EXHIBIT 99
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
The Company wishes to take advantage of the new "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and is filing this cautionary
statement in connection with such safe harbor legislation. The Company's Form
10-K, this Form 10-Q, any Form 8-K, or any other written or oral statements made
by or on behalf of the Company may include forward looking statements which
reflect the Company's current views with respect to future events and financial
performance. The words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward looking statements.
The Company wishes to caution investors that any forward looking statements made
by or on behalf of the Company are subject to uncertainties and other factors
that could cause actual results to differ materially from such statements. The
uncertainties and other factors include, but are not limited to, the Risk
Factors listed below (many of which have been discussed in prior SEC filings by
the Company). Though the Company has attempted to list the factors it believes
to be important to its business, the Company wishes to caution investors that
other factors may prove to be important in affecting the Company's results of
operations. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from forward looking
statements.
Investors are further cautioned not to place undue reliance on any forward
looking statements as they speak only of the Company's view as of the date the
statement was made. The Company undertakes no obligation to publicly update or
revise any forward looking statements, whether as a result of new information,
future events, or otherwise.
RISK FACTORS
General Economic Conditions
The Company's sales and rental businesses are affected by general economic
conditions, including employment rates, prevailing interest rates and other
economic conditions affecting disposable consumer income generally. While the
Company's modular motorhome concept has lessened the Company's reliance on the
sales portion of the business, weakness in the economy could still have an
adverse effect on the Company's business.
Geographic Concentration
The Company operates Hub rental and sales offices from 16 locations in the
United States and Canada. The Company also operates over 70 Satellite rental
centers, which are independently owned businesses that contract to rent the
Company's RVs. Although the geographic diversity of the Company's operations
lessens the impact of an economic downturn in any single region, the Company's
business could be adversely affected by economic conditions in particular
regions. The Company's most significant geographic concentrations of business
are in Canada, California, the Rocky Mountain corridor, the Pacific Northwest
(including Alaska) and the Southeastern United States.
Competition
The Company competes in the rental and sales of RVs with several firms, some of
which operate in multiple locations. In addition, in most markets in which the
Company operates there are local competitors that operate from single locations.
Significant competitive factors in the RV rental and sales industry include
price, service, reliability, quality of product, convenience, the ability to
offer one-way rentals and vehicle availability. The Company also competes with
other leisure and vacation activities, many of which are more visible and
familiar than the Company's product. Among other things, increased competition
could cause downward pressure on rental rates, decreased sales prices and lower
margins.
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Seasonality
The Company's business is seasonal. In the first and second fiscal quarters, the
Company historically records profits. In the third and fourth quarters, the
Company historically records losses. This is caused by a significant majority of
the demand for RV rentals occurring during the summer months. The Company's
purchases of RVs for the rental fleet are also seasonal, with the majority of
purchases being made in the first and fourth fiscal quarters. Due to the
seasonality of the Company's business, the Company believes that quarterly
comparisons of the results of operations during any fiscal year are not
necessarily meaningful and that results for any one fiscal quarter should not be
relied upon as an indication of future performance.
Dependence Upon Key Personnel
The Company's future success will depend upon the continued services of the
Company's senior management as well as the Company's ability to attract
additional members to its management team as and when necessary. The unexpected
loss of the service of any of the Company's key management personnel, or its
inability to attract new management when necessary, could have a material
adverse effect upon the Company. The Company has entered into employment
agreements (which include limited non-competition provisions) with certain of
its officers.
Regulation, Supervision, and Licensing
The Company's operations are subject to ongoing regulation, supervision and
licensing under various federal, state, provincial and local statutes,
ordinances and regulations. The Company believes it is in substantial compliance
with such laws. There can be no assurance, however, that the Company will be
able to remain in compliance with such laws, and any such failure could have a
material adverse effect on the operations of the Company. In addition, the
adoption of additional statutes and regulations, changes in the interpretation
of existing statutes and regulations, or the Company's entrance into
jurisdictions with more stringent regulatory requirements could have a material
adverse effect on the Company's business.
Currency Fluctuations
A significant portion of the Company's rental business is derived from
international tourists visiting North America. The majority of the Company's
international rental customers come from Europe, with others coming from
Australia, Africa and Asia. The exchange rates between the currencies of the
country of origin and the country of destination (the United States or Canada)
has an impact on the cost of the customer's vacation. Fluctuations in these
exchange rates could materially effect the amount of business the Company
derives from international customers.
Fuel Pricing and Availability
The Company's business, the rental and sales of RVs, is automotive in nature and
as such is dependent upon the availability of fuel. A decrease in the
availability of gasoline and the inability of the Company to convert its
vehicles to alternative fuels could have a material adverse effect on the
Company's business. Historically, increases in the price of gasoline have not
had a material impact on the Company's business, as long as there was no
concurrent decline in availability. However, future increases in the price of
gasoline could have a material effect on the Company's business.
