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COACHMEN INDUSTRIES, INC.
2831 Dexter Drive - P.O. Box 3300 - Elkhart, Indiana 46515 -
219/262-0123 - Fax 219/262-8823
NEWS RELEASE
For immediate release Wednesday, November 7, 2001
COACHMEN INDUSTRIES, INC. REPORTS THIRD QUARTER
EARNINGS OF $0.06 PER SHARE
o PROFITABILITY ACHIEVED DESPITE 21 PERCENT DECLINE IN SALES.
o CASH FLOW FROM OPERATIONS TOTALS $42.6 MILLION THROUGH NINE MONTHS.
o LIQUID FINANCIAL POSITION MAINTAINED WITH $44.5 MILLION IN CASH AND
SECURITIES.
ELKHART, INDIANA - Coachmen Industries, Inc. (NYSE: COA) today announced that it
operated profitably in the third quarter despite the impact of the economic
slowdown on the recreational vehicle industry that was aggravated by the attacks
of Sept. 11.
Net income for the third quarter ended Sept. 30, 2001 was $1.0 million compared
with $2.3 million a year ago. For the quarter, diluted earnings per share were
$0.06 compared to $0.15 per share in the same period in 2000. For the first nine
months of 2001, the Company reported a loss of $2.5 million, or $0.16 per share,
compared with net income of $10.0 million, or $0.64 per share for the same
period in 2000.
Sales for the third quarter ended Sept. 30, 2001 were $149.6 million compared
with $188.5 million in the year-earlier quarter. Sales for the first nine months
were $464.9 million compared with $584.4 million in the first nine months of
2000.
"Although the earnings for the third quarter were less than we had expected
prior to the tragic attacks of Sept. 11, we are encouraged by Coachmen's strong
relative performance within the very challenging environment that our industry
is experiencing. Clearly, our immediate prospects have been affected by the
acceleration in the economic slowdown that is occurring; but we remain confident
about the actions being taken to position the Company to resume its long-term
path of growth," said Claire C. Skinner, Chairman, Chief Executive Officer and
President of Coachmen Industries.
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Coachmen Industries, Inc. Reports Third Quarter Earnings
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
----------------------- ------------------------
SALES
- -----
Recreational Vehicle $ 78,527 $ 140,066 $ 278,705 $ 451,325
Modular Housing/Building 71,050 48,407 186,155 133,059
---------- --------- ---------- -----------
Total 149,577 188,473 464,860 584,384
PRE-TAX INCOME
- --------------
Recreational Vehicle $ (1,551) $ 543 $ (9,060) $ 9,506
Modular Housing/Building 6,288 3,873 12,486 9,900
Other (3,128) (1,140) (7,362) (4,575)
----------- ---------- ----------- -----------
Total 1,609 3,276 (3,936) 14,831
RECREATIONAL VEHICLE SEGMENT
- ----------------------------
The Company's Recreational Vehicle segment is being affected by the adverse
impact that the economic slowdown is continuing to have on sales. Industry-wide
deliveries to RV dealers are down 16.2% through the first nine months of 2001,
following a decline of 6.6% for the year 2000. Retail sales have experienced a
smaller decline of 10.6% through the first eight months, indicating that many
dealers are delaying the replacement of sold units. Attendance has remained high
at most retail shows demonstrating sound, underlying demand for recreational
vehicles; but consumers are hesitant about purchases, similar to the pattern
observed during previous economic downturns. Until consumers regain confidence
about the course of the economy, there is unlikely to be much change in
industry-wide sales.
As part of its aggressive market expansion plans, product development at
Coachmen is a continuous process. During the national industry trade show later
this month, for example, Coachmen will introduce 27 new products, each designed
to appeal to a specific target market.
MODULAR HOUSING AND BUILDING SEGMENT
- ------------------------------------
The year-to-year growth in the Company's modular segment is due to the
incremental contribution to sales and income from acquired operations. Although
housing starts have remained strong nationally, several of the regions where the
Company's All American Homes subsidiary operates are experiencing declines in
homebuilding due to difficult local economic circumstances. Margins have been
improved by shifting the sales emphasis to larger, more complex homes; and the
Company is actively seeking to develop new markets for these models. The Company
is also focusing on a greater penetration of urban markets where there is more
concentrated demand.
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Coachmen Industries, Inc. Reports Third Quarter Earnings
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Nov, 7, 2001
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In addition to introducing new residential floor plans and exteriors, Coachmen
is successfully broadening the uses for its commercial structures. Recent
completions include modular structures for a veterinary clinic, banks, portable
classrooms and many variations of multiple family housing.
BALANCE SHEET/CASH FLOW
- -----------------------
As of Sept. 30, 2001, the Company had cash and marketable securities of $44.5
million, shareholders' equity of $210.7 million and book value of $13.27 per
share. Capital expenditures totaled $0.9 million in the third quarter and $4.0
million for the nine months.
Joseph P. Tomczak, Executive Vice President and Chief Financial Officer, said,
"We are continuing to contain expenses, manage our balance sheet more
effectively and allocate our resources in a manner that will generate the
highest efficiency during this difficult period. Our cash flow remains strong.
