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EXHIBIT 99.1
[LOGO]
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, April 28, 2003
COACHMEN INDUSTRIES, INC. REPORTS FIRST QUARTER
RESULTS
O LOW CONSUMER CONFIDENCE LEVELS / WEATHER NEGATIVELY IMPACT BOTH
BUSINESS SEGMENTS
- FIRST QUARTER LOSS OF $2.8 MILLION VERSUS LOSS OF $0.6 MILLION
IN PREVIOUS YEAR PERIOD.
O RV RETAIL MARKET SHARE INCREASES.
ELKHART, IND. - Coachmen Industries, Inc. (NYSE: COA) today announced its
financial results for the first quarter ended March 31, 2003.
Coachmen reported a loss of $2.8 million, or $0.18 per share for the quarter,
compared with a loss of $0.6 million or $0.04 per share in the year-earlier
period. Sales for the first quarter were $146.4 million versus $152.8 million in
the same period of 2002. Due to the seasonal nature of the business, the Company
anticipated a relatively weak first quarter. However, the results were adversely
impacted by negative consumer sentiment regarding the economy and the military
action in Iraq, which resulted in slower RV and housing sales. Inclement weather
during the quarter also had a significant impact on the Company's housing
operations due to lost production days and the inability of builders to accept
delivery of finished homes.
Gross profit declined 0.4 percentage points from the first quarter of 2002
caused by the decline in year-over-year sales, lower production rates in the
Modular Housing and Building segment, and the consequent unabsorbed labor and
overhead. GS&A expenses as a percent of sales increased 1.7 percentage points
while the Company's operating loss increased 2.1 percentage points as a percent
of sales.
Claire C. Skinner, Chairman, Chief Executive Officer and President, remarked,
"The challenges in the marketplace increased during the first quarter as a
result of both the economy and military action in Iraq. The resulting consumer
confidence levels were near historic lows, which affected demand in both our
business segments. But while we
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Coachmen Industries, Inc. Reports First Quarter Results
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April 28, 2003
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managed through those factors, we were unable to circumvent the impact of poor
weather conditions in the geographic areas where we operate our housing units.
In our housing subsidiaries, we estimate that weather alone caused just short of
$7 million of sales to be held up in finished goods inventory during the
quarter, with a corresponding disappointment in profits. Accordingly, while
these first quarter results fall short of our expectations, a significant part
of the shortfall should be realized during the upcoming months."
Three Months Ended
March 31,
2003 2002
-------------------
SALES
Recreational Vehicle $ 107,396 $ 108,333
Modular Housing/Building 38,991 44,513
--------- ---------
Total $ 146,387 $ 152,846
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PRE-TAX INCOME/(LOSS)
Recreational Vehicle $ (1,521)$ (573)
Modular Housing/Building (2,038) (512)
Other (738) 189
--------- ---------
Total $ (4,297) (896)
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RECREATIONAL VEHICLE SEGMENT
During a period when the recreational vehicle industry as a whole was plagued
with plummeting consumer confidence and concerns over the Gulf conflict, the
Company's RV Group reported sales essentially level with one year ago. On sales
of $107.4 million, the segment's pre-tax loss of $1.5 million was $0.9 million
higher than the first quarter of 2002. This variance was primarily due to higher
delivery costs than in prior periods, plus increased resources to support
motorized sales and product development, and heightened marketing and
promotional activity.
The Company is pleased to report that it posted gains in retail market share
during the first quarter. According to the February 2003 data published by
Statistical Surveys, Inc., Industry retail unit sales were down 1.1%, while
Coachmen's RV sales were up 2.0%. Coachmen Industries increased its retail
market share in Class A motorhomes by 4.6%, Class C mini-motorhomes by 3.7% and
Travel Trailers by 8.5%. Importantly, the Coachmen RV brand re-claimed the #1
position of Travel Trailers alone, and Travel Trailer/Fifth Wheels combined. In
the month of February, Coachmen RV's Class C market share rose to 16.0%, which
compares to 14.7% for 2003 year-to-date, and 12.3% for the same year to date
period last year.
Despite the economic challenges felt throughout the industry, Coachmen's
production rate actually increased over the first quarter of last year, based on
the strength of dealer
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orders. Backlogs remained comparable to last year for both motorized and travel
trailer/fifth wheel product types.
