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EXHIBIT 99.1
COACHMEN INDUSTRIES, INC.
2831 Dexter Drive o P.O. Box 3300 o Elkhart, Indiana 46515
o 574/262-0123 o Fax 574/262-8823
NEWS RELEASE
For immediate release Monday, Oct. 21, 2002
COACHMEN INDUSTRIES, INC. REPORTS STRONG GAIN IN
THIRD QUARTER EARNINGS; AFFIRMS OUTLOOK FOR 2002
o Third quarter earnings of $0.27 per share mark significant improvement
over $0.06 per share in year-earlier period.
o RV sales up 46%; RV pre-tax income up 266%; production and shipments
increasing.
o Modular housing remains profitable; production and trends improving.
o Cash flow from operations for first nine months totals $22.5 million
with $40.3 million in cash and securities at end of quarter.
ELKHART, IND. - Coachmen Industries, Inc. (NYSE: COA) today announced
significantly higher earnings for the third quarter of 2002, compared with a
year ago and reaffirmed its outlook for a solid return to profitability for the
full year 2002.
Coachmen reported earnings of $4.3 million, or $0.27 per share for the quarter,
compared with earnings of $1.0 million or $0.06 per share in the year-earlier
period. Sales for the third quarter increased to $179.2 million versus $149.6
million in the third quarter of 2001, reflecting strong RV shipments but softer
results for modular telecommunications structures. Year-to-date sales of $506.3
million are 8.9% higher than last year, while net income of $7.3 million and
earnings per share of $0.45 for the nine months represent increases of $9.8
million and $0.61, respectively.
Claire C. Skinner, Chairman, Chief Executive Officer and President, remarked,
"Our performance during the third quarter was a significant improvement over the
year-earlier period and demonstrates that we are on target to deliver a solid
improvement in earnings for 2002. Our Recreational Vehicle business is
continuing to improve and deliver gains in market share. Coachmen's share of
wholesale shipments through August was 6.8%, a
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Coachmen Industries, Inc. Reports Third Quarter Results
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Oct. 21, 2002
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9.7% increase from our 2001 full-year share. Coachmen's wholesale shipments of
recreational vehicles through August are up 22.5%, compared to a 17.8% growth
rate for the entire industry. While our Modular Housing and Building business
remains profitable, our results continue to be lower than year-ago levels
primarily as a result of lower demand for commercial structures used in the
telecommunications industry."
THREE MONTHS ENDED YEAR TO DATE
SEPTEMBER 30, SEPTEMBER 30,
2002 2001 2002 2001
---- ---- ---- ----
SALES
Recreational Vehicle $ 114,588 $ 78,527 $ 335,491 $ 278,705
Modular Housing/Building 64,576 71,050 170,835 186,155
Total $ 179,164 $149,577 $ 506,326 $ 464,860
========= ======== ========= =========
PRE-TAX INCOME/(LOSS)
Recreational Vehicle $ 2,578 $(1,551) $ 3,115 $ (9,060)
Modular Housing/Building 3,550 6,288 7,008 12,486
Other 512 (3,128) 1,028 (7,362)
Total $ 6,640 $ 1,609 $ 11,151 (3,936)
========= ======= ========= ======
RECREATIONAL VEHICLE SEGMENT
The Company's Recreational Vehicle segment continues to show improved
year-over-year results with third quarter sales and pre-tax earnings up 46% and
266%, respectively, over the year-ago period. The improvement in the Company's
Recreation Vehicle segment continues to be driven by improving industry trends
as well as by increased dealer and consumer acceptance as the result of
extensive redesign and brand strategy changes made during 2001. Compared to
third quarter of 2001, Coachmen's unit production rate was up 47%. The Company
was able to make reasonable progress in reducing its extremely high backlogs by
increasing production rates during the quarter. Coachmen's backlogs continue to
run at substantially higher levels than at the beginning of 2002, demonstrating
the higher demand for its RV products.
MODULAR HOUSING AND BUILDING SEGMENT
The Company's Modular Housing and Building segment reported slightly lower
year-over-year sales but remained profitable in the third quarter. The downturn
in the telecommunications industry has continued to result in lower demand for
commercial modular structures for telecom applications and continues to impact
the overall performance of this segment. Excluding the telecom-related
commercial structure business, third quarter unit production increased 5.4%
versus the year-ago period. Third quarter shipments were down versus the prior
year, but showed sequential gains, hitting the highest level of shipments for
the year and demonstrating the growing demand for the
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Coachmen Industries, Inc. Reports Third Quarter Results
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Company's residential homes. The Company also launched its new Spirit of
America(TM) line of residential homes, geared toward first-time homebuyers and
value-minded consumers on a limited budget.
