Starcraft Reports Fourth Quarter and Fiscal 2004 Year-End Results
GOSHEN, Ind.--Nov. 2, 20043, 2004--Starcraft Corporation announced today results for the fourth quarter and fiscal year ended October 3, 2004.Consolidated revenues for fiscal 2004 were $173.4 million compared to $192.1 million in fiscal 2003. Net loss for the year totaled $45.0 million, or ($5.79) per diluted share. This includes $6.35 per diluted share of charges related to the impairment of goodwill and amortization of intangibles. Excluding those charges, 2004 EPS would have totaled $0.56 per diluted share, which compares to $2.15 per diluted share in fiscal 2003.
Fiscal 2004 revenues were affected by the closure of the Company's New Jersey facility and decreased demand for second stage product produced out of Oshawa, Ontario. Helping to offset this decline was $10 million in revenues relating to the wheel distribution program and acquisition related revenue of $13.6 million.
Net income was impacted by lower second stage revenues, which compressed gross margins. Additionally, the gross margin levels of acquired businesses were below the Company's historical levels. Partially offsetting these factors were income tax benefits.
Net sales for the fourth quarter of fiscal 2004 were $45.4 million, versus $42.9 million for the fourth quarter of fiscal 2003. Net income for the quarter was $0.9 million, or $0.10 per diluted share. Excluding amortization charges of $0.5 million, net income for the quarter would have totaled $1.5 million, or $0.16 per diluted share, which compares to net income of $2.9 million, or $0.51 per diluted share in the 2003 fourth quarter.
Revenues in the fourth quarter were positively impacted by strong performance from the wheel distribution program, which contributed $3.2 million in revenue; while revenues derived from newly acquired companies contributed $4.8 million. These increases were partially offset by a $12.4 million decline in second stage revenue. The corresponding shift in business mix had a negative effect on gross margin, as higher margin second stage revenue was supplanted by acquisition related revenue.
During the quarter, Starcraft announced several new programs beginning in 2005. Amstar LLC, a 50-50 joint venture of Tecstar and AM General, will produce a special edition Hummer H2(R). The venture, starting in July of 2005, is expected to generate revenues in excess of $5 million. Starcraft was also awarded a new program to produce a luxury suburban package for General Motors. The program will last through the 2006 model year with estimated annual revenues of $35 million. Finally, the Company announced the expansion of its current program involving the Silverado S/S pickup truck.
The new programs announced during the fourth quarter come in addition to the Powertrain Integration joint venture with IMPCO Technologies, Inc. that was announced in July 2004. This new company will provide powertrain integration, engineering expertise and production capabilities to satisfy the OEM need for low volume, on-highway vehicle applications.
NON-GAAP FINANCIAL INFORMATION
In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included within this press release, Starcraft Corporation has provided earnings and earnings per share prior to goodwill impairment and amortization of intangible assets, which are considered non-GAAP financial measures. Such information is reconciled to its closest GAAP measure (fully diluted earnings per share) in accordance with SEC Rules.
Management believes that these non-GAAP financial measures are useful to both management and Starcraft shareholders in their analysis of the company's business and operating performance. Management also uses this information of operation planning and decision-making purposes. In particular, providing our pre-tax earnings data excluding these acquisition related non-cash charges, provides a more realistic view of the company's actual results from operations for the periods in question.
Non-GAAP financial measures should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures as presented by Starcraft Corporation may not be comparable to similarly titled measures reported by other companies.
ABOUT STARCRAFT
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. http://www.starcraftcorp.com
STARCRAFT CORPORATION
CONSOLIDATED FINANCIAL RESULTS
Dollars in Thousands, except EPS
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Three Months Ended
-------------------------------------
Statement of Operations October 3, 2004 September 28, 2003
(unaudited):
----------------------- ------------------ ------------------
Net Sales $45,350 $42,932
Cost of Goods Sold 40,723 33,210
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Gross Profit 4,627 9,722
Selling and Promotion Expenses 785 489
General and Administrative
Expenses 3,824 5,091
Goodwill Impairment - -
Amortization of Intangibles 540 -
Operating Income (Loss) (522) 4,142
Nonoperating Income (Expense):
Interest, net (486) (150)
Other, net - 15
------------------ ------------------
(486) (135)
Income (Loss) Before Minority
Interest and Income Taxes (1,008) 4,007
Minority Interest in Income of
Subsidiary - 2,191
------------------ ------------------
Income (Loss) before Income
Taxes (1,008) 1,816
Income Taxes (Benefits) (1,939) (1,061)
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NET INCOME(LOSS) $931 $2,877
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Basic Earnings (Loss) Per Share $0.10 $0.57
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Diluted Earnings (Loss) Per Share $0.10 $0.51
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Weighted Average Number of
Basic Common Shares
Outstanding 8,914 5,023
================== ==================
Weighted Average Number of
Diluted Common Shares
Outstanding 9,253 5,634
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Twelve Months Ended
-------------------------------------
Statement of Operations October 3, 2004 September 28, 2003
(unaudited):
----------------------- ---------------- ------------------
Net Sales $173,403 $192,102
Cost of Goods Sold 150,339 147,835
---------------- ------------------
Gross Profit 23,064 44,267
Selling and Promotion Expenses 2,897 1,866
General and Administrative
Expenses 16,196 17,297
Goodwill Impairment 47,900 -
Amortization of Intangibles 1,440 -
Operating Income (Loss) (45,369) 25,104
Nonoperating Income (Expense):
Interest, net (940) (457)
Other, net - 33
---------------- ------------------
(940) (424)
Income (Loss) Before Minority
Interest
and Income Taxes (46,309) 24,680
Minority Interest in Income of
Subsidiary 610 10,832
---------------- ------------------
Income (Loss) before Income
Taxes (46,919) 13,848
Income Taxes (Benefits) (1,897) 2,060
---------------- ------------------
NET INCOME(LOSS) $(45,022) $11,788
================ ==================
Basic Earnings (Loss) Per Share (5.79) $2.37
================ ==================
Diluted Earnings (Loss) Per Share $(5.79)(1) 2.15
================ ==================
Weighted Average Number of
Basic Common Shares
Outstanding 7,772 4,975
================ ==================
Weighted Average Number of
Diluted Common Shares
Outstanding 8,471 5,494
================ ==================
(1) Calculation does not reflect the effect of incentive stock options
and convertible securities since their effect is antidilutive
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October 3, 2004 September 28, 2003
---------------- ------------------
Balance Sheets: (Unaudited) (Audited)
--------------- ---------------- ------------------
Current Assets:
Cash $1,173 $836
Accounts and Other Receivables 25,079 29,182
Inventories 13,547 10,060
Other Current Assets 4,872 9,002
---------------- ------------------
Total Current Assets 44,671 49,080
Property and Equipment, net 14,517 9,136
Goodwill and Intangibles, net 90,303 0
Other Assets 1,506 514
---------------- ------------------
$150,997 $58,730
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October 3, 2004 September 28, 2003
---------------- -------------------
(Unaudited) (Audited)
---------------- -------------------
Current Liabilities:
Current Maturities & Notes
Payable $310 $0
Accounts Payable, Trade 20,945 19,549
Accrued Expenses 3,549 7,572
---------------- -------------------
Total Current Liabilities 24,804 27,121
Long-term Debt 18,896 9,148
Minority Interest 0 9,821
Deferred Taxes 4,938 0
Shareholders' Equity 102,359 12,640
---------------- -------------------
$150,997 $58,730
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