MIDDLEBURY, Ind.--(BUSINESS WIRE)--April 28, 2008--Coachmen
Industries, Inc. (NYSE: COA) today announced its financial results for
the first quarter ended March 31, 2008.
"We are certainly pleased to report our first quarterly profit
since the second quarter of 2006 and our best quarterly results since
the end of 2004. In addition, we continued to increase our market RV
share in key RV product categories," commented Richard M. Lavers,
President and Chief Executive Officer. "Although our bottom line
profits of $1.3 million are modest, they are profits, and represent an
$11.8 million improvement in pre-tax results in the face of a 7%
decrease in revenues. Company-wide, our gross profits increased over
750% and our operating expenses declined by over 23%, on 7% fewer
revenues. I commend our management team, and thank every one of our
employees for all the efforts that went into generating these
results."
"This is a solid start to 2008," Lavers continued, "but
celebration must be tempered by the realization that Coachmen
continues to face significant challenges in our core markets.
Nationwide, total single-family housing starts were down 39% in the
first quarter and it appears the housing slump will continue for the
foreseeable future. Our core single-family housing business is by no
means immune from industry conditions, but the decisive actions we
took to pursue major project opportunities, particularly in military
construction, has enabled us to weather the downturn so far. In the RV
market, total industry wholesale unit shipments through March fell by
11.8%, and recent dealer surveys indicate that the RV market has
weakened substantially since the start of the year. In addition, the
Conference Board's Consumer Confidence Index fell to 64.5 in March,
its third consecutive decline and its lowest reading in five years,
highlighting the increasing worries of consumers about the economy.
Nonetheless, Coachmen's results for the first quarter have validated
our efforts throughout 2007 to reduce our operating costs and
establish the foundation for profitability despite these bleak market
conditions. Also through February, Coachmen posted 10.9% gains in
Class C retail market share, 14.9% gains in Travel Trailers and an
impressive 26.4% gain in Fifth Wheel retail market share," concluded
Lavers.
Sales for the first quarter were $121.3 million, vs. $130.2
million reported for the same period last year. Gross profits improved
to $10.9 million, or 9.0% of revenues from $1.4 million, or 1.1% of
revenues in the first quarter of 2007. Selling, general and
administrative expenses decreased $2.9 million from last year, due
primarily to reduced selling expenses and lower sales commissions on
the lower revenue levels as well as favorable legal settlements of
approximately $1 million. The total gain on the sale of assets for the
quarter was $0.2 million compared with a gain of $0.4 million in the
first quarter of 2007, while other expenses increased by approximately
$0.3 million. Combined, these items drove an $11.8 million improvement
in pre-tax results to a profit of $1.3 million compared with a pre-tax
loss of $10.4 million in the first quarter of 2007. At the bottom
line, the Company reported net income of $1.3 million, or $0.08 per
share, versus a net loss of $10.4 million, or $0.67 per share in the
first quarter of 2007.
Recreational Vehicle Group
"The results of all our efforts over the past eighteen months to
reduce costs, increase capacity utilization and improve margins were
evident in the quarter," said Michael R. Terlep, President of the
Coachmen RV Group. "We continued to face significant challenges in the
RV Group as both wholesale and retail market conditions deteriorated
during the quarter, but even in face of these challenging conditions
our revenues rebounded substantially from the depressed levels of the
fourth quarter of 2007. Our gross margins improved by over six full
percentage points and would have shown more improvement but for a
seasonal increase in sales of lower-margin rental units."
The Company's Recreational Vehicle Group reported sales of $90.5
million during the first quarter of 2008, down 13.1% from the $104.2
million reported for the same period last year. Despite the continued
softening of revenues, gross margins for the RV Group improved 6.5
percentage points to $5.2 million compared with a loss of $0.9 million
last year. The improvement in gross profit was primarily the result of
significant improvements in product design which resulted in better
margins, increased capacity utilization as the result of consolidation
activities, lower warranty expenses resulting from continued efforts
to improve product quality and material costs savings due to the
Group's efforts in strategic sourcing. The RV Group generated a
pre-tax loss for the quarter of $1.1 million compared with a pre-tax
loss of $8.0 million for the year-ago quarter, representing an 87%
improvement.