Based on its ability to outperform the market at the retail and wholesale
levels, the successful enrollment of new dealers, and the continuing healthy
level of backlogs, the previously announced capacity-expansion plans were
implemented during the first quarter. Coachmen's new state-of-the-art Class C
motorhome plant at its Middlebury, Ind. complex is expected to be operational by
early August and its newly acquired additional facility in Fitzgerald, Ga. will
be operational by June. The increased manufacturing capacity will help Coachmen
meet demand for its popular Travel Trailer, Fifth Wheel and Class C Motorhome
product lines.
MODULAR HOUSING AND BUILDING SEGMENT
The Company's Modular Housing and Building segment's first quarter sales of
$39.0 million were down 12.4% from the first quarter of 2002. On these reduced
sales, the segment had a pre-tax loss of $2.0 million compared to a loss of $0.5
million during the same period one year ago. The troubled Miller Building
Systems unit, still recovering from the telecommunication industry woes,
accounted for $1.2 million of the segment's combined loss.
Though weather issues typically cause the first quarter to be one of the most
difficult for the housing group, weather conditions were unusually severe this
year. Bad weather had a major impact on total new single-family home sales and
commercial construction, especially in the Midwest and Mid-Atlantic regions
where the company operates, effecting both production and shipments. While most
all of the segment's homes are pre-sold, the company's builder affiliates must
be able to prepare the site and foundations before the homes can be delivered.
Snow, sleet, and heavy rain can all delay this crucial site work, which in turn
prevents the ability to complete the sales process.
Production for the combined residential and commercial units was down 8.8%,
while shipments were down 16.1% compared to the first quarter of 2002. Delayed
shipments resulted in increased finished goods inventories. Backlogs at
quarter-end were up 3.7% compared to year-end levels. With improved weather and
the wind-down of military activity in Iraq, early second quarter order flow has
improved considerably, resulting in increased backlogs and scheduled increases
to daily production levels at most housing plants.
The outlook for Miller Building Systems is also improving, where telecom orders
have increased recently, creating higher backlogs than have been seen in over a
year. The Company's marketing efforts in the non-cellular telecommunications
market are beginning to show results, having obtained substantial orders for
specialized shelters to be used as components of statewide emergency services
radio networks.
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The Company is continuing to pursue higher growth markets for the segment in
2003, as well as focusing on governmental applications for Miller's concrete
products and new applications for their proprietary steel-framing technology.
Finally, the Company's All American Homes subsidiary has just completed
negotiating terms on a modular hotel project in North Carolina, as well as a
multi-unit assisted living center project in Ohio. Contracts on a number of
other major building projects should be finalized within the next ninety days.
BALANCE SHEET/CASH FLOW
As of March 31, 2003, the Company had cash and marketable securities of $11.9
million and shareholders' equity of $202.0 million. Cash flow from operations
was an outflow of $9.8 million for the quarter, largely due to the build-up in
inventory. Capital expenditures totaled $1.4 million for the first quarter.
Coachmen repurchased 272 thousand shares totaling $4.1 million during the first
quarter.
Joseph P. Tomczak, Executive Vice President and Chief Financial Officer, said,
"Our focus is on increasing our production to meet the existing and anticipated
second quarter demand while delivering the inventory that built up in the first
quarter. Executing on those two fronts, and controlling our expenses, will allow
us to achieve positive earnings and cash flow throughout the remainder of the
year. With a capital structure containing just 7.3% debt, our balance sheet
remains strong. The changes we made over the last several years in our RV's have
improved our product mix and are resulting in increased market share. Given that
fact, and as concerns over the economy and military conflict stabilize, the
investments we are making to efficiently increase our RV production rates will
ensure that we can meet the returning, previously demonstrated levels of
demand."
OUTLOOK
Chairman Skinner said, "During the second quarter, we expect significantly
improved performance from both our Miller Building Systems and All American
Homes companies, with the delivery of the homes we could not ship during the
first quarter and increased production schedules supported by stronger backlogs.
Further, our special projects business is gaining strength, as is the recently
launched Ameri-Log home series.