BALANCE SHEET/CASH FLOW
As of September 30, 2002, the Company had cash and marketable securities of
$40.3 million and shareholders' equity of $211.4 million. Cash flow from
operations was $22.5 million for first nine months. Capital expenditures totaled
$1.1 million for the third quarter and $3.4 million year to date. In keeping
with its belief that Coachmen shares are an excellent value, the Company
repurchased shares totaling $3.8 million during the quarter. Additionally,
dividends were increased by 20% during the quarter to six cents per share.
Joseph P. Tomczak, Executive Vice President and Chief Financial Officer, said,
"Our third quarter results are gratifying, as we continue to increase our
profitability during 2002. Our balance sheet remains very strong, and our
financial metrics have improved across the board compared to 2001. We also took
steps during the quarter to reduce our level of interest expense, using a
portion of our cash to retire a significant loan against the cash surrender
value of executive life insurance policies. This step will eliminate
approximately $1 million in annual interest expense."
OUTLOOK
Chairman Skinner said, "We are pleased that our third quarter results were
consistent with our expectations of positive earnings. We continue to anticipate
reporting earnings approaching $0.75 per share for the full year of 2002,
assuming that the general industry and economic conditions experienced during
the third quarter remain comparable for the fourth quarter. For the first nine
months of this year, our earnings per share have increased 385% compared to the
same period of last year. We are extremely pleased with this improvement, as it
represents significant progress toward our goal of achieving, and then
surpassing, our historical level of profitability."
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
telecommunications 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.
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Oct. 21, 2002
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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 CONDITION OF THE
TELECOMMUNICATIONS INDUSTRY WHICH PURCHASES MODULAR STRUCTURES, 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
574-262-0123
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Coachmen Industries, Inc. Reports Third Quarter Results
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Oct. 21, 2002
COACHMEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED YEAR TO DATE
SEPTEMBER 30, SEPTEMBER 30,
2002 2001 2002 2001
---- ---- ---- ----
Net Sales $ 179,164 $ 149,577 $ 506,326 $ 464,860
Gross Profit - $ 31,151 26,141 79,553 70,322
Gross Profit - % 17.4% 17.5% 15.7% 15.1%
GS&A - $ 24,422 23,927 69,320 72,056
GS&A - % 13.6% 16.0% 13.7% 15.5%
Operating Income/(Loss) - $ 6,729 2,214 10,233 (1,734)
Operating Income/(Loss) - % 3.8% 1.5% 2.0% (0.4)%
Other (Income)/Expense 89 605 (918) 2,202
Pre-Tax Profit/(Loss) - $ 6,640 1,609 11,151 (3,936)
Pre-Tax Profit/(Loss) - % 3.7% 1.1% 2.2% (0.8)%
Tax Expense/(Benefit) 2,344 604 3,882 (1,425)
Net Income/(Loss) 4,296 1,005 7,269 (2,511)
Earning/(Loss) per share -
Basic & Diluted 0.27 0.06 0.45 (0.16)
Weighted Average Shares Outstanding
Basic 16,080 15,815 16,070 15,811
Diluted 16,175 15,875 16,186 15,811
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS 9/30/02 12/31/01
- ------ ------- --------
CURRENT ASSETS
- --------------
Cash and temporary cash investments $ 29,297 $ 28,416
Marketable securities 10,975 12,180
Accounts receivable 37,446 23,756
Inventories 86,553 80,477
Prepaid expenses and other 7,400 9,059
Deferred income taxes 7,183 7,319
--------- ---------
Total Current Assets 178,854 161,207
Property & equipment, net 76,236 80,233
Goodwill and other, net 18,954 18,954
Other 43,912 28,166
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Total Assets $ 317,956 $ 288,560
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LIABILITIES AND SHAREHOLDERS' EQUITY 9/30/02 12/31/01
- ------------------------------------ ------- --------
CURRENT LIABILITIES
- -------------------
Current portion of long-term debt $ 908 $ 917
Accounts payable, trade 38,625 18,944
Accrued income taxes 2,668 494
Other accruals 42,896 38,846
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Total Current Liabilities 85,097 59,201
Long-term debt 10,620 11,001
Deferred income taxes 2,158 1,257
Other 8,661 8,461
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Total liabilities 106,536 79,920
Shareholder's Equity 211,420 208,640
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Total Liabilities and Shareholders' Equity $ 317,956 $ 288,560
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
2002 2001
---- ----
CASH FLOW FROM OPERATIONS $ 22,474 $ 42,591
CASH FLOW FROM/(USED IN) ACQUISITION & INVESTING ACTIVITIES 2,753 (3,650)
Net Borrowings (18,848) (8,265)
Issuance/Purchase of Stock (2,922) 717
Dividends (2,576) (2,373)
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CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES (24,346) (9,921)
INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS 881 29,020
Beginning of Period Cash and Temporary Cash Investments 28,416 2,614
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ENDING CASH AND TEMPORARY CASH INVESTMENTS $ 29,297 $ 31,634
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