Housing Group
"The continued nationwide slump in the housing market, adversely
affected the performance of the Housing Group's core single-family
housing business in the first quarter," commented Housing Group
President Rick Bedell. "However, our focus on diversifying our revenue
base in an effort to mitigate our dependence on these troubled housing
markets generated substantial benefits during the quarter as we began
our initial shipments of military housing for the barracks project at
Ft. Carson in Colorado. We also continue to create new and innovative
ways to stimulate demand for our traditional single family housing
markets. Most recently, we announced our agreement with Solar Village
to offer a line of solar energy powered homes. We believe this will
allow us to expand our presence in the growing market for 'green'
housing," concluded Bedell.
For the quarter, the Housing Group reported sales of $30.8
million, up 18.2% from $26.1 million in the first quarter of 2007 due
mainly to the impact of major project revenues offsetting weakness in
traditional single-family housing markets. This increase in sales
occurred in the face of a 39% industry decline in single-family
housing starts in the first three months of 2008. With the improved
sales, gross profit margin increased to $5.7 million, or 18.4% of
sales compared with $2.3 million, or 8.8% of sales in the first
quarter of 2007. The higher gross margin resulted primarily from
improved operating efficiencies associated with higher capacity
utilization rates resulting from increased production for major
projects as well as recent consolidation efforts in the fourth quarter
of 2007. Operating expenses decreased to $4.3 million from $5.0
million last year due mainly to lower selling expenses associated with
military construction revenues as well as reduced operating costs
associated with recent plant consolidations. On the improved revenues,
for the first quarter the Housing Group generated a pre-tax profit of
$1.4 million, compared with a pre-tax loss of $2.7 million for the
year-ago quarter.
Coachmen Industries will conduct a conference call to discuss its
financial results in this release at 10:00 a.m. (Eastern Time),
Tuesday, April 29, 2008. Members of the news media, investors and the
general public are invited to access a live broadcast of the
conference call over the internet at www.earnings.com. The online
replay will be available at approximately 12:00 p.m. (Eastern Time)
and continue for 30 days.
Coachmen Industries, Inc. is one of America's leading
manufacturers of recreational vehicles, systems-built homes and
commercial buildings, with prominent subsidiaries in each industry.
The Company's well-known RV brand names include COACHMEN(R), GEORGIE
BOY(TM), SPORTSCOACH(R) and VIKING(R). Through ALL AMERICAN HOMES(R)
and MOD-U-KRAF(R), Coachmen is one of the nation's largest producers
of systems-built homes, and also a major builder of commercial
structures with its ALL AMERICAN BUILDING SYSTEMS(TM) products.
Coachmen Industries, Inc. is a publicly held company with stock listed
on the New York Stock Exchange (NYSE) under the ticker COA.
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, increased interest
rates the availability for floorplan financing for the Company's
recreational vehicle dealers and corresponding availability of cash to
Company, uncertainties and timing with respect to sales resulting from
recovery efforts in the Gulf Coast, uncertainties regarding the impact
on sales of the disclosed restructuring steps in both the recreational
vehicle and housing and building segments, the ability of the company
to generate taxable income in future years to utilize deferred tax
assets and net operating loss carry-forwards available for use, the
impact of performance on the valuation of intangible assets, the
availability and the price of gasoline, price volatility of raw
materials used in production, the Company's dependence on chassis and
other suppliers, the availability and cost of real estate for
residential housing, the supply of existing homes within the company's
markets, the impact of home values on housing demand, the impact of
sub-prime lending on the availability of credit for the broader
housing market, the ability of the Company 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, dependence on significant customers
within certain product types, consolidation of distribution channels
in the recreational vehicle industry, consumer confidence,
uncertainties of matters in litigation, current litigation relating to
and Congressional inquiry surrounding the Company's use of components
containing formaldehyde in its products, further developments in the
war on terrorism and related international crises, oil supplies, and
other risks identified in the Company's SEC filings.
