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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, February 13, 2002
COACHMEN INDUSTRIES, INC. EXPECTS EARNINGS RECOVERY IN 2002
o EARNINGS OF APPROXIMATELY $0.75 PER SHARE PROJECTED FOR 2002.
o CASH FLOW FROM OPERATIONS FOR 2001 INCREASED 38% TO $41.3 MILLION.
o LIQUID FINANCIAL POSITION STRENGTHENED WITH $40.6 MILLION IN CASH AND
SECURITIES AT YEAR END.
ELKHART, IND. - Coachmen Industries, Inc. (NYSE: COA) today announced fourth
quarter results that were consistent with its earlier guidance and support the
Company's expectation for a return to profitability for the full year 2002.
The loss for the fourth quarter matched the previous announcement by Coachmen
about the impact that the economic recession and attacks of Sept. 11 were having
on the industries in which the Company participates. The loss of $1.4 million,
or $0.09 per share, for the quarter compared with a loss of $7.8 million, or
$0.50 per share, in the year-earlier period. Sales for the fourth quarter
totaled $129.1 million versus $150.2 million in the fourth quarter of 2000.
For the year ended December 31, 2001, the Company reported a loss of $4.0
million, or $0.25 per share, compared with net income of $2.2 million, or $0.14
per share, for 2000. Net sales for 2001 were $593.9 million compared with $734.6
million for 2000.
Claire C. Skinner, Chairman, Chief Executive Officer and President, remarked,
"It is clear that the industry-wide demand for recreational vehicles was
affected early in 2001 by the economic slowdown that subsequently was formally
identified as a recession. Although we are not satisfied with the report of a
loss for the fourth quarter or the year, sales began strengthening in the fourth
quarter and gained momentum as the period developed. The recent RV shows in
which we have participated have generated solid
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Coachmen Industries, Inc. Expects 2002 Profit Recovery
Page 2
Feb. 13, 2002
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year-to-year gains in orders from dealers, reinforcing our optimism about
Coachmen's prospects in 2002. We recognize the uncertainty that remains about
the near-term path of the general economy, but expect to achieve a significant
recovery in earnings for the year and establish a platform for further gains in
2003."
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2001 2000 2001 2000
---------------------------- ----------------------------
SALES
Recreational Vehicle $ 71,105 $ 96,326 $ 349,810 $ 547,651
Modular Housing/Building 57,956 53,868 244,111 186,927
------------- ------------- ------------ -------------
Total 129,061 150,194 593,921 734,578
PRE-TAX INCOME (LOSS)
Recreational Vehicle $ (2,571) $ (15,290) $ (11,631) $ (5,784)
Modular Housing/Building 2,980 1,678 15,466 11,578
Other (2,591) 1,668 (9,953) (2,907)
------------- ------------- ------------- -------------
Total (2,182) (11,944) (6,118) 2,887
RECREATIONAL VEHICLE SEGMENT
- ----------------------------
The Company's Recreational Vehicle segment was affected during 2001 by an
industry-wide slowdown that was aggravated for manufacturers by a reduction in
inventories at the dealer level. Unit deliveries for the industry to RV dealers
for the full year declined approximately 15%, and retail unit sales in the
industry were off 9% through the first 11 months. Consumer interest remained
strong, but retail sales were affected by consumers' reluctance to make major
expenditures in the face of the well-publicized uncertainty about the outlook
for the economy. During the fourth quarter, unit shipments for the industry were
down only 7% from a year ago, signaling a general improvement in demand.
Coachmen's Recreational Vehicle segment experienced a similar trend with a
decline in sales of 7% in the fourth quarter from a year ago when adjusted for
discontinued operations. Despite the decline in sales, success in reducing costs
enabled the Company to report a significantly lower loss in the fourth quarter
versus the loss in the same period of 2000.
