COACHMEN INDUSTRIES, INC. RETURNS TO PROFITABILITY; DECLARES DIVIDEND
ELKHART, Ind., Aug. 9 /PRNewswire/ -- Coachmen Industries, Inc. (NYSE: COA -
news) announced today that it has returned to profitability, consistent with its
previously announced expectations.
Total net income for the second quarter ended June 30, 2001 was $1.4 million
compared with $3.7 million reported last year. For the quarter, diluted earnings
per share were $.09 compared to $.24 per share in the same period in 2000. This
rebounds from a loss in the first quarter of $4.9 million, or $.31 per share.
For the first six months of the year, the net loss is $3.5 million, or a $.22
per share loss, compared to net income of $7.7 million, or $.50 per share for
the same period in 2000.
The return to profitability was achieved in spite of revenues that were
significantly below those of a year ago because of continuing softness in the
recreational vehicle industry. Sales for the second quarter ended June 30, 2001
were $162.4 million compared with last year's second quarter sales of $194.7
million. Sales for the first six months were $315.3 million compared with sales
in the first six months of 2000 of $395.9 million.
"Given the continuing difficulty in the RV market as a whole, we are pleased to
return to profitability after two quarters of losses. We believe that our
ability to rebound so quickly is the result of the many internal and structural
changes we have put in place," said Claire C. Skinner, Chairman, Chief Executive
Officer and President of Coachmen Industries.
Recreational Vehicle Group
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The reduction in sales and much of the profit erosion during this period was due
to the continuing industry-wide softness experienced by the Company's
Recreational Vehicle Group.
Recreational vehicle segment sales for the second quarter were $93.9 million,
compared to $148.8 million for the same period in 2000. Sales for the first six
months were $200.2 million compared to $311.3 million for the same period in
2000. After adjustments for sold or discontinued RV operations, sales for 2000
were $128.3 million for the second quarter and $276.8 million for the first six
months of the year. The lower sales volumes, coupled with unusually fierce
competitive pressures in phasing out 2001 models, negatively impacted profits of
the RV Group. During the quarter, Coachmen's
recreational vehicle operations were successful in reducing their inventories by
$11.7 million, in preparation for introduction of the new line of 2002 models.
Throughout the Company's RV Group, capacity and staffing have been further
adjusted during the second quarter. It is anticipated that many of these
adjustments will be temporary, and the Company remains poised to recapture
market share as the industry recovers.
"Cost containment is important in the near-term," said Joe Tomczak, Executive
Vice President and Chief Financial Officer. "However, the Company continues to
be very focused on growth, and is prepared to capitalize on those opportunities
as the market recovers."
Modular Housing and Building Group
- ----------------------------------
During the quarter, the Company's Modular Housing and Building Group
successfully offset the current cycle in the recreational vehicle industry. This
underscores the merits of the Company's strategic plan to bring a better balance
between its two core businesses. The Company's modular homes offer a
high-quality alternative to conventional site-built homes, and should not be
confused with manufactured housing and the problems that have plagued that
industry.
The Housing and Building Group continued its profitable performance during the
second quarter. Segment sales for the quarter ended June 30, 2001 were $68.5
million, compared to second quarter 2000 sales of $45.9 million. Year to date
sales were $115.1 million compared to $84.6 million in the first half of 2000.
Throughout the second quarter, consumer interest and traffic in our builders'
model homes remained strong. This is consistent with the National Association of
Homebuilders forecast that single family housing starts will total 1,274,000 in
2001, 3.3 percent ahead of last year. Since modular homes currently comprise
less than five percent of the new single family home starts nationwide, the
potential exists for growth rates that equal or exceed those of site-built
homes, as the advantages of modular construction become more widely recognized.
The Company's strategic growth plan for this segment included the completion of
a new manufacturing facility for recently acquired All American Kan Build in
Colorado that will enhance the
Company's production in that important area of the country.
During the first half of 2001, the modular and building segment represented
approximately 37 percent of Coachmen's total revenues. This compares to 24
percent in calendar year 2000 and 18 percent in calendar year 1999.
Financial Strength
- ------------------
The Company continues to maintain a strong financial position with total
shareholders' equity of approximately $209.8 million and net book value of
approximately $13.30 per share. The Company has continued to carefully manage
its cash and expenditures in the
second quarter and finished the quarter with over $39 million of cash and
marketable securities. Capital expenditures totaled $0.8 million in the second
quarter, compared to $3.2 million in the same period in 2000.
"Coachmen has a strong balance sheet, with an extremely low level of debt. We
are well positioned to withstand the industry conditions and are poised to
resume the growth that we experienced throughout the decade of the '90s," said
CFO Tomczak. "Improved performance should result from our continuing emphasis on
cost containment and efficiency, as well as from better utilization of Company
assets."
Outlook
- -------
Coachmen Industries will continue to execute its strategic plan by concentrating
on its two core businesses: recreational vehicles and modular housing and
building. The Company is beginning to realize the financial benefits and returns
from the strategic actions taken during 2000 and early 2001, including the
reorganization of the RV segment; the Company's divestiture of its van
conversion and furniture subsidiaries and four RV retail dealerships; and the
acquisitions of Miller Building Systems, Inc., Mod-U-Kraf Homes, Inc., and Kan
Build, Inc.
