EXHIBIT 99.1
3
[LOGO OMITTED]
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, February 2, 2004
COACHMEN INDUSTRIES, INC. ANNOUNCES 2003 FOURTH QUARTER AND FULL-YEAR EARNINGS
o Company reports above-guidance earnings of $0.13 per share in the
fourth quarter and earnings of $0.48 per share for the year.
o Sales of $190.0 million for quarter and $711.1 million for year
surpass 2002 levels.
o Company expects to increase earnings 80% - 95% in 2004.
Elkhart, Ind. - Coachmen Industries, Inc. (NYSE: COA) today announced its
earnings for the fourth quarter and year ended December 31, 2003.
Coachmen reported net income of $2.0 million, or $0.13 per share for the
quarter, slightly higher than the range of earnings cited in the December 15
press release. The $2.0 million compares to net income of $2.7 million or $0.17
per share in the previous year period. Sales for the fourth quarter increased
15.8% to $190.0 million versus $164.1 million during the same period of 2002. As
previously announced in December, Coachmen's fourth quarter earnings were
negatively impacted by RV component shortages and weather-related delays in the
Modular Housing and Building segment. However, diligent efforts to mitigate
these challenges during the second half of December resulted in higher earnings
than previously anticipated.
Coachmen's earnings of $0.48 per share, including $0.02 per share which related
to non-operating gains on the sale of real estate, for the year 2003 compared
with earnings of $0.62 per share in 2002, which included non-operating gains
from real estate sales of approximately $0.10 per share. Sales for the year of
$711.1 million increased 6.9%, from $665.2 million in 2002. Gross profit of
14.7% was 0.2 percentage points lower than the 14.9% in 2002. Lower gross profit
was caused by increased production costs, which were primarily the result of
inefficiencies caused by the parts shortages in the RV segment. Those shortages
caused higher amounts of off-line rework and associated
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Coachmen Industries, Inc. Announced Fourth Quarter and Full-Year Earnings
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manufacturing variances. The Company's full-year operating performance was also
significantly impacted by the first quarter losses, which were related to the
military action in Iraq, the negative consumer sentiment regarding the economy,
and inclement weather conditions.
Claire C. Skinner, Chairman and Chief Executive Officer, remarked, "While we are
frustrated with the RV parts shortages and weather factors that caused the
Company to miss its initial earnings estimate for the fourth quarter, Coachmen
is well poised for a strong 2004. The extremely positive dealer response to our
new line of 2004 models was validated by the more than $100 million in orders at
the National RV Trade Show in December. Our Modular Housing and Building segment
is also making positive progress in its core businesses and new strategic
initiatives. In December, we also strengthened our executive management team
with the addition of Matthew Schafer as President and Chief Operating Officer."
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
------------- ------------ ------------- -------------
SALES
Recreational Vehicle $ 129,025 $ 103,736 $ 488,178 $ 435,548
Modular Housing/Building 61,021 60,350 222,967 229,644
------------ ------------ ------------ -------------
Total $ 190,046 $ 164,086 $ 711,145 $ 665,192
============= ============ ============ =============
PRE-TAX INCOME/(LOSS)
Recreational Vehicle $ (183) $ (1,212) $ 2,087 $ 1,903
Modular Housing/Building 2,753 3,050 10,037 10,058
Other 399 2,007 (1,003) 3,035
------------- ------------ ------------- -------------
Total $ 2,969 $ 3,845 $ 11,121 $ 14,996
============= ============ ============= =============
RECREATIONAL VEHICLE SEGMENT
The Company's Recreational Vehicle segment reported sales of $129.0 million, up
24.4% from $103.7 million during the fourth quarter of 2002. RV sales of $488.2
million for the year represented a 12.1% increase from sales of $435.5 million
in 2002. As previously mentioned, RV Segment pre-tax income during the quarter
was hampered by operating inefficiencies related to major material shortages,
including RV ovens and ranges, among other things. Though the pre-tax loss of
$0.2 million for the quarter compared quite favorably with a pre-tax loss of
$1.2 million in the fourth quarter of 2002, the Segment had been on track for
even more improvement. Pre-tax income for the year increased 9.7% to $2.1
million versus $1.9 million in 2002. The Company expects these shortages to
continue through February and is managing the situation by ensuring all
retail-sold orders receive first priority for completion when parts become
available and offering customers microwave or convection ovens in lieu of
conventional ovens, as well as an "oven-delete" option.
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Coachmen Industries, Inc. Announced Fourth Quarter and Full-Year Earnings
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Wholesale unit shipments for the year were down 4.0% compared to 2002, while
sales revenues were up 12.1%, reflecting a much richer mix of units being sold.