"Our recreational vehicles are continuing to gain momentum with growth at both
the retail and wholesale levels. We are very confident that these trends will
continue, which would result in increased sales and production volumes with
corresponding improvements in profitability," Skinner added.
In summary, Chairman Skinner said, "Though we clearly are not yet operating in a
`reasonably stable business climate', as the military action in Iraq draws to a
favorable conclusion, we believe that consumer confidence could rebound rather
quickly, which in turn should translate into healthy demand for our products
during the balance of this year.
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If these conditions improve rapidly, we continue to believe that we could
achieve our sales and earnings growth goals for 2003."
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(TM), 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. Prodesign, LLC is a subsidiary that custom thermoforms
composite and plastic parts for numerous industries under the PRODESIGN(R)
brand. Coachmen Industries, Inc. 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 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, THE AVAILABILITY AND COST OF REAL ESTATE FOR RESIDENTIAL
HOUSING, THE ABILITY OF THE HOUSING AND BUILDING SEGMENT TO PERFORM IN NEW
MARKET SEGMENTS WHERE IT HAS LIMITED EXPERIENCE, 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, FURTHER DEVELOPMENTS
IN THE WAR ON TERRORISM AND RELATED INTERNATIONAL CRISES, OIL SUPPLIES, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended
--------------------------
December 31,
------------
2003 2002
----------- -----------
Net Sales $ 146,387 $ 152,846
Gross Profit - $ 17,034 18,270
Gross Profit - % 11.6% 12.0%
GS&A - $ 21,431 19,681
GS&A - % 14.6% 12.9%
Operating Income/(Loss) - $ (4,397) (1,411)
Operating Income/(Loss) - % (3.0)% (0.9)%
Other (Income)/Expense (100) (515)
Pre-Tax Profit/(Loss) - $ (4,297) (896)
Pre-Tax Profit/(Loss) - % (2.9)% (0.6)%
Tax Expense/(Benefit) (1,477) (306)
Net Income/(Loss) (2,820) (590)
Earning/(Loss) per share -
Basic & Diluted (0.18) (0.04)
Weighted Average Shares Outstanding
Basic 15,473 16,040
Diluted 15,473 16,040
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS 3/31/03 12/31/02
- ------ ------------ ------------
CURRENT ASSETS
Cash and temporary cash investments $ 4,933 $ 16,549
Marketable securities 6,925 7,641
Accounts receivable 35,443 29,408
Inventories 101,658 85,010
Prepaid expenses and other 8,257 8,862
Deferred income taxes 6,902 6,885
------------- -----------
Total Current Assets 164,118 154,355
Property & equipment, net 77,968 78,889
Goodwill 18,954 18,954
Cash value of life insurance 34,711 33,155
Real estate held for sale 276 276
Other 7,706 7,566
------------- -----------
Total Assets $ 303,733 $ 293,195
============= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY 3/31/03 12/31/02
------------- -----------
CURRENT LIABILITIES
ST borrowings & current portion of LT debt $ 5,896 $ 902
Accounts payable, trade 32,619 18,801
Accrued income taxes 239 1,222
Other accruals 39,398 39,856
------------- -----------
Total Current Liabilities 78,152 60,781
Long-term debt 10,090 10,097
Deferred income taxes 4,123 4,123
Other 9,391 8,768
------------- -----------
Total liabilities 101,756 83,769
Shareholders' Equity 201,977 209,426
------------- -----------
Total Liabilities and Shareholders' Equity $ 303,733 $ 293,195
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
-------------------------
MARCH 31,
---------
2003 2002
---------- ----------
CASH FLOW FROM/(USED IN) OPERATIONS $ (9,825) $ 11,442
CASH FLOW FROM/(USED IN) ACQUISITION &
INVESTING ACTIVITIES (1,846) 797
Net Borrowings 4,987 (14)
Issuance/Purchase of Stock (4,007) 380
Dividends (925) (802)
-------- ---------
CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES 55 (436)
INCREASE/(DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS (11,616) 11,803
Beginning of Period Cash and Temporary Cash Investments 16,549 28,416
-------- ---------
ENDING CASH AND TEMPORARY CASH INVESTMENTS $ 4,933 $ 40,219
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