National RV Holdings Announces Third Quarter 2004 Financial Results
PERRIS, Calif., Oct. 26, 2004 -- National RV Holdings, Inc. , today announced that net income from continuing operations for the third quarter of 2004 was $1.1 million, or $0.10 per diluted share, as compared to a loss of $0.4 million, or a loss of $0.04 per diluted share, for the same quarter in 2003. Net income from continuing operations for the nine months ended September 30, 2004 was $4.6 million or $0.45 per diluted share compared to a loss in the same period of 2003 of $8.0 million or a loss of $0.82 per diluted share. During the third quarter, the Company sold its Travel Trailer business, which is designated as a discontinued operation. Including a net loss of $0.7 million, or a loss of $0.07 per diluted share for discontinued operations, net income for the third quarter of 2004 was $0.4 million, or $0.03 per diluted share, as compared to a net loss of $0.7 million, or a loss per diluted share of $0.07 in the third quarter of 2003.
Net sales from continuing operations for the three months ended September 30, 2004 increased 39% to $117.5 million as compared to $84.6 million for the three months ended September 30, 2003. Gross margins were 7.5% in the third quarter of 2004 as compared to 4.6% in the third quarter of 2003. Net sales from continuing operations for the first nine months of 2004 were $341.0 million as compared to $221.0 million in the first nine months of 2003, an increase of 54%. Gross margins were 7.8% in the first nine months of 2004 as compared to 0.6% in the first nine months of 2003.
"We continue to see positive opportunities in the marketplace," stated Brad Albrechtsen, president and chief executive officer. "At Country Coach, we have increased production in order to address the broad-based consumer demand we have seen for its redesigned product lines. In fact, Country Coach's dealers remain on allocation for the division's high-line vehicles. At National RV, we will be re-introducing our Tradewinds and Islander diesel- powered products at the 42nd Annual National RV Trade Show in early December. We believe these dynamics, combined with a continued focus on strengthening our dealer network, will help us drive future growth.
"However, this quarter presented some unanticipated challenges for the RV industry as the industry dealt with slowing consumer demand, particularly for gas-powered vehicles. We not only had to deal with this at our National RV division, but also manufacturing inefficiencies related to changes we are making in our production processes and reduced results from our final quarter of travel trailer operations," continued Albrechtsen. "As retail motorhome demand began to soften industry-wide, partially driven by weakness in the Southeast market, we adjusted our production levels to better reflect the softening sales trend for our mid-level motorhomes, in addition to offering promotional incentives to avoid a build up of inventory. Unfortunately, these factors impacted our third quarter results."
Country Coach's quarterly sales were $55.7 million, reflecting an increase of $13.1 million, or 31%, over results for the third quarter of 2003. National RV's quarterly sales were $61.8 million, reflecting an increase of $19.8 million, or 47%, over results for the third quarter of 2003. Country Coach's year-to-date sales were $159.6 million, reflecting an increase of $67.2 million, or 73%, over results for the year-to-date sales in 2003. National RV's year-to-date sales were $181.4 million, reflecting an increase of $52.8 million, or 41%, over results for the same period in 2003.
Selling, general and administrative expenses during the third quarter of 2004 increased 50% to $6.6 million compared to $4.4 million in the same period a year earlier, driven primarily by increased personnel expenses and costs associated with Sarbanes-Oxley compliance. As a percentage of sales, SG&A expenses increased slightly to 5.6% of sales in the third quarter of 2004 from 5.2% in the third quarter of 2003.
