National R.V. Holdings, Inc. Reports Third Quarter Results
31 October 2000
National R.V. Holdings, Inc. Reports Third Quarter Results
PERRIS, Calif., Oct. 31 National R.V. Holdings, Inc.
, today reported results for the third quarter ended
September 30, 2000. Net sales for the quarter were $86.7 million compared to
$108.9 million for the third quarter of 1999. Net income for the quarter was
$2.7 million compared to $9.0 million for the same quarter last year.
Earnings per share were $0.28 compared to $0.81 last year.
Net sales for the nine months ended September 30, 2000 were $266.4 million
compared to $317.3 million for the same period last year. Net income for the
nine months was $10.4 compared to $24.6 million last year, and earnings per
share were $1.03 compared to $2.20 last year.
In commenting on the quarter, Wayne Mertes, National's President and CEO,
stated, "We saw a continued softness in the industry during the third quarter.
Interest rates and fuel prices remained high, and dealers continued to reduce
inventory levels, resulting in ongoing discounting within the industry. We
anticipate that this environment will continue to put pressure on both
revenues and earnings for the foreseeable future. On a positive note, the
July introduction of our 2001 models helped reverse the decline in retail
market share the Company experienced during the first half of the year. Our
market share in July and August averaged 7.9%, compared to an average of 7.2%
for the first six months of the year."
To help in the Company's compliance with new SEC fair disclosure
regulations, this earnings release is longer and more comprehensive than in
the past.
Corporate Results
Wholesale shipments of the Company's gas motorhome products were down 39%
from 630 units for the third quarter last year to 382 units this year.
Shipments of the Company's motorhomes built on diesel chassis declined just 3%
to 356 units for the third quarter compared to 367 last year -- reflecting an
industry-wide trend favoring the higher-priced diesel units. Accordingly,
while total motorhome unit sales declined 26%, revenues from such sales were
down 21%. Class "A" motorhome sales continue to represent approximately 95%
of the Company's revenue.
Unit sales of the Company's towable products increased 68% to 129 units
from 77 units for the third quarter last year. The increase is the result of
the introduction of the Company's first entry-level towable products as well
as an increase in shipments of fifth-wheel products. Revenues from towable
sales increased 33% for the third quarter over the same quarter last year.
Gross margins during the quarter were unfavorably impacted by
inefficiencies attributable to operating at reduced production levels,
continued sales discounting, and an increase in warranty expense.
Increases in the Company's selling, general and administrative costs were
the result of increased promotional costs directly resulting from the
competitive environment discussed above, the Company's increased presence at
industry shows and rallies, and increases in administrative and technology
costs.
Capital Resources
Cash increased by approximately $4 million during the third quarter.
Income of $2 million and a $10 million reduction in inventories for the
quarter were partially offset by a $4 million increase in trade receivables
and $4 million in capital expenditures -- primarily related to the
construction at the Company's Perris facility. For the nine months ended
September 30, 2000, operating activities provided $17 million in cash, while
the Company spent $12 million on capital expenditures and $15 million on share
repurchases.
Capital expenditures for the fourth quarter are likely to be around
$3 million bringing them to a total of $15 million for the year. Such
expenditures are expected to total $8-$10 million in 2001 as the Company moves
forward on its plans to build a service and parts distribution facility in
Florida. Previously announced plans to expand capacity at the Junction City
facility have been put on hold.
Outlook
Dealer inventories of the Company's products remain roughly even with
those of a year ago. Reductions in dealer inventories of previously existing
models were offset by six newly-introduced models on dealer lots at
September 30, 2000: the Palisades fifth-wheel towable, the Splash entry-level
towable, and the Marlin, Caribbean, Islander, and Tradewinds LTC class "A"
diesel motorhomes.
The Company's production rate is approximately 20% below that of a year
ago. At this lower rate, the backlog for the Company's products has been
increasing. Accordingly, the Company is modestly increasing production in the
fourth quarter to maintain the backlog at an optimum level. The Company's
goal is to manage production levels to be consistent with the retail
sell-through rate -- thus avoiding the buildup of inventory either at the
manufacturing or dealer levels.
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Net sales $ 86,652 $108,947 $266,431 $317,267
Cost of goods sold 76,460 89,333 232,709 263,520
Gross profit 10,192 19,614 33,722 53,747
Selling expenses 3,669 3,079 10,176 8,403
General and
administrative expenses 2,044 1,648 6,920 5,382
Amortization of
intangibles 103 103 310 310
Operating income 4,376 14,784 16,316 39,652
Other expense (income):
Interest expense 1 -- 3 28
Interest income (156) (381) (637) (974)
Other 7 11 28 (373)
Income before
income taxes 4,524 15,154 16,922 40,971
Provision for income
taxes 1,791 6,134 6,500 16,369
Net income $2,733 $9,020 $10,422 $ 24,602
Earnings per common
share:
Basic $0.29 $0.87 $1.07 $2.37
Diluted $0.28 $0.81 $1.03 $2.20
Weighted average number
of shares:
Basic 9,585 10,378 9,770 10,392
Diluted 9,847 11,189 10,146 11,185
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
September 30, December 31,
2000 1999
(Unaudited)
Current Assets:
Cash and cash equivalents $10,456 $20,301
Trade receivables, less allowance for
doubtful accounts of $199 21,054 22,473
Inventories 64,704 68,187
Deferred income taxes 6,489 5,610
Prepaid expenses 2,011 1,439
Total current assets 104,714 118,010
Goodwill 6,642 6,952
Property, plant and equipment, net 42,480 33,167
Other 1,276 1,085
$ 155,112 $ 159,214
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $20 $20
Accounts payable 10,316 11,167
Accrued expenses 16,346 14,908
Total current liabilities 26,682 26,095
Deferred income taxes 2,603 2,470
Long-term debt 69 84
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.01 par value;
5,000 shares
Common stock - $.01 par value; 25,000,000
Shares authorized, 10,595,536 and
10,588,886 issued, respectively 106 106
Additional paid-in capital 47,800 47,768
Retained earnings 93,113 82,691
Less cost of treasury stock - 932,900 shares ( 15,261) --
Total stockholders' equity 125,758 130,565
$ 155,112 $ 159,214
Please direct questions to investors@nrvh.com.
The conference call to review third quarter results will be webcast today,
October 31, 2000, at 2 PM (EST). The link can be found on the Company's web
site at http://www.nrvh.com, and will be available for 90 days.