Shipments of the more expensive motorized and towable product categories, Class
A's and Fifth Wheels, were up 13.4% and 34.8% for the year, respectively, with
rear diesels up 50.4%. Similar results were seen for the fourth quarter, as
wholesale recreational vehicle unit shipments for the Company were down 2.7%
compared to the year-ago quarter, while sales were up 24.4%. Product category
and model mix were again the reasons for this dichotomy. Fourth quarter unit
shipments of Class A's increased by 21.2%, and Fifth Wheel unit shipments were
up 31.5%. Further, within those categories, the Company is enjoying strong
success in its 2004 rear diesel Class A and higher-line Fifth Wheel models, with
diesel Class A unit shipments up 128.8% in the fourth quarter. These successes
drove increases of 20.4% and 10.7% in the average price of units shipped in the
Class A and Fifth Wheel categories during the quarter. Based on the strength of
product acceptance, year-ending backlog levels are up 26.6% over December 31,
2002. Production rates have been increased in most plants, including two new
facilities brought on line during the year, and further production increases are
being planned for early 2004.
As was previously reported, dealer reaction to the Company's new 2004 model
offerings was overwhelmingly positive. Nearly half of Coachmen's 2004 RV line
represents new or improved models. Coachmen RV Company introduced its
Concord(TM) "C+" motorhome, and the Class C Freelander. Georgie Boy
Manufacturing introduced its newest Class A designs and its first quad-slideout
motorhome, a beautifully appointed 40-foot Bellagio(TM), built on a raised rail
chassis and showcased by handsome full- body paint graphics. Viking RV also
introduced an array of entry-level camping trailers. The Company unveiled the
latest addition to its highly successful Epic(TM) series, the all-new Epic 17.5
Limited Edition.
Finally, as announced just days ago, the Company has entered into a long-term
exclusive licensing agreement to design, produce and market a comprehensive line
of Coleman brand recreational vehicles, beginning with camping trailers in
mid-2004. The Company expects incremental sales of approximately $12 million in
the second half of 2004, as a result of this agreement.
MODULAR HOUSING AND BUILDING SEGMENT
The performance of the Company's Modular Housing and Building segment in the
fourth quarter was very similar to the same period one year ago, with sales and
pre-tax earnings of $61.0 million and $2.8 million, respectively, versus $60.4
million and $3.1 million. For the year, sales of $223.0 million were 2.9% below
2002's $229.6 million. Pre-tax income of $10.0 million was comparable to last
year's performance.
Order flow remained strong during the fourth quarter, but many finished homes
were held up in inventory due to poor weather conditions. Finished goods
inventory was reduced slightly, leaving significant amounts of residential
finished goods still to be delivered as of the end of the fourth quarter. With
cooperative weather conditions, these should be delivered in the first quarter,
along with the regularly scheduled production. As a result
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of the notably strong order flow for the fourth quarter, residential backlogs
were 16.1% higher than year-end 2002.
All American Homes has been focusing on opportunities in the special projects
area, while expanding and strengthening its builder network. Contracts for two
urban in-fill projects have been signed, coming on the heels of the successful
63-home project completed in the third quarter. A contract for a luxury
retirement home in Virginia has been signed and another one is nearing the final
stages of negotiation. The new Ameri-Log (TM) business, a marketer and producer
of custom log homes, has opened five regional sales centers with models. They
are located in Indiana, Ohio, Colorado, Virginia, and North Carolina. Four
additional builders have signed exclusive agreements to become Ameri-Log(TM)
builders. Each will have a model home sales center open soon. In terms of
geographic expansion, All American continues to make inroads into the Florida
market, with new builders in seven key Florida markets. Highlighting the
expansion drive is a major builder retail sales center located in Okeechobee,
featuring well-appointed model homes showcasing a wide spectrum of product
offerings. The Company's building prowess was recently featured at the
just-concluded International Builders Show in Las Vegas. All American Homes was
selected to build the Nex-Gen home, which is used to display the latest in home
features from a variety of home products manufacturers. The home was also on
display at the Consumer Electronics Show just preceding the International
Builders Show. It was a hit at both shows.
BALANCE SHEET/CASH FLOW
As of December 31, 2003, the Company had cash and marketable securities of $12.1
million and shareholders' equity of $211.2 million. Exacerbated by delayed
housing shipments and RV shipments that occurred very late in the period, cash
flow from operations was a negative $7.2 million for the quarter, bringing
year-to-date cash flow from operations to a negative $3.6 million. Capital
expenditures totaled $1.6 million for the fourth quarter and $12.1 million for
2003.
Joseph P. Tomczak, Executive Vice President and Chief Financial Officer, said,
"The Company's financial position remains strong as we enter 2004. With a
capital structure made up of less than 5% long-term debt, we are well positioned
to pursue our growth objectives for the future. Our focus remains on profitable
growth, while managing challenges like the ones we faced in both business
segments during the fourth quarter. We are also determined to improve the
overall efficiency and profitability of both our Recreational Vehicle and
Housing operations."