Through the first nine months, we generated $7.9 million in EBITDA (earnings
before interest, taxes and depreciation and amortization). Coachmen generated
cash flow from operations of $15.0 million in the third quarter and $42.6
million in the first nine months of 2001, and we had cash and equivalents of
$44.5 million at the end of the quarter.
"During the quarter we initiated a process for restructuring our bank line of
credit to obtain terms and conditions that would better meet our current and
expected future borrowing needs over the duration of the agreement. Subsequent
to the close of the quarter, we amended the agreement as a secured $30.0 million
facility. Our liquid cash position and expectations of continued positive EBITDA
were key factors in our ability to execute the new agreement. We believe
Coachmen's strong financial position is a vital asset that will support our
efforts to gain market share through ongoing internal gains as well as strategic
acquisitions of complementary operations such as the KanBuild modular housing
unit that we added in February 2001."
OUTLOOK
- -------
Skinner said, "Based on the recent events and current economic trends, we
anticipate operating at or slightly below break-even in the fourth quarter,
which is a seasonally slow period for our RV segment. We believe, however, that
the results of the actions we have taken to realign our operations, reduce
expenses and complete accretive acquisitions will lead to fourth quarter results
significantly improved from the loss of $7.8 million, or $0.50 per share, in the
fourth quarter of 2000. This would result in a loss for the full year in the
range of $0.20-$0.25 per share.
"Coachmen has the opportunity to use our well-established brand names,
outstanding network of dealers and strong financial position to focus on
increasing market share during this cyclical downswing in demand. Our record
over almost four decades in the recreational vehicle industry shows that while
our near-term financial performance has
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Coachmen Industries, Inc. Reports Third Quarter Earnings
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Nov, 7, 2001
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been affected during periods of slower demand, we have historically emerged to
reach new records in net sales and earnings. The successful expansion of our
modular segment reinforces our optimism about Coachmen's longer term prospects.
Fundamental demographic trends favor growth in those population segments
especially attracted to our products, and we are intent on capitalizing on that
potential."
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 functioning of
the Company's information technology systems, the availability and the price 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 consumer
confidence and economic uncertainty on high-cost discretionary product purchases
and other risks identified in the Company's SEC filings.
For more information:
Joseph P. Tomczak James O. Baxter
Executive Vice President and Vice President
Chief Financial Officer Communications
219-262-0123 219-262-0123
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Coachmen Industries, Inc. Reports Third Quarter Earnings
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Nov, 7, 2001
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COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
----------- -------------- ---------- -------------
Outside Sales $ 149,577 $ 188,473 $ 464,860 $ 584,384
Gross Profit - $ 26,141 27,206 70,322 87,871
Gross Profit - % 17.5% 14.4% 15.1% 15.0%
GS&A - $ 23,927 25,289 72,056 74,028
GS&A - % 16.0% 13.4% 15.5% 12.7%
Operating Income/(Loss) - $ 2,214 1,917 (1,734) 13,843
Operating Income/(Loss) - % 1.5% 1.0% -0.4% 2.4%
Other (Income)/Expense 605 (1,359) 2,202 (988)
Pre-Tax Profit/(Loss) - $ 1,609 3,276 (3,936) 14,831
Pre-Tax Profit/(Loss) - % 1.1% 1.7% -0.8% 2.5%
Tax Expense/(Benefit) 604 1,003 (1,425) 4,828
Net Income/(Loss) 1,005 2,273 (2,511) 10,003
Earning/(Loss) per share -
Basic & Diluted 0.06 0.15 (0.16) 0.64
Weighted Average Shares Outstanding
Basic 15,815 15,574 15,811 15,566
Diluted 15,875 15,577 15,867 15,573
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Coachmen Industries, Inc. Reports Third Quarter Earnings
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Nov, 7, 2001
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(UNAUDITED)
ASSETS 9/30/01 12/31/00
-------------- ----------------
Current Assets
Cash $ 31,634 $ 2,614
Marketable securities 12,852 18,737
Accounts Receivable 35,765 40,079
Inventories 85,850 97,315
Prepaid expenses and other 6,984 6,821
Deferred income taxes 8,858 8,384
-------------- ----------------
Total Current Assets 181,943 173,950
PP&E, Net 82,304 84,163
Goodwill and Other Intangibles, Net 18,775 15,983
Other 27,653 22,350
-------------- ----------------
Total Assets $ 310,675 $ 296,446
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LIABILITIES AND SHAREHOLDER'S EQUITY 9/30/01 12/31/00
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Current Liabilities
Current portion of LT debt $ 927 $ 865
Accounts payable, trade 33,715 24,015
Accrued income taxes - 845
Other Accruals 42,403 31,988
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Total current liabilities 77,045 57,713
Long-Term Debt 11,379 11,795
Deferred Income Taxes 3,349 3,370
Other 8,204 8,619
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Total Liabilities 99,977 81,497
Shareholder's Equity 210,698 214,949
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Total Liabilities and Equity $ 310,675 $ 296,446
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