National RV Holdings Reports Second Quarter 2004
Results Including Record Quarterly Sales
PERRIS, Calif., July 27 -- Driven by record quarterly sales, National RV Holdings, Inc. , reported that net income increased to $2.5 million for the second quarter compared to a loss of $3.4 million for the same quarter last year. The second quarter's earnings per diluted share were $0.24 compared to a loss per diluted share of $0.35 for the second quarter of 2003. Net income for the six months ended June 30, 2004 was $3.2 million or $0.30 per diluted share compared to a loss in the same period of 2003 of $8.1 million or $0.83 per diluted share. Net sales for the second quarter increased to $126.4 million from $73.5 million for the second quarter of 2003, an increase of 72%, and a 14% increase over the first quarter of 2004. The second quarter 2004 sales represented a record level for any quarter in the Company's history.
"We are very pleased with the strong demand we are seeing for all of our motorhomes, and are particularly proud of the second consecutive quarter of record sales at our Country Coach subsidiary," said Brad Albrechtsen, National RV Holdings' President and CEO. "While demand for all of our products is very strong right now, revenue from sales of our diesel motorhomes was up 119% compared to the second quarter of last year. More important," continued Albrechtsen, "is the progress we are making with margins. The efforts of many over the last 18 months are driving the improving results. The Company has also benefited from a healthy economy and strong industry demand."
Second quarter wholesale unit shipments of diesel motor homes were 443, up 103% from 218 units last year. Quarterly shipments of gas motor homes were 369, up 26% from 293 units last year. Quarterly shipments of towable products were 314, down 34% from 475 units last year.
Country Coach's quarterly sales were $57.0 million and year to date sales were $104.0 million, reflecting an increase of $54.1 million, or 108%, over results for the first six months of 2003. National RV's quarterly revenues were $69.4 million and year to date sales were $132.8 million, reflecting an increase of $31.1 million, or 31%, over results for the first six months of 2003.
The Company reported continued improvement in gross margins, which were 8.4% of net sales for the quarter compared to -0.6% for the same quarter last year, and 6.6% in the first quarter of 2004. "These improved margins were driven primarily by increased sales revenues, decreased discounting, and improved product quality, and are consistent with our previously stated expectations and goals," said Albrechtsen.
Quarterly selling, general and administrative (SG&A) expenses were $6.5 million or 5.2% of sales compared to $4.9 million and 6.7% of sales in the second quarter of 2003. Compared to 2004's first quarter, SG&A was up $0.3 million but down 0.4% of sales.
Total inventory of $63.9 million met expectations and remained relatively constant when compared to first quarter inventory levels of $64.2 million. Annualized inventory turns were 6.7 turns for the current quarter versus 4.8 turns for the second quarter of 2003 and 6.9 turns for the first quarter of 2004.
The Company spent $1.0 million in the quarter on capital expenditures and incurred depreciation of $0.9 million. Both results were consistent with expectations and similar quarterly results are expected for the remainder of 2004.
National R.V. Holdings will host a live webcast to review second quarter results today, July 27, 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. (the Company), through its two wholly-owned subsidiaries, National RV, Inc. (NRV) and Country Coach, Inc. (CCI), is one of the nation's leading producers of motorized and towable recreation vehicles. NRV is located in Perris, California where it produces Class A gas and diesel motor homes under model names Dolphin, Islander, Sea Breeze, Tradewinds and Tropi-Cal, and travel trailers under model names Blaze'n and Rage'n. CCI is located in Junction City, Oregon where it produces high-end Class A diesel motor homes under the model names Affinity, Allure, Inspire, Intrigue, Lexa and Magna, and bus conversions under the Country Coach Prevost brand.
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
Net sales $126,408 $73,471 $236,846 $151,572
Cost of goods sold 115,738 73,907 218,889 154,094
Gross profit (loss) 10,670 (436) 17,957 (2,522)
Selling expenses 3,262 2,952 6,883 6,085
General and administrative expenses 3,286 1,958 5,873 4,077
Operating income (loss) 4,122 (5,346) 5,201 (12,684)
Interest expense 18 58 78 224
Other income (1) (3) (47) (5)
Income (loss) before income taxes 4,105 (5,401) 5,170 (12,903)
Provision (benefit) for income taxes 1,618 (1,999) 2,014 (4,775)
Net income (loss) $2,487 $(3,402) $3,156 $(8,128)
Earnings (loss) per common share:
Basic $0.24 $(0.35) $0.31 $(0.83)
Diluted $0.24 $(0.35) $0.30 $(0.83)
Weighted average number of shares
Basic 10,197 9,832 10,194 9,832
Diluted 10,440 9,832 10,377 9,832
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 30, December 31,
2004 2003
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $363 $2,059
Restricted cash 250 250
Trade receivables, less allowance
for doubtful accounts ($93 and
$132, respectively) 31,172 20,978
Inventories 63,859 51,659
Deferred income taxes 7,955 7,955
Prepaid expenses 1,993 1,658
Total current assets 105,592 84,559
Property, plant and equipment, net 39,362 40,833
Long-term deferred income taxes 3,805 3,805
Other 1,231 1,252
$149,990 $130,449
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 7 19
Accounts payable 27,131 14,101
Accrued expenses 23,666 20,770
Total current liabilities 50,804 34,890
Long-term accrued expenses 7,946 7,569
Total liabilities 58,750 42,459
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,
10,201,671 and 10,190,230 issued
and outstanding, respectively 102 102
Additional paid-in capital 36,557 36,463
Retained earnings 54,581 51,425
Total stockholders' equity 91,240 87,990
$149,990 $130,449
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months
Ended June 30,
2004 2003
Cash flows from operating
activities:
Net income (loss) $3,156 $(8,128)
Adjustments to reconcile net
income (loss) to net cash (used
in) provided by operating
activities:
Depreciation 1,935 1,974
Gain on asset disposal (45) --
Changes in assets and
liabilities:
Increase in trade receivables (10,194) (1,194)
(Increase) decrease in inventories (12,200) 9,456
Decrease in income taxes receivable -- 7,015
(Increase) decrease in prepaid expenses (335) 569
Increase in accounts payable 13,030 5,769
Increase (decrease) in accrued expenses 3,273 (1,049)
Increase in deferred income taxes -- (4,517)
Net cash (used in) provided by
operating activities (1,380) 9,895
Cash flows from investing activities:
Decrease in other assets 21 340
Proceeds from sale of assets 1,932 --
Purchases of property, plant and equipment (2,351) (729)
Net cash used in investing activities (398) (389)
Cash flows from financing activities:
Net payments on line of credit -- (4,943)
Decrease in book overdraft -- (943)
Principal payments on long-term debt (12) (11)
Proceeds from issuance of common stock 94 --
Net cash provided by (used in)
financing activities 82 (5,897)
Net (decrease) increase in cash (1,696) 3,609
Cash, beginning of period 2,059 14
Cash, end of period $363 $3,623