EXHIBIT 99.2
Travis Boats Reports Third Quarter Fiscal 2003
Results and Update on Key Initiatives
AUSTIN, Texas, Aug 4, 2003 /PRNewswire-FirstCall via COMTEX/ --
Travis Boats & Motors, Inc. (Nasdaq: TRVS) today reported the results of
operations for its third quarter of fiscal 2003 and the nine month period ended
June 30, 2003 and provided an update on several key initiatives on operations
and financing.
Results of Operations
Net sales were $53,129,000 for the quarter ended June 30, 2003, compared to net
sales of $67,825,000 for the same quarter of the prior fiscal year. The decline
in net sales is related to operating fewer stores, a decline in comparable store
sales and the decline in average retail prices due to the aggressive
sell-through of non-current inventory as outlined in the business plan
strategies implemented in March 2003 and discussed below. Comparable store sales
declined 16.5% (30 stores in base) for the quarter ended June 30, 2003. For the
nine month period ended June 30, 2003 net sales totaled $109,149,000, compared
to net sales of $135,879,000 for the nine months ended June 30, 2002. Comparable
store sales declined 15.2% (30 stores in base) for the nine months ended June
30, 2003. The Company had 30 and 35 stores in operation on June 30, 2003 and
2002, respectively, which accounted for approximately $4,600,000 and $8,200,000
of the decline in net sales for the quarter and nine months ended June 30, 2003,
respectively.
For the quarter ended June 30, 2003, the Company reported net income of $438,000
($0.10 per basic and $0.07 per diluted share) after preferred stock dividends of
$120,000. During the quarter ended June 30, 2003, the Company incurred expenses
of approximately $307,000 related to the non-cash elimination of leasehold
improvements and other expenses related to the closing of four store locations.
The Company had net income of $1,510,000 ($0.35 per basic and $0.25 per diluted
share), after preferred stock dividends of $67,000 for the same quarter of the
prior fiscal year. The decrease in net income for the quarter ended June 30,
2003 is due in part to the impact of the reduction in net sales and gross profit
due to the accelerated inventory sell-through as outlined in the business plan
strategies discussed below, the operation of fewer store locations and the store
closure expenses.
For the nine month period ended June 30, 2003, the Company reported a net loss
of $5,105,000, ($1.18 per basic and diluted share, respectively). This loss
includes $360,000 in preferred stock dividends.
The Company had a net loss, prior to the cumulative effect of accounting change,
of $1,667,000 ($0.39 per basic and diluted share) for the nine months ended June
30, 2002. As of October 1, 2001, the Company adopted SFAS 142, "Goodwill and
Other Intangible Assets". Based on application of the provisions of SFAS 142,
the Company incurred a non-cash, non-recurring charge of approximately
$6,528,000, net of taxes. The charge eliminated the Company's goodwill accounts.
Inclusive of the cumulative effect of accounting change, the Company's net loss
for the nine months ended June 30, 2002 was approximately $8,262,000 ($1.90 per
basic and diluted share) after preferred stock dividends of $67,000.
Mark Walton, President of Travis Boats, said, "The Company has worked
aggressively to implement its business plan objectives and I am pleased that we
are making meaningful progress on these key objectives. There remains a lot of
work to do and we have begun the planning process for the next year. I am
enthusiastic about the prospects ahead."
Key Initiatives -- Travis Boats & Motors, Inc. also has provided an update and
status on various key initiatives.
Real Estate Borrowing Agreements -- Based on the Company's operating strategy
and the significant equity in the appraised values versus loan amounts on the
real estate, we have continued to focus on the potential refinance or
sale/leaseback of several properties with the objective of refinancing all
Hibernia real estate loans by the fall of 2003. Since March 2003, the Company
has repaid three (3) real estate loans at Hibernia Bank totaling approximately
$1.2 million with cash generated from operations. Efforts are underway to recoup
the cash via new secured loans on the properties.
Several other properties are currently being marketed for sale/leasebacks and
one property is under contract. This sale/leaseback is expected to generate cash
proceeds of approximately $850,000, net of debt on the facility. If the other
properties attain similar sale/leaseback terms to the property currently under
contract, the Company would generate additional cash proceeds of $2.5 million,
after debt repayment. Each of these listed properties is in a vibrant market
area and the Company has received considerable interest from potential
investors.
Senior Inventory Borrowing Agreements -- The Company's Senior Inventory Lenders
(the "Inventory Lenders") have continued to support Travis Boats and also the
Company's continued execution of its business plan. The Company expects its
performance to the plan to serve as the basis for the renewal of its Inventory
Borrowing Agreements with terms providing the necessary time and flexibility for
the Company to execute its strategy.
Business Plan -- as previously discussed in our Second Quarter Earnings Release,
our Chairman, Richard Birnbaum, and Company management presented the plan to its
key Inventory Lenders in mid April. The plan strategy included acceleration of
the sell-through of prior year and discontinued inventory with the expected
result being a short-term adverse effect on average retail prices and gross
profits, offset by a significant improvement in working capital from its
inventory borrowing base requirements. This sell-through, which began in
February, has progressed favorably and continues to meet our plan objectives. As
of June 30, 2003, we have sold approximately $14.5 million of non-current and
aged inventory at reduced retail sales prices and gross margins. Management
estimates that the sale of this targeted inventory at reduced retail prices and
margins, versus the sale of our standard inventory packages accounted for a
reduction of approximately $2.5 million in pre-tax profits for the three months
ended June 30, 2003.
