demand with brisk sales of our new Inspire product, expanded bus conversion commitments and the addition of several new dealers during the fourth quarter," continued Albrechtsen.
"Higher production and sales levels coupled with continued improvements in efficiency in the fourth quarter were key factors leading to improved gross profits and a positive net income," stated Albrechtsen. "Given our current product demand, we expect to continue to improve our sales and profitability as we increase production over the next several months."
Revenues in the quarter for the National RV division were $56.2 million, up 45% from $38.8 last year. Revenues in the quarter for the Country Coach division were $42.6 million, up 81% from $23.5 million last year. National RV revenues for the twelve months were $206.2 million, up 12% from $183.3 million last year. Country Coach revenues for the twelve months were $133.7 million, up 14% from $116.8 million last year.
Fourth quarter wholesale unit shipments of diesel motorhomes were 283, up 35% from 209 units last year. Quarterly shipments of gas motorhomes were 436, up 126% from 193 units last year. Quarterly shipments of towable products were 295, down 14% from 343 units last year.
Wholesale unit shipments of diesel motorhomes for the twelve months were 1,035, up 6% from 974 units last year. Shipments of gas motorhomes for the twelve months were 1,382, up 46% from 945 units last year. Year-to-date shipments of towable products were 1,515, down 6% from 1,609 units last year.
Quarterly selling, general and administrative (SG&A) expenses were $5.3 million, down 4% from $5.5 million last year. As a percentage of sales, quarterly SG&A expenses were 5.4% versus 9.0% last year. SG&A expenses for the twelve months were $20.3 million, down 11% from $22.7 million last year. As a percentage of sales, year-to-date SG&A expenses were 5.9% versus 7.5% last year.
The Company reported that cash increased by approximately $2.0 million during the fourth quarter, due primarily to a decrease of $9.8 million in inventory, a $0.4 million decrease in accounts receivable, $1.1 million of proceeds from exercise of stock options and $0.4 million of net income partially offset by a $5.6 million decrease in accounts payable, a $1.4 million decrease in book overdraft and $3.2 million of net repayments against the line-of-credit.
PRIOR QUARTER RESTATEMENTS
The Company also announced that it has restated its financial statements for the first three quarters of 2003. The restatements reflect the Company's reconciliation of raw materials inventory to a year-end physical inventory count. The Company has determined that standard cost estimates were too low during these periods by an aggregate of $2.7 million. The impact of these restatements is to increase the Company's loss per diluted share for first quarter 2003 by $0.06, from $0.42 to $0.48. The second quarter 2003 diluted loss per share increases by $0.07, from $0.28 to $0.35. The third quarter 2003 diluted loss per share increases by $0.04, from $0.03 to $0.07. The Company expects to file amended Form 10-Q reports with respect to the restatements discussed above as soon as practicable. No other prior periods were affected.
"Total inventory, after adjustment for the $2.7 million restatement, decreased by $9.8 million during the fourth quarter 2003. This reduction resulted mainly from a $4.0 million reduction of finished goods and a $5.1 million drop in raw materials. We were particularly pleased with the $5.0 million reduction of finished goods at our Country Coach division." said Chief Financial Officer Mark Andersen. "The adjustment to raw materials inventory at year-end was related to standard costs that were too low through out the year at the National RV division. The Company's move to a new perpetual inventory system and future quarterly physical inventory counts will ensure that all material costs are recorded in the correct period."
National R.V. Holdings will host a live webcast to review fourth quarter results today, February 17, 2004, 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, all built on the exclusive DynoMax chassis 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)
Three Months Twelve Months
Ended December 31, Ended December 31,
2003 2002 2003 2002
Net sales $99,086 $61,047 $341,972 $300,251
Cost of goods sold 92,918 66,844 334,547 302,483
Gross profit (loss) 6,168 (5,797) 7,425 (2,232)
Selling expenses 3,296 3,539 12,482 14,492
General and administrative expenses 2,041 1,934 7,801 8,176
Impairment of goodwill -- -- -- 6,126
Operating income (loss) 831 (11,270) (12,858) (31,026)
Interest expense 90 210 399 357
Other income (1) (23) (7) (472)
Income (loss) before income
taxes 742 (11,457) (13,250) (30,911)
Provision (benefit) for income taxes 267 (4,558) (4,910) (9,489)
Net income (loss) $475 $(6,899) $(8,340) $(21,422)
Income (loss) per common share:
Basic $0.05 $(0.70) $(0.84) $(2.19)
Diluted $0.05 $(0.70) $(0.84) $(2.19)
Weighted average number of shares
Basic 10,095 9,832 9,900 9,788
Diluted 10,201 9,832 9,900 9,788
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 31, December 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $2,059 $14
Restricted cash 250 --
Trade receivables, less allowance
for doubtful accounts ($132 and
$276, respectively) 20,978 9,829
Inventories 51,659 72,532
Deferred income taxes 7,955 6,005
Income taxes receivable -- 7,015
Prepaid expenses 1,658 2,134
Total current assets 84,559 97,529
Property, plant and equipment, net 40,833 43,230
Long-term deferred income taxes 3,805 367
Other 1,252 1,013
$130,449 $142,139
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $-- $4,943
Book overdraft -- 943
Current portion of long-term debt 19 22
Accounts payable 14,101 13,483
Accrued expenses 20,770 22,291
Total current liabilities 34,890 41,682
Long-term accrued expenses 7,569 6,273
Long-term debt -- 19
Total liabilities 42,459 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,
10,190,230 and 9,832,161 issued
and outstanding, respectively 102 98
Additional paid-in capital 36,463 34,302
Retained earnings 51,425 59,765
Total stockholders' equity 87,990 94,165
$130,449 $142,139
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve Months
Ended December 31,
2003 2002
Cash flows from operating activities:
Net loss $(8,340) $(21,422)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation 3,952 3,936
Impairment of goodwill -- 6,126
Gain on asset disposal (1) (355)
Tax benefit related to exercise of
stock options 550 105
Changes in assets and
liabilities:
Increase in restricted cash (250) --
(Increase) decrease in trade
receivables (11,149) 6,549
Decrease in inventories 20,873 12,853
Decrease (increase) in income
taxes receivable 7,015 (327)
Decrease (increase) in prepaid
expenses 476 (487)
(Decrease) increase in book
overdraft (943) 335
Increase (decrease) in accounts
payable 618 (15,997)
(Decrease) increase in accrued
expenses (225) 6,814
Increase in deferred income
taxes (5,388) (2,574)
Net cash provided by (used in)
operating activities 7,188 (4,444)
Cash flows from investing activities:
Increase in other assets (239) (1)
Proceeds from sale of assets 14 2,859
Purchases of property, plant and
equipment (1,568) (4,414)
Net cash used in investing
activities (1,793) (1,556)
Cash flows from financing activities:
Net (payments on) advances under
line of credit (4,943) 4,943
Principal payments on long-term
debt (22) (21)
Proceeds from issuance of common
stock 1,615 1,070
Net cash (used in) provided by
financing activities (3,350) 5,992
Net increase (decrease) in cash 2,045 (8)
Cash, beginning of period 14 22
Cash, end of period $2,059 $14