Rexhall Continues Record Growth, Reports Best-Ever Third Quarter Results
12 November 1999
Rexhall Industries Continues Record Growth, Reports Best-Ever Third Quarter Results; Nine Month Earnings Exceed Full Year 1998
LANCASTER, Calif., Nov. 11 -- Rexhall Industries, Inc.
posted a 30 percent increase in net earnings in the third
quarter ended September 30, 1999, driven by growing market penetration in the
Class A RV market.
The Lancaster, Calif.-based motorhome maker said net earnings increased to
$1,251,000, or $0.42 per diluted share, in the 1999 third quarter, compared
with net earnings of $965,000, or $0.32 per diluted share, in the prior year
third quarter. Rexhall reported a 10 percent increase in net sales to
$20.6 million in the 1999 quarter, versus net sales of $18.8 million in the
third quarter of 1998.
Rexhall said the strong recreational vehicle (RV) market, fueled by
consumer confidence and improving population demographics, coupled with
growing consumer demand for its products contributed to the sales growth in
the quarter. Higher sales volume, continued operating efficiencies and
increased sales of higher margin products fueled the Company's strong earnings
performance in the quarter.
Rexhall reported that gross profit increased 9.2 percent to $4.0 million
in the 1999 third quarter, reflecting increased unit sales and increased sales
of Class "A" motorhome featuring upscale amenities such as double slides and
diesel chassis. Higher sales and improved margins on products helped offset
higher labor costs in the quarter due to the introduction of Rexhall's
millennium-edition motorhomes. Third-quarter 1999 earnings before income
taxes rose 28 percent versus the prior-year period, reflecting continued
cost-management efforts as well as increased investment in sales and
marketing.
"Our third quarter results reflect the continued leadership of Rexhall
products in the Class A market," said William J. Rex, Rexhall chairman,
president and CEO. "We are well on our way to a record year and are
particularly pleased with our operating performance, which is enabling us to
continue to expand earnings ahead of strong sales.
"Our task now is to pursue aggressively new product development
initiatives and new dealer distribution to sustain our momentum."
Rexhall recently announced that it added a new sales division in the third
quarter to target the Midwest and East Coast markets. The Company said it
expects new dealer distribution in these regions to favorably impact its
results in 2000.
For the nine months ended September 30, 1999, Rexhall reported a
52 percent increase in net earnings on higher net sales compared to the prior
year nine months. Net earnings rose to a best-ever $3,758,000, or $1.25 per
diluted share in 1999, versus net earnings of $2,464,000, or $0.83 per diluted
share, in the first nine months of 1998. Rexhall said
year-to-date earnings have already exceeded its earnings for all of 1998. Net
sales rose to $63.8 million, up from $51.7 million in the prior year
nine-month period.
"We are focused on continuing to execute our rapid-growth strategy and
building shareholder value," said Rex.
Rexhall Industries, Inc. (http://www.rexhall.com) designs, manufactures and sells
various models of Class A motorhomes used for leisure travel and outdoor
activities. Rexhall's six lines of Class A motorhomes, sold through more than
100 dealer locations across the U.S., Canada and Europe, include Aerbus,
RexAir, Vision, American Clipper, Anthem and RoseAir. Rexhall was recently
ranked one of America's 100 Fastest Growing Companies by Individual Investor
magazine.
Our expectations are forward-looking statements, based on assumptions and
facts known to us today, and we do not intend to update statements in this
report. While we have enjoyed good results, our business is both seasonal and
cyclical. We are subject to increases in materials costs, and pricing and
other pressures from substantially larger competitors, interest-rate
increases, and adverse weather. The reduced production of oil by OPEC members
may reduce sales of motor homes. Management intends to remain aware of these
factors and react to them, but cannot predict their timing or significance.
REXHALL INDUSTRIES, INC.
Condensed Statements of Earnings
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Sales $20,590 $18,755 $63,760 $51,709
Cost of Sales 16,574 15,079 51,939 42,542
Gross Profit 4,016 3,676 11,821 9,167
Selling, General,
Administrative Expenses
and Other Expenses 1,956 2,068 5,572 5,063
Earnings Before
Income Taxes 2,060 1,608 6,249 4,104
Income Taxes 809 643 2,491 1,640
Net Earnings $1,251 $965 $3,758 $2,464
Basic Earnings Per Share $0.42 $0.33 $1.25 $0.83
Diluted Earnings Per Share $0.42 $0.32 $1.25 $0.83
Weighted Average
Shares Outstanding-Basic 3,010 2,953 3,010 2,953
Weighted Average
Shares Outstanding-Diluted 3,010 2,980 3,010 2,980