2004 OUTLOOK
Chairman Skinner said, "We believe substantial progress was made in positioning
Coachmen for greater growth in 2004, despite the challenges we faced during the
first and fourth quarters of 2003. The underlying fundamentals of both business
segments have been steadily improving and we are experiencing strong demand for
our products in both Recreational Vehicles and Housing. Our products are very
well positioned for our customers, we are expanding into new markets consistent
with a solid strategic plan,
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we've brought on new capacity and we are building greater strength in our
management team. Based on these facts, and assuming no significant impact from
external factors, we are forecasting an increase in sales of 11% to 12%, and an
increase in earnings per share in the range of 80% to 95% in 2004, which is
inclusive of anticipated expenses associated with the start up of the Coleman
business. We will work to tighten up this forecast as the year progresses and
external events become more certain."
Coachmen Industries, Inc., now celebrating its 40th anniversary, is one of
America's leading manufacturers of recreational vehicles with well-known brand
names including COACHMEN(R), GEORGIE BOY(R), SHASTA(R), SPORTSCOACH(R) and
VIKING(R). Through its Building Group, Coachmen Industries also comprises one of
the nation's largest producers of both systems-built homes and commercial
structures with its ALL AMERICAN HOMES(R), MOD-U-KRAF(R), ALL AMERICAN BUILDING
SYSTEMS(TM) and MILLER BUILDING SYSTEMS(TM) products. Prodesign, LLC is a
subsidiary that produces custom composite and thermoformed 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 IMPACT OF
PERFORMANCE ON THE VALUATION OF INTANGIBLE ASSETS, THE AVAILABILITY AND THE
PRICE OF GASOLINE, THE COMPANY'S DEPENDENCE ON CHASSIS AND APPLIANCE 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, ADVERSE WEATHER CONDITIONS
AFFECTING HOME DELIVERIES, 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 YEAR ENDED
----------------------- ----------
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
---- ---- ---- ----
Net Sales $ 190,046 $ 164,086 $ 711,145 $ 665,192
Gross Profit - $ 26,991 25,205 104,701 99,219
Gross Profit - % 14.2% 15.4% 14.7% 14.9%
GS&A - $ 25,089 22,417 94,109 86,198
GS&A - % 13.2% 13.7% 13.2% 13.0%
Operating Income - $ 1,902 2,788 10,592 13,021
Operating Income - % 1.0% 1.7% 1.5% 2.0%
Other (Income)/Expense (1,067) (1,057) (529) (1,975)
Pre-Tax Profit - $ 2,969 3,845 11,121 14,996
Pre-Tax Profit - % 1.6% 2.3% 1.6% 2.3%
Tax Expense 978 1,185 3,756 5,067
Net Income 1,991 2,660 7,365 9,929
Earnings per share -
Basic 0.13 0.17 0.48 0.62
Diluted 0.13 0.17 0.48 0.62
Weighted Average Shares Outstanding
Basic 15,439 15,778 15, 437 15,996
Diluted 15,514 15,871 15,487 16,107
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS 12/31/03 12/31/02
- ------ -------------- --------------
Current Assets
Cash and temporary cash investments $ 6,408 $ 16,549
Marketable securities 5,667 7,641
Accounts receivable 46,232 29,408
Inventories 101,100 85,010
Prepaid expenses and other 7,170 8,862
Deferred income taxes 5,959 6,885
--------------- --------------
Total Current Assets 172,536 154,355
Property & equipment, net 79,225 78,889
Goodwill 18,954 18,954
Cash value of life insurance 36,506 33,155
Real estate held for sale -- 276
Other 3,467 7,566
--------------- --------------
Total Assets $ 310,688 $ 293,195
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY 12/31/03 12/31/02
- ------------------------------------ --------------- --------------
Current Liabilities
ST borrowings & current portion of LT debt $ 5,990 $ 902
Accounts payable, trade 30,486 18,801
Accrued income taxes 2,511 1,222
Other accruals 37,586 39,856
-------------- --------------
Total Current Liabilities 76,573 60,781
Long-term debt 9,419 10,097
Deferred income taxes 4,089 4,123
Other 9,456 8,768
-------------- --------------
Total liabilities 99,537 83,769
Shareholders' Equity 211,151 209,426
-------------- --------------
Total Liabilities and Shareholders' Equity $ 310,688 $ 293,195
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COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
YEAR ENDED
DECEMBER 31,
2003 2002
---------- -----------
CASH FLOW FROM (USED IN) OPERATIONS $ (3,559) $ 13,027
CASH FLOW FROM/(USED IN) ACQUISITION & Investing Activities (3,393) 4,828
Net Borrowings/(Payments) 4,410 (19,377)
Purchase of Stock (3,880) (6,824)
Dividends (3,719) (3,521)
---------- ------------
CASH FLOW USED IN FINANCING ACTIVITIES (3,189) (29,722)
DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS (10,141) (11,867)
Beginning of Period Cash and Temporary Cash Investments 16,549 28,416
---------- ------------
ENDING CASH AND TEMPORARY CASH INVESTMENTS $ 6,408 $ 16,549
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