Coachmen Industries Reports Q2 Earnings
28 July 2000
Report Also Reveals Progress on Strategic Plan
ELKHART, Ind. - Coachmen Industries, Inc. today announced that sales for
the second quarter ending June 30, 2000 were $188 million compared with last
year's second quarter sales of $203 million. Sales for the first six months
were $383 million compared with sales in the first six months of 1999 of
$414 million.
For the quarter, diluted earnings per share were 24 cents compared to
54 cents in the same period in 1999. Total net income for the quarter was
$3.7 million compared with $9 million reported last year. Net income for the
first six months was 50 cents per share compared to 98 cents per share
recorded for the same period in 1999.
The reduction in sales and much of the profit erosion during this period
was due to an industry-wide softening in motorized recreational vehicle
shipments along with dealer inventory adjustments. However, strong orders
received at recent dealer meetings reflect dealers' confidence in returning
market strength as well as great acceptance of the new 2001 models, many of
which take the Company into expanded markets.
"Despite the recent market conditions, we remain confident in and focused
on improving our core businesses -- recreational vehicles and modular housing
-- while continuing to take the necessary actions to enhance shareholder
value," said Claire C. Skinner, Chairman and Chief Executive Officer.
During the first half of the year the Company continued the implementation
of its strategic plan. The administrative and support functions of Coachmen
Recreational Vehicle Company and Shasta Industries were combined. While
transparent to Coachmen's dealer partners and customers, the consolidation
will enable the Company to leverage the combined size and eliminate redundant
costs between the two entities. This business model is a new platform that
will be phased in throughout the Company in its brand management strategy to
best capture the synergies that exist among all of Coachmen Industries'
companies. This reorganization will bring about increased efficiencies,
margins and returns while building upon the Company's powerful brand equity.
As part of the Company's focus on its core businesses and its asset
rationalization strategy, the assets of two marginally profitable operations,
office seating and van conversions, were sold. Further, the decision has been
made to sell at least four of the Company's six RV dealerships. Many costs
associated with these decisions are reflected in reduced profits year-to-date.
Another important part of the Company's plan is to build on its leadership
through strategic acquisitions. During the second quarter, Coachmen completed
the acquisition of Mod-U-Kraf, Inc., a modular home and special products
manufacturer based in Rocky Mount, Virginia. "The Company is actively
pursuing other acquisitions that fit within our strategic objectives," noted
Chairman Skinner.
"Coachmen's core businesses are very sound and we continue to maintain a
strong balance sheet and financial structure," said James E. Jack, Executive
Vice President and Chief Financial Officer. "With the positive changes made
during the second quarter we remain confident that our strategic plan will
enable our Company to return to leadership levels."
Economic factors including consumer confidence and demographics remain
favorable for both the recreational vehicle and modular housing industries.
Unlike most competitors Coachmen is positioned to meet the broad range of RV
consumer preferences because it produces every traditional recreational
vehicle type at multiple price points. Coachmen Industries, Inc. also
continues its national dominance as the largest manufacturer of modular
housing.
COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands except per share data)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2000 1999 2000 1999
Net sales $ 187,910 $ 203,199 $ 383,138 $ 414,224
Cost of goods sold 164,184 175,191 335,246 358,643
Gross profit 23,726 28,008 47,892 55,581
Selling, delivery and
general and admin.
expenses 18,244 16,753 35,966 33,845
Operating income 5,482 11,255 11,926 21,736
Nonoperating income
(expense), net (127) 2,503 (371) 2,751
Income before income
taxes 5,355 13,758 11,555 24,487
Income taxes 1,655 4,744 3,825 8,256
Net income $3,700 $9,014 $7,730 $16,231
Earnings per common share:
Basic $.24 $.54 $.50 $.98
Diluted $.24 $.54 $.50 $.98
Number of common shares
used in the computation
of earnings per share:
Basic 15,566 16,665 15,559 16,645
Diluted 15,581 16,744 15,571 16,711