National R.V. Holdings, Inc. Reports Fourth Quarter Results
1 February 2001
National R.V. Holdings, Inc. Reports Fourth Quarter Results
PERRIS, Calif., Feb. 1 National R.V. Holdings, Inc.
, today reported results for the fourth quarter ended
December 31, 2000. Net sales for the quarter were $80.3 million compared to
$102.2 million for the fourth quarter of 1999. Net income for the quarter was
$0.4 million compared to $8.3 million for the same quarter last year.
Earnings per diluted share were $0.04 compared to $0.75 last year.
Net sales for the year ended December 31, 2000 were $348.8 million
compared to $419.4 million last year. Income for the year before the
cumulative effect of change in accounting principle was $11.2 million, or
$1.11 per diluted share, compared to $33.0 million, or $2.95 per diluted share
last year. Net income including the effect of a change in accounting
principle was $10.0 million, or $0.99 per diluted share.
In 2000, the Company adopted the Securities and Exchange Commission's
(SEC) Staff Accounting Bulletin No. 101 ("SAB 101") - Revenue Recognition in
Financial Statements, which the SEC staff issued in December 1999. SAB 101
sets forth the SEC's views concerning revenue recognition, the effect of which
on the Company is to record revenue upon delivery of products to dealers
rather than upon shipment by the Company. The cumulative effect reported in
2000 represents the amount by which prior years' earnings would have been
reduced by application of the new principle retroactively.
In commenting on the quarter, Wayne Mertes, National's President and CEO,
stated, "We saw a continued softness in the industry during the fourth quarter
with a marked slowdown during November and December. In addition, consumer
confidence levels declined significantly towards the end of the year. The
resulting decline in retail sales of RVs from dealer lots adversely affected
our dealers' ability to obtain flooring for new units." In addition, stated
Mr. Mertes, "Mirroring an ongoing industry trend, the Company saw a continued
shift in product mix towards more diesel motorhomes away from gas units. The
continued slow down during the quarter necessitated further reductions in
production rates resulting in unfavorable manufacturing variances."
On January 1, 2001, the Company opened the doors of its newly constructed,
30-bay service and parts distribution center in Perris, California. The
facility services both National RV and Country Coach motorhomes and provides
much-needed additional service capacity.
On January 26, 2001, the Company consummated the acquisition of a parts
and service facility in the Florida area. This purchase provides the Company
with a presence on the East coast for better servicing dealers and customers
and will enhance company-wide efforts to provide improved customer service.
The Company has placed on the market the land that was purchased in 1999 for
the purpose of building an East-coast service and parts distribution center.
The Company also announced the resignation of Jack Courtemanche as CEO of
the Company's Country Coach division. The 65-year-old Mr. Courtemanche had
served in that capacity since July of 2000. Don Fults, who was named
president of Country Coach in July of 2000, will assume the responsibilities
of Mr. Courtemanche.
Corporate Results
Wholesale shipments of the Company's gas motorhome products were down 50%
from 511 units for the fourth quarter last year to 256 units this year.
Shipments of the Company's motorhomes built on diesel chassis declined 14% to
323 units for the fourth quarter compared to 377 last year. Unit sales of the
Company's towable products increased 48% to 193 units from 130 units for the
fourth quarter last year.
For the year ended December 31, 2000, wholesale shipments of the Company's
gas motor home products declined 40% to 1,508 units compared to 2,533 units
last year. Diesel motor home shipments were down 5% to 1,344 compared to
1,420 units last year. Wholesale shipments of towable products increased 29%
to 553 units from 430 units last year.
Gross margins during the quarter were significantly impacted by
inefficiencies attributable to operating at reduced production levels and by
the continued sales discounting.
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 $6 million during the fourth quarter, due
primarily to a decrease in receivables and inventories, offset by additional
capital expenditures during the quarter of $3 million -- primarily related to
the construction at the Company's Perris facility. For the year ended
December 31, 2000, operating activities provided $26.3 million in cash, while
the Company spent $14.7 million on capital expenditures and $15.2 million on
share repurchases.
Capital expenditure plans for the 2001 have been reduced to $5 million,
with approximately $3 million of that coming in the first quarter with the
purchase of the Florida parts and service center and the completion of the
Perris construction.
Outlook
The Company's expectations for the next couple of quarters remain below
prior year levels. However, the Company is enjoying a backlog of orders
comparable to that of a year ago, growing towables sales, and some success at
cutting costs to reduce overhead.