Based on the Company's return to profitability in the second quarter, management
expects the Company to remain profitable during the second half of the year,
though at lower levels than previously forecasted due to a softer than
anticipated economy. "It now appears that recovery in the economy and the
recreational vehicle industry will be later than the experts had originally
forecasted," Chairman Skinner commented, "although we are encouraged by signs
that market conditions have begun to improve in the third quarter, and we expect
continuing improvements through early 2002. Further, many of the Company's
actions to reduce costs and improve margins should be more apparent in the third
and fourth quarters." Continuing, she said, "We are also very encouraged by the
strong response to our 2002 RV models recently unveiled at our Annual Dealer
Seminar. As a result of the orders placed by our dealers, we are increasing
production rates in many of our facilities." Chairman Skinner concluded,
"Coachmen has many unique strengths including powerful brand equity, dedicated
employees, a strong balance sheet and the willingness to take aggressive actions
in response to changing market conditions. Our senior management team is now
fully in place. Having been through similar cycles during our 37 years in
operation, we know how to not only survive, but thrive, as our Company emerged
stronger from each of the previous economic downturns. All of us at Coachmen
expect nothing less going forward."
In other news, during its regular meeting on August 6, 2001, Coachmen's Board of
Directors declared a $.05 per share dividend to shareholders of record as of
August 27, 2001. This is the 76th consecutive quarter that Coachmen Industries
has paid dividends.
Founded in 1964, Coachmen Industries, Inc., is one of the nation's leading
manufacturers of recreational vehicles with well-known names including Coachmen
RV, Shasta, Viking
and Georgie Boy. Coachmen Industries is also the largest modular home producer
in the nation with its All American Homes and Mod-U-Kraf subsidiaries. Modular
commercial and telecommunication structures are manufactured by the Company's
Miller Building Systems subsidiary. Coachmen is a publicly held company with
stock listed on the New York Stock Exchange (NYSE) under the COA ticker symbol.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned not to
place undue reliance on forward-looking statements, which are inherently
uncertain. Actual results may differ materially from that projected or suggested
due to certain risks and uncertainties including, but not limited to the
potential fluctuations in the Company's operating results, the implementation of
its enterprise-wide software, the availability and pricing of gasoline, the
Company's dependence on chassis suppliers, interest rates, competition,
government regulations, legislation governing the relationships of the Company
with its recreational vehicle dealers, the impact of economic uncertainty on
high-cost discretionary product purchases and other risks identified in the
Company's SEC filings.
For more information:
Joseph P. Tomczak
Executive Vice President and
Chief Financial Officer
219-262-0123
Coachmen Industries, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
Outside Sales $162,359 $194,699 $315,283 $395,911
Gross Profit - $ 28,059 30,515 44,181 60,665
Gross Profit - % 17.3% 15.7% 14.0% 15.3%
SG&A - $ 24,580 25,033 48,129 48,739
SG&A - % 15.1% 12.9% 15.3% 12.3%
Operating Income/
(Loss) - $ 3,479 5,482 (3,948) 11,926
Operating Income/
(Loss) - % 2.1% 2.8% -1.3% 3.0%
Other (Income)/Expense 1,232 127 1,597 371
Pre-Tax Profit/(Loss) - $ 2,247 5,355 (5,545) 11,555
Pre-Tax Profit/(Loss) - % 1.4% 2.8% -1.8% 2.9%
Tax Expense/(Income) 823 1,655 (2,029) 3,825
Net Income/(Loss) 1,424 3,700 (3,516) 7,730
Earnings/(Loss) per
Share - Basic & Diluted .09 .24 (.22) .50
Weighted Average Shares Outstanding
- Basic 15,778 15,566 15,773 15,559
- Diluted 15,855 15,581 15,773 15,571
Coachmen Industries, Inc.
Condensed Consolidated Balance Sheet
(In Thousands)
(Unaudited)
Current assets 6/30/01 12/31/00
-------------- ------- --------
Cash $25,098 $2,614
Marketable securities 13,987 18,737
Accounts receivable 30,505 40,079
Inventories 86,514 97,315
Prepaid expenses and other 5,330 6,821
Deferred income taxes 9,077 8,384
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Total current assets 170,511 173,950
PP&E, net 84,484 84,163
Goodwill and other intangibles, net 19,087 15,983
Other 28,663 22,350
------- ------
Total assets $302,745 $296,446
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Current Liabilities 6/30/01 12/31/00
------------------- ------- --------
Current portion of L-T debt $865 $865
Accounts payable, trade 20,310 24,015
Accrued income taxes 269 845
Other accruals 39,667 31,988
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Total current liabilities 61,111 57,713
Long-term debt 19,945 11,795
Deferred income taxes 3,349 3,370
Other 8,580 8,619
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Total liabilities 92,985 81,497
Shareholders' equity 209,760 214,949
------- ------
Total liabilities and
shareholders' equity $302,745 $296,446
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