Coachmen Industries, Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
2008 2007
---------- ----------
Net sales $121,318 $130,244
Gross profit - $ 10,863 1,427
Gross profit - % 9.0% 1.1%
GS&A - $ 9,130 12,048
GS&A - % 7.5% 9.2%
Gain on sale of property - $ (208) (445)
Gain on sale of property - % (0.1)% (0.3)%
Operating income/(loss) - $ 1,941 (10,176)
Operating income/(loss) - % 1.6% (7.8)%
Other expense 614 273
Pre-tax profit/(loss) - $ 1,327 (10,449)
Pre-tax profit/(loss) - % 1.1% (8.0)%
Tax credit - (1)
Net income/(loss) 1,327 (10,448)
Earnings/(loss) per share - basic and diluted 0.08 (0.67)
Weighted average shares outstanding
Basic 15,749 15,700
Diluted 15,758 15,700
Coachmen Industries, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
March 31, December 31,
ASSETS 2008 2007
-------------------------------------------- ------------ ------------
Current Assets
--------------------------------------------
Cash and cash equivalents $ 2,568 $ 1,549
Accounts receivable 35,777 9,122
Inventories 82,255 79,268
Refundable income taxes 1,627 1,628
Prepaid expenses and other 7,922 7,623
Assets held for sale 5,021 -
------------ ------------
Total Current Assets 135,170 99,190
Property, plant & equipment, net 47,231 52,932
Goodwill 12,993 12,993
Cash value of life insurance, net of loans 29,531 33,936
Note receivable 6,147 6,158
Other 2,022 2,459
------------ ------------
Total Assets $ 233,094 $ 207,668
============ ============
March 31, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 2008 2007
-------------------------------------------- ------------ ------------
Current Liabilities
--------------------------------------------
ST borrowings & current portion of LT debt $ 34,690 $ 20,925
Accounts payable, trade 31,173 15,042
Floor plan notes payable 3,565 4,116
Accrued income taxes 510 536
Other accruals 28,678 33,235
------------ ------------
Total Current Liabilities 98,616 73,854
Long-term debt 2,992 3,010
Postretirement deferred comp benefits 6,854 7,632
Deferred income taxes 1,990 1,990
Other 72 49
------------ ------------
Total Liabilities 110,524 86,535
Shareholders' Equity 122,570 121,133
------------ ------------
Total Liabilities and Shareholders'
Equity $ 233,094 $ 207,668
============ ============
Coachmen Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
2008 2007
---------- ----------
Net income/(loss) $ 1,327 $ (10,448)
Depreciation 1,377 1,506
Changes in current assets and liabilities (19,148) 13,060
---------- ----------
Net Cash Provided by/(Used in) Operations (16,444) 4,118
Net Cash Used in Investing Activities (1,768) (1,091)
Net borrowings (repayments) 19,196 (1,584)
Net issuance of stock 35 46
Dividends paid - (471)
---------- ----------
Net Cash Provided by/(Used in) Financing
Activities 19,231 (2,009)
Increase in Cash and Cash Equivalents 1,019 1,018
Beginning of period cash and cash equivalents 1,549 2,651
---------- ----------
End of Period Cash and Cash Equivalents $ 2,568 $ 3,669
========== ==========
Coachmen Industries, Inc.
Quarterly Segment Data
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
2008 2007
---------- ----------
Sales
------------------------------------------------
Recreational Vehicle $ 90,479 $104,152
Housing 30,839 26,092
---------- ----------
Total $ 121,318 $130,244
========== ==========
Gross Profit
------------------------------------------------
Recreational Vehicle $ 5,192 $ (866)
Housing 5,671 2,293
---------- ----------
Total $ 10,863 $ 1,427
========== ==========
Gross Profit Percentage
------------------------------------------------
Recreational Vehicle 5.7% (0.8)%
Housing 18.4% 8.8%
---------- ----------
Total 9.0% 1.1%
========== ==========
Operating Expenses
------------------------------------------------
Recreational Vehicle $ 6,284 $ 7,072
Housing 4,291 5,022
Other (1,653) (491)
---------- ----------
Total $ 8,922 $ 11,603
========== ==========
Operating Expense Percentage
------------------------------------------------
Recreational Vehicle 6.9% 6.8%
Housing 13.9% 19.2%
---------- ----------
Total 7.4% 8.9%
========== ==========
Operating Income/(Loss)
------------------------------------------------
Recreational Vehicle $ (1,092) $ (7,938)
Housing 1,380 (2,729)
Other 1,653 491
---------- ----------
Total $ 1,941 $(10,176)
========== ==========
Pre-Tax Income/(Loss)
------------------------------------------------
Recreational Vehicle $ (1,057) $ (8,044)
Housing 1,358 (2,677)
Other 1,026 272
---------- ----------
Total $ 1,327 $(10,449)
========== ==========
CONTACT: Coachmen Industries, Inc.
Colleen Zuhl, 574-825-5821
Chief Financial Officer
or
Jeffery A. Tryka, CFA, 574-825-8238
Director of Planning and Investor Relations
SOURCE: Coachmen Industries, Inc.