National R.V. Holdings will host a live webcast to review third quarter results today, October 26, 2004, at 11 a.m. Eastern Time. 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., 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 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. 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 Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
Net sales $117,457 $84,640 $340,977 $220,979
Cost of goods sold 108,672 80,756 314,403 219,749
Gross profit 8,785 3,884 26,574 1,230
Selling expenses 3,512 2,845 9,898 8,285
General and
administrative expenses 3,063 1,543 8,643 5,407
Other expense 374 -- 374 --
Operating income (loss) 1,836 (504) 7,659 (12,462)
Interest expense 52 85 130 309
Other income (25) (2) (72) (6)
Income (loss) from
continuing operations
before income taxes 1,809 (587) 7,601 (12,765)
Provision (benefit)
for income taxes 758 (217) 2,985 (4,723)
Income (loss) from
continuing operations 1,051 (370) 4,616 (8,042)
Loss from discontinued
operations 1,532 503 2,155 1,228
Gain from sale of
discontinued operations (336) -- (336) --
Benefit for income taxes (501) (186) (714) (454)
Net loss from discontinued
operations (695) (317) (1,105) (774)
Net income (loss) $356 $(687) $3,511 $(8,816)
Basic earnings (loss) per common share:
Continuing operations $0.10 $(0.04) $0.45 $(0.82)
Discontinued operations $(0.07) $(0.03) $(0.11) $(0.08)
Total $0.03 $(0.07) $0.34 $(0.90)
Diluted earnings (loss) per common share:
Continuing operations $0.10 $(0.04) $0.45 $(0.82)
Discontinued operations $(0.07) $(0.03) $(0.11) $(0.08)
Total $0.03 $(0.07) $0.34 $(0.90)
Weighted average number of shares
Basic 10,222 9,835 10,203 9,833
Diluted 10,426 9,835 10,392 9,833
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
September 30, December 31,
2004 2003
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $11 $2,059
Restricted cash 250 250
Receivables, less allowance for doubtful
accounts ($103 and $132, respectively) 27,941 20,978
Inventories 68,818 51,659
Deferred income taxes 5,885 7,955
Notes receivable 2,737 --
Prepaid expenses 3,270 1,658
Assets held for sale 1,669 --
Total current assets 110,581 84,559
Property, plant and equipment, net 37,312 40,833
Long-term deferred income taxes 3,805 3,805
Other 1,242 1,252
$152,940 $130,449
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $2,150 $--
Book overdraft 7,228 --
Current portion of long-term debt 1 19
Accounts payable 22,310 14,101
Accrued expenses 21,537 20,770
Total current liabilities 53,226 34,890
Long-term accrued expenses 7,716 7,569
Total liabilities 60,942 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,
10,242,940 and 10,190,230 issued and
outstanding, respectively 102 102
Additional paid-in capital 36,960 36,463
Retained earnings 54,936 51,425
Total stockholders' equity 91,998 87,990
$152,940 $130,449
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2004 2003
Cash flows from operating activities:
Net income (loss) $3,511 $(8,816)
Adjustments to reconcile net income
(loss) to net cash (used in) provided
by operating activities:
Depreciation 2,881 2,959
Loss on asset disposal 6 3
Changes in assets and liabilities:
Increase in trade receivables, net (6,963) (11,575)
(Increase) decrease in inventories (17,159) 11,326
Decrease in income taxes receivable -- 7,015
Increase in notes receivable (2,737) --
(Increase) decrease in prepaid expenses (1,612) 628
Increase in accounts payable 8,209 6,256
Increase (decrease) in accrued expenses 914 (826)
Decrease (increase) in deferred income taxes 2,070 (4,876)
Net cash (used in) provided by
operating activities (10,880) 2,094
Cash flows from investing activities:
Decrease (increase) in other assets 10 (177)
Proceeds from sale of assets 2,246 3
Purchases of property, plant and equipment (3,281) (1,196)
Net cash provided by (used in)
investing activities (1,025) (1,370)
Cash flows from financing activities:
Net advances under (payments on) line of credit 2,150 (1,727)
Increase in book overdraft 7,228 499
Principal payments on long-term debt (18) (17)
Proceeds from issuance of common stock 497 518
Net cash provided by (used in)
financing activities 9,857 (727)
Net decrease in cash (2,048) (3)
Cash, beginning of period 2,059 14
Cash, end of period $11 $11