National R.V. Holdings, Inc. is a leading manufacturer of Class "A" motor
homes. From its Perris, California facility, the Company designs,
manufactures and markets National R.V. Class "A" motor homes under brand names
including Tradewinds, Dolphin, Islander, Sea Breeze, Sea View, Surf Side,
Marlin, Tropi-Cal, and Caribbean, and travel trailers under brand names
including Sea Breeze, Palisades, Splash and Rage'n. From its Junction City
facility, the Company designs, manufactures and markets Country Coach high-end
(Highline) Class "A" motor homes under brand names including Affinity, Allure,
Intrigue and Magna, and bus conversions under the Country Coach Prevost brand.
This release and other statements by the Company contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that forward-looking statements are
inherently uncertain. Actual performance and results may differ materially
from that projected or suggested due to certain risks and uncertainties
including, without limitation, the cyclical nature of the recreational vehicle
industry, seasonality and potential fluctuations in the Company's operating
results; the Company's dependence on chassis suppliers, the integration by the
Company of acquired businesses and management of growth; potential liabilities
under repurchase agreements; competition; government regulation; product
liability; dependence on key personnel and dependence on certain dealers and
concentration of dealers in certain regions. Additional information
concerning certain risks and uncertainties that could cause actual results to
differ materially from that projected or suggested is contained in the
Company's filings with the Securities and Exchange Commission (SEC) over the
last 12 months, copies of which are available from the SEC or from the Company
upon request.
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Twelve Months
Ended December 31, Ended December 31,
2000 1999 2000 1999
Net sales $80,318 $102,154 $348,846 $419,421
Cost of goods sold 73,955 85,072 308,216 348,592
Gross profit 6,363 17,082 40,630 70,829
Selling expenses 3,935 3,034 14,111 11,437
General and administrative
expenses 2,218 1,832 9,138 7,214
Amortization of
intangibles 103 103 413 413
Operating income 107 12,113 16,968 51,765
Other expense (income):
Interest expense 3 1 6 29
Interest income (569) (434) (1,206) (1,408)
Other 107 (59) 135 (432)
Income before income
taxes and cumulative
effect of change in
accounting principle 566 12,605 18,033 53,576
Provision for income taxes 215 4,256 6,864 20,625
Income before cumulative
effect of change in
accounting principle 351 8,349 11,169 32,951
Cumulative effect on prior
years of change in accounting
principle -- -- (1,212) --
Net income $351 $8,349 $9,957 $32,951
Earnings per common share
and common equivalent
shares:
Basic:
Income before cumulative
effect of change in
accounting
principle $0.04 $0.80 $1.15 $3.16
Cumulative effect of
change in accounting
principle -- -- (0.12) --
Net income $0.04 $0.80 $1.02 $3.16
Weighted average number
of shares 9,663 10,378 9,743 10,430
Diluted:
Income before
cumulative effect of
change in accounting
principle $0.04 $0.75 $1.11 $2.95
Cumulative effect of
change in accounting
principle -- -- (0.12) --
Net income $0.04 $0.75 $0.99 $2.95
Weighted average number
of shares 9,859 11,189 10,086 11,178
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
December December
31, 31,
2000 1999
(Unaudited)
ASSETS
Current Assets:
Cash $16,696 $20,301
Trade receivables, less allowance for
doubtful accounts of $321 15,109 22,473
Inventories 63,639 68,187
Deferred income taxes 6,035 5,610
Prepaid expenses 2,100 1,439
Total current assets 103,579 118,010
Goodwill 6,539 6,952
Property, plant and equipment, net 44,460 33,167
Other 1,096 1,085
$155,674 $159,214
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt $20 $20
Accounts payable 12,550 11,167
Accrued expenses 14,946 14,908
Total current liabilities 27,516 26,095
Deferred income taxes 2,801 2,470
Long-term debt 64 84
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,
10,595,536 and 10,588,886 issued,
respectively 106 106
Additional paid-in capital 47,800 47,768
Accumulated earnings 92,648 82,691
Less cost of treasury stock - 932,900 shares (15,261) --
Total stockholders' equity 125,293 130,565
$155,674 $159,214
Please direct questions to investors@nrvh.com.
The conference call to review fourth quarter results will be webcast
today, February 1, 2001, 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.