Monaco Coach Corporation Reports First Quarter 2004 Results
COBURG, Ore., April 28 -- Monaco Coach Corporation today reported revenue for its first quarter ended April 3, 2004. First quarter earnings per share were 40 cents, on record quarterly revenue of $355.0 million. Net income for the first quarter was $11.9 million. Operating income for the first quarter was $19.7 million. First quarter motorhome sales totaled 2,142 units and first quarter towable recreational vehicles totaled 994 units for a total of 3,136.
"We're pleased to announce record quarterly revenue and unit sales," stated Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson. "Retail demand for recreational vehicles remains strong, and the debut of our first 2005 motor-home models was met with a very positive dealer and consumer response at recent retail shows. Also, our towable unit sales reached record quarterly levels, bolstered by demand for our new toy-haulers and lower-priced towable models. Furthermore, through the first three weeks of the second quarter, retail registrations have outpaced our production levels, which is reflected in our solid order backlog."
Monaco Coach Corporation President John Nepute added, "We continue to monitor the commodity pricing environment, specifically materials such as steel, copper, aluminum and many petroleum-based products. Price increases in these areas are reflected in our raw materials costs, as well as in several component costs from our suppliers. Additionally, our freight expenses rose due to higher fuel prices. As a result, we implemented modest price increases to offset rising costs on all of our products to take effect in the second quarter."
Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley stated, "Margins were impacted as a result of higher commodity prices and a production mix shift toward lower-margin products. However, we benefited from greater labor efficiencies, reduced warranty and legal settlement expenses, and lower indirect manufacturing costs."
Daley continued, "We expect demand to drive second quarter revenues to approximately $360-$370 million. This sales level, combined with the shift in production mix, should allow for second quarter gross margins between 12.45% and 12.65%, with sales, general, and administrative expenses expected in the 7.2% to 7.4% range."
Headquartered in Coburg, Oregon, with additional manufacturing facilities in Indiana, Monaco Coach Corporation is one of the nation's leading manufacturers of recreational vehicles. The company offers customers luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and Royale Coach brand names.
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited: dollars in thousands, except share and per share data)
January 03, April 03,
2004 2004
ASSETS
Current assets:
Cash $13,398 $22,776
Trade receivables, net 89,170 114,617
Inventories 127,746 146,552
Resort lot inventory 13,978 10,618
Prepaid expenses 3,029 6,575
Deferred income taxes 33,836 33,676
Total current assets 281,157 334,814
Property, plant and equipment, net 141,662 141,456
Debt issuance costs, net of accumulated
amortization of $815, and $944, respectively 596 467
Goodwill 55,254 55,254
Total assets $478,669 $531,991
LIABILITIES
Current liabilities:
Current portion of long-term note payable $15,000 $15,000
Accounts payable 64,792 103,867
Product liability reserve 20,723 19,602
Product warranty reserve 29,643 30,712
Income taxes payable 3,395 6,362
Accrued expenses and other liabilities 26,373 29,930
Total current liabilities 159,926 205,473
Long-term note payable 15,000 11,250
Deferred income taxes 17,495 17,794
Total liabilities 192,421 234,517
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 50,000,000 shares
authorized, 29,246,143 and 29,297,031 issued
and outstanding respectively 292 293
Additional paid-in capital 54,919 55,687
Retained earnings 231,037 241,494
Total stockholders' equity 286,248 297,474
Total liabilities and stockholders' equity $478,669 $531,991
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited: dollars in thousands, except share and per share data)
Quarter Ended
March 29, April 03,
2003 2004
Net sales $273,574 $354,976
Cost of sales 239,968 310,493
Gross profit 33,606 44,483
Selling, general and administrative expenses 25,649 24,800
Amortization of goodwill 0 0
Operating income 7,957 19,683
Other income, net 206 86
Interest expense (1,012) (405)
Income before income taxes 7,151 19,364
Provision for income taxes 2,825 7,441
Net income $4,326 $11,923
Earnings per common share:
Basic $ .15 $ .41
Diluted $ .15 $ .40
Weighted average common shares outstanding:
Basic 28,956,906 29,296,193
Diluted 29,340,788 29,967,452
Units Sold: 2,367 3,136
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: dollars in thousands)
Quarter Ended
March 29, April 03,
2003 2004
Increase (Decrease) in Cash:
Cash flows from operating activities:
Net income $4,326 $11,923
Adjustments to reconcile net income to net cash
used (provided) by operating activities:
Loss on sale of assets 16 78
Depreciation and amortization 2,262 2,536
Deferred income taxes (1,009) 459
Changes in working capital accounts:
Trade receivables, net 17,821 (25,447)
Inventories (24,292) (18,805)
Resort lot inventory 2,606 3,360
Prepaid expenses 792 (3,547)
Accounts payable 9,861 39,075
Product liability reserve 1,091 (1,120)
Product warranty reserve (1,071) 1,068
Income taxes payable 2,592 2,967
Accrued expenses and other liabilities (2,664) 3,556
Net cash provided by operating activities 12,331 16,103
Cash flows from investing activities:
Additions to property, plant and equipment (8,439) (2,553)
Proceeds from sale of assets 687 145
Net cash used in investing activities (7,752) (2,408)
Cash flows from financing activities:
Book overdraft 14,698 0
Payments on lines of credit, net (15,713) 0
Payments on long-term note (4,333) (3,750)
Debt issuance costs (11) 129
Dividends paid 0 (1,465)
Issuance of common stock 780 769
Net cash used by financing activities (4,579) (4,317)
Net change in cash 0 9,378
Cash at beginning of period 0 13,398
Cash at end of period $0 $22,776