The strategy also contains initiatives in merchandising and several revenue
enhancement opportunities. The merchandising strategy includes focusing on
inventory turn improvement, product mix refinement and seasonal sales velocity
by product category. Revenue opportunities include the review and benchmarking
of all stores in the areas of parts, service and finance to leverage the best
practices and achievements of our top producing stores. We believe the
implementation of our strategy across all stores will provide significant
opportunity for enhancing sales and operations.
Richard Birnbaum, Chairman of Travis Boats said, "Our team has done an excellent
job of rapidly selling through a tremendous amount of non-current and aged
inventory which had compounded in size over several seasons. The impact of these
sales on the comps, margins, and net income for our June 2003 quarter should not
be under estimated. To a lesser extent, I was disappointed that we missed some
sales opportunities in the important weeks prior to the July 4 holiday as
various product shortages resulted due to ordering restraints we had to deal
with last winter and this spring. We are in the process of revamping our
merchandising ordering systems and remain focused on several additional
opportunities to improve customer service, training and execution."
The Company will host a Conference Call at 9:00 am Central Standard Time on
Monday, August 4, 2003 to discuss the Results of Operations and the status of
Key Initiatives. The call in number is (212) 346-7490 and the code for entry is
21155996. A replay of the conference call will be available through midnight on
Wednesday, August 6, 2003. The replay is accessible by calling (800) 633-8284
and the required reservation code is #21155996.
Travis Boats & Motors, Inc., is a leading multi-state superstore retailer of
recreational boats, motors, trailers and related marine accessories in the
southern United States. The Company operates 30 store locations in Texas,
Arkansas, Oklahoma, Louisiana, Alabama, Tennessee, Mississippi, Georgia and
Florida under the name Travis Boating Center. The Company's website is
www.travisboatingcenter.com .
TRAVIS BOATS & MOTORS, INC. and SUBSIDIARIES
Unaudited Financial Highlights
(in thousands, except share and store data)
Three Months Ended Nine Months Ended
June 30, June 30,
2003 2002 2003 2002
Net sales $ 53,129 $ 67,825 $ 109,149 $ 135,879
Cost of goods sold 42,136 52,614 87,049 106,134
Gross profit 10,993 15,211 22,100 29,745
Selling, general
and administrative 8,704 10,850 24,682 27,380
Store closing expense 307 --- 307 ---
Depreciation and amortization 598 625 1,863 1,868
9,609 11,475 26,852 29,248
Operating income/(loss) 1,384 3,736 (4,752) 497
Interest expense (872) (1,054) (2,614) (3,208)
Other income/(expense) 46 (178) 88 66
Income/(loss) before income taxes, and cumulative effect of
accounting change 558 2,504 (7,278) (2,645)
Income tax
(provision)/ benefit --- (927) 2,533 978
Net income/(loss) before
cumulative effect of
accounting change $ 558 $ 1,577 $ (4,745) $ (1,667)
Cumulative effect of
accounting change,
net of taxes of $2,281 --- --- --- (6,528)
Net income/(loss) $ 558 $ 1,577 $ (4,745) $ (8,195)
Preferred Stock dividends (120) (67) (360) (67)
Net income/(loss)
attributable to
common shareholders $ 438 $ 1,510 $ (5,105) $ (8,262)
Earnings/(loss) per share Basic:
Net income/(loss) before
preferred stock dividends
and cumulative effect
of accounting change, net 0.13 0.36 (1.10) (0.39)
Preferred stock dividends (0.03) (0.01) (0.08) (0.01)
Cumulative effect of
accounting change, net --- --- --- (1.50)
Net income/(loss) $ 0.10 $ 0.35 $ (1.18) $ (1.90)
Diluted:
Net income/(loss) before
preferred stock dividends
and cumulative effect of
accounting change, net 0.07 0.25 (1.10) (0.39)
Preferred stock dividends --- --- (0.08) (0.01)
Cumulative effect of
accounting change, net --- --- --- (1.50)
Net income/(loss) $ 0.07 $ 0.25 $ (1.18) $ (1.90)
Weighted average common
shares outstanding 4,313,243 4,345,657 4,324,232 4,349,742
Weighted average dilutive
common shares outstanding 8,094,653 6,524,013 4,324,232 4,349,742
Supplemental Data - Unaudited
Cash $ 4,014 $ 8,961
Inventory (net) $ 39,262 $ 61,667
Revolving/Inventory debt $ 39,687 $ 58,432
Stores open at end of period 30 35
Cautionary Statement for purposes of the Safe Harbor Provisions of the 1995
Private Securities Litigation Reform Act. The statements in this document or in
documents incorporated by reference herein that are not historical facts are
forward-looking statements as that term is defined in Section 21E of the
Exchange Act that involve a number of risks or uncertainties. The actual results
of the future events, including expectations of fiscal 2003 revenue and
earnings, and expectations of alternative capital sources or ability to generate
sufficient cash flow for operations could differ materially from those stated in
such forward-looking statements. Among the factors that could cause actual
results to differ materially are: the impact of seasonality and weather, general
economic conditions and the level of discretionary consumer spending, and the
Company's ability to restructure to stop operating losses. These and numerous
other risk factors were identified in the Report on Form 10-K filed for fiscal
year 2002 and other documents filed of record.
Contact: Michael B. Perrine
Chief Financial Officer
(512) 347-8787 Ext 119
SOURCE Travis Boats & Motors, Inc.
Michael B. Perrine, Chief Financial Officer of Travis Boats &
Motors, Inc., +1-512-347-8787, Ext. 119
http://www.travisboatingcenter.com
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