To regain positive momentum in market share, the Company launched an aggressive
redesign effort that included over 50 new recreational vehicle models and styles
for the 2002 model year. The success of these new products has contributed
importantly to the improvement recorded in incoming orders and production
levels. Orders at the national industry trade show in the fourth quarter were up
25%, and the Company also recorded significant gains in orders at subsequent
regional retail shows. Based on the improved level of incoming orders, Coachmen
plans to expand its manufacturing capacity by mid-year by reopening a motorhome
facility closed late in 2000.
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Coachmen Industries, Inc. Expects 2002 Profit Recovery
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Feb. 13, 2002
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MODULAR HOUSING AND BUILDING SEGMENT
- ------------------------------------
The sales and income for the Company's modular housing/building segment for 2001
included significant contributions from acquired operations. Although housing
starts remained strong nationally, several of the geographic regions where the
Company has operations experienced declines in overall demand for new homes due
to difficult local economic circumstances. To offset this trend, Coachmen has
shifted its marketing emphasis to larger, more complex homes where demand is
generally less cyclical and margins are higher. The Company is also focusing on
a greater penetration of urban markets where there is the most concentrated
demand. Coachmen's backlog for modular housing began strengthening late in the
fourth quarter and was up more than 30% at the end of January 2002 from the
year-earlier level.
Coachmen is continuing to find broadened uses for its modular products as
commercial structures. Recent completions include modular structures for
telecommunications companies, healthcare providers and educational institutions.
BALANCE SHEET/CASH FLOW
- -----------------------
As of Dec. 31, 2001, the Company had cash and marketable securities of $40.6
million, shareholders' equity of $208.7 million and book value of $13.18 per
share. Capital expenditures totaled $0.7 million for the fourth quarter and $4.7
million for the full year.
Joseph P. Tomczak, Executive Vice President and Chief Financial Officer, said,
"Our financial management strategy during 2001 was focused on reducing working
capital and utilizing our positive cash flow as effectively as possible. We had
record cash flow from operations of $41.3 million, up from $29.9 million in
2000. EBITDA (earnings before interest, taxes, depreciation and amortization)
amounted to $9.4 million for the year. We paid off all the debt related to our
2001 acquisitions, leaving us with only nominal long-term obligations at the end
of the year.
Coachmen's balance sheet provides us considerable flexibility to fund the
investments in new products necessary to drive internal gains and to support our
interest in completing complementary, strategic acquisitions."
OUTLOOK
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Skinner said, "Based on current trends, we conservatively expect to achieve an
approximate 10% gain in net sales for 2002. We believe this increased sales
volume will translate into a solid profit recovery for the year, aided by the
results of our cost reduction actions. We expect further progress toward
profitability in the first quarter and to operate close to breakeven for the
period. We anticipate reporting earnings in each of the subsequent quarters
leading to earnings of approximately $0.75 per share for the full year. This
return to profitability will compare very favorably with our 2001 results and
establish a pattern that we can build on in 2003 and beyond.
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Coachmen Industries, Inc. Expects 2002 Profit Recovery
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Feb. 13, 2002
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"We believe that the structural factors in our business model offer the
potential to return Coachmen fully to its historical levels of profitability.
Our long-term record includes other cyclical periods in which economic slowdowns
impacted us as well as other manufacturers of recreational vehicles. We have
shown strong recoveries in the ensuing expansions based on the fundamental
appeal of recreational vehicles and the attractiveness of our product offerings.
We believe that our modular housing segment enhances our longer term growth
prospects, and our balance sheet and demonstrated, positive cash flow provide
the capital to fund internal investment opportunities as well as additional
strategic acquisitions."