Insurance Risk
The Company maintains a $15 million umbrella insurance policy insuring against
third party claims as a result of its rental and dealership operations. Each
claim is subject to a $250,000 self insured retention for which the Company is
liable. The frequency and severity of claims, as well as the availability and
cost of such insurance could adversely affect the Company's results of
operations. Management closely monitors these claims and historically has
experienced reasonable claims expense. There can be no assurance that this low
claims experience will continue, nor is there any assurance that umbrella
coverage will continue to be available at economic costs, if at all.
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Environmental Risks
The nature of any automotive business involves the handling of hazardous wastes
such as motor oil, fuel, paint and other chemicals. The Company seeks to adhere
to all existing laws and regulations for use, containment, record keeping and
disposal. Noncompliance with or changes to environmental regulations could
adversely affect the Company's business.
Dependence on External Financing
The Company has borrowed, and will continue to borrow, substantial amounts to
fund its operations from banks and other lenders. The Company's current
financings are under various notes and lines of credit with various terms,
renewal dates and numerous covenants that limit the Company's ability to
undertake certain transactions, require it to meet specified financial ratios,
and require it to comply with all laws relating to the Company's business. There
can be no assurance that the Company will be able to continue to satisfy the
terms and conditions of the various credit facilities and notes, or that credit
lines will be extended beyond their current expiration dates. Although the
Company believes that it is currently in compliance with the terms and
conditions of its borrowing agreements, a default thereunder could have a
material adverse effect on the Company's financial condition and results of
operations.
Suppliers
The Company is dependent upon various manufacturers for new vehicles and
chassis. Labor disruptions, strikes or other events affecting the manufacturers'
ability to deliver their products could adversely affect the Company's business.
Implementation of New Business Strategies
In recent periods, the Company has implemented certain new business strategies,
including the conversion to the use of modular motorhomes. The Company
anticipates that the use of modular motorhomes will enable it to extend the life
of the coach component of its motorhomes, enable it to reduce the purchase of
new complete RVs and reduce holding costs accordingly. The Company believes that
the cost savings associated with this program will more than offset the
resulting reduction in sales and gross profit from the resale of motorhomes,
although there can be no assurance in this regard. In addition, in an attempt to
offset the seasonality of its core RV sales and rental business, the Company has
begun the rental of shuttle buses, motorcycles and other specialty vehicles and
may pursue other business opportunities along these lines. The rental of these
vehicles requires distinct marketing and sales programs, and there can be no
assurance that these strategies will be successful in offsetting the seasonality
typically experienced by the Company.
Factors Inhibiting Takeover
The existence of the Company's outstanding preferred stock purchase rights,
which become exercisable after, among other events, a person or group acquires
20 percent or more, or makes a tender or exchange offer for 30 percent or more,
of the Company's Common Stock, as well as certain provisions of the Company's
Articles of Incorporation, Bylaws and Florida law, may delay, defer or prevent a
takeover attempt that a shareholder might consider in its best interest. The
Preferred Stock purchase rights, when exercisable, entitle the holders to
purchase Preferred Stock of the Company or, under certain circumstances,
securities of the Company or the acquiring entity, having a market value of
twice the exercise price. The Company's Articles authorize the Board to
determine the rights, preferences, privileges and restrictions of unissued
series of Preferred Stock, without any vote or action by the Company's
shareholders. Thus, the Board could authorize and issue shares of Preferred
Stock with voting or conversion rights that could adversely affect the voting or
other rights of holders of the Company's Common Stock or may have the effect of
delaying, deferring or preventing a change of control of the Company. The
Company's Bylaws establish certain advance notice procedures for nomination of
candidates for election as directors and for shareholder proposals to be
considered at annual shareholders' meetings. The Company is also subject to (i)
the Florida Control Share Act, which generally
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provides that shares acquired in excess of certain specified thresholds will not
possess any voting rights unless such voting rights are approved by a majority
vote of the corporation's disinterested shareholders, and (ii) the Florida Fair
Price Act, which generally requires supermajority approval by disinterested
directors or shareholders of certain specified transactions between a
corporation and holders of more than 10 percent of the outstanding shares of the
corporation (or their affiliates).
Possible Volatility of Stock Prices
The market price of the Company's common stock could be subject to significant
fluctuations in response to such factors as, among others, variations in the
anticipated or actual results of operations of the Company or other companies in
the RV sales and rental industry, changes in conditions affecting the economy or
the stock market generally or in the market for stocks in the Company's industry
group, analyst reports or general trends in the industry or related industries.
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