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