Founded in 1964, Coachmen Industries, Inc. is one of the nation's leading
manufacturers of recreational vehicles with well-known brand names including
Coachmen(R), Georgie Boy(R), Shasta(R) and Viking(R). Coachmen Industries is
also the largest modular home producer in the nation with its All American
Homes(R) and Mod-U-Kraf(R) 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
Executive Vice President and
Chief Financial Officer
219-262-0123
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Feb. 13, 2002
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COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2001 2000 2001 2000
----------- -------------- ---------- -------------
Net Sales $ 129,061 $ 150,194 $ 593,921 $ 734,578
Gross Profit - $ 20,240 15,363 90,562 103,234
Gross Profit - % 15.7% 10.2% 15.2% 14.1%
General, Selling & Administrative - $ 22,995 26,690 95,051 100,718
General, Selling & Administrative - % 17.8% 17.8% 16.0% 13.7%
Operating Income/(Loss) - $ (2,755) (11,327) (4,489) 2,516
Operating Income/(Loss) - % (2.1)% (7.5)% (0.8)% 0.3%
Other (Income)/Expense (573) 617 1,629 (371)
Pre-Tax Profit/(Loss) - $ (2,182) (11,944) (6,118) 2,887
Pre-Tax Profit/(Loss) - % (1.7)% (8.0)% (1.0)% 0.4%
Tax Expense/(Benefit) (742) (4,105) (2,167) 723
Net Income/(Loss) (1,440) (7,839) (3,951) 2,164
Earning/(Loss) Per Share -
Basic & Diluted (0.09) (0.50) (0.25) 0.14
Weighted Average Shares Outstanding
Basic 15,918 15,635 15,835 15,584
Diluted 15,996 15,717 15,939 15,639
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Feb. 13, 2002
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(UNAUDITED)
ASSETS 12/31/01 12/31/00
- ------ -------- --------
Current Assets
- --------------
Cash $ 28,416 $ 2,614
Marketable securities 12,180 18,737
Accounts receivable 23,756 37,743
Inventories 80,477 97,315
Prepaid expenses and other 9,059 9,157
Deferred income taxes 7,319 8,384
--------------- ----------------
Total Current Assets 161,207 173,950
Property, plant & equipment, net 80,233 84,163
Goodwill and other, net 18,954 15,983
Other 28,166 22,350
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Total assets $ 288,560 $ 296,446
=============== ===============
LIABILITIES AND SHAREHOLDER'S EQUITY 12/31/01 12/31/00
- ------------------------------------ -------- --------
Current Liabilities
- -------------------
Current portion of long-term debt $ 917 $ 865
Accounts payable, trade 18,944 24,015
Accrued income taxes 494 845
Other accruals 38,846 31,988
--------------- ----------------
Total Current Liabilities 59,201 57,713
Long-term debt 11,001 11,795
Deferred income taxes 1,257 3,370
Other 8,461 8,619
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Total liabilities 79,920 81,497
Shareholder's equity 208,640 214,949
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Total liabilities and equity $ 288,560 $ 296,446
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Feb. 13, 2002
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
TWELVE MONTHS ENDED
DECEMBER 31,
2001 2000
---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities $ 41,294 $ 29,932
CASH FLOWS USED IN INVESTING ACTIVITIES
Proceeds from:
Sale of marketable securities 51,672 134,673
Sale of properties 1,800 1,931
Sale of businesses - 4,826
Acquisitions of:
Marketable securities (47,752) (121,972)
Property and equipment (4,719) (8,222)
Businesses, net of cash acquired (7,707) (34,351)
Other (922) (1,898)
---------- -----------
Net cash used in investing activities (7,628) (25,013)
---------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES
Proceeds from short-term borrowings - 30,000
Payments of short-term borrowings - (30,000)
Proceeds from long-term debt 13,500 -
Payments of long-term debt (18,909) (4,447)
Issuance of common shares under stock
option and stock purchase plans 734 896
Tax benefit from stock options exercised 10 91
Cash dividends paid (3,169) (3,114)
Purchase of common shares for treasury (30) -
---------- -----------
Net cash used in financing activities (7,864) (6,574)
---------- -----------
Increase (decrease) in cash and temporary cash investments 25,802 (1,655)
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 2,614 4,269
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End of period $ 28,416 $ 2,614
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